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economic potfolio

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Introduction

Commentary Number 2 Food waste costs �8bn a year People around the world are running unhealthy and dangerous activities that are destroying the whole society and economy around them. One of these activities is throwing uneaten food in the bin without considering the consequences of this activity. This activity costs 8 billion a year which is a large amount of money that the economy can use to increase the amount of goods and services for example. Moreover, the amount of energy that is used up into producing food is about twenty tonnes for every one tonne of food produced. Activities (production and consumption of goods and services) that affect the society positively and negatively, and that are external to the market and are not taken into account by consumers and producers where there is no appropriate cost is paid are known as externalities. ...read more.

Middle

Market failure is a situation where the market either leads to uneven allocation of resources (under-allocation or over allocation) to a specific economic activity. Economics is concerned about the environmental risks that are growing due to damaging effects of production or consumption. Throwing food wastes is considered as a polluting activity. Polluting activities are considered a major problem because they impose an external cost. For example, householders getting rid of uneaten food are not paying the cost of the methane gas which is causing global warming when the food piles up and rotten. In addition, there is a distributional problem where the polluters are imposing costs on others. For example, global warming affects the whole world and so the polluters are imposing costs on others by this polluting activity which is causing global warming. Nevertheless, there are other economic concerns about this negative externality. ...read more.

Conclusion

In conclusion, I would like to mention other economic solutions that are not mentioned in the article to stop market failure. Controlling market failure and reducing pollution caused by food wastes can be achieved by the interference of the government. The government can extend property rights (internalize the externality). The consumers who are causing pollutions will meet the costs of damage to other people's lives. This can be done by giving the people who are concerned about their life a right to report any person who fills the bin with loads of food wastes. Another method is by using the law (legislation). For example if a person gets caught with additional food wastes he gets charged an appropriate amount of money. COMMENTRY COVERSHEET Economics commentary number: _______ SL Number 2________________ Title of extract: _____ Food waste costs �8bn a year_______________ Source of extract; ______BBC News_______________________________________ Date of extract: __________15/04/2008_____________________________________ Date the commentary was written: _______21/04/2008_________________________ Sections of the syllabus to which the commentary relates: ___Section 2. ...read more.

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