Economics

The media is a tool that is used to deliver news as well as educates people. There are various aspects covered in the news broadcast that are delivered by the media. Articles in the news have impacts to all divisions of the society. Global warming is a topic that has been discussed by the media in the recent past. The causes and impacts of global warming have been explained at length by all stakeholders in the economic arena. Media and economics are linked and they relate in the delivery of information as well as educating the people.

Global warming
Many topics about Global warming have been discussed in the media concerning causes and impacts to the people and economies. The Copenhagen meeting which was held last was to discuss issues concerning reduction of global warming. The discussions had an agenda that countries are continuously releasing greenhouse gases to the environment. These gases are causing great harm to the environment. The news about this meeting reported that several countries all over the world had assembled in Geneva to discuss how to implement Kyoto protocol. Delegates from different countries discussed at length how possible to reduce the increasing global warming which is as a result of the emission of greenhouse gases. Most of the developed nations were blamed about causing the largest emission of greenhouses gases. Presidents from various countries had assembled in the meeting to come up with a solution to the increasing climate change.

This article illustrates the globalization of economies. Globalization has caused countries to join together in the fight against common problems that are affecting the entire world. Economics explains the impacts of globalization to countries in the world. Global integration of economies has influenced the unity of different countries. Developed and developing countries can discuss issues affecting them since they depend on each other in the international market.

This article applies to economics in that global warming is causing climate change on earth. The change in climate is affecting economic activities such as agriculture. Many countries are dependent on agriculture and any negative impact on the climate will affect these activities. Reduction in agricultural production will affect the Gross Domestic Product of the countries which rely on agriculture as the main economic activity. Most developing countries rely on agriculture as the backbone of their economies. Decrease in agricultural production will reduce their exports and their balance of trade will greatly be affected.

Conclusion
Countries should adhere to the discussion carried out in Copenhagen since this will help alleviate the negative effects of global warming. Developing countries should diversify production in non agricultural economic activities so as to reduce the negative effects of over dependence on agriculture. The media ought to educate people on various aspects that are affecting the global community since many people are not aware about the activities in the international scene.

The global steel industry is characterized by slow market growth, competition, and pricing problems. The most important challenges facing leading players in the global steel industry today are intensified local and international competition and environmental demands for lower carbon dioxide emissions. This essay discusses these challenges and how some companies managed to stay competitive.

Competition comes from local and international companies, and some of the fiercest competitors arise from cheap imports of steel. For instance, European and Japanese steel arrived in the United States (U.S.) in the 1950s, wherein the latter experienced pricing competition for high-priced stainless and specialty steel. Because of previous practices of oligarchy, American steelmakers, nonetheless, also made themselves less competitive already. The oligarchy affected the pricing system by making price a product of collusion, instead of being dictated by costs and market demand. During this time, American steelmakers complained of the dumping done by steel imports. American steelmakers also charged that foreign subsidies allowed imports to drastically lower their prices and which skewed the competition. A recession occurred also during this time, which made the profit-maximizing output lesser than the output that minimizes average cost. The raw materials also for steel continued to spike, thereby increasing average cost and prices in the long run. Since the steel market became somewhat elastic because of lower prices from imports, many customers transferred to the competition.

Competition, however, is not merely about foreign players, but it also involves brand management and efficiency. American company Nucor, for instance, broke traditional steel production by shifting from blast furnace strategy to minimills and using scrap metal for its raw materials. Nucor invented the mini mill, which refers to smaller-scale steel production plants that are strategically located near clients and use scrap metal production. Because of the production system and location, Nucor decreased their operational costs and provided lower-priced products. McQuiston also talks about brand management as an effective way of fighting competition. He made a case study on RAEX LASER Steel and how its marketing positioned the product as a total solution to shops and other clients. This marketing strategy is merged with customer relations support, which greatly improved revenues in the long-run. Its customers did see the product as more than a commodity, but an experience of total customer satisfaction. Hence, marketing issues and production efficiency improvements also affected domestic competition.

Environmental concerns also push steelmakers to improve production practices and technology. Kim and Worrell noted that during the1992 Earth Summit in Rio de Janeiro, more than 150 countries signed the United Nations Framework Convention on Climate Change (FCCC), which targeted lesser carbon dioxide emissions in order to stabilize greenhouse gas concentrations. Because of this move, there are calls for steel companies to produce steel with minimal ecological footprint. Steel companies are charged for not paying their externalities, such as pollution, which greatly affects not only local communities, but contributes to the global climate changes happening in the world. Environmental protection, however, is not a cheap option for steel companies, and they have yet to improve their technology, so that they can drastically lessen carbon dioxide emissions.

