Questions in Principle of economy Essay Example | Topics and Well Written Essays - 1250 words

Questions in Principle of economy - Essay Example Economists use the concept of elasticity to define the sensitivity of consumers to the change that happens in prices of goods and services. In general understanding elasticity is a reaction’s measure of one variable on the changing of another variable expressed in percentage. There are several types of elasticity, one of which is the price elasticity of demand. This indicator shows the percentage of demand changing under the influence of price changing also expressed in per cents. In other words, the coefficient of price elasticity defines how many per cents of changing the volume of demand will have if the price changes by 1 per cent. Formula of the mentioned indicator is the following: If calculated rate is bigger than 1 then demand on the product is elastic. This means that if price changes by 1 per cent then demand will change by more than 1 percent. So decrease in price on the product will cause sharp increase of sales that enlarges the level of total revenue. Therefore, in such situation the policy of decreasing the price can be very effective and may bring additional profits afterwards. Hence, for instance, for the telecommunication service providers, the higher the elasticity the better, because cutting prices will affect the growth in demand which in its turn will boost profits (Weingarten and Stuck 2001, pp. 32). If calculated formula of elasticity reaches 1 sharply then there is a unit elasticity, which indicates that 1 per cent change of price causes the same percentage change of demand. In this respect, the fall of price is compensated with the rise of sales and the total revenue remains unchangeable. The products with elastic demand are considered those goods that are easy to substitute. Luxury goods also have coefficient of elasticity that exceeds 1. For example, pieces of art are the products with elastic demand. Articles of prime necessity, such as, for example,

Discuss the impact of volcano-induced climate change in Earth's Term Paper

Discuss the impact of volcano-induced climate change in Earth's history - Term Paper Example This paper discusses how volcanic activities have caused climate change, and the resulting impact on earth’s history. How Volcanoes induce climate change Although large scale volcanic eruptions last only a few days, the effect of these eruptions on climate on the Earth can last for several years. At first, scientists believed that the dust emitted from volcanic eruptions blocked the solar radiation from reaching earth thereby leading to cooling of the earth. However, measurements later indicated that most of this ejected dust returns back to earth within six months of the volcanic eruption. The stratospheric data suggests that during large explosive volcanic eruptions, large quantities of greenhouse gases (CO2) and sulfur dioxide (SO2) gas are also expunged into the atmosphere. SO2 reacts with the water vapor in the stratosphere and converts to sulfate aerosols, which are sub-micron droplets containing 75% sulfuric acid. These aerosols form a dense optically bright haze layer. Typically, they stay in the stratosphere for 2-4 years. Now, the large quantities of greenhouse gases released by volcanoes trap the heat radiated off the surface of the earth and form a sort of insulation around the planet. Further, the volcanic aerosol clouds scatter a significant amount of incoming Sun’s radiation back to space. This effect is known as â€Å"radiative forcing† that can last for up to 2-3 years following a volcanic eruption. Due to these two combined effects, the Earth experiences a change in climate pattern (NASA, 2011). Evidence of climate change due to volcanic eruptions Observational evidence has also shown that volcanic eruptions and lowering of global temperatures are correlated. Four of the largest eruptions in the recent past have been associated with significant lowering of average global/regional temperatures (DGSDU, 2011) - the eruptions of Laki, Iceland in 1783, Mt Tambora, Indonesia in 1815, Krakatu, Indonesia in 1883, and two large vol canic eruptions occurred within a gap of one month in 1991 – one in Philippines (Pinatubo) and Chile (Mt Hudson) in 1991. Over the next two years, the mean world temperature was observed to have dropped by about 1 °C. Research on the recent eruption of Eyjafjallajokull, Iceland in 2010 showed that the effect of volcanoes on climate change could have been previously underestimated by 7 to 8 orders of magnitude (Boulon, Sellegri, Hervo, & Laj, 2011). This leads us to believe that there could have been a significant effect of volcano-induced climate change that significantly impacted the earth history. Impact on earth history The volcanic activity as we see today is only a small proportion of the level of volcanic activity of the historical past when large scale volcanic eruptions were much more common, long lasting, and frequent. Thus, the volcano induced climate change could possibly even have led to major changes in earth’s history. For example, approximately 70,000 years ago, a large scale volcanic eruption of Mt Toba, Sumatra may have caused a terribly cold winter leading to the coldest 1000 years of the Last Ice Age (Michigan Tech, 2011). Sev Kender conducted research on the middle Miocene period (16 to 11.5 million years ago) and found that super-volcanic eruptions may have caused terribly cold win