Microeconomics: Describe An Example For The Following Terms (Essay Sample)

Microeconomics
Name
Institution
Date of submission
Microeconomics
Question 1
Define, describe and use an example for the following term. Price elasticity of demands
Response
Price elasticity of demand is a term used while discussing price sensitivity of goods. It refers to a measure of the relationship between a change in the quantity demanded by a customer of particular goods and a change in the price of the same goods. For Instance, PED for Point X is 15/15, which is one while PED for point Y is 18/10, which is 1.8.
Question 2
Monopolistic Competition
The term describes a common market structure in which producers have several competitors, but each one of them focuses on slightly different products from each other. Therefore, Monopolistic competition refers an imperfect competition in which many producers compete by selling products that are differentiated from the exact copy either by branding or packaged quantity thus making imperfect substitutes. A good example of monopolistic competition exists in Hotel and Pubs setup.
Question 3
Monopoly
Monopoly is a condition that exists when a specific enterprise is the only supplier in the market for a certain goods or commodity. The situation exists when there is a lack of economic competition to supply goods and service. In most instances, the monopolies are established by the government and the competition laws restrict them.
Question 4
Oligopoly
Oligopoly refers to a small form of market where the industry is usually dominated by small numbers of sellers. Usually, it exists in as a result of various forms of collusion which often reduces the competition thus leading to inflation of prices for consumers. It can best be described by its nature of maximizing the profits. Qualitative description of oligopoly usually utilizes a four-firm concentration ratio.
Question 5
Sunk Cost
Economist usually refers to sunk cost as those expenses and cost which has already spent and therefore they cannot be recovered. It is worth noting that sunk cost should not be interchanged with economic loss. It does not affect the plans for the business. During planning and making of a rational decision, sunk cost is not usually considered in such cases.
Question 6
Why wouldn't it make sense for an individual earning $500/ hour and working 10 hours a day to spend 3 hours (taken from the 10 hours) to shovel snow from their driveway? FYI- To hire someone to shovel snow costs $30/ hour.
Time as a factor of production should properly be utilized to enhance the growth of the economy. It is profitable and cost effective to hire someone at the cost of $30/ hour to shovel the snow from the driveway than spending precious 3 hours of precious time to work on the same. Spending 3 hours by an employed person for $50/ hour would mean losing $...