FA_Economics Issues_outcome 1

经济学研究方法综述Studying economics is like peering into a crystal ball, trying to decipher the complex patterns and trends that drive the world's economies. The methods used in economic research help us gain a deeper understanding of the forces at play, allowing us to make more informed decisions and predictions.经济学研究就像凝视水晶球，试图解读推动世界经济的复杂模式和趋势。

经济研究中使用的方法帮助我们更深入地了解各种力量的作用，让我们能够做出更明智的决策和预测。

One of the most common methods used in economic research is statistical analysis. By collecting and analyzing data, economists can identify correlations, trends, and patterns that can provide valuable insights into economic phenomena. Statistical analysis allows researchers to test hypotheses, make predictions, and draw conclusions based on empirical evidence.经济研究中最常用的方法之一是统计分析。

经济学家通过收集和分析数据，可以确定相关性、趋势和模式，从而为经济现象提供有价值的见解。

Unit 3 Economic Issues: An IntroductionLearning hours: 60 hoursUnit level: 5Description of UnitThis unit is one of eighteen units leading to a BTEC HND in Global Trade & Business The purpose of this unit is to introduce learners to the concepts of economics that have a particular emphasis on organisations and the markets they operate within. The unit introduces learners to the basic issues associated with economies and how consumers and other economic agents deal with those problems. It also looks at how markets operate and what can be done when the operation of these markets fail.On the completion of this unit, learners will have a good level of understanding into the practical aspects of economics. By closely examining key economic policies such as welfare and competition policy learners will gain a clear understanding of the instruments that government use in order to control the macro and micro environment. Also by examining other policies such as health care for the elderly, public transport allows learners to evaluate polices in a real and relevant environment.Unit is internally assessed.Summary of learning outcomesTo achieve this unit a learner must:1. Explain the allocation of resources within the economy.2. Describe the theory of national income.3. Evaluate the importance of government policy within the UK market.Content1.Allocation of resourcesAllocation of resources: scarcity of resources, criteria for production choice and justification; criteria for allocation; opportunity costs (unlimited wants & finite resources); determinants of demand and supply; interaction with the market; price and income elasticity.2. National income.National Income: circular flow of income; injections and withdrawals; measuring national income; difficulties of measurement; comparisons of national income globally; national income growth (monetary & real); multiplier.3. Government policy.Government policy: role of government in market failure (missing markets, externalities & imperfect competition); government policy instruments (regulation, taxes, public ownership); current government welfare policy; current government competition policy.Learning outcomes and assessment criteriaGuidance on delivery and assessmentDelivery StrategiesThis unit is designed to compliment other units within the syllabus of Global Trade and Business. It is essential that learners gain an understanding of all the relevant components associated within a business and its international environment.The teaching and learning model can be described as facilitative and directed at developing occupational competence. In terms of teaching-learning methodology, a combination of the following styles of delivery should be used: presentation methods (lectures), discussion methods and group Work (tutorials & group tasks), self-study methods (individual assignments). Centres should adopt a proactive approach towards the delivery if this unit by utilising reported cases from the press and media. Candidates should be encouraged to source relevant information e.g. internet, journals, magazines, newspapers. Learners should also be encouraged to use these articles as discussion topics within the learning environment.Learners require access to an appropriate environment whereby they can work to produce the required evidence with supervision and direction as required. Learners should be able to discuss and consider the impact of all relevant information to their occupation/subject area and be allowed to examine various outcomes of their assessment.AssessmentLearners can achieve a pass, merit, or distinction for this unit by applying the assessment criteria outline to each task.Students should produce a portfolio of evidence to cover the requirements of the learning outcomes. 2 or 3 written assignments and individual/group presentations would demonstrate the candidates’ understanding and analysis of this unit. Case studies of actual/simulated businesses will provide a realistic scenario for students to explore and interpret business management principles.The assessment of this unit can be through individual and/or group assignments. These may be in the form of submitted reports, written memoranda, business letters, and presentations. The presentations may be formal and include electronic presentations using software such as Microsoft PowerPoint. Alternatively presentations may be in the form of a discussion, or learner-led seminar on an outcome during which the learner, either individually or in a group, orally conveys assessment material to the group. It is recommended that a bank of different assessments be prepared to cover the knowledge and understanding of all outcomes within this unit.Students should produce evidence in relation to each of the learning outcomes within a portfolio.Learning ResourcesLearners should have access to the following resources:Text Books1. Treitel G —Law of Contract (Sweet & Maxwell, 2003) ISBN: 042178850X2. Young M —Cases and Commentary in Contract Law (Prentice Hall, 1997)3. Cranston, Scott and Black —Consumers and the Law (Law in Context)(Butterworths, August (2000)4. Crystal, Phillips and Davis —Insolvency Law Handbook (Butterworth, June 2003)ISBN: 04069440915. Davis J —Butterworths Core Text: Intellectual Property Law (Butterworth,September 2003) ISBN: 04069637976. Ottley M —Briefcase on Company Law (Cavendish, April 2002) ISBN:18594169937. Smith and Keenan —Advanced Business Law (Prentice Hall, January 2000)ISBN: 027364601X8. Steiner J —Textbook on EC Law 7th Edition (Blackstone, October 2000) ISBN:1841740233JournalsLaw Society GazetteNew Law JournalWebsites Companies House Competition Commissionhttp://europa.eu.int The European Union online European Patent Office legal information for educational purposes Lawtel online legal information service/lcc/iolis Iolis website Lexis-Nexis online legal and businessinformation service The UK Patent Office Seneca website website of The Times newspaper。

