1. Describe and explain the main functions of prices in a modern competitive market economy? (20 marks) 2. Explain what economists mean by: (a) an increase or decrease in the demand or supply of a product or service (10 marks) (b) an extensi

1. Describe and explain the main functions of prices in a modern competitive market economy?

(20 marks)

2. Explain what economists mean by:

(a) an increase or decrease in the demand or supply of a product or service(10 marks)

(b) an extension or contraction in the demand or supply of a product or service(10 marks)

Use appropriate diagrams to support your answer.

3. Examine the market for Enrolments on Full Time University Degree Courses in the United Kingdom. Explain and illustrate – with the use of relevant diagrams as appropriate - what the effects on this market would be as a result of the following events:

(a) a rise in the wages paid to lecturers delivering Degree Courses(10 marks)

(b) a reduction in the incomes of students(10 marks)

(c) a new research report is published that shows the significant long run

increase in career earnings that result from achieving a good Honours degree(10 marks)

(d) the UK government grants more institutions University status and the

authority to provide Degree Courses (10 marks)

(e) an increase in the number of students choosing to enter directly onto

apprenticeships and training schemes at companies(10 marks)

(f) an increase in the population as a result of rising birth rates and greater

Immigration(10 marks)

NOTE:- You are required to limit your answer to no more than 2000 words in length IN TOTAL, excluding any bibliography and references. It is recommended that you seek to allocate this total in proportion to the marks allocated to each question and its parts.

To score high marks in this assignment it is essential that you ensure that you pay attention in your answer to the principles that have been covered in class and in the Sloman and Garratt textbook.

It is expected that your answer will make reference to and use:-

- the interaction between demand and supply and the determination of market prices

- how markets may be interrelated on both the demand and the supply side

- distinctions between “shifts in” and “movements along” both demand and supply curves

- the importance in the analysis of elasticity

- the distinction between changes in the short-run and in the long-run

- the use of appropriate and accurate illustrative diagrams/graphs

- the inclusion of varied examples of your analysis in terms of theory and real world cases.