Sample Assignment 1 Answer
EXPLANATION WRITE-UP FOR “TROJAN MAN” MEME
The “But I think that’s a Stretch!” completion line is an obvious play on words that’s intended, along with the picture, to meet the “funny” requirement for the Meme.
The “Economics” of the Meme involve the crucial concept of Price Elasticity of Demand, which addresses the issue of the degree of consumer response to a change in the price of a good or service. The completion line indicates a disagreement with the professor’s contention that the demand for condoms is relatively elastic – that is, a given percentage change in the price of condoms will result in an even greater percentage change in the quantity of condoms demanded.
Focusing on the following three determinants of the price elasticity of demand will support my contention that the price elasticity of demand for condoms will be relatively INELASTIC.
1) Number and closeness of good substitutes: Condom use performs two critical functions, prevention of unwanted pregnancies and prevention of contracting STD’s. Where there are several effective substitutes for pregnancy prevention, regarding disease prevention – especially AIDS prevention – there really is no substitute. As we learned in class, when substitutes are lacking, demand tends to more price INELASTIC.
2) Proportion of Income spent on the good or service: Relative to the typical individual’s total expenditures per time period, the amount of money spent on condoms is a VERY small percentage of this total. As we learned in class, the smaller the proportion of income allocated to a given good or service, the less responsive consumers will be to a change in price.
3) Luxury vs. Necessity: As we learned in class, the more a good or service is viewed as a necessity, the LESS price elastic demand tends to be. Given the contemporary awareness of the risks associated with “unprotected” sex, especially the AIDS risk, condom use nowadays is highly likely to be viewed as a NECESSITY, not a luxury.