National economics: lecture notes Koshelev Anton Nikolaevich

2. Regulated and unregulated markets

Depending on the availability of external control of processes occurring in markets, they are divided into regulated and unregulated.

Unregulated markets- this is a state of the market when the processes occurring within its framework are not subject to control, but proceed in accordance with the natural mechanisms of market self-regulation.

This state of the market ensures an efficient allocation of resources. Natural market mechanisms direct limited resources to the production of goods that are most needed by the population. Constant improvement of production technologies contributes to the effective combination of supply and demand - their balancing. The personal interests of an individual in market conditions are directed in such a way that he acts for the benefit of the whole society: he produces the most necessary goods, the incentive for which is the price of the good.

The basis of a free market is economic freedom, but the market directs it in the interests of the entire society. The market is capable of coordinating the activities of a large number of individuals without the use of violent coercion. Freedom of economic activity is one of the main reasons for the high efficiency of the unregulated market - the level of his well-being depends only on a person’s personal abilities and actions, which stimulates him to increase the efficiency of his economic activities.

The disadvantage of an unregulated market is the gradual decrease in competition, which is the engine for the effective functioning of the market.

From the consumer's point of view, it is a favorable phenomenon, but for the manufacturer it seems to be an undesirable element of economic activity. In the process of market development, the manufacturer inevitably seeks to minimize the influence of competition on its activities (for example, through various agreements, company mergers) and ultimately monopolize the market. At the same time, scientific and technical developments require the concentration of capital, which is only possible when the economic resources of several economic entities are combined, as a result of which several producers remain on the market who have sufficient resources to conduct scientific and technical developments and who are able to provide consumers with higher quality benefits. This situation makes it possible to manage demand by regulating supply; the consumer is forced to buy the offered goods at the offered price, since their substitutes are not available on the market. In the process of its development in an unregulated market, competition weakens, at the same time the efficiency of the functioning of market mechanisms decreases.

Another disadvantage of an unregulated market is the increasing tendency towards uneven distribution of resources - national wealth among the population. The free market system promotes the concentration of capital among a small number of people who are more capable of economic activity. Recognized and guaranteed property rights enhance property differentiation, since capital is inherited.

An unregulated market system is not always able to adequately respond to consumer signals and produce all the goods they need. The manufacturer makes a decision on the efficiency of production of a certain good only on the basis of comparing its own costs and profits, but does not assess the costs for the entire society (for example, the negative impact of industrial production on the environment and the costs necessary to eliminate it).

Another dysfunction of the market is its inability to produce public goods. Economic activity based on personal gain does not prioritize the production of public goods, which are necessary for the whole society, but their financing cannot be made by an individual consumer, but only by a group or the entire population. Imperfect pricing and the inability to provide an optimal level of employment for society are also significant market shortcomings.

Along with the negative features of an unregulated market, its advantage in ensuring the efficient allocation of resources is also significant.

Regulated markets- this is a state of the market when the processes occurring within its framework are fully or partially subject to external control and regulation.

The external source of regulation is the state or bodies authorized by it. The method for regulation is state regulation of the market - a system of methods of legal, administrative and economic regulation of the market, carried out by state-authorized bodies.

The inability in some market situations to self-regulate causes an objective need for state regulation (for example, in the field of production of public goods, employment regulation, financial and credit sphere). The explanation for the need for external regulation of the market is mainly due to the fact that many market crises can only be resolved with government intervention.

The volume, scale and effectiveness of regulation are directly related to the level of development the market is at. At the moment, government regulation is part of the process of reproduction of the national economy.

Depending on the specific situation in the market, the tasks of state regulation are also transformed. Typically these include creating conditions for sustainable economic growth, reducing unemployment, initiating structural transformation of the market, creating a system for protecting national producers and stimulating the export of goods.

The objects of state regulation of the market are specific problems that have arisen or may arise during the functioning of the market, causing significant damage to the standard of living of the population and economic growth.

The main points of government regulation of the market are:

1) economic cycles;

2) market structure;

3) circulation and accumulation of capital;

4) regulation of the level of employment;

5) monetary sphere of the market;

6) pricing;

7) competition;

8) distribution and redistribution of income of the population and national wealth;

9) ecology;

10) foreign economic relations.

