Task:
A. Death of a Craftsman
1. Haveyou ever been to an IKEA store?If so, which location and what do you remember about the store?
2. IKEA sells cheap furniture that is not that well-built. So why are they so successful? List and describe three reasons for their success.
3. List and describe five ways IKEA keeps its manufacturing and operational costs down.
4. What is your take-away from this chapter?
B. Discounting and its Discontents
The price elasticity of demand is a measure of how much the demand of a good or service varies with its price. A product or service is very elastic if a slight change in price leads to a sharp rise or fall in demand.
In my opinion, Daily necessities are elastic, for example, some brand clothes price falls, people will buy more clothes. Meat, egg, milk, we eat or drink these every day. We spend money for these everyday. It's a huge expense. In order to save money, people would buy cheaper goods most of time. Beef price gets higher, we can choose buy chicken or pork.
In addition, the price of house is inelastic. Even the house price falls, people would not buy too many houses. On the one hand, even the house price falls, it still needs a lot of money; on the other hand, people usually live in one house, if they have many houses, it means they have to pay too much money each year to clean, maintain the house. I think toilet is also inelastic, because each family needs no more than three toilets in their house. Even its price falls, people would not buy too many. People have already had these, it's enough to use. We don't need to buy too many about this kind of goods in our daily life.
It is not necessary to discount goods that are inelastic. Like what I talked before, those inelastic goods demand would not change a lot when changes in price. Even the price falls, people don't need it, they would not buy it. Even if the price is high like some medicine, people still will buy it when they need it. Its demand is not related to its price change.
Higher income helps us to accept high level education. Higher income also results in forming a good eating habit.
Lower income usually leads to a bad education, it's difficult to form a good eating habit. Meanwhile, Lacking of education usually leads to lower income.
1. What does the concept of elasticity mean?
2. What products are elastic and inelastic? Provide examples that are NOT in the book.
3. Why is it not necessary to discount goods that are inelastic?
4. What is the relationship between education, income, and good eating habits? (Note, this is a conceptual thought question).