The global steel industry is facing global challenges that are not easy to respond to. More than ever, they face the challenges of being environmental stewards, while balancing the interests of a wide range of stakeholders.

The controversy over the leasing and settlement of government lands in Texas can be traced back to the Annexation Resolution in 1845, by which Texas was permitted to retain ownership of its public domain. The legislature divided the domain into three classes soldiers or veterans grants (equivalent to several thousands acres), school and university lands (leased land), and railroad grants (served as inducement for rail companies to construct lines from East Texas.

The state created a checkerboard surveying policy to prevent the consolidation of large chunks of land by any group or individual. However, the policy was ineffectual. Many farmers bought land certificates for as little as 16 centsacre or 100 per section. The worse thing was that these farmers grazed their herds both on their lands and the intervening school sectors. Thus, in 1883, the state legislature passed the Land Board Act, which provided for the competitive sale of seven sections of public land to a single person. A policy of leasing land to ranching operations was implemented. Ranchers who had been using these lands refused to pay for the leases or would pay less than four cents an acre a year.

Theoretically, the 1884 solution of the Texas legislature is a CAC-type solution. Suppose that a governing entity sold land to a single owner. The individuals utilizing the land are required to pay leases to the owner. The idea is to equalize social cost to social benefit derived from the use of the land. Mathematically, the relationship can be expressed as Cs  Bs or the social cost is equal to the social benefit. The rational behind this idea is that by disaggregating social cost, that is, by forcing all users to pay for the same social cost, the governing body can control the economic behavior of the users. The CAC solution is a control type solution.

The 1884 solution is not an application of Coase theorem. For one, the formal design of the Coase theorem was only published in 1960 (the first draft was written in 1937). And second, the situation cannot be understood in the vocabulary of this particular theory. The theorem states that when transactions in an externality are possible and that there are no transactions costs, bargaining will lead to an efficient result regardless of who owns the property.

Suppose that there is a two-good economy. The fisherman owns the river while the industrial plant illegally uses the fishermans land for producing steel. The plant throws wastes to the river, affecting the catch of the fisherman. If the fisherman throws the plant out of his property, overall output of that economy (two-good economy) is at the minimal. If the plant wishes to pay the fisherman for its use of the land, the payment is equal to the additional returns of the fisherman (until the additional returns are equal to zero). In this set-up, regardless of who owns the property, the allocation of resources (fish and steel) is efficient.

The case the aim of the 1884 solution was not to find the best possible allocation between certain goods but rather on how to control economic behavior.

Economics is a broad field which deals with several complex ideals that all root to the concept of scarcity. Scarcity is a phenomenon which pushes people to make some of the most crucial and critical decisions in their lives. In economics, this claim also holds true, since the core of economics is all about making choices. Without scarcity, it is said that economics cannot exists since scarcity is basically the root of economics core principles. Basically, economics was deemed as the science of dealing the decisions being brought forth by scarcity. Hence, it could also be said that economists are scientists who apply technical methods in dealing with and exploring the ideal of scarcity.

In understanding the basic principles of scarcity, it appears significant to first understand its basic concepts. The first thing people have to understand about economics and its emphasis, the economy, is that it is composed of large organizations such as businesses, households and governments. One major role of economists is to make forecasts on what the decision-making trends of these organizations will be like in the future. And this is what is called, descriptive economics. On the other hand, they can also give some suggestions as to what sound options these organizations have. And this is normative economics. The terms, macroeconomcis and microeconomics basically describe the two different categories of economics that deals with the aggregate and the individual level respectively. These categories basically address the analysis and evaluation of economics processes and operations in two different levels, with corresponding technicalities when it comes to the decision-making process. These two aggregates hold different degrees of technicality and complexity and they deal with two different sizes of organizations. And obviously, macroeconomics deals with the more complex aggregate while microeconomics addresses the more simplistic, individual level.

