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Ap:  The higher the proportion of income spent on jeans, the more price elastic will be the demand for it.
An: With a higher proportion of income, consumers will be more willing and able to spend on a higher priced jeans for instance guess jeans which cost about $500, as compared to H&M jeans which cost about $30.
Ans: Since the price difference between guess jeans and H&M jeans is huge, it will be more price elastic, PED>1, more than proportionate change.
hence more proportionate

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AP: The proportion of income that a good takes up will affect the PED of the good.
AN: For example, a Rolex watch is a luxury good that takes up a large proportion of income. Thus the PED is more than 1 as a fall in PRICE OF ROLEX would result in a more than proportionate fall in QUANTITY demand for the good. In comparison, a Casio watch is a normal good that takes up a small proportion of income. Thus the PED is less than 1 as a fall in income will result in a less than proportionate fall in demand for the good.
ANS: Hence, the proportion of income spent on the good will result in change in the PED

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Ped differs when applied to different market products due to the availability and closeness of substitutes .Demand for Coke, with many close substitutes such as Pepsi, would be more responsive to price changes of coke as consumers can easily switch to Pepsi if the price of coke changes,t hus a change in price of coke will lead to a more than proportionate change in quantity demanded of coke , hence demand of coke is price elastic, ped>1.ON THE OTHER HAND, Demand for rice, with little close substitutes, the change in price of rice  would lead to a less than proportionate change in ITS quantity, as the demand for rice products is PRICE inelastic ,ped <1.

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AP: CED measures the degree of responsiveness of demand for a good due to a change in price of another good, ceteris peribus. CED will be affected by the relationship of the goods, if the goods are GOOD substitutes, CED value will be a high positive. However, if they are weak substitutes, they will have a low positive CED value.

AN: Levi's and H&M jeans are very close substitutes as they are both jeans --> if the price of Levi's jeans rises, people will be more inclined to buy jeans from an alternative brand, hence, the demand of H&M jeans will increase BY A SIGNIFICANT AMT.

ANS: In this particular instance, if the jeans of another clothing brand become more expensive, the price of the pair of jeans will become more expensive too.

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PED - degree of necessity (Dazaree, Wendy, Justin)

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PED - degree of necessity (Dazaree, Wendy, Justin)

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PED is affected by the degree of necessity of the good. The demand for jeans is price elastic as jeans are not a good addictive in nature, as compared to other apparels like for example, winter wear in colder climates, where this good is a necessity. Considerable increases in the prices of jeans would likely greatly deter consumers from their consumption as they do not have a strong need for this good and are not addicted to this good either. Hence the demand for such products is price elastic. VS ANOTHER GOOD

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AP: CED for Wood and Wooden Table are strong complements (high -ve value)

AN: Wood used in production of wooden table. Increase in Qdd of wood would directly increase Demand of wooden table.

ANS: Wood and wooden table are complements

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Intro:
Interpret:
1)Elasticities general definition
2)Specify PED and CED slightly, cp
Scope:
3)’Explanation of PED and CED are explored when applied across various markets’

BP1:
1)PED definition
2)Negative sign
3)Price elastic definition
4)Price inelastic definition

BP2:
1)PED determinants x2
2)egs of determinant 1
3)egs of determinant 2

BP3:
1)CED definition
2)Negative sign definition
3)Positive sign definition

BP4:
1)CED determinants x2
2)egs of determinant 1
3)egs of determinant 2

Conclusion
-Compare determinants of PED and CED

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intro: interpret elasticity of demand + scope
bp1: define ped + AAA
bp2: define ced + AAA

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command word: explain
concept word: price elasticity and cross elasticity
context word: -

intro: define ped and ced and their determinants
BPs:
-determinants of PED
-different values of PED
-determinants of CED
-different values of CED
Conclusion.

