Calumpita, Ron Ron R. IR-157 (Finals) Dec.

18, 2020

1. The supply and demand in economics are a concept. Now, the law of supply is the price

of the certain goods, supply curve typically slope upward since the higher price, means

producers earn more from each item they sell so they will produce that even more; the

assumption that quantity supply is producing when the goods can be solve in an particular

value.

While in demand, the demand curve is

in downward slope, so the relationship of between the price of the certain goods and the

number of good buyers want to buy; the assumption of that the quantity demand will

decrease as the value increases.

 Now, if we graph supply curve and demand curve together, it will meet in the intersection

which is what we called equilibrium; the consumer agrees to supply the product for the

quantity of the product. So, the availability of the factors will change in supply, for

example, the income of the labors changes its taxes it will shift from left to right (for

example) and vice versa.

2. Substitution Effect is where a price of a certain good that the consumers usually buy,

increases, and found another substitute product that is similarly than the previous

purchase, however, with the lower price it will eventually switch in a specific product as

a substitute because of its cheap price. Although, Income Effect is where your income

purchase, increase. Now, there are two effect in income, first in a positive way, your

fixed income can buy more products because of the price of the goods or product

decreases; and for the negative one our purchasing power decreases, and the reason is, the
price of the product increases which, therefore it decreases its ability in purchasing the

necessary product you can buy as before. In simplest term, substitution effect is the

relative prices of goods, while the income effect is the purchasing power.
3. Globalization is a word used to describe the growing interdependence of the world’s

economies, cultures, and populations, brought about by cross-border trade in goods and

services, technology, and flows of investment, people, and information. This guide uses

the term more narrowly to refer to international trade and some of the investment flows

among advanced economies. The wide-ranging effects of globalization are complex and

politically charged. As with major technological advances, globalization benefits society,

while harming certain groups. Understanding the relative costs and benefits can pave the

way for alleviating problems while sustaining the wider payoffs.

Globalization is import for IR students because it can enhance the of access, assess,

adopt, and apply knowledge, to think independently to exercise appropriate judgement

and to collaborate with others to make sense of new situations. Globalization encourages

explorations, experimentation to push the frontiers of the potential of information

technologies and communications for more effective learning.