Aside from the basic concepts, it also appears relevant to understand the troublesome concept in economics so as to understand how to deal with them in the course of this study. One of the most problematic concepts in this field will be selfishness and self interest. Economists define selfishness as a dilemma in economics since it entails almost no concern to the interest of others but to ones own only. Moreover, there also is the constantly misunderstood concept of profit. Most people would see profit as the excess wealth from wealthy businessmen however economists define it, basically, as whatever monetary returns the business acquires. This means that it is not just about wealth and extras. Whatever returns to a businessman after a business operation in the form of money, may it be great or small, it is profit. Apart from these problematic issues, there is also the conflict between want and need. In economics, the supply and demand curve appears to be the mantra and the most fundamental graph being used. Demand is what dictates supply however in identifying this kind of relationchip, a crucial need to differentiate between what people want and what people need rises.

One scenario which best explains this contradiction is when a person wants something, yet cannot demand because of lack of funds. This is very important for economists to predict since this shall dictate what is logical to produce. Among others, these are the most basic problem areas in studying economics.

Going further, it also appears important to understand the possibilities in economics. And one of those learning is to understand the fact that whatever decisions people make every day is an opportunity cost. In this concept is where the production possibilities frontier relies. Basically, this is a graph which identifies several crucial information significant in economics such as  producers and consumers goods as well as costs. And this graph helps in determining what goods are exhaustible, whether or not there are depletion costs, as well as whether or not there is economic growth.

Markets At Work
In economics, it is important to understand how markets work. In this feat, it must be known that markets have varying characteristics that are categorized as either desirable or undesirable. A market having all the desirable characteristics would have to be categorized as perfect. However, economists, themselves say that no market is indeed perfect.

In the process of understanding the complexities of market, the most fundamental thing to do is to return to the market basics. Firstly, it is significant to understand that consumers play the most important role in the success of a market. In studying markets, one important consideration is being kept in mind and this how products meet the expectations of buyers. This is being analyzed through the benefit-cost analysis. Aside from this, it is also important to determine whether a certain market is keeping up with the expected benefits from consumers. Hence, there is the concept of diminishing marginal benefits to explain this. In studying economics, students have to get used to a lot of graphs. But as what was mentioned earlier, the fundamental principles underlying all graphs in economics are the laws of demand and supply. In the law of demand, it is said that consumers tend to have higher benefits when the prices are low. On the other hand, the law of supply suggests that profit tends to rise when the prices are also being lifted. Understanding these basic rules enables students to also have a basic grasp on the more complex elements in economic graphs.

Demand and supply curves are the graphs or illustrations that are commonly being utilized in describing the relationships between producers and consumers. Each graph involves individual rules and considerations. For example, the demand curve is the part of the graph where the producers are more concerned about. This curve dictates how much consumers need a certain kind of product or service. Hence, this curve is where the production is mainly dependent. Basically, all the other more technical and complex ideals in economics depend on the basic curves of supply and demand. First and foremost, these graphs determine the benefit expectations of consumers, which the producers have to meet. Moreover, these two curves also identify whether or not the market stays at equilibrium, at a profitable state or at the losing end. This relationship between demand and supply appears very significant to both the ends of consumers and producers as this dictates how well a market performs and how strong the consumers are demanding for a certain kind of product or service. Basically, this tells the producers whether or not they have to stop their operations, based on their performance being reflected through the profit margin on the graphs.

As what has been mentioned earlier, economists suggest that there is really no perfect market. Basically, a market is responsible in determining the equilibrium point where in the prices, costs, profits and benefits of the consumers are at their most optimal levels. Since there is no perfect market, economists have identified several types of market imperfections and one form of imperfection if tagged, the spillover effect. In this kind of imperfection, a market will appear to affect some external factors in the production in a negative way. A good example of this is when pollution comes as an effect in producing a certain kind of product. Although some objectives in production is met, the effect incontestably poses effects to the consumers in various aspects, such as health and well being. The demand and supply curve are able to identify internal forces in distribution and production such as the demand, benefits and concerns however, external forces such as influences of pollution are not addressed. Because of this, although producers are able to meet the demands, they experience what is called a market failure.

Supply, Demand, and Prices
Supply, demand and prices are three of the most fundamental concepts in economics. Understanding these ideals shall also correspond understanding some complex relationships involved in market operations.

Firstly, there is the concept of stocks versus flows. Flow is basically the amount of product of services being supplied from the producer. Stock on the other hand is amount of goods or services which is being kept and regulated for a certain period of time in order suffice in times of scarcity in supply. Loosening up in terms of regulation may affect production however, this will not in any way affect supply. This is important to understand in order to do well in market adjustments involving stocks and supply flows.

