Cocktail Party Economics Chapter Summary

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Register to read the introduction…These two are used to evaluate systems of resource allocation. Allocating a resource means deciding what to use it for. The reason resource allocation is important, is because economics studies what people do when resources are scarce, that is, when there 's not enough resources to satisfy all the human wants that are competing for them. Its very rare to find a perfectly functional competitive market. Even though they are efficient they result in very inequitable markets. In Cocktail Party Economics the concepts of efficiency, equity, and market failure are gone over very clearly with specific examples that use your knowledge to see how the Canadian government’s intervention in agricultural…show more content…
It is said that the government tries to have the best of intentions for the economy. In a recent article Canada is talked about in how they have been intervening in the farm markets. They are trying to enhance profitability for the farms by using different programs and policies. Government interference in agriculture does not only affects which goods and products are produced, but also the quantity of imports and exports of many commodities. This usually is because they are trying to make the economy efficient but this can sometime backfire and make it inefficient. They are also trying to make it fair for consumers and make sure they don 't pay more then they should have to if farmers have high prices. Canadians farmers seemed to like having no government programs regulating there products and produce due to the fact that they could produce and sell more. It goes on to talk about how the government uses price supports on the farmers which means that they are basically putting price controls on the farmers to artificially increase prices in there agricultural market. As government make changes to there polices there are both winners and losers. This is because trade sensitive commodities have both much to gain and much to

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