Microeconomics
The notion of “fairness” is often the justification given for the government intervention in the market. Do you agree or disagree. 1.0 Introduction Fairness in the market can be defined as the equally distribution in the proportion of economic pie to every party. In the past, the economic prosperity is not uniformly allocated among the members of society. The wealthier will have a larger proportion of the economic pie whereas the poorer parties will only occupy a smaller part of the economic pie. However, there is a decrease in unfairness since the liberal market economies is introduced. 2.0 Market mechanism
Market mechanism is used in describing how the supply and demand work in the market economies. Supply and demand are important in the determining the price and quantity of goods and services that can be offer to sell in a free market.
Graph 1.0 shows the supply and demand curves
Supply is the relationship of the quantities of a goods or services that the sellers are able and willing to sell at each price within a specific time period. The law of supply claims that the increasing in the price of goods will leads to an increase in the quantity supplied. The quantity supply is directly proportional to the price of goods. Therefore, movement along the supply curve happens. A market supply curve was stable when everything is hold constant. However, when there is changes in one of the factors such as increase in the input price, this will result in the shifting in the supply curve. Shifts the supply curve to the right is called an increase in supply while shifts the supply curve to the left is called an decrease in supply.
Graph 2.0 shows the shifting in supply curve
In the other hand, demand is the relationship of the quantity of a goods or services that the buyers are able and willing to buy at each time within a specific time period. According to the law of demand, the increase in the prices of good will decrease the quantity demanded. The
Market mechanism is used in describing how the supply and demand work in the market economies. Supply and demand are important in the determining the price and quantity of goods and services that can be offer to sell in a free market.
Graph 1.0 shows the supply and demand curves
Supply is the relationship of the quantities of a goods or services that the sellers are able and willing to sell at each price within a specific time period. The law of supply claims that the increasing in the price of goods will leads to an increase in the quantity supplied. The quantity supply is directly proportional to the price of goods. Therefore, movement along the supply curve happens. A market supply curve was stable when everything is hold constant. However, when there is changes in one of the factors such as increase in the input price, this will result in the shifting in the supply curve. Shifts the supply curve to the right is called an increase in supply while shifts the supply curve to the left is called an decrease in supply.
Graph 2.0 shows the shifting in supply curve
In the other hand, demand is the relationship of the quantity of a goods or services that the buyers are able and willing to buy at each time within a specific time period. According to the law of demand, the increase in the prices of good will decrease the quantity demanded. The
Bibliography: Kevin, A. (2010) Supply Demand and Government Policies, Slideshare. http://www.slideshare.net/kaycock/ch06-supply-demand-and-government-policies Mankiw, N.G.(2009) Principles of Economics, 6th edition, South- Western, Cengage Learning. Minnessota States University Mankato (2012)Supply and Demand: The Market Mechanism,United States of America http://kr.mnsu.edu/~renner/supdem.htm Morrissey, ED. (2010) Shocker: Yet another government intervention failure story, Hot Air. http://hotair.com/archives/2010/01/02/shocker-yet-another-government-intervention-failure-story/ Sherfin, H. and Statman, M.(1993) Financial Analysts Journal Vol. 49, No. 6,CFA Institute. Scholasticus, K. (2011) Price Ceiling, Buzzle.Com. http://www.buzzle.com/articles/price-ceiling.html Tomasi, J.(2011) Free Market Fairness,Bleeding ,Heart Libertarians. http://bleedingheartlibertarians.com/2011/06/free-market-fairness/