Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Introduction to Economics Assignment - Essay Example

Comments (0) Cite this document
Name: Economics Assignment Module Semester 1350 Words 1) The free-market economy is an economic system which works and operates automatically. The mechanism used in this is called price-mechanism. The movement in prices under this system leads to efficient allocation of resources and also helps the producers decide which goods these should produce…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.4% of users find it useful
Introduction to Economics Assignment
Read TextPreview

Extract of sample "Introduction to Economics Assignment"

Download file to see previous pages Free Market Economy is also characterized by the rights of individuals to buy and hold private property (Lipsey & Chrystal 2003). This characteristic is an incentive for both buyers and producers. It allows both buyers and producers to make bold and brave decisions. Since producer knows that he can own land, capital and other factors of production, he invests money into the system. Buyers also know that they can acquire goods, property or other thing of value now and can either consume it or store it for future consumptions. This moves the wheels of the economy and leads to equilibrium quantity demand and quantity supplied in the market. It also leads to price adjustments in the economy at a point where the motives of the buyers meets the motives of the sellers or producers. This is also called market creation or market searching. Market searching is the process when the market is trying to adopt or settle at the equilibrium price. Eventually market settles down at equilibrium because in over priced market supply is greater than demand which eventually leads to price going down. If the market is under priced demand is going to be higher than supply and this will result in price hike and eventually equilibrium will be reached. Free Market Economies encourage the process of market searching through market forces working without any intervention from government or other control factors. (Brue & McConnell 2006) Adam Smith also pointed out an interesting phenomenon in the system. He laid the foundations for the concept of “Invisible Hand” in the free market economy. He was referring to the fact that everything changes in response to the movement in prices. In essence, he was telling the world that in order to achieve their own motives, buyers and producers end up doing good for the system. This interesting fact can be explained in the following example. When a person earns income in this system, he spends it on his necessities, needs and wants. The money spent in the economy changes hand and transfers from the hand of the person spending the money to the producers of goods and services wanted by that person. This encourages producers of these goods and services to employ more resources and produce more goods and services. This leads to employment generation in the economy and when people are employed they tend to invest and save more. This leads to further employment generation and the cycle continues. The focus in this example is on the trickledown effect in the Free Market Economy. Many countries where the socialism dominated previously have realized the importance of Free Market Economic System and are opening up themselves for more private investment and encouraging the development of private entrepreneurs that will provide the impetus for high economic growth rates. The debate here is not about how good or bad the free market system, but it is more about why aren’t countries adopting the model of free market economy in its perfect sense. Even USA is not a totally Free Market Economy. Government controls and regulates the economy in the United States of America as well. The reason for this is simple. Extremism in any system is bad. If a system is totally dominated by private sector without any government regulation of the economy, then there are chances that private businesses might exploit the resources, consumers and the environment. This would lead ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Introduction to Economics Assignment Essay Example | Topics and Well Written Essays - 1750 words”, n.d.)
Retrieved from
(Introduction to Economics Assignment Essay Example | Topics and Well Written Essays - 1750 Words)
“Introduction to Economics Assignment Essay Example | Topics and Well Written Essays - 1750 Words”, n.d.
  • Cited: 2 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Introduction to Economics Assignment

Financial Markets and Economics

As of the staff of the Indonesian mine, a thorough evaluation of the existing resources should be conducted regarding all levels of the working area (from the management team to the worker).
b. The acquisition should create a competitive advantage for TCC mainly for the following reasons: 1. This mine should be the first offshore production base for TCC, a fact that could help towards the reduction of the company’s dependence on domestic mines, 2. The transport of the material from the specific mine is easier due to the absence of issues like the rail or port bottleneck, 3. Currently, the mine has a positive performance with a tendency for more growth (an export authorization for 20% more tonnage was granted this year)...
12 Pages(3000 words)Assignment

International Business Economics

According to Adam Smith, the absolute advantage would be realised as long as the cost of production differed from between countries, one or both countries would gain by trading. An example to illustrate this is a situation where we have two countries A and B which produce two similar goods X and Y. The figures show labour cost in hours for producing one unit of a good

David Ricardo formulated the theory of comparative advantage and argued that even if one country is more productive in both lines of production it would be still profitable to trade. Country A is more productive in both lines of production but it will still be profitable to trade with country B, this is shown by first stating that country A is more advanta...
6 Pages(1500 words)Assignment

