The Limits on Economic Resources
Economic Resources In this world we live in we can only have a certain amount of needs to live, however we can have unlimited wants and as humans we constantly want more and more, we are very rarely satisfied with what is on our plate. However there are only finite resource such as machines, workers and other natural resources, because of this we are not able to produce unlimited amounts of items and by having limited amounts of things such as wheat farms then we must choose what to do with the resources we could turn it into food or into fuel. This is called the opportunity cost. Also we are starting to question if what we are doing to the world is contributing to global warming and finding ways of making things more efficient and less damaging to the environment. If these new measures are not put into place it could affect the future generations inhabiting the world and if we use too many resources we will not leave enough for them. Even basic human needs such as water could be used as the demand for household and commercial use continues to grow each year Production is limited by factors such as Land and Labour, companies strive to produce the most competitive product and get a decent profit. This means that in most cases these manufactors are not taking into consideration the environmental impacts of creating their product in the cheapest manor possible. This has
What Are The Effects Of Tescos Oligopolistic Market Structure, On Both Consumers And Producers?
What Are The Effects Of Tesco's Oligopolistic Market Structure, On Both Consumers And Producers? During this assignment I wish to highlight the benefits and losses that consumers and suppliers are likely to experience while shopping at Tesco. I would also like to analyse other consequences of Tesco's oligopoly position that seem to affect other aspects of the UK economy. MARKET STRUCTURES I would like to begin by pointing out the major types of market structure, and then focus on the oligopoly market structure, and its behaviour. In economics, market structure is a term that describes the state of a market, with respect to competition. The major market forms are: . Perfect Competition Market Structure Seller Entry Barriers Buyer Entry Barriers Seller Number Buyer Number Perfect Competition No No Many Many 2 Monopolistic competition No No Many Many 3 Monopoly Yes No One Many 4 Oligopoly Yes No Few Many 2. Monopolistic Competition 3. Monopoly 4. Oligopoly The simple characteristics of these market structures can be seen in Figure 1(right.) This table illustrates how the 4 markets work in the real world. Perfect competition is a market in which there are many sellers and many buyers. There are no barriers to entry whatsoever. This is the ideal market structure, however, in a perfect world, it is very difficult to always obtain. A monopoly is
Economy and how it affects my business selling tables
| Page ________________ SUPPLY AND DEMAND. Scenario. Imagine you are the owner of a business manufacturing and selling a particular type of table. The average variable costs of producing each table are £180 while the fixed costs are £12,000. Also, you have carried out some market research and found that the total number of customers wishing to buy the table varies with changes in price of the table below: (Q1) Product: table Price (£) Quantity Demanded Total Revenue 00 770 77,000 140 680 95,200 180 610 109,800 220 550 121,000 260 500 130,000 300 460 138,000 340 400 136,000 380 320 121,600 (Q2) £300 would yield the greatest revenue at a quantity of 460 giving total revenue of 138,000. (Q3) Draw the demand curve for the table. Please see graph attached. Now, assume you are willing to supply the following number of tables at different prices: Price. Quantity supplied. 00 220 140 260 180 320 220 400 260 500 300 640 340 880 380 1400 (Q4) Draw a supply curve for the tables on the same diagram as the demand curve for Q3. Please see the graph attached. (Q5) On the supply/ demand diagram find the equilibrium quantities sold/ bought. The equilibrium price (E. Price) I found was 260
Outline the basics of economics
Economics is the study and understanding of the economy or the system of government and people that deals with money and financial things. Because the government officials did not understand my report about the economic reforms that are supposed to help stimulate the economy, I have decided to teach them about few concepts about the economy and how it works and how they can benefit from me and use these concepts to make wise and good decisions to stimulate the economy. The first thing I decided to teach the government officials about is economic freedom. People highly care about their economic freedom, thus, the government needs to give the consumers or people some freedom. People want to make their economic choices; their job or occupation, what they are going to do with their money, what to produce and how to produce it. Another important concept concerning the people is economic equity; people greatly value equality. Treating people fairly without discriminating between them is an important rule. Thus, discriminating on the basis of age, sex, race, religion, or disability is illegal. An example for economic equity would be minimal wage; the lowest legal wage that can be paid to a worker. People who are not very rich get affected dramatically by inflation; therefore, people prefer to have price stability. Price stability is important because inflation can damage a lot of
Discuss the extent to which privatization of the UK railway has been economically worthwhile
Discuss the extent to which privatization of the UK railway has been economically worthwhile. Privatization is the process by which the former publicly owned organization or activity is sold off to the private sector. There are three processes of privatization. These include the outright sale to another company, a management/employee buyout or making shares publicly available. In 1992, the "new opportunities for British rail" White Paper put forward some powerful economic arguments from privatization. Two years later Britain had privatized railway, and the first passenger franchises were awarded to private sector train operating companies. The aim was to more efficiently utilize the railways, provide greater responsiveness to the consumer, to see a high quality of service and give better value for money for all rail users as well is to generate new capital investment. There are now 23 franchises available, and the Department for Transport decides who the franchises will be given to. Examples of franchises include Virgin Trains, go ahead and Arriva. The infrastructure is owned and maintained by single organization: this is network rail and can be described as a non-profit company invests all profits back into business, However it operates privately. There are many perceived benefits of privatization, and many of these aspects have benefited the rail industry.
Using the data and your economic knowledge, evaluate the economic case for and against government intervention in car markets.
