Prices affect both consumers and producers. Consumers want to buy at the lowest possible price. Producers...

  

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Prices affect both consumers and producers. Consumers want to buy at the lowest possible price. Producers want to sell at the highest possible price. For both consumers and producers, incentives affect their choices and influence them to make decisions in their own best interests. Imagine that you are preparing for the new school year and need new jeans. There's one brand that you really like. You are hoping you can buy enough pairs so you can reduce the amount of time you have to spend doing laundry. You figure that eight pairs of jeans would be enough. But what is your budget for jeans? You have saved $200 already, and you save an additional $25 each week from your salary at a part-time job. How many pairs can you buy and what is the price? Procedure How can you find the brand you want at the price that is right for you? 1 You use the Internet to compare prices and find that a local store has the jeans you really want for $55. They also have a pair of shoes you would like for $75. But you are not ready to buy yet. How much can you afford to spend? What is the price of eight pairs of jeans and the shoes? Do you have enough? 2 Perhaps you could buy fewer pairs of jeans, but you decide to wait because you're thinking that there may be a back-to-school sale soon, and the price you can afford will be lower. You also decide to work a few extra hours this week to get more money. By the end of the week, you earn an extra $50, on top of the $25 you usually save from your pay check. What is your budget now for the jeans and the shoes? 3 You were right. After waiting two weeks, the price of the jeans you wanted did come down. Now they are $40 a pair. You're a little disappointed because the shoes are the same price. Can you now afford the eight pairs of jeans and the shoes? Do the calculation. Prices affect both consumers and producers. Consumers want to buy at the lowest possible price. Producers want to sell at the highest possible price. For both consumers and producers, incentives affect their choices and influence them to make decisions in their own best interests. Imagine that you are preparing for the new school year and need new jeans. There's one brand that you really like. You are hoping you can buy enough pairs so you can reduce the amount of time you have to spend doing laundry. You figure that eight pairs of jeans would be enough. But what is your budget for jeans? You have saved $200 already, and you save an additional $25 each week from your salary at a part-time job. How many pairs can you buy and what is the price? Procedure How can you find the brand you want at the price that is right for you? 1 You use the Internet to compare prices and find that a local store has the jeans you really want for $55. They also have a pair of shoes you would like for $75. But you are not ready to buy yet. How much can you afford to spend? What is the price of eight pairs of jeans and the shoes? Do you have enough? 2 Perhaps you could buy fewer pairs of jeans, but you decide to wait because you're thinking that there may be a back-to-school sale soon, and the price you can afford will be lower. You also decide to work a few extra hours this week to get more money. By the end of the week, you earn an extra $50, on top of the $25 you usually save from your pay check. What is your budget now for the jeans and the shoes? 3 You were right. After waiting two weeks, the price of the jeans you wanted did come down. Now they are $40 a pair. You're a little disappointed because the shoes are the same price. Can you now afford the eight pairs of jeans and the shoes? Do the calculation.

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ANSWER To find out if you can afford the eight pairs of jeans and the shoes lets go through each ste... View the full answer