Substitution and income effects Assignment Example | Topics and Well Written Essays - 1000 words

Substitution and income effects - Assignment Example Therefore, an increase in the price of gasoline has various effects. The owner of the vehicle can opt to take several measures in order to remain at the same level of satisfaction (Hall & Lieberman, 2008). Considering that it is only the price of gasoline that have changed, yet the income of the consumer remains constant, the following decisions will have different income and substitution effects: You drove less and purchased less gasoline When a consumer decides to drive less and purchase less gasoline, he/she will be able to save some income. The income saved from the reduction in the gasoline purchased can make up for the budget reduction that would have occurred as a result of increased gasoline prices (Landsburg, 2011). However, the satisfaction obtained by the consumer is likely to change. This is because, the consumer can no longer travel to far off distances where he/she used to go before. This could limit the satisfaction he obtains from the travel and adventure (Hall & Lieb erman, 2008). Additionally, the reduction in the quantity of gasoline purchased limits the extent to which the basket of the consumer can be filled, since some cheaper commodities that make up his/her basket could be found some distance away. Therefore, although reducing the quantity of gasoline purchased and the consequent distance travelled can maintain the consumers purchasing power, it is likely to reduce his/her satisfaction (McEachern, 2012). You ate out less often The effects of reducing what the customer eats, is not any different. Eating out less often has the substitution effect of conserving some resources that could have been used for food, to make up for the gap created by the increased gasoline price. This is meant to maintain the customer at the same level of consumption for gasoline units, despite the change in its prices (). However, even though such a move can keep the consumer at the same levels of gasoline consumption, he/she has already lost out in the quantity of food and drinks consumed. This has the effect of reducing the satisfaction of the customer, derived from eating several times in a day (Landsburg, 2011). In making such a decision, the preference and utility derived by the consumer from eating certain units of foodstuff in a day will play a greater role (Hall & Lieberman, 2008). The consumer will make his/her shopping basket based on the preference and the utility he/she derives from them. Thus, although reducing the quantity of foodstuff consumed can maintain the purchasing power of the consumer, his/her situation could be worse off in terms of satisfaction derived from foodstuff consumption (McEachern, 2012). You spent less to maintain your automobile Where the consumer decides to reduce the money spent in maintaining the automobile to mitigate the effects of increased fuel prices, the decision can maintain his purchasing power in the short run. However, this can be detrimental in the long run, since the automobile might end up breaking down, causing more resources to be used in its repair, than would have been used in its maintenance (Hall & Lieberman, 2008). Therefore, reducing the resources used in automobile maintenance can help the consumer remain at the same consumption level as before. However, this is not sustainable since lack of maintenance worsens the condition of the automobile. This is likely to

Writer's choice Essay Example | Topics and Well Written Essays - 500 words - 17

Writer's choice - Essay Example The short cuff gloves exposed the wrist to potential injury prompting players to start attaching specially molded plastic to the front part of their elbow pads to protect the lower part of their forearm (National Hockey League 9). Ideally, the evolution depicts the significance of plastic material in making hockey skates where plastic pads and fiberglass replaced leather shoulder and elbow pads to enhance protection. With a specific focus on the impact of plastics material on hockey sticks, pucks, skates, and safety, we can derive how plastics revolutionized ice hockey. Indeed, plastic has revolutionized traditional hockey sticks that were initially wooden via nanotechnologies that enhance the durability and speed of handling hockey sticks (Canadian Plastics Industry Association 1). Moreover, manufacturers use plastic material to make hockey pucks through modern technologies like vulcanization. Most specifically, plastic materials advanced hockey skates that initially had leather with metal blades (Canadian Plastics Industry Association 1). Unlike old skates, the modern skates have a protective plastic cowling made of a major polymer, high-end polyvinyl chloride (PVC) (Canadian Plastics Industry Association 1 ). Indeed, the PVC is dominant in covering the lower half of the hockey boot (Canadian Plastics Industry Association 1). Modern manufacturers of hockey skates rely on PVC polymer subject to its good insulation properties. Indeed, PVC can only start decomposing when the temperature exceeds 140 Â °C since it has a melting point of about 160 Â °C. Moreover, the polymer has a small linear expansion coefficient and good flame retardancy that enhances the sliding action of the skate blade and skating speed. This relates to its high hardness and good mechanical properties. Indeed, with a thermal coefficient of expansion of 80 x 10-6 and density of 1.38 g/cm3, PVC promotes the production of hockey skates that generate less