Page 33 Questions

1. Demand is the quantity of a good or service that consumers are willing and able to purchase. Demand can increase or decrease depending on determinants such as price, substitutes, consumers’ income and many more.

Economic growth is the steady growth in the productive capacity of the economy as measured by the GNP.

2. One possible increase for the price of copper was the large demand in China (But it is demand in China…recovery of copper prices). China had been using large amounts of copper for various projects. China had been buying copper wiring for construction projects and for the Shanghai Expo. The government had been spending copious amounts on infrastructure of buildings that which required massive amounts of copper.

3. Prices of appliances are expected to rise because of the rising demand for copper. The demand from China, England and the United States (Copper prices on the London…data published recently) led to the rise in copper, which in turn will lead to the increase in prices of appliances. The rise in copper prices will increase the price of manufacturing appliances therefore decreasing supply and increasing prices.

4. The text suggests that copper prices will fall after projects in China are finished, and I agree with that statement. After the need for copper is reduced in places with such large demand for copper, the price of copper will decrease as well.  The demand will not drop dramatically considering copper is used in manufacturing many other things such as dishwashers and washing machines. The drop in demand will leave excess supply until equilibrium is reached.