• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The UK - a free market economy?

Extracts from this document...


The UK - a free market economy? Since the 1980s, the UK government has been trying to reduce its involvement in the economy and increase the role of the private sector.UK was quite clearly a mixed economy. Government will intervene and try to provide public services and other goods that can increase the consumer welfare. The government and the private sector work together to manage the economic affairs. The role of the UK government is not to compete with but to complement the government by providing the infrastructure so that economic activities can be carried out effectively and efficiently. The education and health were both provided by the government so as to increase the general living standard of the people. ...read more.


The government will try to reduce income inequality by imposing a progressive tax system where higher income earners are taxed more than the lower income earners. In this way, the gap between the rich and the poor will be narrowed. The rich will get richer while the poor will get poorer. Consumers are the ones who would determine and influence the types and quantities of good to be produced. Consumers are free to choose occupations they are qualified. They express their preferences though their ability to pay, in order to maximum satisfactions and minimum expenditure. Producers respond to consumers preferences and produce whatever consumers demand, in order to maximise profits and minimise costs. ...read more.


This is when only a single producer is necessary to undertake certain economic activities to avoid unnecessary competition. For example, in the bus industry, firms were allowed to compete freely on national and local routes. Similary, government support for research through contracts with companies making technologically advanced goods such as computers and military hardware illustrates how employment in private industry can be sensitive to state patronage. Thus people pursing their own self-interest through buying and selling in competitive markets helps to minimise the central economic problem of scarcity, by encouraging the efficient use of the nation's resources in line with consumer wishes. Lack of competition and high profits may remove the incentive for firms to be efficient. The government might enforce its plan even if they were unpopular. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Markets & Managing the Economy section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Markets & Managing the Economy essays

  1. Marked by a teacher

    Supermarkets in UK - An oligopily

    5 star(s)

    This is partly down to the threat of substitutes. For instance, Tesco has competition from companies like Sainsbury that can provide substitutes for their goods. This drives the prices of groceries down in both companies. Monopsony issues There has been growing concern over the monopsony power of the big four supermarket chains: Tesco, Asda, Morrisons and Sainsbury.

  2. Free essay

    Characteristics of poverty in the UK

    Also as kids are the future we need to make sure that we can help out as many as possible that are in poverty and if we can help those that are not then that is another plus because it will mean they will have a much better lifestyle and

  1. Economics - Monopolists

    to control the number of operators in their market, through restriction in supply. An example of this is the De Beer Company, they control the world supply of diamonds. Controlling the amount supplied to the market ensures high prices are maintained and helps to maximise profits.

  2. The Importance of the Canadian Airline Industry.

    When CP Air received carrier rights in the Pacific, a two airline international system was born. Regional markets served by different carriers were created in 1966, but were not allowed to compete against the two major airlines (Williams 94).

  1. What Are The Effects Of Tescos Oligopolistic Market Structure, On Both Consumers And Producers?

    The kinked demand curve can be thought of as two demand curves. The marginal revenue curve MRa is related to demand curve Da and MRb is related to demand curve Db. (See Figure 3) The dotted sections of Da and Db are irrelevant as consumers are always going to

  2. Outline the main features of a market economy and compare them to a command ...

    the need for medical attention should arise, only those who had enough money to pay for their surgery/medication/vaccination would be given this service whereas if you needed the exact same

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work