How Do Futures Contracts Avoid the Difficulties with Forward Contracts

question 27

Essay

How do futures contracts avoid the difficulties with forward contracts?

Understand and calculate the elasticity of demand and supply and its implications on market behavior.

Analyze the impact of external changes to demand or supply, such as changes in consumer preferences or technological improvements.

Understand the relationship between the elasticity of supply and demand and tax incidence.

Calculate and analyze deadweight loss resulting from taxes and how it affects overall market efficiency.

---

Definitions:

Behavior

Actions, reactions, or functioning of an organism, often in response to external stimuli.

Physical Units

Basic quantities used in measurement, such as meters for length, kilograms for mass, or seconds for time.

Operationalized

The process by which concepts are made measurable and testable by defining how they will be observed or measured in a particular study.

Content Analysis

A research method used to systematically evaluate the presence of certain words, themes, or concepts within texts or sets of data.