The Workings and Effectiveness of the Price Mechanism
Introduction In this essay I am going to analyse the workings and effectiveness of the price mechanism as a means of allocating and reallocating scarce resources. I am going to do this by comparing the free market economy with its alternatives and by looking at how government intervention allows the price mechanism to carry on working. I am also going to look at the role that we, as consumers, play in the workings of the price mechanism.
Definition & Workings of the Price Mechanism The Price Mechanism: The system in a market economy whereby changes in price in response to changes in demand and supply have the effect of making demand equal to supply. The price mechanism works as follows, prices respond to shortages and surpluses. Shortages cause prices to rise, surpluses cause prices to fall. The price of a product will either encourage producers to supply more or less, the higher the price the higher their profit and the more they are going to want to supply. For example should consumers decide that they want more of a good (of if producers decide to cut back supply), demand will exceed supply. The resulting shortage will cause the price of the good to rise. This will act as an incentive to producers to supply more and will discourage consumers from buying so much. Price will continue to rise until the shortage has thereby been eliminated. The exact opposite is true if consumers decide that they want less of a good. Price will continue falling until the surplus had been eliminated. The same analysis can be applied to factor markets. If the demand for a particular type of labour exceeded its supply, the resulting shortage would drive up the wage rate, thus reducing firm's demand for that type of labour and encouraging more workers to take up that type of job. Wages would continue rising until demand equalled supply or until the shortage was eliminated. The result of this is that, in theory, the allocation of all resources happens without the need of government intervention and only through the price mechanism. Free Market Economy The price mechanism can only function within a free market economy.
Despite its size, only 190 pages, the authors address the basic concepts of economics while also applying those politically and for personal finance decision making. Those basic concepts include scarcity, gains from trade, marginal decision-making, profit management, income growth, and Adam Smith’s invisible hand theories are all discussed within the first part of the book; allowing readers to understanding the concepts, Gwartney applies the same concepts to the creation of wealth and the importance of competition, private property, open trade, monetary stability, and lower taxes. This book educates its audience by evaluating our economy and government mechanisms without the overpowering display of charts, formulas, and graphs; which you would typically see in a textbook allow...
It is therefore imperative that the fight against terrorism focuses on preventive rather than reactive strategies that involve understanding how terrorism works and what can be done to prevent terror attacks. One way of achieving this is through learning the psychology of terrorist group recruitment. Understanding this psychology is important as it will raise awareness to the general public to understand how terrorists are recruited and how they can avoid being recruited into terrorist organizations. In addition, anti-terrorist groups and policy experts may use this knowledge to develop interventions or policies that discourage and prevent terrorist group recruitment. This paper will focus on the psychology of terrorist group recruitment and the discussions will be summarized at the end.
However, price controls historically is widespread, steady, and lackluster. Tight controls on prices lead resources to be unused and production to be cut short. Widespread famines assure providers a steadfast demand for inferior services and prevent them from profiting by innovating or improving quality. Prices fixed by sanction lessen enticement for providers to cut costs and encourage them to seek profits by playing politics rather than by serving their customers. Whil...
Gertrude is a kind and loving mother, the kind that watches after her son through thick and thin and loves him unconditionally. Hamlet had suspected her of aiding in the killing of King Hamlet. She is shown to be a quiet, “stand with your man” type person who is influenced easily. However, there is a slight change in her personality that isn’t too noticeable. At the end of the play, the King and Laertes have plotted to kill Hamlet. One part of the plot was to have Hamlet drink out of a poisoned cup but in the confusion of it all, the Queen ends up with the cup in her hand. Even after the King's warnings not to drink from it she does. She does this and completely defies her husband's wishes by saying before she drinks from the cup, “I will, my lord, I pray you pardon me.” I think this shows that if she wouldn’t have died from the poison, Gertrude may have been a completely different woman had she found out about Claudius’s plot about killing King Hamlet and young Hamlet as well. I believe that she would have stood up for her son if she had a chance to. Hamlet meets with his father’s ghost who tells him of Claudius's plot to kill him. After the ghost is done telling his story, he tells Hamlet to punish only Claudius, but "Taint not thy mind nor let thy soul contrive against thy mother aught. Leave her to heaven". He was trying to tell Hamlet to only punish Claudius. The one other time in the play that we see the Queen standing up for herself or actually arguing is when she and Polonius decide to confront Hamlet on his behavior toward the King. Since the revealing of Claudius's involvement i...
In “Hamlet,” Shakespeare commendably conveys a, if you will, a “love story” between the major characters in the play. Hamlet, Gertrude and Claudius are the individuals he writes about. In this story, Gertrude must choose between her son, a loyal, sincere male figure in her life that has always supported and loved her, or a man who can offer her power and fulfill her dependency trait, which one may say is what she has always strived to attain. Gertrude’s inability to see the bigger picture of King Claudius’ deceit and ill morals is what makes Gertrude a weak and submissive character. While Gertrude means no harm, her poor judgment contributes significantly to the rotten events that occur throughout the play. The choices Gertrude does make ultimately leads to her death and the downfall of the ones she loves as well.
