Tutorial 2 - Demand and Supply
Tutorial 2 - Demand and Supply
1. What is the law of demand? What is the law of supply?
Law of demand – as PQd and vice versa.
Law of supply – as PQs and vice versa.
2. Name a type of good that doesn’t conform to the law of demand.
An “exclusive” luxury good eg ferraris. Another example would be speculative goods eg shares, property.
3. During the Celtic Tiger, as house prices were rising, quantity demanded increased. Now that a recession has hit and that prices are still falling, quantity demanded has actually decreased. Is this an example of the law of demand in action? Why / why not?
No – these are speculative goods and they don’t obey the law of demand. as PQd.
4. Economics has a role to play in many disciplines and the law has had a significant impact on many economic events. Likewise, the opposite is the case also where the economy has an impact on law. Provide an example of how the law has an impact on the supply or demand for a good / service. Provide also an example of how economic events have had an impact on law.
Here linking economics to law for these L&T students.
Example of how the law has an impact on the supply or demand for a good / service = minimum wage legislation. This doesn’t allow the market to reach its natural equilibrium point.
Example of how economic events have had an impact on law = for example, legislation on judges salaries over the past year introduced as a result of economic conditions where it was deemed unfair that they weren’t able to be...
