Question

GETTING AQUAINTED WITH ECONOMICS ACTIVITY Economics affects so many aspects of our daily lives. Issues conceming inflation, economic growth, unemployment, and productivity comprise the study of macroeconomics. Issues concening industries, firms, and individuals comprise the study of microeconomics. These are the kind ofissues for this course. One small but relevant item, clothing, is the subject of the following exercise. Answer each of the following questions and post your responses in the appropriate forum. 1. Where did your cdlothes come from? 2. Who worked to produce your clothes? 3. What things do you consider when buying a gament? 4. Where were your clothes produced (what countries)?

Answer 1

1. Clothes come from the textile industry which is further distributed to the customers via firms or retail channels. Industry is a group of firms that produce homogeneous products.

2. The producer and his labourers worked to produce my clothes. Most often these labourers are daily wage earners.

3. The factors that determine while purchasing a garment is

Price: if the price is less, then more clothes will be demanded and vise versa

Income: if income is high, then more clothes will be demanded and vice versa.

Tastes and preferences: if the clothe is of my fashion and preferences, then I will purchase the product.

Utility: if the clothe gives me a higher utility, then it will be purchased and vice versa.

4. My clothes are produced from comparatively advantaged countries. These countries have lower average cost when compared to it's trading countries.