1. Describe the main factors (supply and demand) affecting the current price of gasoline. Include at least two supply and two demand.
2. Discuss at least two costs and two benefits of increasing the minimum wage. Should the minimum wage be increased?
Please answer questions with a maximum of 250 words explaining your position on the issue and supporting it with evidence.© BrainMass Inc. brainmass.com October 16, 2018, 11:10 pm ad1c9bdddf
I have answered the questions with my view of the current supply and demand affects and the minimum wage issue. The actual answers are included. I am also including two sites with information, one for each.
The causes of supply and demand both industry and local issues. For most of the gasoline industry and the oil industry at large, the subject of supply is based on factors that are controlled by the oil companies and just as often, out of their hands. As the recent run up of prices shows, supply and demand can also be a little factor when speculation is in control of the market. However, though the oil industry trades as a commodity, it is not speculation that has driven up the cost currently, but the consistent problem of refineries and oil produced.
Every year, twice a year, refineries change their set up to make gasoline from oil. Since there are not enough refineries to ...
A discussion of the issues noted in the questions about supply and demand and price of gasoline, and about the benefits and costs of establishment of minimum wages.
Explain why, in the microeconomics view of the world, the operation of the private market as a default, maximizes economic efficiency--hence, why government intervention on efficiency grounds has to be specifically justified by particular circumstances.
The answers should be 1 short paragraph for each subpart.
a) Explain why, in the microeconomics view of the world, the operation of the private market as a default, maximizes economic efficiency--hence, why government intervention on efficiency grounds has to be specifically justified by particular circumstances.
b) What are the 3 specific circumstances, where the operation of private markets does not maximize economic efficiency, hence, where government intervention is conceptually justfied on efficiency grounds?
c) Picking 2 of the 3 examples from part (b), draw diagrams which show how the market responds to the optimal government intervention designed to correct the efficiency problem, and explain, with appropriate lettering in the figures,, the net economic effects on all of the affected parties, and the net efficiency effect that results when the "market failure" is fixed through government intervention.
d) Explain the conservative critique of the accounting result obtained in part (C), and the more general critique of the philosophy that government intervention is justified to fix the efficiency probblem in such cases. Please see attached handout on "market failure" versus "government failure" for explanation of these 2 terms.
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