The Economic Problem

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Answers the economic problem Australia faces.

Transcript of The Economic Problem

What to produce?Australia utilises the dollar voting system to determine which products will continue to be produced and supplied to the market. Every dollar paid for a particular product may be considered a dollar vote for that product, such that the products with the largest number of dollar votes generate the most profit and will therefore continue to be produced.Similar in concept, Australia also utilises the supply and demand principal. For instance, if a product is demanded by consumers, then businesses will produce more as to retain more profit. How much to produce? Australia determines how much to produce based on consumer demand as well as their budget. In other words, Australia follows a consumer sovereignty system where the consumers decide the output of the producers. How to produce? In Australia, a lot of things are done by machine because it has the level of technology required. The Australian government permits manufacturers to make it however they want, as long as its legal. How to distribute? Australia utilises the price mechanism to determine the allocation of resources and distribution of goods and services are made on the basis of relative market price. Generally, middleclass people and the wealthy have access to everything, whereas the poor gets access to the leftovers (for instance people on the doll). Even so, the government does make sure everyone has access to a reasonable standard of living for instance access to health services, education and transport.