Apart from this, one of the most basic understandings required in economics is on market equilibrium. As what has been mentioned earlier, market equilibrium defines a point in the supply and demand curve which corresponds to the optimal range or supply, demand and price. This point also presents the real situation of a products relative scarcity at present. Quite obviously, the reason why it is important to understand market equilibrium is because it defines the win-win situation for both the producers and consumers. Moreover, it defines the surplus, the shortage and whether a firm is actually at the profitable or at the losing end.

In relation to understanding the market equilibrium, one of the most basic processes in economics is determining the equilibrium price. In order to do this, it is first important to know that other prices can yield either a product surplus or shortage. To make things more comprehensive, consider the figure below

This figure presents a situation where P (the current price) is on top of Pe. With this, there will be an observable excess in supply, represented by Qs  Qd. Since firms cannot produce products that do not actually sell, they will not be left with any other choice but to decrease the price in order to generate sales. This is basically how adjustments in this kind of situation go. And basically, this justifies why the equilibrium price (Pe) is at the most optimum point of supply and demand.

However, in dealing with this complex ideal of supply, demand and price, a lot of ethical issues usually arise. One of such issues deals with greed and unfairness when it comes to pricing. Over the years, the consumers have grown sensitive and vigilant enough in scrutinizing how companies price their products and services. A lot of issues regarding unjust and unreasonable pricing have already rose, that made people more communicative of their sentiments regarding price and benefit satisfaction. This is basically the reason why economics and legislations came up with ideals like price floors and price ceilings. These are the upper and lower boundaries set by federal legislations in line with their goal of controlling the pricing of companies, which eventually aids in avoiding unreasonable pricing.

The housing bubble has become one of the major economic problems in 2008-2009. Since the middle of 2008, housing prices have presented the major economic challenge to everyone, who was involved in borrowing-lending activities. In his article, Robert Frank (2008) presents a novel look on the housing market. While Congress, according to Frank (2008), is debating loan guarantees that would help homeowners renegotiate their mortgages, the real causes of the housing crisis remain unclear. Frank (2008) believes that the so-called two-income trap could be responsible for the problems in housing markets families where both parents work have better opportunities to meet their financial obligations and seek to invest in their childrens future. When choosing the best school for their children, parents also face the need for the best house, for by choosing and purchasing the most expensive and the most sophisticated house parents actually pave the way to the better-off social class. However, the search for the best house is the direct prerequisite for the growing demand and increased lending and when the housing bubble is growing, misbalanced demand, liberal conditions of lending, and speculations equally contribute to the problems, which parents have to experience because of their desire to send their children to the best school.
Housing markets Microeconomic terms and definitions

What Frank (2008) discusses in his paper is directly related to the concepts of supply, demand, and prices, and tradeoffs. Supply as the ability of sellers to produce a certain amount of goods and demand as the willingness and ability of buyers to purchase these goods are expected to be in equilibrium, but this is an idealistic situation. In reality, and according to Frank (2008), in the situation when the level of demand exceeds that of supply, the market will have an opportunity to speculate on the buyers desire and willingness to purchase more. Moreover, buyers themselves are willing to accept the negative consequences of borrowing as a tradeoff in their decision to move to a better district. As a result, housing prices grow, lending conditions become more liberal, and consumers take these speculations as the necessary condition of their future prosperity.

Big ideas of microeconomics How housing markets work
In the context of the housing crisis, two big ideas apply first, choices involve tradeoffs  we always give something up to get something else and second, the market doesnt always work efficiently then, government action may be needed. Franks (2008) article is very demonstrative in that it discusses the trade-offs which consumers are bound to accept whenever they take a purchasing decision. It is difficult not to agree to Pindyck and Rubinfield (2005), who show trade-offs as one of the most important concepts in microeconomics, because consumers have to decide, what purchases they are willing sacrifice for the sake of purchasing other, more important items. But in housing, trade-offs were either invisible or unpredictable, and mortgage issues represent one of the major negative consequences of liberal lending opportunities. This is where the government is expected to become the major regulatory mechanism and the basic source of action on the housing markets. Government action in housing markets may take a variety of forms first, modified system of property rights will change the principles of resource allocation second, prices at which exchanges take place will either reduce the demand or will increase the supply of housing goods third the state itself can engage in the production of goods. The current housing crisis has become the best test to the role, which governments may play in microeconomics.

