Read market schedules and diagrams to locate equilibrium, measure excess demand or supply and explain how price signals move resources and restore market balance.
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).
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One mark for more resources devoted to products in high
demand / fewer resources devoted to products in low
demand.
Some markets in Belgium are in equilibrium. The country produces a wide range of goods and services with different degrees of price elasticity of demand. The Belgian Government wants the economy to move to a production possibility point beyond its current production possibility curve (PPC). Belgium's scientific industry is one industry which is doing well. Workers in this industry are highly specialised.
Define market equilibrium.
Define market equilibrium.
Demand equalling supply (2).
No shortage (1) no surplus (1).
Balance of demand and supply (2).
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Washington State is the state which grows the most apples in the US. In 2019, apple production increased in Washington State but the market was in disequilibrium. Apple farming is a labour
intensive industry because apples are picked by hand. The market for apples in the US is competitive.
Define market disequilibrium.
Define market disequilibrium.
A market where demand and supply are not equal / balanced / matched (2).
A market where there is a surplus / excess supply (1) or a shortage / excess demand (1).
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