Trading blocks are groups of countries who form trade agreements between themselves. Trading blocks can include Free trade areas – elimination of tariffs between economies in the trading block Customs union – free trade area + a common external tariff with non-members Economic union/Single market – Customs union + common rules and regulations. Different types …
A look at some arguments for and against public/private healthcare provision. Should healthcare be left to the free market or should the government provide universal healthcare? Arguments for Public Health Care Healthcare is not a profit maximising industry. Doctors and nurses don’t need financial incentives to do a good job but are motivated by aims …
Competition is an essential element of market economies. Different firms have the freedom to attract customers based on price, quality, service and convenient. The type of competition will depend on the product and market structure. For example, in a market with many traders selling potatoes, price will be a key factor. Consumers will shop around …
A product market refers to a place where goods and services are bought and sold A factor market refers to the employment of factors of production, such as labour, capital and land. Product market Demand for product markets comes primarily from households The main sellers of goods are different kinds of firms. Demand for goods …
Factors of production refer to the different elements that are used in producing goods and services. Factors of production are inputs into the productive process. The four main factors of production are: Land – this is raw materials available from mining, fishing, agriculture Capital – This is a manufactured item used to aid production, for …
Cobweb theory is the idea that price fluctuations can lead to fluctuations in supply which cause a cycle of rising and falling prices. In a simple cobweb model, we assume there is an agricultural market where supply can vary due to variable factors, such as the weather. Assumptions of Cobweb theory In an agricultural market, …
A merger occurs when two firms join together to form one. The new firm will have an increased market share, which helps the firm gain economies of scale and become more profitable. The merger will also reduce competition and could lead to higher prices for consumers. The main benefit of mergers to the public are: …
Readers Question: Is a strong economy generally accompanied by a strong currency? In short, a strong economy is generally characterised by a strong currency. When the economy is doing well, and at a boom period of the economic cycle it implies higher interest rates to keep inflation low. These higher interest rates will attract hot …