Purpose of Assignment, business and finance homework help

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Purpose of Assignment

In Week 2, students will employ the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. Students learn about welfare economics--the study of how the allocation of resources affects economic well-being--and will discover that under most circumstances, the equilibrium price and quantity is also the one that maximizes welfare. Students will review different sources of externalities and a variety of potential cures and will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes. Students will see how the U.S. government raises and spends money and the difficulty of making a tax system both efficient and equitable.

Assignment Steps

Scenario: Imagine you have been assigned the responsibility of preparing a paper for the governor's next economic conference.

Prepare a 1,050-word paper addressing the following:

  • Explain why equilibrium of supply and demand is desirable.
  • Explain the following concepts using the concept of consumer and producer surplus:
    • Efficiency of markets
    • Costs of taxation
    • Benefits of international trade
  • Discuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.
  • Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.

Cite a minimum of three peer-reviewed sources, not including your textbook.

Format consistent with APA guidelines.

Tutor Answer

School: Boston College



Equilibrium of supply and demand:
Student’s Name:
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Equilibrium of supply and demand
The term equilibrium is inferred as equivalent, here is economy were, it proposes that in a
competitive market, the unit cost for a specific good, or other exchanged thing, for example,
labor or fluid budgetary resources, will shift until it settles at a point where the amount of
quantity demanded (at the present cost) will be at the same level with the amount supplied (at the
present cost), bringing about an economic equilibrium for cost and amount of quantity executed.
(i.e. at the point when the supply capacity and demand function cut cross). Now at this point, the
portion of merchandise is at its most proficient in light of the fact that the measure of products
being supplied is precisely at the same as the measure of products being demanded.
Supply and demand activity is perhaps a standout amongst the most crucial ideas of
financial aspects and it is the foundation of a market economy. Demands alludes to how much
(amount) of an item or services is needed by purchasers. The amount demanded is the total
amount of an items which an individual will purchase at a specific price; the connection between
the cost and the amount of good or services demanded is known as the demand relationship.
Supply speaks to how much the market can offer. The amount supplied alludes to the amoun...

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