Contents1. Introduction2. Answer2.1 Market Failure2.2 Public Goods2.3 Merit Goods2.4 Externalities2.5 Imperfect Competition2.6 UK Government policy on welfare2.7 The evaluation3. Conclusion4. Reference1. IntroductionThe reporter is expounding the market failure, and in my explanation I make appropriate reference to the role of government in relation to each of the following: Public Goods, Merit Goods, Externalities and Imperfect Competition. I will explain the UK government policy on welfare and identify and describe the instruments the government use to achieve their policy and give a justified evaluation of the performance of the policy in relation to its use within the UK.2. Answer2.1 Market FailureAn economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of a lack of certain economically ideal factors, which prevents equilibrium.Market failures have negative effects on the economy because an optimal allocation of resources is not attained. In other words, the social costs of producing the good or service (all of the opportunity costs of the input resources used in its creation) are not minimized, and this results in a waste of some resources.For example, the common argument against minimum wage laws. Minimum wage laws set wages above the going market-clearing wage in an attempt to raise market wages. Critics argue that this higher wage cost will cause employers to hire fewer minimum-wage employees than before the law was implemented. As a result, more minimum wage workers are left unemployed, creating a social cost and resulting in market failure.2.2 Public GoodsImagine that the government did not provide an army, navy, air force, etc. A private company might have the idea of forming a national army and to raise the required money, they decide to ask everyone for £10. If you were that person on the CND march, and you did not want to be defended, then you would not pay. There may be a lot of people who refuse to pay for this reason. Also, there may be some people who do quite want to be defended, but take the risk of not paying on the assumption that there will be some people in the UK that will care enough to pay the inevitable increased price. This is the free-rider problem. The people who do not pay, for whatever reason, are having a free ride.To sum up, the reason why public goods come under the topic 'Market failure' is that the free market would fail, horribly, to provide defense and street lighting if left to them. The government has to intervene to correct this market failure.2.3 Merit GoodsMerit goods are also things that are 'good' for you, but unlike public goods they can be provided privately. The problem is that if they are provided solely by the private sector then they tend to be under-consumed, so, again, the government has to step in to correct the market failure.The best two examples are health and education. Both of these goods can be provided privately. Some of you may be at a private school (or independent school, as they are called), or your family may have a private health insurance scheme. But, if the government did not step in and provide state schools and the NHS, then numerous families would not be able to afford either. This would cause increased crime and reduced productivity from an underclass of the non-educated and increased health problems which can also cause problems for the labor market.2.4 ExternalitiesNegative Externalities in Production: The socially optimal output level is less than the market equilibrium quantity. Negative externalities in production or consumption lead markets to produce a larger quantity than is socially desirable.When externalities are significant and private solutions are not found, government may attempt to solve the problem through command-and-control policies, market-based policies.The government can either regulate behavior or internalize the externality by using Pigovian taxes.2.5 Imperfect CompetitionIn economic theory, imperfect competition is the competitive situation in any market where the conditions necessary for perfect competition are not satisfied. It is a market structure that does not meet the conditions of perfect competition.There may be imperfect competition due to a time lag in a market. An example is the “jobless recovery”. There are many growth opportunities available after a recession, but it takes time for employers to react, leading to high unemployment. High unemployment decreases wages, which makes hiring more attractive, but it takes time for new jobs to be created.2.6 UK Government policy on welfareWelfare economics is the study of how an economy can best allocate its resources to ensure that they achieve the greatest utility or economic welfare of its people, When resources are used efficiently then they maximize the welfare or utility of all. This is refers to people’s well being, and the United Kingdom Government believes it has a role in the redistribution of income and wealth allowing the increase in economic welfare. This policy is achieved by1.Taxation——by taxing those “who have ”,the Government can then give to those who do not “have ”2. Legislation——employment laws or discrimination laws (see supply side policies)3. Providing system of benefits and support.Government accepts that there are certain goods and services that are beneficial to society but will not be provided by the private sector in either the correct quantity or at an affordable level. Such areas include health and welfare.Traditionally the Government provides the majority of care for the elderly in the form of large long-stay institution/nursing homes. The Thatcher Conservative Government believed in the role of the free market and introduced the legislation that would introduced the legislation that would introduce market principles into welfare by closing the long stay institution and increasing the number of services-care in the community.2.7 The evaluationIt is clear that the policy has proved to be more expensive than was envisaged. It is difficult to assess the amount of money needed to carry out the policies, such as, care in the community and free personal care-local authorities that may not have enough money to provide these partly due to the aging population. However, another issue arose. Once the policies were put in place, local authorities and social workers soon discovered that there were many more people in the community entitled to these benefits than had previously claimed Government help.This problem will, in the future, be exacerbated with the decline in the population –there will not be enough young people to work and provide the taxes needed to support an aging population. Another issue was that demand was outstripping supply. When free personal care was introduced, social work and health services were swamped with demand for these services.This is not the only area of public ownership. We must always remember that the role of public ownership will cover many aspects of our society:·Public goods·Nationalized / Government owned industries for example, BBC, Royal Mail ·Regulation of industries for example, transport with OFGAS, OFTEL etc3. ConclusionThis report mainly writes the term market failure, and discusses the role of government in the market failure by four parts. Also talk about the UK government policy on welfare and the way or instrument to achieve this policy and give a justified evaluation for this policy.4. Reference。