Microeconomics and the housing market Policy implications
The article itself and the terms, which it covers, have far-reaching economic and policy implications. First of all, it is not always appropriate to blame borrowers for everything that happens in the housing (or any other market)  very often, the growing demand is just the reflection of the misbalanced market situation, which suppliers use for their own benefit and profit. Second, consumers have limited incomes and trade-offs usually predetermine the quality and the direction of their market choices. However, long-term consumer trade-offs are often invisible or unpredictable, and may turn consumers into easy victims of market speculations. Finally, even where markets are expected to be free and self-regulated, governments remain the central measure of the market control in case of a market failure. That housing markets require constant government control is probably the major policy implication, which Frank (2008) provides. As a result, consumers, suppliers, the government, supply and demand altogether create a complex market mechanism that is hardly ever in equilibrium, and that also requires that individuals approach their choices consciously and can understand what is going on.

Medicaid and Medicare are two different programs and are often confused with each
other. It is important to understand the differences between them. Medicare is a federal
medical insurance program primarily for persons over 65. Medicaid is a federal-state
medical assistance program for low-income recipients of public benefit programs.

Medicare provides only partial coverage, and requires beneficiaries to pay premiums,
deductibles, and co-payments. Medicaid provides more complete coverage, without
significant payments from the beneficiaries. All persons over 65 (as well as younger
individuals disabled for at least two years) who paid into Social Security are eligible for
Medicare, but only low-income persons who are elderly, blind, disabled or are low-
income families can receive Medicaid. It wont be wrong to say that Medicare is geared
more toward the elderly, while Medicaid is for women and children.

Medicare
Medicare is a Federal health insurance program for Americans above the age of 65 and
for certain disabled Americans. If a person is eligible for Social Security or Railroad
Retirement benefits and is above the age of 65, the person and their spouse automatically
qualify for Medicare. Medicare has two segments

Part A- hospital insurance which included inpatient hospital stays (at least overnight),
including semiprivate room, food, tests, and doctors fees. The maximum time of stay that
Medicare Part A covers in a skilled nursing facility per ailment is 100 days. The first 20
days is paid for in full by Medicare with the remaining 80 days requiring a co-payment.

Part B- supplementary medical insurance, which provides payments for doctors and
related services and supplies ordered by the doctor such as nursing services, x-rays,
laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood
transfusions, renal dialysis, outpatient hospital procedures, limited ambulance
transportation, immunosuppressive drugs for organ transplant recipients, chemotherapy,
hormonal treatments and other outpatient medical treatments administered in a doctors
office.. Members who come in the part a category need not pay anything but the part b
category candidates need to pay a premium amount.  Medicare pays for many health care
expenses, but not all of them. Medicare does not cover nursing home care, long-term care
services in the home or prescription drugs .There are also special rules on when Medicare
pays the bills of the members. The rules also are applied differently weather the
employment holder is the member or their spouse. Medicare provides services for a fee.
the better the fees the better the service. HMOs and similar forms of prepaid health care
plans are available to Medicare enrollees in some of the locations. People who are
covered by Medicare often buy private insurance, called Medigap policies, to pay the
medical bills that are not covered by Medicare. However, the categories of Part A nor
Part B do not pay for all of a covered persons medical costs. This program contains
premiums, deductibles and coinsurance, which the covered individual must pay out-of-
pocket. A study by the Kaiser family foundation in September 2008, found that the Fee-
for-Service Medicare benefit package was less generous than the Federal Employees
Health Benefits Program Standard Option.

Medicaid
Medicaid was created as an additional health benefit to two welfare programs
Supplemental Security Income (SSI) and Aid for Dependant Children (AFDC). AFDC
was replaced by the Temporary Assistance to Needy Families (TANF) program. People
who continue to receive those benefits except for earned income or cost of living
increases often continue to receive Medicaid. Women with breast or cervical cancer may
also qualify if they lack health insurance.

