Economic objectives and types of markets

Question 1

Economic objectives for producers (Economic agents)

Answer 1

We assume they want to maximise profits, but may also look to maximise total sales or increase their market share. Some firms also have ethical objectives to look good.

Question 2

Economic objectives for Households/ consumers and workers (Economic agents)

Answer 2

Consumers look to maximise welfare whilst living a life they can afford.

Workers want to maximise their income whilst having as much free time as they can

Question 3

Economic objectives for government (Economic agents)

Answer 3

They want to balance the resources of the country, by allocating them efficiently and correctly so producers have a balanced chance. (maximise public interest)
Also aim for: economic growth, full employment, low inflation

Question 4

whats a free market and what are the ADV and DIS ADV of them

Answer 4

Free market= the consumers determine the price of things based on what they’re willing to pay for it
A= Allows element of choice for consumers
rewards for good ideas/ entrepreneurship
D= Huge inequalities of income which may be seen as unfair.
Huge dominance from top producers makes it hard for smaller companies

Question 5

whats a planned economy market and what are the ADV and DIS ADV of them

Answer 5

planned economy= government controlled and they decide how much resources should be sold for and how they’re allocated
A= more control over economy, so they can reduce inequality, as well as provide lots of people with jobs as there would mostly be public sector work
D= restricted choice for consumers and lack of innovation as there is no competition between producers

Question 6

what is a mixed economy and why does it work ?

Answer 6

The UK is a mixed economy, where we have both public and private sector businesses. Public sector provide vital services such as the NHS (government owned) and the private sector is business who are looking to maximise profit and beat competition

Question 7

types of business ownerships?

Answer 7

private sector
public sector
voluntary sector

Question 8

Whats the private sector?

Answer 8

provide most goods and services for consumer use, they exist to make a profit and we assume they want to maximise profit.

Question 9

Whats the public sector?

Answer 9

goods and services not suitable for private production- government organises provisions for this

Question 10

whats the voluntary sector?

Answer 10

charities and societies that exist to help people