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P1:definition of ped ced

P2:sign and magnitude of ped/determinants of ped

P3:sign and magnitude of ced /determinants of ced
P4:conclusion

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Taking into account the simultaneous changes in demand and supply for the market air travel, the recession and the closure of some of the major airlines of the world has led to an overall increase in price and decrease in quantity in the market of air travel. (ANS: meet the q requirement directly)Both the change in demand and supply would cause a decrease in quantity of air travel from Qo to Q1. Moreover, there will be a slight upward pressure on the price of the market for air travel as demand factor causes price to decrease while supply factor causes causes price to increase. Hence, price will only increase slightly. Assuming that the supply decreases more than the demand, (PUT FORTH THE REASON FOR THE LIKELY OUTCOME)equilibrium price increases from Po to P1 and equilibrium quantity decreases from Qo to Q1. NEED TO INPUT PRICE ADJUTMENT PROCESS

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Since air travel is a luxury good, the demand for air travel is likely to be income-elastic. Hence the fall in income due to the recession will lead to a more than proportionate decrease in the demand for air travel. Hence the fall in demand is more significant than the fall in supply

There is a closure of some airlines due to fear of air travel due to the recent terrorist attack involving aeroplanes. However, since air travel is a commodity needed to sustain trade between countries, there will still be some airlines available. Thus the fall in supply is less significant than the fall in demand.

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the closure of certain airlines will result in the fall in supply of airline tickets. This is because the terrorist attack caused an increase in fear of flying hence leading in a drop of number of airline firms as the sellers leave the airline industry due to the predicted fall in profit (P0 to P1). Therefore leading to a fall in supply in the air market and a leftward shift of the supply curve(Q0toQ1). ENF OFF WITH EQUM P AND QTY . EXPLAIN DIAGRAM (W/O ADJUSTM PROCESS)

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The factor that affects demand is the recession. As the recession will cause a decrease in the income of households, which lowers the purchasing power of consumers. Since air travel is a normal good, consumers would be less willing and able to afford air travel.Thus demand for air travel would fall ,causing a leftward shift to the demand curve.Due to the leftward shift of the demand curve, at the original p, it would be the case where the quantity demand is less than the quantity supplied,which is the case of surplus, causing a downward pressure of price.This causes a decrease in equilibrium price (from P0 to P1) and a decrease equilibrium quantity(from Q0 to Q1)

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One factor that would affect the demand for air travel is due to recession-household income falls. As air travel is a Normal good, the demand for air travel decreases as the income level decreases. This is illustrated in figure 1 where demand for air travel decreased from D1 to D2 (good! explained the diag--> required in Q) .Thus ,due to decrease in level of income, consumer’s pursing power and ability to afford air travel decreases. At original P1, the quantity demanded q2 is lesser than the quantity supplies q1,causing a surplus , this causes a downward pressure on price (show in diag) to drop from p1 to p2. There would be a leftward shift of demand curve. END OFF WITH EQUM P AND Q

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Both factors of related goods and income will lead to an increase in demand, while factors of technology and no. of firms will lead to an increase in supply. It is certain that equilibrium quantity will increase, but the equilibrium price is uncertain.
I believe that the increase in demand will be more than the increase in supply as there has been an "explosive growth" in the quantity demanded. Thus the equilibrium price will decrease

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When income increases, consumers have a larger purchasing power. Since ebooks is a normal good, consumers are more willing and able to purchase ebooks. Thus, the demand for ebooks will rise

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More sellers > more supply
Technology increase  > profit margin will increase > more incentive for sellers to join this market > hence supply will increase
As technology increases (as seen from Para 3), the cost of production of producing ebook readers will decrease hence causing the profit margin to increase.This incentivses more sellers to come into the market and therefore the supply increases.

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The changes in technology would also affect the supply of Ebooks. Technological advancements can enable producers to use lesser factor to produce the same amount of e books, thus the unit cost of production decreases.The lower unit cost of production will increase the profit for producers and they will be more willing and able to produce ebooks at various prices .Hence the supply of ebooks increases due to the advancements in technology.

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when there is an explosive growth of e-books account in the adult fiction market in America, authors may be entice to enter the profitable sunrise industry. this leads to increase in number of authors, hence market supply for e-books increases. thus supply curve shift to the right

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Technology advancements enable authors to use less factors to produce the same amount of e-books. Hence, there is lower cost of production and more profit for authors. There will be more incentives for authors to produce more e-books. Hence, there will be higher supply of e-books and the supply curve for e-books shifts right.

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Technology advancements from paper books to ebooks allows producers to use less factors to produce the same amount of goods per unit cost of production. This would reduce the price of ebooks. Thus producers are more willing and able to produce ebooks, which will increase the supply of ebooks

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As the price for hardback and paperback physical books increases, the quantity demanded for hard copy books decreases.Since hard copy books and e-books are substitutes in competitive demand, there is an increase in demand for e-books and a rise in willingness to buy e-books. Hence equilibrium quantity for e-books increases. Overall demand for e-books increases