Medicaid provides health care coverage to the lower-income class people who generally
cannot afford a health or life insurance it. This includes people who aged blind, or
disabled or certain people in families with dependent children. Medicaid is operated by
the States and is a Federal program. The terms and conditions are different for every
state. Each State decides the eligibility and the range of health services offered. A limited
income is one of the primary requirements for Medicaid eligibility, but  being poor does
not  qualify a person to receive Medicaid benefits unless they also fall into one of the
defined eligibility categories. According to the CMS (Centers for Medicare and Medicaid
Services ) website, Medicaid does not provide medical assistance for all poor persons.
Even under the broadest provisions of the Federal statute (except for emergency services
for certain persons), the Medicaid program does not provide health care services, even for
very poor persons, unless they are in one of the designated eligibility groups There are
many number of Medicaid eligibility categories within each category there are
requirements other than income that must be met. These requirements include, but are not
limited to, age, pregnancy, disability, blindness, income and resources, and ones status as
a U.S. citizen or a lawfully admitted immigrant Medicaid - Examples of several of these categories include Children and Pregnant Women - pregnant women with low income and children through
the age of 18 may be eligible for Medicaid. Children between the ages of 6 to 18 are
eligible if their family income doe not exceed 100 of the federal poverty guideline.

Parents - Low income parentscaretakersguides of children may qualify for Medicaid.
People with Disabilities- People receiving a steady SSI because of disability or because
of being senior citizens, are automatically eligible for Medicaid in thirty-nine states.

Eleven states, Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New
Hampshire, Oklahoma, and Virginia, are known as 209(b) states and each state sets its
own eligibility criteria for Medicaid that is different than the SSI criteria. In certain cases
like if the individual, who meets the level of care requirement for nursing home care and
whose income does not exceed 300 of the SSI benefit amount is also considered to be
eligible for Medicaid nursing home services or Home and Community-Based Waiver
Services.

Children in Foster Care and orphanages - Children in foster care or in orphanages under
Title IV-E of the Social Security Act are eligible for Medicaid.

In comparison to Medicaid which is viewed as a comprehension program for low income
groups, Medicare has certainly outperformed Medicaid in many ways. In the year1998,
when 88 percent of older people were covered by Medicare, 73 percent of low income
groups did lacked proper insurance. This means that around 44 million people were left
uninsured. Even employer-based insurance programs have not been able to perform better
than Medicare. However after all the differences, the CMS website gives an overview
that in 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.

Economics is the field of study that helps us understand the practice of production, distribution, and final consumption of the commodities or goods and services produced by the manufacturers. Since this research paper is all about shedding light over the basics of Microeconomics, therefore we first must understand what actually Microeconomics is. Microeconomics basically deals with the models that are designed to help us understand and make sense out of the process of resource allocation through different uses, and the role played by the markets and prices that are prevalent in it. In other words, Microeconomics focuses on a much narrower picture and deals with the analysis of the market behavior of the firms and consumers depending n the variation in prices and supply and demand.

To further elaborate on Microeconomics, one must have a clear picture of the basic elements of it such as, Commodities, Prices, and Markets. Commodities are the physical objects, goods, or items that are the basic element of an economics activity in the market. Such commodities or goods possess certain attributes, features, or quantity over which they are considered or evaluated. For example, cotton is a commodity. Price is a value of a commodity that a buyer is willing to pay in exchange of the goods price is usually in monetary value. For example, the buyer agrees to pay 100 for 5kg cotton.

A market is a specific place where the goods are exchanged in return of a certain value of money. Markets can be of different kinds such as, Monopolistic market, Oligopolistic, market, or Competitive market. A market where only one firm operates alone, where three or four firms operate, or where several firms operate simultaneously are known as monopolistic, oligopolistic, and competitive market, respectively.

Basic Concepts of Microeconomics
To further get a broad view of microeconomics and its basics, we would elaborate on certain concepts that are considered to be the backbone of microeconomics. They are mentioned as follows.

Demand Curve
Demand curve clearly represents the basic behavior or decision made by the consumers in consideration of price and quantity demanded. The demand for a particular good or commodity is dependent over its price level varaition in the prices would result in the changing of quantity demanded and hence would shape the demand curve with respect to it. Demand for a particular commodity is based on the law of demand, which states that the quantity demanded of a commodity moves in the opposite direction of price while keeping all other things constant, hence this change results in the downward slope of the demand curve.

Consider an example, if a consumer wants to buy apples and different price levels are offered to him then obviously he would buy more apples when offered at lower rate and would buy less quantity of apples when offered at a higher rate. As price decreases, the quantity demanded increase, and vice-versa. This effect can be seen in the following figure.

The demand of a particular commodity might increase or decrease at the same price levels as mentioned above, which would in result shift the demand curve to the right or to the left. This shift in the demand curve is dependent on several factors that are Customer preference or need for the same product, change in the prices of the substitute products and complements, change in income, and expectations of change in price in future. So suppose these changes occur in a favorable way for a customer, then his demand curve would shift to the right as shown in the following figure.

