Economics Essay Help (1 Viewer)

[kaz1]

Explain the influence of market forces in determining output and prices in the Australian economy.
Identify reasons why government may intervene in certain markets.

I have the economics half yerlies on Wednesday and got 8/19 in the multiple choice section in a practice exam. Any suggestions?

 

[foram]

Explain the influence of market forces in determining output and prices in the Australian economy.
Identify reasons why government may intervene in certain markets.

I have the economics half yerlies on Wednesday and got 8/19 in the multiple choice section in a practice exam. Any suggestions?

Explain the influence of market forces in determining output and prices in the Australian economy.

The Price mechanism is the process where adjustments in price in a market determine the equilibrium quantiy that consumers will demand and firms will stupply.

If the price is set too low, then there will be excess demand, and a shortage of supply. In this case, the price will move up to reduce demand (according to the law of demand) and to increase supply (according to the law of supply), to the equilibrium point to maximise profit.
Likewise, if the price is set too high, then there will be excess supply, and a shortage of demand, and the price will be reduced to the equilibrium point to maximise profit.

Identify reasons why government may intervene in certain markets.

Market failure is the inability of an unregulated market to achieve allocation efficiency in all circumstances. Therefore, because of market failure, government intervention allows for allocation of resources in a way which is best for the economy and society.

There are a number of areas of government intervention. For merit good, which are things important to society such as education and healthcare which would otherwise need to be payed for. For public good which are good which everybody uses such as drains and tragic lights. For externalities which are effects of the actions of producers and consumers which affect other people, such as smoking. Taxes are necessary to pay for these things, therefore there is government intervention.

 

[foram]

Just study according to the syllabus. Theres very little stuff, and it looks like you're only being tested on the first 3 topics. You'll be fine if you start studying anytime before next week. Even if you studied the day before, you should be fine because theres so little to learn, but you shouldn't risk it.

 

[gurmies]

Also to add to what foram said, Governments aim to distribute income (output). This is because if the free-market system were embodied in a society, a fair or socially desirable distribution would seldom occur, as it isn't in the best interests of the markets. Profit infatuation =) aka human nature

 

[foram]

equity disgusts me. I don't think we should give drug addicts more money to spend on drugs. Its such a waste of money. Giveing money to the disable and elderly is fine, but why doees the government give money to people who ruined their lives because of their very poor and stupid decisions.

 

[gurmies]

I partly agree foram, but i'm sure they are basing it on humanity, and that every individual deserves to enjoy life? Maybe perhaps they're blindly giving the money in order to help the individual get rid of their drug/alcohol abuse problem? Either way does seem like a silly move by the Government that some poor person who worked hard all their life to achieve a good living, has to share some of it with someone who has achieved nothing... Does actually seem more injust than equitable...

 

[michael1990]

equity disgusts me. I don't think we should give drug addicts more money to spend on drugs. Its such a waste of money. Giveing money to the disable and elderly is fine, but why doees the government give money to people who ruined their lives because of their very poor and stupid decisions.

We need to ask, what happened for them to make those stupid mistakes and how do we help?

Its not like the government says, okay lets give every drug/alcohol addict a pension.

 

[kaz1]

Thanks for the help foram.

 

[haiderr]

for multiple choice questions, the best thing you can do is practice!

for the market force quesitons, like every1 above wud have said (cbf reading), talk about price mechanism... supply and demand...

Govt intervention:

bcoz in a free market some necessary goods/services may not be provided bcoz they do not generate enuff profits e.g. state rail system, other transport systems, etc etc. the govt may also intervene to achieve its economic goals which are achieving full employment, 'redistribution of income and wealth', internal and external stability. u wont need to explain these ones in great detail i dnt think, bcoz u dnt learn them until yr 12, but if u mention them the marker will know u hav done ur research n u understand wat the question is asking

 

[kaz1]

for multiple choice questions, the best thing you can do is practice!

for the market force quesitons, like every1 above wud have said (cbf reading), talk about price mechanism... supply and demand...

Govt intervention:

bcoz in a free market some necessary goods/services may not be provided bcoz they do not generate enuff profits e.g. state rail system, other transport systems, etc etc. the govt may also intervene to achieve its economic goals which are achieving full employment, 'redistribution of income and wealth', internal and external stability. u wont need to explain these ones in great detail i dnt think, bcoz u dnt learn them until yr 12, but if u mention them the marker will know u hav done ur research n u understand wat the question is asking

Thanks haiderr.