Table of Contents1.0Introduction (1)2.0 Oligopoly (1)●Entry barriers (1)●Non-price competition (1)3.0 Explanation for Diagram in Oligopoly (2)4.0 Pure Competitive Market (3)●Lower prices (3)●Low barriers to entry (3)5.0 Explanation for Diagram in Pure Competitive Market (3)6.0 Roles of Profit in Market Economy (4)●Demand for factor resources (4)●Market Entry (5)7.0 The other two alternatives to profit maximization (5)●Satisficing behaviour (5)●Sales revenue maximization (5)8.0 Influences on a Firm in the Short Run (6)9.0 References (7)1.0IntroductionMarco and Micro economic knowledge we had learned in this period is mainly to discuss about some major market structures in the entire market now. And they are oligopoly, monopoly and pure competitive market and so on. In this case, the Virgin Mobile had entered in mobile phone market in the UK, which is an oligopoly market. In this market, Orange, V odafone, BT Cellnet and One2One are the oligopolists.2.0OligopolyWhen a market or industry is dominated by a small number of sellers, we usually believe an oligopoly appears. And there are two main features of oligopoly:●Entry barriers: It’s a great block for the new company to be a long-run partof an oligopoly market. Usually, many smaller firms operate on the periphery on such s market, which means these companies cannot reach the supernormal profits or affect much to market prices and output. Take Virgin Mobile (VM) as an example: Before VM engaged in the mobile phone market in the UK, there were some industrial giants conquered the market- Orange, V odafone, BT Cellnet and One2One, which account for a large market share.Although VM is making profit, the money it earned is far less than any one of these oligopolist.●Non-price competition:As a few company be dominant to an industrial,pricing can be no longer an effective competitiveness for those oligopolistic firms. Compared with pricing, after-sales service, extension of new market and advertising seem to be more emphasized by them. In this case, the VM is better to promote the competitiveness in such ways -- improving the after-sales quality, expanding into new markets , building their own brand and so on.3.0Explanation for Diagram in OligopolyIn the oligopolistic market, the oligopolists may react diversely to the different price variation trend of their rivals. If one oligopolist raises the price and other companies will not follow it to maintain the market share, however, if the company reduce the price and other companies must follow, which is to keep more market shares. It can be seen in the kinked demand curve below.Before the price is higher than P1, the product demand is elastic that means the price raises and the total revenue will reduce. But when the price is lower than P1, the product demand is inelastic -- the price reduces and the total revenue will also do. Thus, the company may able to reach a stable profit-maximizing equilibrium at the point G, so the companies in the oligopolistic market can not change the price optionally.4.0Pure Competitive MarketIn the pure competitive market structure, the company can compete with each other perfectly. There are two common characteristics that are considered to be “competitive” are:●Lower prices: Generally, a perfectly competitive market exists whenevery participant is a "price taker"which means the suppliers will have notable to raise price for facing elastic demand curves, and no participantinfluences the price of the product it buys or sells.( /wiki/Perfect_competition#Basic_structural_characteristics ) .So simply raising price will make a loss of demand and total revenue. Thecross-price elasticity of demand can reflect the customers’ attitude towardssome particular goods. The demand of substitute goods is holding pacewith the price when it has any change. Conversely, the demand ofcomplementary goods would decrease when the price increase. In thiscondition, customers will always find the most proper goods forthemselves.