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The policy will become costly because the government will be forced to implement the same policy of buying up the surplus of wheat to prevent price from falling.
Moreover, the policy 2 is costly than the policy 1 when the government faces a problem in dealing with the excess wheat it bought. The policy is costly because if government opts to purchase the wheat, but it sells it to developing countries at a rock bottom prices. The government can also sell the surplus to farmers by feeding animals or offering it at a reduced price prices to those in need of it, in other countries. However, the policy of paying the farmers the supply price is costly than that of buying the surplus because the price paid to farmers in inevitably higher than the price received from the sale of surplus.
1f) both Policies will produce equal net economic benefit because the cost associated with both policies affect the society directly, and are subtracted from the producer and consumer surplus. From the graph, the net economic benefit is shown by the triangle Q1P1QE.
a) In the real world environments, firms are not identical because technology changes continually and diverse firms have different histories. The change in technology will cause the firm to reduce the cost of production, and in turn causes downshift of in each firm’s marginal cost curve. Meanwhile, the short run supply curve that is the total of the firm’s marginal cost curves will shifts downwards. According to Lipsey and Chrystal (2007, 146), the firm’s produces economic profits and output at which price equals marginal cost. In the perfect competition, the marginal cost curve is greater and stiffer than average cost curve. Meanwhile, there will be no new entrants attracted to the industry because the average cost minimizing output is greater. In the short run, the entry of new firms shifts the supply curve to the right. Each firm old and new will cover its total cost by producing at a
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There is a reduction in growth rate as experienced in other developing countries for example 3.2%-2.6% rates in Kenya during the same period. Like other developing country, its population has doubled since 1990 due to the high population growth rate. However, its fertility rate is reducing just as the case in other developing countries for example from 7.0% between 1990-1995 and to a projected rate of 4.8% between 2010-2015.
The disappearing jobs and the devaluation in the home prices had compelled the consumers to cut down on their costs which adversely affected the labor market as the business laid off their workers to reduce costs, eventually making the country enter into a vicious downward cycle.
oyment is perilous for a country which is the reason why the governments of both developing and developed countries are taking steps to cope with this problem in a better way.
Actually, when employment starts to create problems, no one but government can handle it in the right
Oftentimes, economics strongly asserts or assumes that the world behaves according to the models that it has developed and recommends policies based on models that do not adequately consider or factor in social and historical
The market system is said to be a very just system where everyone gets what he or she deserves and there are no monopolies and government control on prices.
There are many reasons why market system is considered the best mechanism of allocating scare resources.
“The Hunt brothers believed that inflation would result in silver becoming a haven, just like its more expensive cousin, gold... Bunker foresaw at least a tenfold increase in the price of silver as a result of the plummeting
The overall structure of the industry suggest that there are two type of producers i.e. the one who produce and manufacture mobile phones and other ones who provide data services to communicate and perform other tasks
While, the long run is the overall period till the period comes to termination. The long run has the disadvantage that the insurance policy might come to an end or the insured is compensated before the
According to studies, like Ferris (2013) the concern as to whether a market can be termed as efficient or not is purposeful only when considered in relation to the types of market information. Investors who own few securities expect to upsurge their
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