Analysis Of Australian Progressive Economic Development

Demand

Discuss about the Australian Progressive Economic Development.

The demand of a product by the consumer is what triggers the production. After a market research and an effort made by a potential entrepreneur to identify a market gap, one of the key factor that influences his or her decision on whether to engage in the production of the commodity under research is the size of the market (Brandow, 1961). Apart from that he or she also looks on other factors such as does the market have any potential of growth? How easy is it to obtain the raw materials that are crucial in the production of a product? What are the government policies in the area? How well is the area developed in terms of infrastructure? Among other things. The size of the market creates a demand pull. The size of the demand pull is determined by the extent the consumers they willing to do to get the commodity. After a production industry has been established by an entrepreneur they have to gauge their supply with the quantity demanded (Smith, & Friesz, 1985).  These two parameters lead to the supply and demand curves. This is so because the entrepreneur has to determine an optimal point, an equilibrium, in the curves of which the quantity they supply to the market, is the same amount of quantity demanded and that they will all be purchased. This is to avoid overproduction in the firm which may lead to products going bad while still in the market especially if the company is dealing with foodstuffs which may result to extreme loss by the company and to ensure that there is a continuous production process in the chain of production (Helpman, 1987).

In the practical world, market prices are determined good inventory which is held by the manufacturers and not the rate at which goods are supplied to the market by the manufacturers. If they supply goods at an equal rate to which the consumers demand the company’s products, then the market will be said to be at equilibrium. However if this is not the case and the manufacturers supply more that the quantity demanded then there will be a possible inflation as they will be forced to lower their prices to attract more buyers. The same case applies if they produce a few products then there will be excess competition in the quantity demanded and this will result in extreme prices to the products (Shafer, & Sonnenschein, 1982).

Supply

This is the ability and willingness of a consumer to purchase a product. The demand for a commodity is mainly a product of two qualities which are the “taste” and this describes the consumers preference of the very commodity other that other similar commodities in the market and the other is the “ability to buy” which dictates the consumer ability to purchase the exact commodity at a particular price of which he or she has a preference of taste in it (Sonnenschein, 1973).

These two factors rely on the price of the market. For instance when the price of a particular commodity is high in the market there will be a subsequent drop in demand of the product especially when alternative product has a cheaper price and the consumer is not willing to buy the very commodity at the high price or when the consumer disposable income does not put him or her in the position to purchase the commodity at that price. When the prices are low there will be a consequential high demand. This is because at very low prices many consumers of all classes, upper, middle and lower class will be able to purchase the product. However, consumer’s taste may vary over time. Continued use of the product may alter the demand by the consumer and over time their preference may change and they may opt for other products leading to a drop in demand it (Sonnenschein, 1973).

The curve above explains the market demand scenario based on the demand of a commodity. The graph explains the consumers’ willingness to purchase a commodity at a particular price. However, this graph seem to explain that the quantity demanded is only affected by the price of the product, this is not true as other factors do affect the demand of a commodity by the consumer but in the scenario above they have been kept constant (Jaffe, 1988).

This is the ability and the willingness of the suppliers to supply a certain commodity to the market a certain set price. In the case of a higher price of a commodity in te market the suppliers will be more willing to supply are goods as the marginal revenue they realize is increased due to the elevated profits returns. In the practical market a scenario in which the inventory is much less than the desired inventory, the suppliers raises both the price and the volume of their supply to the market. In the short run, increasing the supply of commodities to the market will definitely lead to high production costs which eventually will have a direct impact on the price of the end product as they will rise. This price rise will have a positive impact on the producers as they will increase their supply (Chang, & Schorfheide, 2003).

Relation between quantity demanded and quantity supplied

The supply curve above slopes upwards. This is because every additional unit is taken to be more complex and difficult to produce than the previous unit and hence this reflects directly on the higher prices per unit increment. A short-term expansion in the production chain can mainly be achieved by making workers work on overtime rates, increase the labor force by contracting to a source from outside or just simply by increasing the workload on the present equipment (Cohen, Diether, & Malloy, 2007).

Demand is a number of products or service that an end consumer is willing and able to buy at a particular price. Supply, on the other hand, refer to the quantity that a manufacturing or service industry is willing and able to supply at a particular market price. Consumers and producers react differently to a fluctuation of the market price of commodities (Jamison, & Plott, 1997). For example, when there is an increment in price, the ability and willingness of the suppliers to offer the same commodity in the market will increase. However, on the other hand, the ability and willingness of the consumers to buy the same commodity will reduce. The figure below illustrates the above theory (Smith, & Friesz, 1985).

In the table above we note the quantity of the commodity supplied at each price. It is clear that as the price decreases there is a corresponding increase in supply and when there is shoot in price there is a corresponding decrease in supply (Guide Jr, Teunter, & Van Wassenhove, 2003). The market reaches an equilibrium when there is an equality in the quantity demanded and the quantity supplied as illustrated by the graph below.  It is evident that the supply and the demand curves get to equilibrium when the quantity supplied is at 57. Taking for example if the price of the commodity was at 30, the manufacturers would be willing and able to supply 84 units of the products, however from the quantity demanded at a price of 30 only 28 units of the product will be sold and evidently the producers would have so much excess inventory which is definitely a loss to them. To take back their inventory to the optimal level, the producers would have to reduce their market prices to a price of 15 where the quantity supplied and the quantity demanded are at equilibrium (Freeman, 1979).

