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There are some goods and services that see very little change in quantity demanded with an increase in price. On the other hand, there are those that see the complete opposite. How responsive consumers are to changes in price is called elasticity. This is measured by dividing the percent change in price in to the percent change in quantity demanded.

We’ve already discussed how to visually interpret price and the demand curve on a graph: Price ascending vertically on the y-axis and quantity demanded ascending horizontally to the right on the x-axis.

If an increase in price creates a small decrease in how much the product is demanded, we call that inelastic demand. It is inelastic because the demand curve stretches only slightly to the left. For example, quantity demanded for a meal priced at $10 is 60, but decreases just to 55 when the price goes up to $15. Accordingly, if an increase in price creates a significant decrease in quantity demanded, the demand is said to be elastic – demand going from 60 to 30 as the price increases by $5.

So how is elasticity influenced? Products that are considered a necessity are often harder to substitute, so when prices rise there will be a smaller change in quantity demanded (i.e. highway tolls, gas, milk). But when a product is deemed a luxury, the opposite occurs (i.e. expensive candies, vehicles, brand names). A product that has many substitutes will also see a more elastic demand curve as price increases because consumers have other options, and vice versa.

Contrary to what the greater population wants to believe, bad management can make for a bad economy. From your knowledge of elasticity, you can understand the detrimental effects of increasing the price of a good that is highly elastic. If you produce cigarettes and raise your prices, it is very unlikely that your business will take a hit. However, if you make pencils and hike the price, don’t be surprised if consumers partake of the many other substitutes available.

Career Outlook: People who like to delve into consumer behavior in this regard usually do well with careers as a pricing analyst or revenue analyst.

Contributor: Simone Devereueawax

This is my inaugural posting in which I will discuss “What is Engineering”.

In up coming postings I will discuss- in no particular order:

Engineering Technology, CAD (Computer Aided Design)-2D,3D, GD&T (Geometrical Dimensioning and Tolerancing), Mechanical Engineering, Industrial Engineering, Rapid Prototyping, Engineering Careers/Education, Green Technology, STEM (Science, Technology, Engineering, Math), Blueprint Reading, and anything else you the reader is interested in under the “Engineering” umbrella.

I will further address many of these topics from a high school students’, as well as college students’ perspective, and finally to those looking to change careers.

Engineering- What is it?:

The Accreditation Board for Engineering and Technology (ABET), the national board establishing accreditation standards for all enginnering  programs  defines engineering as follows (Landis):  “Engineering is the profession in which a knowledge of the mathematical and natural sciences, gained by study, experience, and practice, is applied with judgement to develop ways to utilize, economically, the materials and forces of nature for the benefit of mankind.”

I like James Kip Finch’s (1960) definition of Engineering- “The engineer has been , and [still] is, a maker of history”. When you get right down to really thinking about what the engineer does and has done from the earliest of times does this not simplify the definition. Think about all the items, whether it  is clothing, cars, houses, ships, satellites… we have today, on a global scale and through history, has been from an idea someone had that an engineer eventually designed, into a product or process using mathematics, science, and technology principles. Yes, engineers turn ideas into reality and make a world of difference.

The results of a recent Lemelson-MIT Invention Index Survey shows:
·    77% of teens are interested in pursuing a STEM career
·    53% of teens said they would like to build things and conduct experiments
·    85% said they wished they knew more about STEM in order to create or invent something
·    FEWER than 5% felt that engineers contribute most to society’s well-being

This to me means teens have not seen, met or talked with an engineer but they have some of the same interests as what a degreed engineer probably started with early on in their life. The degreed engineer probably is good in math and science, may have a relative/neighbor/friend who is/was an engineer that worked at a high tech job,  was interested in assembling/disassembling things and also likes to build things- that’s the hands on aspect, or like myself read a lot of SCIFI books/magazines as a child or as kids now a days watch a lot of TV/movies, was counseled by a teacher or school counselor, heard that this field is one of the top paying  career opportunities in our economy today.

What can I do with a major in engineering you might ask?
·    Application Engineering
·    Computer engineering
·    Electrical engineering
·    Electronics engineering
·    Industrial engineering
·    Mechanical engineering
·    Research engineering
·    Product engineering
·    Safety engineering
·    Quality engineering
·    Plant engineering
·    Development engineering
·    Testing engineering
·    Design Engineering
·    Analysis engineering
·    Systems engineering
·    Manufacturing and Construction engineering
·    Operations and Maintenance engineering
·    Technical support engineering
·    Customer support-Sales/Marketing/Consulting
·    Management of any of the above

I will close this session with the following thoughts/facts for next posting:
·    The U.S. is lagging behind the rest of the world in production of needed technical talent
·    This lag could lead to loss of U.S. competitiveness in technical fields that drive our economy.

Contributor: Jim Orr