●Low barriers to entry: Compared with oligopoly, the new firms wouldbe easier to enter in the pure competitive market. And the entry of newparticipants will probably provide competition and ensure price is keptlow in the long run.5.0Explanation for Diagram in Pure Competitive MarketIt is known to all that each individual firm is considered as a price taker.Customers may not prefer to buy a product with a higher price. Because of the characteristic (perfect knowledge) of pure competitive market, neither buyers nor sellers can gain an advantage and firm may sell their goods at the pointwhere they have the maximized profit.From the short run view of a firm in a pure competitive market structure, the explanation of the diagram is as follow:The price in a pure competitive market structure is decided by demand and supply, which can be seen in panel on the right. When demand rises from D1 to D2, the equilibrium point goes from A to B and P2 is the established price. Because of the price which a firm use stays at P2, marginal revenue is equal to P2 at last a verage revenue is equal to P2 as well. When MC=MR, profit maximization is achi eved, so the point which firms will stop producing should be C which ordinate is P2 and abscissa is Q2. According to the diagram above, when quantity is Q2, ATC is equal to P1. So P2 subtract P1 is average profit and then multiply by Q2 can obta in total profit.6.0Roles of Profit in Market EconomyDemand for factor resourcesScarce factor resources to flow where the expected rate of return or profit is highest. In the mobile phone market, when Richard Branson started to get profit in 2002, VM has 1,445,492 customers, which means stronger demands, more labour and capital are committed. With more scarce factor resources, VM mayable to earn more profit. However, in a recession, the output, incomes and investment for VM must all fall, which may cause the profit loss. Thus the company should take action (for example cutting costs) to preserve its market position.●Market EntryIf an individual company gets more profit than others, it must be a signal to other producers within a market that profitable entry may possible. After three-year efforts, Richard Branson made VM profiting. When it comes, many other firms would be attracted to enter the industry. Thus, the competition would be increased and new products, technologies would be also updated in a higher speed.7.0The other two alternatives to profit maximization●Satisficing behaviourSatisficing behaviour can be the substitute to profit maximization behaviour. This behavioural method lays stress on how decisions are taken within the firm. Whena decision is making, satisficing explains that individuals and groups shouldchoose the first option that is good enough to address most needs rather all. Based on Herbert Simon’s work concerning behaviour --“people possess limited cognitive ability and can exercise only ‘bounded rationality’ when making decision in complex, uncertain situations”, satisficing behaviour encourages individuals and groups to attain a more realistic goal.If VM set a goal that expending their customers to 2 million in a year, finally it reaches 2.5 million. Thus wise we can take the goal for a receivable.●Sales revenue maximizationThe goal of sales revenue maximization is to maximize the sales other than profits.The managers decision price and strategy of products. In this pattern of management, business can grow or sustain market share, ensure survival, discourage competitors, achieve bonuses and build the prestige of the seniormanagement.For the VM, when it initially entered the mobile phone market, it is a great approach that selling their products as many as possible with the lowest profit to enlarge their market share.8.0Influences on a Firm in the Short RunFrom the diagram above, which can be seen are total cost (TC) is the sum of fixed (TFC) and variable costs (TFC).In the beginning, when nothing is being produced ,the fixed costs will be equal to the total cost. The TC and TVC increase concurrently with the quantity, but they are paralleled and the distance between them is TFC which is always invariable. And total cost is an upward trend.The diagram is about the short run cost curves. One time the fixed cost is excessively used, which will lead to the progressive decrease of marginal product, meanwhile the marginal product reduce will lead to the decrease of marginal revenue. Leading the reducing of the ATC when MC<ATC, on the opposite, it will lead to the ATC's increasing. Making the short-run ATC curve look like U-shaped, on the other side, the law of diminishing returns will lead to the rise of marginal cost of production as o utput increases.When AVC increasing higher than the fall in AFC one time the output increases , whi ch the marginal cost is rising will lead to the average total cost rising9.0References( /wiki/Perfect_competition#Basic_structural_characteristics ) .。