Impact of Global Economic Shocks on Economy
Added on 2020-07-23
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Business Economics
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Economic problem of scarcity and demand resource allocation......................................11.2 How equilibrium in a market is achieved.........................................................................31.3 Importance of different market systems...........................................................................51.4 Role of opportunity cost in determine how economies make decisions..........................61.5 Importance of elasticity in market interaction..................................................................8TASK 2............................................................................................................................................92.1 Implication of pricing and objectives on business firms operations................................92.2 Compare how price set in different market structure.....................................................112.3 Analyse firms behaviours on market structure and operations......................................122.4 Impact of regulation on market power in given situations.............................................12TASK 3..........................................................................................................................................133.1 Analyse how the structure of an economy has changed.................................................133.2 Evaluate tools available to meet macroeconomic policy challenges..............................143.3 Evaluate the success of government policies in achieving objectives...........................153.4 Economic performance of an economy in global market...............................................16TASK 4..........................................................................................................................................164.1 Theory of comparative advantage using relevant illustration........................................164.2 Advantage and disadvantage of free trade......................................................................174.3 Analyse the impact of emerging economies on developed economies..........................194.4 Impact of recent domestic and international economic shocks......................................20CONCLUSION..............................................................................................................................20REFERENCES..............................................................................................................................22
INTRODUCTIONIn modern time period, the level of competition is continuously increased day by day.Business economics help in facing financial challenges and shortcoming which arises in anorganisation. There are many problems that an enterprise can handle and also few issues such aselaboration, schemes, organisation and business management. This report is based on Tesco Plcwhich is British Multinational grocery company (Acs and et. al., 2011). Its headquarter is locatedin Welwyn Garden City, Hertfordshire, England. Its stores are covered more than 12 countries ofAsia and Europe and this is leader of all retail stores of UK. The purpose of this report is toidentify the problem of business economics and analyse how it is affects on UK businessorganisation. In United kingdom, economy rate is highly formed and market oriented. It is standsfor fifth largest economy of the world. Government mainly intervene energy sector which haslead to difficult system. The growth rate of UK is 1.5%. Fiscal that policy which changes thelevel of consumption of government expenditure and monetary policy help in maintaining RBIrate. TASK 11.1 Economic problem of scarcity and demand resource allocationIt refers to the study of human behaviour relationship between users and scare whichhave secondary usage. Economic is the examination of resources involved when they choosebetween alternate form of several conclusion. On the hand economic analysis means to a methodwhich help in distributing scare resources in limited value. There are various source of economicapproach such as cost benefit analyses that influence the nominal value of result. Tesco candivide the economic analysis into three primary divisions that includes microeconomics,macroeconomics and econometrics. Microeconomics- In this company will try to estimate thebehaviour of a person in different situations basically they are only private and firms customers(Brabham, 2013). They can focus on how the business select to produce its demand of productswith compare to supply of consumers of specific goods. Macroeconomic- It directly effects onbusiness operations decisions on the whole economy. This includes affects of economicsdecisions on employment, development and inflation of entire economy. The econometrics is determined with usage of mathematics theory of economic. Theeconomic branch which is use the method of statics for measuring and calculating the concepts1
of relationship of economic. The whole world resources are limited. All the researchers are saidthat resources are used in very limited value. Scarcity refers that economical factors that includesgovernment, global and organisation authority which can obtain large value of resources atparticular time period. The economists have three parts which assist in solving basic problem ofeconomic that are as follows:what to be produced?How to be produced?For whom to be produced?Scarcity and demand resource allocation- Scarcity refers to the limited value of goodsthat may be demanded by customers in the market place. The capacity of an individual is totallydepends upon their selling and buying commodities of available resources by an organisation.Demand allocation refers to that process which distribute products and services and supply totheir customers, and when supply is affected for the demand of whole allotment of group. Theseregulations are defined to solve all supply confinement within an portion group if need is scare. Marks and Spencer firm has face problem with scarcity of resources because they sellvarious types of products and services. It includes branded clothes, food items and homeproducts which are sell in the large market. The scarcity of resources is face by cited firm andthis create lack of customers base. They can not provide branded clothes from outside thecountry by this they can not attracts more buyers towards their goods and services. For example, NHS is the health care company which is based in UK. They are facescarcity resources problem in badly manner. The issue is that lack of qualified doctors andlabours who help in increasing factors of production. By this, they can not take care of patientwho are come for providing proper care to the required customers. Scarcity of qualified doctorsare creates major problem within an organisation and this will face by company in effectively.This will directly affects on patient health by lack of proper advice and they suffer from heavyloss regarding diseases. The scarcity of doctors will affects patient health by which some peopleare die and some are suffer from their disease. The company will also arrange certain requiredresources which assist in taking care of customers by using these resources. It is the duty ofcompany manager is to arranged needed equipments and techniques which required within anorganisation. At some time, the demand of higher resources but firm have lack of resource bythis they can not fulfil all requirements of enterprise in effective manner. 2
Demand- When a customer need some products and services they ask seller for purchaseonly such type of good so that it is known as demand. The capacity of an individual is totallydepends upon their selling and buying commodities of available resources by an organisation.In UK, the problem of scarcity of resources can drive for maintaining high in the nation.The major reason behind value of products is that the supply does not getting increasing inspecific time period but their demand will enhancing more than expected from suppliers and risein production capacity. Each economy have limited resources for managing allotment challengesin proper manner. For example, UK government want to invest their financial resources forgenerating more jobs at the same time for saving money. 1.2 How equilibrium in a market is achievedMarket equilibrium refers to that situation in which supply of actual products iscompetitive with its need by the consumers (Czinkota, Ronkainen and Moffett, 2011). It is thatparticular rate point when the quantity which manufacturer produces will be purchased by buyerswithout left any commodity as remaining. For understanding how to achieve market equilibrium point of TESCO organisation, agraph is representing as below:3Illustration 1: Market Equilibrium, 2017
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