Post Your Economics Question Here

Scroll to see replies

Apagg

I'm not entirely sure, but I'd hazard a guess that it might be through the increased education higher incomes allow

Yes that's a good one, I was also thinking along the lines of firms would be more willing to hire an affluent individual than a poor one- discrimination.

Reply 1301

Drogue

They wouldn't be, aside from it being (about to be) illegal. Richer people have access to better education and a better network of rich people who are more likely to own companies or be in powerful positions and thus can give jobs out.

Reply 1302

vinsta

Drogue

Ah, thanks another useful response :smile:

Although just because it may be illegal, discrimination still (all will always) exist in the market.

Reply 1303

Drogue

Remember this is an economic question, not a political one. Why, economically, should discrimination exist? It's inefficient - if you hire someone who isn't the best because of their wealth, colour or gender, you lose out. Obviously if either of those poses an actual benefit (for example in service jobs people may have preferences of being served by a particular type of person) then this may not hold. Be very careful when justifying discrimination argument.

Reply 1304

vinsta

Drogue

Point taken :smile:

Reply 1305

rg2005

what is the significance of firms wanting to achieve productive and allocative efficiency i.e. why would they want to charge at those levels, also what is the correct definition of X-inefficiency?

Reply 1306

cookieboy

rg2005

what is the significance of firms wanting to achieve productive and allocative efficiency i.e. why would they want to charge at those levels, also what is the correct definition of X-inefficiency?

Hello mate, lets get cracking with the question. Just a quick run down on it okay? Its from a different view but it should make sense.

Both Productive and Allocative efficiency is of great significance to firms. Firstly, productive efficiency is where the maximum amount of output is produce with the given amount of input at the lowest possible cost. In a free market, assuming that the firm is in a competitive environment, a major objective would be to maximise the difference between the cost and revenue (increase profits). In order to do this, then the maximum output will need to be produce with the minimum amount of inputs, once the firm manages this then they will be more productive and less resources will be wasted hence, lower costs. When a firm lowers its cost then they are then able to sell the goods and services at a lower price. In economics, we know that when the price of a good is lowered then demand will increase thus increased revenue. Increased revenue can only be achieved when costs are minimised therefore firms will aim to be productively efficient.

Another reason is that if firms are productively inefficient (in a competitive market) then their costs will be high resulting in that firm selling at a higher price, consumers will not be willing to pay such high prices thus switching to competitors resulting in the productively inefficient firm suffering major losses and eventually they will be out of the market.

So basically thats why they will aim to be productively efficient, you could expand on this simple answer. This answer is assuming that wer are talking about a market where there is fierce competition.

Maybe have a go at allocative efficiency now?

Hope it helped a little
[Any mistakes then please clear them up kindly, I did rush this so sorry if there are any mistakes]

Reply 1307

robmorganjones

Hi,

I've been given the following question, 'When do choices made in the pursuit of self-interest also promote the social interest?' and I have 30 minutes to write a structured answer. Could you direct me towards what I should be including in this short essay. I presume I only have about 500 words (max) to answer. So far I have a paragraph detailing historical thought on the matter (Smith and Marx) and then I've detailed a modern take on the question in the form of HIV/AIDS drugs been given to developing countries. Am I going in the right direction, or should I be including something else?

Thanks
Rob

Reply 1308

vinsta

robmorganjones

It's surely about the invisible hand theorem? For example:
If a farmer decides he wants to produce crops as efficiently as possible he needs to lower his costs. With lower costs he can then undercut his competitors by selling at a lower price, perhaps to gain market share or to eliminate his competitors. Other competitors in the crop market will realise this and they will also produce more efficiently, thus lowering the market price of crops. As you know lowering costs increases profits ceteris paribus. Consumers will benefit from this for obvious reasons, and thus: farmers pursuing their own interests have contributed to society in falling prices.
I'm not sure where Marx comes into this though, I think he came up with the idea of abnormal profits. Something like a worker works for an hour, but in order for the firms to make a profit, during that hour, he must have produced more revenue for the firm than his hourly wage.

Reply 1309

MCYan

Hello there I have a question: Comment on the extent to which high-fat fast food is a demerit good
I know the negative bits,which is kind of obv, and I do agree it is a demerit good,but How should I mention the 'extent' bit when I do not even have some pos points on this,if u know what I meant?

thank you very much

Reply 1310

thetopnotch

MCYan

Pos points could be that it is cheaper than healthier and organic food like from Waitrose etc. so more people can afford to buy it. It might also be more readily availible as a meal since you may need to prepare the healthy food yourself and turn it into a meal, so your oppurtunity cost is time with healthy food.

then when you say to what extent just mention that although there are some postives the negatives outweigh the postives...

Reply 1311

REAPER666

Hi there i just wondered if there was any chance you will be able to answer the following question.

Explain the effects of an unexpected increase in Consumers’ Expenditure on GNP in an open economy with a government sector, using both Keynesian cross and 45 degree diagrams. (60 Marks)
Then explain the effect of the GNP change on
(i) the budget balance (20 Marks)
(ii) the trade balance (20 Marks)

In the answer i am meant to explain the process by which the economy moves to a new equilibrium, including the multiplier and use diagrams wherever possible and explain them fully. Aslo to explain some key macroeconomic mechanisms. Use diagrams based on the simple Keynesian model.

Thank you for your time and help.

Reply 1312

MCYan

thetopnotch

thank you

Reply 1313

maxell

Hi can anyone help me with my essays? (please see attachement)
Economics sent to TSR.doc
can you suggest more ideas or on how to get the top band. thanks!

en1?

Hello,I was just wondering whether you know about the nutritional information provision in UK has been successful. I tried to find some information, but I couldn't find any, any links would be great too. By the way, I need for and against opinions.

Thank you very much! :smile:

Reply 1316

maxell

Hey guys!

Can anyone help me with my essay? It's attached; Economics sent to TSR.doc.It was marked already but I failed to get the top band for this essay. Does anyone know how to layout their essay and how to evaluate etc to get top marks? Thanks

Reply 1317

alex_hk90

maxell

For the first one you could talk about elasticities of demand, particularly cross and income elasticities.

Reply 1318

Ourkid

Could anyone please help me with this? I'm trying to find out how I can find out whether a production function fails in satisfying the law of diminishing returns. for example:
x1 + 2x2
Whats steps should I take to find this out?
Any help much appreciated.
Ourkid

Reply 1319

alex_hk90

Ourkid

I'm guessing you just find the second differential with respect to the factor which you want to check for diminishing returns, showing that this is not negative.