I was just wondering if anyone could help me? I’m looking at the casestudy about lunchtime prices being slashed (in the marketing section) and one of the questions is:

Explain how why a fall in price of a service like a restaurant meal will not always result in higher demand

I’m going to be teaching this to a g.c.se business class - who won’t know elasticity, so can anyone help with answers I might/could expect? I was under the assumption that restaurant meals are income elastic, so a fall in price in theory would lead to a higher demand?

Any help clearing this up would be greatly appreciated!!

Thanks!

Regarding politics, I am currently following AQA spec (GOV4, GOV7, GOV8) with my A2s but have switched to Edexcel with my current AS cos I fancied a change and they allowed me to mix and match at A2.

Look forward to exchanging ideas with you all! :-)

If the pound depreciates against the dollar, imports become more expensive, we import less, but what happens to the value of imports depends on the elasticity of demand for imports.  Fine.

HOWEVER, with regards to exports, when the pound depreciates against, say, the dollar, exports become cheaper in dollar terms (but the pound price doesn’t change), so if the poound depreciates from £1 - $2, to £1 - $1.50, a dyson vacuum cleaner priced at £100, will now cost an American customer $150 rather than $200.  They will demand more.  Even if only one more dyson vacuum cleaner is demanded in the whole of the USA, we are going to earn more from the sale of our exports of dysons, as the price we receive here in the UK hasn’t changed..so how can the export side be dependant on elasticity?

Surely the equation should simply be if the demand for imports are inelastic.

Can anyone shed any light on this, or am I just being particularly dim. 

James

I am having a complete mind blank on the balance of payments. I have read through so many resources that I am losing the plot. The questions I have are why does the balance of payment ‘have to balance’ is this due to the double entry accounting system or because, as I am constantly reading, ‘a deficit on the current account will be matched by a surplus on the capital/ financial account’ why? And why does a current account deficit have to be financed eg. through attracting FDI or running down reserves. The reserves is another topic I am struggling with, if we have a deficit on the CA due to ‘too many’ imports how does/ can that impact on the govs central reserves?
Many questions sorry but if anyone can help I would be v grateful

Thanks

The rationale behind a -ve complementary cross elasticity is that if the price of, say, strawberries goes up, fewer will be bought, hence less demand for cream. That assumes a shift to the left of the supply curve for strawberries. But what if the price of strawberries rises because of increased DEMAND. A shift to the right of the demand curve leads to a higher price and GREATER quantity, which will imply more cream demanded. Thus CED will be +ve, for a complementary good.

It’s my own fault - I’ve been hammering home the message, like never before, that cost is not the only thing that makes up the price. Can anyone help me out this please!

Thanks

Roger

My name is June. I’m glad to be here.

I have taken over an A2 AQA G & P group having taught on the Edexcel Route A course a few years ago.  I have to say I am staggered by the lack of support that is available on the AQA website and paucity of textbooks.  I am teaching 3C Politics and Power and there is next to nothing available.  Am I missing something?

Instead of carrying on the Power thread I have decided to do unit 4B Ideologies in Action as the synoptic unit, and hope that the situation improves, or that I can at least crib from the other boards. If we have any takers next year, I intend to go back to Edexcel.

If anyone can offer some suggestions I would really appreciate it.

Many thanks