Economics A Levels, Term Paper Example

Question 1

Identified issues affecting electricity production in the UK include inadequate alternative production processes. Production depends solely on the wind, which is free, and it means that when there is no wind, production does not go on because there is no power to continue with production. Another issue is the lack of the continuous output of electricity because of the lack of efficient gas-fired power, leading to expensive production. Depending on wind only means that production will be limited and would not equitably be distributed to all people because it is costly. Another issue is the control of carbon dioxide emissions, and this does not support the goal of zero gas emission to protect against global swarming and climate change.

Question 2

Equity incorporates equality of being impartial, fair, and just. According to the article, subsidizing wind-power electricity production would not be equitable. Equity calls for equal distribution of resources, and in this case, it gas costed other people in terms of income and job. On the same note, it will not be equitable because small businesses are expected to pay per unit for electricity.

Question 3

A competitive market incorporates a market with many producers that compete amongst themselves, intending to provide goods and services for the consumers. In this market, no single producer can dictate the market in terms of decision-making. Yes, I agree with the judgment, considering that those who benefit are those with political and financial power but not the small-scale farmers. They restrict markets and exploit small-scale farmers.

Question 4

Yes, there is evidence in the article that large businesses are detrimental to the economy. First, the report highlights that huge multinationals capture markets through political and financial powers. As a result, they restrict farmers’ choice regarding inputs and markets to supply. Second, the article highlights that large corporations exploit small-scale farmers, which makes them monopolize them in terms of decisions and price setting.

Part B

Question 1

Economic efficiency involves a situation where all goods and factors of production within an economy are utilized by distributing them to the most valuable use, and waste is minimized or eliminated. Yes, I agree that the only approach to achieving economic efficiency is through public sector interventions. First, most of the private sectors have monopolized every industry. They control decisions regarding what to supply, price settings in such sectors, and other matters affecting the markets and factors of production. Therefore, if the public sector will intervene and set specific standards that will guide all markets, economic efficiency will be achieved.

Question 2

Consumer equilibrium incorporates a state of balance obtained by the consumers of end-users of products in terms number of goods and services that can buy based on the level of income and the general level of cost prices. Yes, the assumptions underlying consumer equilibrium are realistic in an efficient market because an individual has to have a specific amount of money to purchase particular product units.

Normal goods involve goods whose demand increases with the increase in consumer income. Inferior goods involve products whose demand decrease as consumer income increase. Giffen goods incorporate goods whose demand increases as demand increases and vice versa. Yes, the companies consider all these differences when it comes to changing the price of their products because individual income and demand are two main factors that shape the cost of goods.