# Homework Help: I need help with economics!

1. Jun 29, 2005

### jzq

Four out of eight problems I do not understand. These are the four problems:

1. Given Utility function----Max utility S.T. Budget curve
a. How demand changes if $$p_{1}p_{2}M$$ change whether the good is normal, regular, ordinary

b. find demand function $$x_1x_2$$

2. Given product function----max the profit
a. find optimal amount of outputs/inputs

3. Minimize cost S.T. $$y=f(x_1x_2)$$
a. find cost function $$C(y,w_1 w_2)$$

4. Example of a general equilibrium in a pure exchange economy.

I don't even know where to start! I would very much appreciate it if someone would explain it to me. Unfortunately, my professor does not do a very good job of teaching.

2. Nov 16, 2009

### Naatalkaa

hi all i need help from economic, i have exam on friday, i have text and guestions, but i have now idea how to answer them , please help me, i can even pay if someone, will help me .

this is text and guestions:
Store groups warned last year, when the pound fell 15% against the dollar in three months, that they would have to pass on higher prices to shoppers. Next, for instance, thought its customers could face price increases of 7-10% .Marks & Spencer issued a similar warning.

In the event, however, fashion prices edged ahead only very slightly, as factories in China were forced to lower their asking prices when the number of orders coming in dipped as a result of the downturn and they were left with spare capacity. Freight rates also tumbled, making the cost of bringing goods halfway around the world substantially cheaper.

Not all retailers escaped unscathed, however. Home Retail Group’s Argos hiked its prices by up to 10% when its most recent catalogue was published. More than half the 8,000 products in the catalogue are made in China and another 8% come from other East Asian countries.

Retail analyst Tony Shiret of Credit Suisse said the pound/dollar exchange rate was not currently a major issue for retailers. He warned, however, that there could be upward pressure on prices if the UK economy stayed in the doldrums for longer than the rest of the world as Chinese factories moved back towards full-capacity working. This would leave UK store buyers vulnerable to high prices for materials and manufactured goods.

The pound/euro exchange rate could also push up some food prices in the winter months on produce imported from the euro-zone. Some retailers, however, are getting a boost as a direct result of the pound’s weakness especially those in central London, which has seen an influx of shoppers from Europe and other countries eager to spend money at, what have become for tourists, bargain basement UK prices.

More than 100 million foreign visitors a year flock to central London. Earlier this month, property consultant Colliers said that influx of foreign tourists had brought crucial trade to many retailers in Central London. The number of visitors from France and Germany has leapt up this year as a result of the weak pound. Earlier this year for the first time ever, the number of visitors from Europe overtook the number from the US.

According to Colliers, the vacancy rate in key West End shopping streets was just over 4.5% in the summer, compared to nearly 6% in January 2007. Across the rest of the country the proportion of empty shops has climbed from 7.3% to nearly 14%. The consultant said the difference was due to London’s “reputation as a leading international shopping destination”.

Questions

In total there are 40 marks available for this question. The marks for each section are given for each part. It is important to answer as fully as possible. Marks will also be awarded for clarity and for the use of correctly labeled diagrams where appropriate.

(1) Explain why the increases in fashion prices were only small even though the value of the pound (£) against the dollar (\$) had fallen by 15% in three months.
(6 marks)

(2) Using demand and supply diagrams and the concept of elasticity to support your answer, assess the possible outcomes of the decision by Argos to increase its prices by up to 10%. (10 marks)

(3) Explain how the influx of foreign visitors will affect the prices of fashion items in Central London. Draw appropriate diagrams to help your answer.
(6 marks)

(4) Explain how the pound’s weakness against the euro () has benefited London retailers even though many shops remain empty in other parts of the country.
(6 marks)

(5) Suppose that you are working as a consultant of one of the leading retail companies in the UK. Explain which strategies you may suggest to your clients to obtain a competitive advantage over rival firms in the current business climate in the following areas:

Company product
Product price
Product promotion
Product distribution (i.e. place) (3 marks each)

3. Nov 16, 2009

### Redbelly98

Staff Emeritus