Eco 372 Week 2 Product Purchases & the Economy

This is because giving up gasoline altogether is much harder. Public transportation or Hybrid vehicles can be substitutes for vehicles powered by gasoline, but it would take time for people to make this transition as majority of vehicle owners are dependent on gasoline. Therefore, an increase in the price of gas would not greatly decrease purchase.

Why do some cars depreciate faster than others? Why do some cars hold their value, while some don’t? These are a couple questions that will be answered in this paper.

People usually purchase cars for different reasons. Most people choose their cars according to necessity. In spite of all the world campaigns to raise awareness about air pollution an global warming people still prefer to have their own vehicle to be able to move around more comfortably.

Being a world-class classic sedan car M5, it targets the middle or high income people as their customers. And these target customers will not usually pay seriously attention on the price. So the purchase decision made by this group of people will always depend on the product features, quality or even just image. These target customers and up-to-date technology make M5 stay a high price.

The market pressure that occurs when the quantity demanded exceeds the quantity supplied could result in a shortage (MaEachern, 2015, p. 62). Furthermore, the consumers will compete to purchase the product, even though it is in short supply (McEachern, 2015, p. 62). Also, the purchaser’s competition to buy the merchandise forces the price to go even higher due to the demand (McEachern, 2015, p. 62).

When purchasing a car it is advisable to consider the economic hardships. New cars are expensive and may not be viable during recession. Old cars on the other hand are cheaper but their interest rates on the loan are high. Your income levels will determine which car to purchase. Old cars are subject to breakdown and recurring repair and maintenance costs.

The law of supply and demand states that when there is high demand for a good or service, the price of the good or service rises. If there is a large supply of a good or service but not enough demand for the good or service, the price falls. Each transaction involves a buyer and a seller. The seller places an offer for an item and the buyer may accept or reject the offer. When there is a high demand for certain good in a particular city or country and a lack of supply for a quality good, the prices tend to rise as well. Also, when there is no demand for a certain good due to a weak economy and an

As income of people is rises and once the economy gets stable, the demand for automobiles will also increase.

Buying a car is one of the most important decisions we make at a youthful age. The little knowledge that us masses of people fear when it comes to cars, can lead to wrong decisions that can affect us not only economically, but also at the level of security. Therefore, it is important to inform ourselves before buying a car. We should interpret the pros and cons and exactly understand our needs and which is our budget. After several searches and the consideration of some factors, there are two cars I am willing to consider purchasing and they are the Honda Civic LX Coupe, 2017 with a MSRP of $20,415 and the Hyundai Sonata Sedan, 2017 with a MSRP of $22,435.

There has been a rise in the unemployment rate from 5% in 2008 to 8.2% in 2012. This shows that the economy of the country is not healthy (Heertje & Perlman, 2010). As it implies that industries are either unwilling to employ, or the power of the economy to absorb the existing workforce is low. The inflation rate has been declining over the past five years. The decline in inflation and increase, in unemployment, suggest that poor performance in an economy (Heertje & Perlman, 2010). Comparing with five years ago there is a high expansion of capital market in the united state than the general economic growth.

SUV and Crossover vehicles are starting to take over the US car market. 2016 is the year of the SUV and pickup truck. Each month the car sales share of the market slips a bit (NPR, 2016). This means that sales of your average car are starting to slip. If you pay attention while driving down the road you may notice this. I believe there are several reasons why this is starting to be the case. SUVs and Crossover vehicles sit higher than an average commuter or luxury car. They tend to have more space inside for passengers and cargo. They are starting to rival the fuel economy of cars. Four wheel drive is a feature available to all of them.

The countrywide automotive industry in USA are changing the expense of recyclables upwards almost 50 % and the declining US dollar are growing pressures During U.S. exports have become appealing, other lands are waging a cash war to stop their moneys from dropping. Another factor influencing national automakers is the expanding demand for high tech equipment -fostering increase in exports and creation by 10% to 30%. The interest rates, money, increase (less than 2%) and rising prices, which stay low, are inhibiting a more talented restoration. Exacerbating this slow growth is deleveraging, where buyers fall a 9 % unemployment cost; their debt; and uncertainty over the futurity of authority policies such as for instance the Bush administration's tax cuts and the Obama business's healthcare bill and increase private savings.

Despite recent growth, the U.S. motor-vehicle sector is still behind. Total U.S. motor-vehicle sector sales in 2011 were 48.1 percent below sales in 2000 because of declining overall demand and significant long-term loss of market share.

During the last decade, more investors have been jumping on the classic-car bandwagon, buying antiques and otherwise prized automobiles. The demand has helped push the value of classic cars up nearly 500 percent in the decade ending in 2015, according to the Knight Franklin Luxury Investment index.

Among the contributing factors to this trend is the fact that cars are being produced in large numbers and in many varieties. Due to a large supply of cheap vehicles, more and more people can now afford to purchase cars (Researcher, 2009, p. 384).