Follow price signals from changing consumer demand to producer incentives, showing how resources move towards products with rising prices and away from weaker markets.
Missions to outer space face the same basic economic problem as that experienced on Earth. The African Space Agency was created to improve science and technology on the African continent. This agency also aims to coordinate trade between African countries to help technological development. This may improve how markets work. In 2021, total government spending on this agency was more than $ 500 million.
Explain how a market allocates resources.
Explain how a market allocates resources.
Logical explanation which might include:
A market is made up of buyers (1) and sellers (1) who trade products (1) through the interaction of demand (1) and supply (1) creating market equilibrium (1)
Price signals / price mechanism indicate to sellers how to allocate their resources (1) profit provides the incentive for sellers to respond to changes in demand (1).
If demand for the product increases, price will rise (1) more resources will be devoted to its production (1).
If demand for the product decreases, price will fall (1) fewer resources will be devoted to its production (1).
4
One mark for more resources devoted to products in high
demand / fewer resources devoted to products in low
demand.