Test 1 - SCor deir o Samuel A. Cordeiro Eco 101- 04 8:00 am...

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Samuel A. Cordeiro Eco 101- 04 8:00 am Prof. Yves A. Isidor October 2, 2007 Test 1 5) I do agree with Jean Baptiste’s theory, “Supply creates its own demand.” This theory states that as the supply of a certain product ort service increases, demand for this product or service will follow. I truly believe although that in order to be successful in controlling the demand issue, good advertisement is necessary. I truly believe that in order to be a demand, there need to be supply. The more goods (for which there is demand) that are produced, the more those goods (supply) can constitute a demand for other goods. Instead of there being an excess supply of goods in general, there may be an excess supply of one or more goods but only when balanced by an excess demand of yet other goods. If spenders don’t spend, that is when I believe advertisement has its biggest challenge. Advertisement has to be able to make the buyer want to purchase a product or service, even when it may not be needed, but there needs to be a persuasive message behind the advertisement in order to win the buyer over. SCordeiro
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8) Capitalism, also known as a market economy, is an economic system based on private ownership and control of resources, known as private property rights, and on coordination of resource-use decisions through markets. In contrast, Communism, also known as command economy, is everything capitalism is not. That is, communism is an economic system characterized by state ownership and/or control of resources and centralized resource-use decision making. Capitalism, sought by Adam Smith, has two major components: (1) private ownership of the economy’s resources, known as private property rights, and (2) decentralized decision making coordinated through markets. Within the capitalist party, private individuals, businesses , and combinations of the two are allowed, with minor interference, to engage in whatever voluntary exchanges they feel best maximize their well-being. In contrast, Communism, sought by Karl Mark, decisions concerning what and how to produce are made by central authorities through binding directives to producers. Although both economic systems try to fulfill the same purpose, to control a country’s economic system the best way they believe. In the capitalist economy, private individuals and businesses control the economy on their behalf. On the other hand, the communism party appoints the government to make the decisions on how to control supply and demand for businesses and wages. 9) The decision by consumers to buy larger or lesser quantities of a product at each possible price can be cased by a number to things. Other factors (in addition to price) affect the quantity of a product consumers will buy. Consumer's income and tastes determine how much they will purchase. Also, consumers will consider the price of substitute goods (things they can purchase SCordeiro
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Test 1 - SCor deir o Samuel A. Cordeiro Eco 101- 04 8:00 am...

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