Shakespeare’s Hamlet, shows strong prejudice against woman especially with such characters of Ophelia and Gertrude. Shakespeare created an interesting character with Gertrude; he created a character that sits in the middle of all the conflict and appears to not partake in much of it. However Gertrude does seem intent in defusing it at every possible chance she receives. Gertrude is a central figure in the play. She appears a great deal but doesn’t say much – implying mystery and creating an interesting uncertainty in the audience. Hamlet spends a lot of time dwelling on her marriage to Claudius and Shakespeare leaves many questions unanswered with Gertrude such as did she have an affair with Claudius behind old hamlets back? Why does she drink the poisoned wine that is intended for her son? Does she know it is poisoned? Gertrude is the mother of Hamlet and although they do not have a typical mother son relationship she does love him. Queen Gertrude is often interpreted by many as an adulterate, incestuous woman. Catherine Belsey states that typical interpretations of Hamlet maintain: ‘Gertrude a slut; and Shakespeare a patriarchal bard’ (Belsey,1997:34). Gertrude’s actions throughout the play could be read to show her to be a very passive character, far from a strong independent woman. This is shown with her obedience to Claudius, three times during the play, Gertrude is told to leave and each times she complies without hesitation. In Act 1, scene 2 Claudius says to Gertrude, ‘Madam, come’ (122). Then again, Act 3, scene 1, Claudius says to her, ‘Sweet Gertrude, leave us .’ (28), she complies with ; ‘I shall obey you’ (37). And finally, in Act 4, scene 1, Claudius say, ‘O Gertrude, come away!’ (28). This obedience that Gertrude ...
Marshall’s explanation of how producers decide is divided in two decision making functions: 1) the price bidding function and 2) the production level start up function. Producers do not impose prices; they propose list prices and buyers decide how much to buy at prices proposed, of course after some possible bargaining. All the same producers do not impose production levels, they invest with a production level target that sometime later may succeed or not. Both price and production follow demand in the same direction; if demand grows then producers observe that their individual inventories decrease and hence they, acting in cooperation or huge competition among them, raise their own prices and production levels. Next, each producer decide whether to accept the amount sold and keep the selling prices or to change bid prices and production levels again until a satisfactory, or inevitable, solution comes about. This satisfactory solution looks ...
The only thing left to make Gertrude unhappy is Hamlet’s refusal to forget the death of his father or to forgive her for remarrying so quickly. In order for her to completely bury the past, she must convince Hamlet to accept her new marriage and forget his father’s death.
Gertrudes portrayal in Shakespeare's Hamlet evokes feelings of both disdain and empathy from the audience. The complexity that surrounds this somewhat minor character causes her to be hated by those who do not care to delve deeper. Through her remarriage to Claudius, and the mystery surrounding her former husband's death, the audience initially may take her for a cold hearted woman who is insensitive to her son. However, when analyzing her character throughout the course of the play, one will find her true affection for Hamlet. Although Hamlet portrays Gertrude as a cold hearted and lustful woman, her unwavering love for him reveals the true compassion she holds for her son.
We first realize Gertrude’s poor judgments are her major flaw in the beginning of the play. As the mother of a grieving son, Gertrude should have been more considerate to the situation Hamlet is faced with. Instead, less than two months after King Hamlet 's death, Gertrude
In conclusion, generally speaking the Law of Supply states that when the selling price of an item rises there are more people willing to produce the item. Since a higher price means more profit for the producer and as the price rises more people will be willing to produce the item when they see that there is more money to be earned. Meanwhile the Law of Demand states that when the price of an item goes down, the demand for it will go up. When the price drops people who could not afford the item can now buy it, and people who are not willing to buy it before will now buy it at the lower price as well. Also, if the price of an item drops enough people will buy more of the product and even find alternative uses for the product.
...o make up the difference. This difference we have to make up is usually a higher tax. In raising the tax the price of the good goes up and when price goes up demand tends to go down. As the demand keeps falling and the price keeps rising the product usually ends up off the market and filing a chapter eleven. It typically does not go that far but this is an example of what could happen. A free market is a privilege to have and it is a shame people have to take advantage of it because they do not feel the need to work hard or to go out of their way to do something for someone else.
Japan’s particular high-context style can be characterized by its formalized communication structures and codes (Kowner). As the island nation was isolated from 1640 to 1854, the communication structures became deeply ingrained in Japanese culture (Kowner). After more than two-hundred years of isolation, each individual has had the opportunity to grow and develop a high-context language, and in turn teach it to their own
Because of the GDP growth too fast, increased wages of some citizens will lead to higher demand as consumers spend more freely. This will imply that the supply and demand will be increased and it will occur the shortage of supply. Business must hire more employees and further increasing demand by increasing wages. The increased demand will face of shortage supply and quickly forces prices up.
...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to.