Supply Curve
The supply of a particular commodity or good is also dependent over its price level variation in the price level would change the supply of that product. The law of supply states that the higher the price, the larger the quantity supplied while all other things are constant, hence this change results in the shape of the supply curve that is upward sloping.

Consider an example, suppose a fruit seller is selling apples. As the price of apples increase, he would increase the supply of apples as to gain more profit on them whereas when he gets to know that the price has fallen then he might not sell them at that time and would probably wait for the price to rise.

The supply of a particular product or service might increase or decrease depending on several factors such as, change in the prices of other goods, number of sellers of that product, prices of relevant inputs, technological changes, and expectations regarding future prices for that product. If these factors change in favor of the supplier, the supply curve would shift to the right as shown in the following figure.

Price Elasticity of Demand
The price elasticity of demand measures how much the quantity demanded of a good or commodity changes when its price changes. The precise definition of price elasticity of demand is the percentage change in the quantity demanded divided by the percentage change in price.

Goods vary greatly in their price elasticity or are sensitive to the change in prices. When there is a high price elasticity for a commodity, there is an elastic demand for that product. This means that the quantity demanded for that product responds sharply when price changes. For example, the price elasticity of demand for luxuries are high, when airline tickets or travel packages fall in their prices, their demand increases.

When there occurs a change in price in a certain proportion, and then the quantity demanded changes in the same proportion as the price changed, this is called the unit-elastic demand. This can be easily understood by the following figure.

When a certain percentage chagne in price results in less than the same percentage change in quantity demanded, its called price inelastic demand. For example, the price elasticity of demand is inelastic for the basic necessities such as, food, fuels, shoes, and medicines. Following is the figure for inelastic demand.

Budget Line
Budget line or budget constraint is the representation of a consumers capacity to buy certain amount of goods in a certain quantity from the income that he or she possesses. Obviously any product or commodity can be bought in exchange of a certain value of money therefore, given a specific amount of money would only result in having a specific amount of commodity that has its specific price.
For example, if a person has 30 in his pocket and he makes his budget to buy either tacos or burgers and suppose tacos cost 1 per one unit and burgers cost 3 per unit. So, the person would be able to buy 30 units of tacos and 10 units of burgers and not more than that. But yes, he can alter the number of units of both the products and can have both of them but in low quantity as to satisfy his need. The following figure would further illustrate the concept.

The world is just recovering from what is arguably the worst economic crisis since the Great Depression. The impact of the economic crisis was heaviest between 2008 and 2009, threatening to bring the worlds largest, and seemingly resilient, economies to their knees. Democrats and Republicans agreed that the economic situation in their country was grim and unless something was done to reverse or arrest the trend, the economy would collpase. Since 2001 when the US economy started shrinking, former President Bush had implemented several tax-cuts in attempts stimulate the economy. Bush and his successor have implemented more tax cuts in spite of their cost on the federal budget.

Leaders of countries experiencing recessions or slowdowns oftentimes opt for tax cuts as a step towards reviving their economies. Tax cuts are meant to ensure that the citizenry has more money to spend, as spending sustains demand for commodities. According to Francis, when taxes are cut, funds are provided immediately and directly to households to spend or save. With more money to spend, the citizens ensure that demand for commodities does not collapse. Subsequently, companies do not lay off their workers due to diminishing demand for their products.

John Maynard Keynes argued that one individual gets income from what another spends. Thus, economy is driven by spending. During a recession, most consumers have little to spend. Predictably, demand for products falls, forcing companies use only a fraction of their resources, and lay off workers. To sustain demand during slow-downs, the government has the duty of boosting spending. Tax cuts stimulate spending which in turn  increases demand for commodities, and profits and earnings for industrialists and their workers, thereby encouraging spending. This is the multiplier effect.

The 200809 financial crisis generated fears among the leaders that unless the leadership adopted a stimulus plan, thousands would lose jobs. Experts believed that an expansionary fiscal policy would help fill the gap between potential gross domestic product and the actual gross domestic product. They estimated that the percentage response of output growth to a shift in the tax ratio (the tax multiplier) for the 2009 tax cuts would stand at 1.0 for up to four quarters after the tax cuts and rise slightly after two years after which the effect of the tax cut would level off. Experts believe that an expansionary fiscal policy, whether involving tax cuts, increased government spending or a combination of both, boosts an economys aggregate demand.