The economic problem and how different groups attempt to solve it essay

Because of this, producers will allocate the scarce resources more efficiently which will increase productivity and thus producing a higher amount of goods and services. This action by the government ensures consumer sovereignty.

Australian Bureau of Statistics Available: They can affect savings and investment behaviour, the spending behaviour of households, the supply of credit, asset prices and the exchange rate, all of which affect the level of aggregate demand. The economic problem Not applicable Available: This problem affects the economies of individuals, businesses and governments.

The government provides most basic health, education and welfare services, however most decisions are left to the market. Market and mixed economies will use different methods to attempt to solve the economic problem in terms of decision-making, resource allocation and distribution of final output.

Economic management is affected by decisions made through The Reserve Bank, and monitoring policies regarding unemployment and interest rates. Freedoms of enterprise- individuals have the right to use their resources as they choose. These means fulfilling our desires are limited, so not all our wants can be satisfied with the limited resources available.

Producers will respond by increasing the production to meet demand and therefore more consumer wants will be satisfied and scarce resources are allocated more efficiently. Wants can be defined as materialistic desires of individuals or the community, which are desired because they give utility.

Subsequently we must choose between them, and make choices in which our higher preference wants are given priority, and others are left unsatisfied. Public ownership of factors of production allows the government to allocate resources, however they wish.

Therefore, in a mixed economy, the government will regulate some private sector activity and stabilize economic activity in order to solve the economic problem.

What is the Economic Problem?

Whenever we satisfy one want, we are foregoing the opportunity of another alternative want. Australia has a comprehensive economic policy framework, with a sound, stable and competitive institutional structure. In order for this to be successfully achieved, government policies were introduced such as establishing a minimum wage rate.

There are different types of economies, which range between a market economy and a centrally planned economy. Its main function is monetary policy, where it tries to achieve low and stable inflation over the medium term. Through policies created, the government can intervene to affect the operations of free market forces, in order to decrease the economic problem and increase economic prosperity in Australia.This is the central economic problem.

According to Answers (), Finite resources can be termed as a source by which people have taken % advantage and further it cannot be utilized. Infinite wants are those that are unlimited. As each consumer group's wants and resources varies greatly, each deals with trying to solve the economic problem in a different way.

The choices made by each individual are unique, depending on income, age, gender, living situations, education, voting, retirement and personal expectations.

Contrast the way in which market economies and mixed economies attempt to solve the economic problem. Economic Mixed and Market Economy Essay Sample.

Market and mixed economies will use different methods to attempt to solve the economic problem in terms of decision-making, resource allocation and distribution. Different economies have different solutions to the basic economic problem.

The different economies included are traditional, market, planned and mixed.

Economic Mixed and Market Economy Essay Sample

Many different countries embrace the following varying economies. Different countries can attempt to overcome the economic problem in several ways; which is to apply a different economy system to their country.

Due to scarcity consumers will now have to make a choice of what they want, by sacrificing the next best alternative when making a decision, this is known as opportunity cost.

As each consumer group’s wants and resources varies greatly, each deals with trying to solve the economic problem in a different way.

The choices made by each individual are unique, depending on income, age, gender, living situations, education, voting, retirement and personal expectations.

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The economic problem and how different groups attempt to solve it essay
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