Business Economics Presentation

This presentation covers various topics in Business Economics including the economic problem of scarcity, resource allocation, opportunity costs, elasticity of demand, pricing and corporate objectives, market structure, UK regulations, UK economy in the 21st century, macroeconomic policy changes, UK economy performance, theory of comparative advantage, and more.

Business Economics

economic problem of scarcity and
demand resource allocation
 Scarcity is the term which means limited quantity of sources available in
the economy.
 It is necessary to assure efficient resource allocation so that optimum
use of scare resources will helps to accomplish greater level of
consumer demand
 Natural resources such as land, oil, coal, natural gases, water etc. are
available in limited quantity which results in arising scarcity problem in
the economy

Importance of different market system
 Perfect competition
 Monopoly
 Oligopoly

the role of opportunity costs in
determining the economic decisions
 Opportunity cost is the cost of sacrificing one alternative so as to pursue
a specified action which is already taken.
 In the situation of scarcity, Asda has to choose best option from the
available competing alternatives
 Asda is a profit motive business organization who wants to maximise its
turnover and minimise costs so as to get better profitability.

Elasticity of demand
 The level at which product demand get changes with the fluctuation in price is called
elasticity of demand.
 In general, higher the price will lead to decrease consumer demand and vice-versa.

Importance of Elasticity of Demand
 International trade:
 Taxation policy:
 Monopolist's decisions
 Factor pricing

implications of pricing and corporate
objectives on its operations
 Asda is a privately owned enterprise who mainly aims at maximize their
profitability to compete effectively in the market
 Its corporate objective is to provide cheap and affordable goods and
services to great customer base.
 Less prices helps Asda to generate larger turnover and high profit
margin.

Compare how prices can be set in
different market structure
 Perfect competition
 Monopoly
 Oligopoly

Impact of UK regulations on market
power
 Competition Act, 1988 is designed so as to prevent domestic
organizations from the fierce level of competition from the international
corporations.
 Asda need to comply with all the provisions and run operations in
faithful manner
 , Enterprise Act, 2002 is also applied to the organization specially for
detecting the terms and punish abuse of market dominance
 OFT's (office for fair trading) objective is to ensure fair trading practices
to protect consumer interest.

how the structure of UK economy has
changed in 21st Century
 In 21st Century, UK economic structure changed at staggering rate.
 Technological improvement due to extensive research and development
operations increased UK nation growth rate to a great extent
 Due to globalization, more international rules and regulations came into
force
 High number of firms lead to enhance competition level among
organizations.

Evaluate the tools available to meet
macroeconomic policy changes
 If central bank declined CRR, SLR and interest rate on loan than Asda
can take cheaper loan of large amount.
 In context to UK economy, high credit supply influenced economic
activities by affecting savings and investment
 In context to Asda, strong pound value provide benefits of foreign trade
by exporting goods to the other countries

performance of the UK economy in global market
and its impact on the organization
 In 2014, GDP has been increased by 2.8% however, the expected growth
was only 2.6% which is very good sign of UK economic performance.
 Moreover, its unemployment rate was fallen higher than expected. In
this year, UK unemployment rate has been declined by 6% and the
number of jobless people decreased by 1.97 million which is very good
sign of improved economic performance.
 Moreover, high increase in manufacturing and industrial production is
also a sign of enhanced economic performance in UK (UK economy,
n.d.). It has been increased by 1% in February specially in
pharmaceutical, food and beverage and tobacco industry.
 UK inflation rate in 2014 is 1.2% which is lowest in five year. However,
retail price index has been fallen by 2.4% to 2.3%.

Demonstrate theory of comparative
advantage
 Comparative advantage is the ability of an organization to manufacture
goods at less opportunity costs than other business organizations.
 In context to Asda, after globalization, firm became able to operate at
global level and take benefits of comparative advantage

CONCLUSION
 Different market structure decides prices on different basis but the basis
of it demand and supply forces
 Free trade policy make it possible to enhance globalization which
resulted in high international regulations on the corporations
 UK government achieved its macroeconomic objectives by altering its
fiscal policy, monetary policy and exchange rate policy.

REFERENCES
 Andreyeva, T., Long, M.W. and Brownell, K.D., 2010. The impact of food
prices on consumption: a systematic review of research on the
price elasticity of demand for food. American journal of public health.
100(2). pp. 216-222.
 Bachmann, R., Elstner, S. and Sims, E.R., 2010. Uncertainty and economic
activity: Evidence from business survey data. National Bureau of
Economic Research.
 Cicala, S., Fryer Jr, R.G. and Spenkuch, J., 2014. A comparative advantage
theory of social interactions. Northwestern University, mimeo.
 UK economy, n.d. [Online]. Available through:
<http://www.theguardian.com/business/economics-blog/2014/oct/24/the-
uk-economy-six-key-charts>. [Accessed on 26th April, 2016].