China runs on a socialist market economy comprising of state-owned enterprises and public ownership within a market economy
B1.1
An economic system relates to the method through which societies and governments organize and distribute the available resources within a country or region. China runs on a socialist market economy comprising of state-owned enterprises and public ownership within a market economy (https://www.worldatlas.com/articles/what-kind-of-economy-does-china-have.html). In the market, economy key decisions are influenced by the supply and demand forces that influence prices. The Chinese government asserts such an economy is among the stages for attaining full socialism. Currently, it runs on state ownership of key sectors of the economy.
B1. 2
Marketing usually has an impact on the number of orders placed for a commodity. For those firms whose production is tied to the orders placed, the marketed products will have large production units as compared to those that the company does not advertise. Marketing also has the impact of transforming wants to needs through its power of convincing.
B1. 3
The production possibility curve is a model used to indicate the tradeoffs that must be done in the allocation of resources between the production of two goods. The production possibilities curve depicted above presents a tradeoff between crab puffs and storage sheds (https://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=investment,+production+possibilities). At Point A (0 sheds and 450 dozen crab puffs) there is no investing. At point E, there is investing (4 sheds at a cost of giving up 40 dozen crab puffs). Further investment is attainable by moving from E to I (8 sheds and giving up 140 dozen crab puffs). The best combination is at I since there are simultaneous investment and consumption.
B1.4
Scarcity is as a result of people having unlimited wants and needs with the condition of limited resources. The latter means there are never enough resources or materials to satisfy the wants and needs for every person. These excessive wants with limited resources demand that some wants are foregone based on their urgency. The cost of the forgone alternative is what is referred to in economics as an opportunity cost. Scarcity results in opportunity cost. Buying a car or investing in a home.
B1. 5
Rent entails monthly rent payments that bear no interest. On the other hand, buying a home is a one-of costly investment that will gain interest as the land in which the house sits appreciates. Additionally, the purchased home can generate returns income through monthly rent.
B21
The equilibrium is influenced by government intervention through the imposition of price ceilings and price floors (LEC 2 XX 16). A price ceiling could entail maximum price for gasoline within a county. The government might institute a price control to safeguard consumers from unscrupulous suppliers such as gas cartels who engage in price-fixing.
B2.2
Taxes have the effect of raising the prices for commodities. In the case of elastic demand goods, the demand for such products will decline owing to the higher pricing (LEC 2 XX 26). For inelastic demand goods, the demand will not be affected by the changes in pricing due to the tax.
B2.3
Price is an internal factor that will impact a consumer’s purchase decision. Price is internal since it is relative for what one consumer may regard as expensive might be affordable to another
Weather/season is an external factor that could impact the choice of running shoes to purchase. In the rainy season, the sneakers selected will be the one with water-resistant qualities and less colourful.