Choose two microeconomic concepts, present and analyze two current events through the lens of...

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Choose two microeconomic concepts, present and analyze two current events through the lens of microeconomic theory. “How does my current event illustrate a microeconomic concept?”

Robert · Accepted Answer

Microeconomics – Elasticity of Demand 
Elasticity of Demand is one of the most essential aspect and product that takes into 
consideration the change in demand with the change in the price of the product. 
The responsiveness or change in demand due to change in the price of the product. It 
measures the change in quantity demanded or the quantity that is supplied with a change in one 
or the more determinants like price and income.  
Price elasticity of demand measures the change in the quantity demanded with a change 
in the price of the product. When the quantity of goods demanded changes substantially with the 
change in the price of the product it is elastic, whereas when the quantity demanded changes 
slightly with the change in price of goods then it is inelastic.  
Price elasticity of demand = % change in quantity demanded / % change in price 
Price elasticity of demand is related to the change in price of the product that is 
demanded. 
Substitutes: Substitutes are two goods whose increase in the price of one leads to the 
increase in price of the other goods. Example hamburger and hot dog 
Considering the current event we can say that with the financial crisis that hit the market,

Choose two microeconomic concepts, present and analyze two current events through the lens of microeconomic theory. “How does my current event illustrate a microeconomic concept?”

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