An Introduction to Family Law in the United Kingdom

When complete judicial separation is not advisable and where children may need continued maintenance the Courts have resorted to Mesher orders in property settlement as set out in the case of Mesher v Mesher, where the wife as the custodial parent is allowed to remain in the home until the children reach the age of 184 and receive periodic payments from the father to look after the children. Alternatively, the payments continue till her death, remarriage or cohabitation with another man. These constitute once and for all maintenance orders that hold good until children reach 18 years of age.
The advantage with this system is that provision is made for the child with a primary caretaking parent, however, the disadvantage is t...
6 Pages(1500 words)Assignment

Business Economics: Small and Medium

The entry of small firms into the global markets has proven to be the main aspect of the creation of economies of scale. Markets are fast evolving to the needs of varied tastes and customer preferences, so necessary knowledge and technology asset has a major role to play for small firms to rise and to match up to the situation. However, small firms are characterized by “smallness of the market share (a large number of similar-sized firms) and hence lack of individual market power, corresponding to the theoretical concept of Pure Competition.” (Waite 1973. P. 154).

They need to overcome the handicap of smallness by strategic alliances and mergers with larger or technically more competent entities. Small firms...
10 Pages(2500 words)Assignment

Introduction to Social Science and Counselling

Qualitative research may be taken as a research strategy that employs a naturalistic and interpretative approach to the understanding of the meanings that people attribute to actions, decisions, beliefs, values and the like within their social world and the mental processes that are employed by the respondents to comprehend and interpret the world in which they live. (2). Qualitative research is characterized by the predominant stress on the inductive approach and the generation of theories; rejects the approaches of the natural scientific model and of positivism, which is replaced by stress on the manner in which the social world is interpreted by individuals and incorporates the perspective of social reality as a constantly chan...
7 Pages(1750 words)Assignment

Economics or Ethics

Several CEOs in America have in coalition with top managers deviated from the norms of corporate governance and caused immeasurable woes to the stakeholders. Using their power and ego they chased the wealth for personal gains without any concern for the shareholders or other stakeholders of the company. Enron, the world’s largest energy trader at one time, had to file bankruptcy under Chapter 11 when about 5000 workers lost their job (Bhattacharya, 2004). Arthur Anderson, one of the big five auditing firms was charged to have colluded with the management to misappropriate funds and project a picture different from the reality. Income was inflated and then all concerned papers were destroyed. The leadership at Enron was conce...
6 Pages(1500 words)Assignment

Real Estate Economics

...Real e economics: Introduction: The real e industry is engaged in leasing, renting, selling of real e and buying real e on behalfof others. The real estate industry comprises of the owners of the estates, the users who are the consumers, the developers who build, the renovators who refurbish buildings and the facilitators who enable sale of real estate, the facilitators comprises the financers example banks, the brokers and lawyers. According to July statistics this year the industry employs over 2125 thousand and the hourly wage rate is estimated to $16.37. This paper discusses the real estate industry on the basis of demand, supply, elasticity of demand and supply, wage rates and wage inequality, how monetary and fiscal policies affect...
7 Pages(1750 words)Assignment

Managerial Economics and Business Environment

Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making proce...
15 Pages(3750 words)Assignment

Introduction to Visual Culture

...Page Introduction to Visual Culture Question # 2 Michel Foucault’s (1975) theory of panopticism examines the link between surveillance, discipline and power. In the text(s) you have chosen to study, what is the relationship between looking and power? Introductory answer While discussing the writings of Michel Foucault.--Discipline & Punish (1975), Panopticism, we would like to emphasize on Bentham’s Panopticon to be the architectural figure of this composition. As per bentham “visibility is a trap”. He mentions that panoptic mechanism provides the arrangements of spatial unities, which make it possible to see constantly and then recognize immediately. Briefly said, Bentham’s assessment reverses the earlier theory of three functions...
6 Pages(1500 words)Assignment

Economics in Business

...Economics in business Introduction: The purpose of this paper is to analyze the business objectives as best applicable to the Southampton Solent University. Herein, it is essential for the author to analyze the competitive landscape that the university finds itself and try and identify the forces which are governing the business decisions of the university. Further, the author aims to complete understand the simplex of competitive market forces and subsequently make recommendations for better future functionality of the university. PESTLE Analysis The author feels that it is applicable to use a PESTLE analysis due to the fact that the Political, Economic, Social, Technological, Legal and Environmental aspects of this model...
6 Pages(1500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Introduction to Economics Assignment for FREE!

Contact Us