Christos Singh Using the data and your economic knowledge, evaluate the economic case for and against government intervention in car markets. Markets are generally thought to work well. Changes in the relative prices of goods serve to create signals and incentives to which firms and consumers respond, allocating resources to where they produce the most utility. I These principles can easily be applied to car markets. At the time of the extracts, for example, there was a large drop in the market for new cars, especially luxury ones, due to the global economic downturn. New cars are a normal good, such as a decline in income sees a fall in demand for them. More than that, they are likely to be income elastic, with demand falling more than proportionately in response to any fall in income. This is because consumers can keep their existing cars for longer, or turn to public transport, in order to spend more of their limited income on necessities during difficult periods. This effect was reinforced during the economic downturn by a lack of availability of credit with which to finance car purchases. It is part of the way that markets work to allocate resources that the excess supply created should put downward pressure on price, reducing the price of cars relative to other goods, and also reducing the profit margin on each car supplied for a given cost of production. This
Discuss the extent to which a tax on chewing gum is the most appropriate way of solving the market failure involved?
Market Failure Essay Discuss the extent to which a tax on chewing gum is the most appropriate way of solving this market failure? Market failure is whereby the market mechanism fails to achieve allocative efficiency. In this case it is caused by negative externalities; these exist where the social costs of a market activity exceed private costs, which causes an adverse effect on a third party. This is instigated by consumers dropping chewing gum onto the floor, on public roads and pavements. Here, the third party is the local council, as they have to pay to have the gum removed. Chewing gum is removed as it is an eye sore and average pedestrians may become stuck in the more recently dropped gum. It costs 10p to remove every piece of gum, and therefore can become very expensive. By the government introducing an indirect tax on non-degradable chewing gum, it hopes that consumers will become aware of the now more expensive non-degradable gum and turn to the cheaper more environmentally friendly, biodegradable gum. Therefore, less permanent gum will be dropped onto the streets and subsequently costs on local councils will be reduced. However, by implementing these taxes on chewing gum, the government may become unpopular within the public from the increased price and therefore will become less likely to implement taxes and policies to better improve the environment and
Discuss the view that inflation is always harmful.
Discuss the view that inflation is always a major problem? High Inflation dampens the ability of governments to achieve their ultimate objective of enhancing their citizens’ wellbeing. It widens income inequalities between the rich and the poor, reduces the price competitiveness of goods and services leading to balance of payment problems, discourages savings and lending, causes economic and political instability etc. The true consequences of inflation however, depend on its rate, how old it is, whether it is anticipated or unanticipated and the inflation rates of other countries. A rapid rate of inflation implies a sharp rise in the cost of living. Consequently relatively poor individuals or those belonging to low income classes suffer more than the rich. Fixed income earners, pension bearers and those deriving income from fixed interest securities etc. lose when price level rises. This is because they have lesser to spend in real terms or their purchasing power is eroded due to higher prices of goods and services. Businessmen on the other hand, can shift the burden of increased costs to consumers, particularly if the demand for their products is price inelastic. A country facing a comparatively high inflation rate experiences reduced price competitiveness of goods and services both at home and abroad. Exporters lose whereas importers’ businesses flourish from
Discuss how far rising house prices are likely to benefit the UK economy
Discuss how far rising house prices are likely to benefit the UK economy. House prices in the UK, by April, were 9.9% more expensive compared to a year ago, according to official figures. This rise in house price is considered by many as beneficial to the economy however this is not entirely true as it does not benefit everyone. Price level S S1 P1 P D1 D Q Q1 Quantity of homes The diagram above shows how the demand and supply for houses can increases the price level. The demand curve, in the diagram, shifts to the right from D to D1 and the supply curve shifts from S to S1. Price level in turn rises from P to P1 which increases the quantity of homes from Q to Q1. Supply increases but no to the extent of demand and therefore the price of homes increases. A reason house prices in the UK have been increasing in the last few years is linked to the supply and demand of homes. As a nation we do not build enough houses to keep pace with a growing population. Since 1982 the population has steadily increased. Rising divorce rates have created a need for more single-person homes. There was also an estimated net flow of 212,000 long-term migrants to the UK in the year ending September 2013, a statistically significant increase from 154,000 in the previous year. This rise in population, for the various reasons, means
Analyse and comment upon the pricing and output decisions of the firm and the industry in perfect competition and monopoly
Q. Analyse and comment upon the pricing and output decisions of the firm and the industry in perfect competition and monopoly. A. Perfect competition is a market structure which is characterised by many buyers and sellers. As such, no single buyer or seller can affect the market price taker. In perfect competition, all firms sell identical or homogenous product. There is also perfect mobility of resources, free entry and exit of firms and perfect knowledge. As the individual firm can only contribute a small fraction in the total output of the industry, its actions cannot affect price. Therefore, the demand curve of an individual firm is perfectly elastic. It is a horizontal straight line at the prevailing market price over the range of output that the firm can produce. Assuming the factor prices remain constant and firms in the competitive industry simultaneously expand or contract output, the industry’s supply curve is the horizontal summation of the supply curves of all the producers. Since the firm’s supply curve is MC curve, the industry supply curve is the aggregate marginal cost curve, as shown below. Equilibrium in the market is reached at the point where the demand curve intersects the supply curve. Thus, as shown in the diagram above, equilibrium price is OP, and output is OQ1. In the short run, firms in the perfect competitive industry may enjoy normal,
