Thailand , 2017

In 2017, the export price of Thai rice rose from $365 a tonne to $425 a tonne in a matter of weeks, driven by a sharp surge in the global demand for rice, and lower rice supply. Thailand is the world’s second-largest exporter of rice with around 23 per cent of total rice exports (India accounts for about 29 per cent of the world’s total rice exports).

Basic economic problem and Decision making in allocating

1. What production should take place?

This question is about deciding which goods and services should be provided in the economy. For example, is it better for the economy to have more roads and airports or to have more schools and hospitals? As resources are limited in supply, decision makers realise there is an opportunity cost.

2. How should production take place?

This question is about the methods and processes used to produce the desired goods and services. For example, decision makers will have to decide which combination of factors of production (land, labour, capital and enterprise) should be used in the production process.

3. For whom should production take place?

This question is about which economic agents receive goods and services. For example, should any goods and services be provided free to everyone in the economy, irrespective of their willingness and ability to pay for them? Or should goods and services only be produced for those who can pay?

Exam style questioning

1. Which option is not a key economic question that is addressed by the market economy ?

• A For whom should production take place?

• B How should production take place?

• C Why should production take place?

• D What production should take place?

Answers

• The production should only take place for the people who are willing to pay for the good or service but they should also be willing to pay the amount you want to sell it for

• Production depends on the 4 factors of production ( land , labour , entrepreneurship and captial ) Acoording to the good or service you want to produce , related to that the factors of production works

• With no production goods and service wont be sold very quickly , you will have big backlogs to sell the goods or service to the consumers

• The production should take place depending on the demand , for example should we produce hospitals and police stations or schools and atm , there is an opportunity cost over there, depending on what a city or a state or a private firm is lacking on