Analysis using the data provided

Quantity of product

Analysis using the data provided

The number of persons employed is defined as the total number of people with full-time jobs in unison with those in the part-time jobs. Analysis of employment as a full time or part time is derived respect to the number of hours worked by an employee in a typical time span rather than a given reference period.  The idea of usual hours is applied to persons working as well as persons on a temporary absenteeism (Burgess, & Campbell, 1998). With full-time employment, a worker must have worked for 35 hours or even more within a week. On the other hand, a part-time employment refers to a person having worked for less than 35 hours with a week. With the Australian economic fluctuations, the government decided to study its employment trends over the years. This study would explain the movements of the country’s labor force with special concern focused on the shifting between full time and part time jobs. More so the statics was intended to study the movement in and out of the work duty (Campbell, & Burgess, 2001)

In my analysis I have used the data from 1985 because it is from then that the profit before income of several independent parameters like  Accommodation and food services Transport, postal and warehousing Information media and telecommunications Financial and insurance services Rental, hiring and real estate services Rental, hiring and real estate services and ;  Total State  and Industry. By so doing I will be able to compare various population, gender and employment statistics to come up with a fine prediction of the country’s level of unemployment and the number of worker versus the total profits realized in millions.

Over the years the pollution of Australia has been increasing steadily. This has been the case with both genders in that the female and the males. However the male population continuously to lead in numbers compared to the female population. An increase in population has a corresponding increase in the number of the available labor force (Dawkins, & Norris, 1987).  This labor force has been continuously increasing in the industrial basis of Australia hence the level of outputs increased significantly over the years as the population progressively grew as shown in the graph below (Romeyn, 1992).

Following the data provided it is evident that the population of the male gender unemployed is far much great than their female counterparts. This can be explained that the male population in the country is leading the female population (Pettit, & Hook, 2005).  This is then directly reflected in the number of unemployed as there are more male unemployed compared to the female population (Preston, A., & Whitehouse, G. (2004). In the early years the female gender did not participate much in employment but over the year they have caught up with the male gender and even the female unemployed to employed ratios has been increasing over the years (Pocock, Elton,  Preston, Charlesworth, MacDonald, Baird, & Ellem, 2008).

The level of the unemployed compared to that of the employed population gives the graph below. It shows that the employed population is by far much great compared to the unemployed one. The economic condition in Australia has a favorable job market and most of the population readily get a job. This is also evident in the unemployed to population ratio. This ratio presents a very small figure that continuously drop over the years (Romeyn, 1992).

As the data presents there not much difference between the total population and the employed population. At the early years, the two graphs show a small figure in this trend. However as the years progressed there was a growth in population as well as the country’s economy. The economic growth boosted the country’s economy and the industrial, production and servicing sectors employed even more people from the growing population. However, the too much population could not be fully employed as some remained unemployed as stipulated from the graph above (Gornick, 1994).

With the population increasing over the years the government has realized an increase in the provision of social amenities. This is because with the continuous growth in population and the country’s economy, the labor force has enjoyed incomes which has consequently increased their disposable income making them opt for better standards of living which incorporate the social amenities. These include the infrastructural tools as well as the social requirements by the general public (Lebow, Saks, & Wilson, 2003).

 A nominal wage is a standard rate of payment that employee is compensated. This payment has not the adjustment in the case of inflation. On the other hand, real wage is the quality of services and the amount of goods that a worker buys from his/normal wages. The labor supply id primarily determined by the real wage. In that, the economic status of a workforce is measured on the basis of the amount of products and services he/she is able to purchase. In the case when the prices of the products and services have been doubled, the laborer will have to double his/her amount of the nominal wage to be able to purchase the exact quantity of the product (Bhaduri, & Marglin, 1990).

Nominal wage is mainly measured in monetary values. The real wage, however, is nominal wage in a given economy after changes in purchasing capability of a worker. They are related in that the real wage is given by nominal wage divided by price levels (Lebow, Stockton, & Wascher, 1995).

Real wage = nominal wage/price level

The workforce mostly is much concerned with the real wage and not the normal wage. This is so because the real wage takes into account the trade-off between the time spent in leisure and the ones in purchasing of good and services. Firms mainly are concerned with the real wage because it estimates the bill that the firm will endure in case they are to increase their workforce numbers (Bhaduri, & Marglin, 1990).

Conclusion

Australia is an excellent example of an ever growing country will excellent economic grow. The analysis of the data has proven that the country is just more than providing a job for its employees but also taking care of their welfare in terms of nursing homes and provision of insurance policies all round matters affecting the employees as a whole. The country has provided a favorable environment to attract external investors who have established businesses within the country thus ensuring its population is free of unemployment and despite this is not yet achieved the statistical data clearly suggests that the country is in the right track on the fight against unemployment (Kidd, 1993).  The government has also encouraged women to participate in the development of the country’s economy by giving them job and we can see that the level of women employed is now almost at par with that of the male. This strategy should be enumerated by other countries one of the best ways to ensure economic growth (Lebow, Stockton, & Wascher, 1995).

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