In the economic practice of no country it is impossible to find an exclusively regulated or unregulated market. Experience shows that only a reasonable combination of elements of the free market and government regulation makes it possible to stimulate sustainable economic growth and stability of the national economy.

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How the labor market regulates market relations, especially for the formation and real functioning of the modern economy - this question is asked by those who run large businesses involving a large number of personnel. The labor market is a market in which a good is sold - labor. The price for this kind of product is wages.

The modern labor market is structured as a system of social relationships, which are reflected in the level of development and the currently achieved certain balance of interests between the forces present in the market: the state, entrepreneurs and workers.

The modern labor market is capable of occupying one of the most dominant places in various types of economic relations. It is in such a system that the interests of both employers and able-bodied people collide. The relations that have already developed in the modern labor market have a very clearly expressed socio-economic character of our state. First of all, they affect all sorts of urgent needs of the vast majority of the country's population.

Employment levels, as well as wages, are established through the labor market system. Unemployment is a common phenomenon in our social life. This is an almost inevitable negative phenomenon in the economy of any country.

What is the impact of the labor market?

The labor market is a constant indicator: its condition allows one to judge national stability, well-being, and the effectiveness of socio-economic reforms. The emerging economy and its structural reorganization are placing ever newer and stricter demands on the quality of the so-called “labor force,” its level of training and professional composition. Thus, the tasks of clarifying the influence of factors that form the main processes in the modern labor market, assessing their patterns, prospects and trends in its positive development are updated.

The organizational form of expressing precisely such interests in the modern labor market are associations of entrepreneurs, on the one hand, and trade unions, on the other. The state acts as the employer. Thanks to this, state-owned enterprises have investors who finance development programs and the largest projects. But one of its main functions is to determine the rules governing the interests of partners and all opposing forces. This is all determined as a result of equilibrium, which serves as the main mechanism in relations in the labor market. This is where both the system of stimulation and development of productive forces and the established system of social protection are included.

The mechanism of formation of the labor market covers a possible range of legal, economic, psychological and social factors that determine the functioning of the market. This is done through:

  • a system of universal employment, including the widest network of employment services;
  • banks of necessary data on all jobs;
  • state targeted programs that provide assistance in obtaining professional knowledge, as well as potential employment;
  • target programs of enterprises that provide for the retraining of existing personnel in connection with the planned and possible modernization of general production;
  • implementation at various enterprises of a policy of complete stabilization of their personnel, which is being especially actively implemented in the context of the current financial and economic crisis.

All these integral and component parts of the modern market mechanism, which regulates all employment in different industries, are in different proportions. It depends on the economic, geographical and historical conditions of development of a particular industry.

Labor market structure and its typology

The structure of the modern labor market includes:

  • principles of state policy in the field related to labor and unemployment;
  • system of general training of various personnel;
  • contract system;
  • hiring system;
  • unemployed support system;
  • labor exchanges and other bodies that allow the employment process to be carried out;
  • regulation of employment of the population within the legal framework.

In the modern labor market there is a real opportunity to:

  • Free choice regarding profession, as well as place of possible employment. This is determined by various factors, such as wage conditions, working conditions in general, location of employers, etc.
  • Certain migration processes, which allow a specialist to move from one area to another, as well as change regions of work. In addition, this also speaks of the versatility of a separate category of specialists who are able to change the specifics of their work.
  • Universal movement of wages, which is associated with certain factors, such as the priority of experience and qualifications.

Two types of existing markets can be divided into internal and external. The internal market is the movement of labor within one enterprise, when employees move from position to position and move up the structure, increasing their status as a good employee. A foreign market is the movement of workers between enterprises in the same or different fields of activity. These two markets are very connected. However, turnover in the foreign market is a higher percentage than in the domestic market.

Unemployment as a social phenomenon of the modern labor market.

Very often the market economy is remembered when talking about unemployment. Unemployment as a phenomenon occurs when the level of supply exceeds the level of demand for labor.

In today's conditions, five main types of unemployment can be distinguished:

  1. Seasonal unemployment occurs when demand for certain occupations occurs only at a certain time of year or season.
  2. A hidden form of unemployment manifests itself in large enterprises when an employee does not perform his functional duties to his full potential. Especially in the modern economy, there are frequent cases when enterprises do not fire employees, but switch to a shorter work week, send employees on vacation “at their own expense,” etc. There are no statistics on this type of unemployment.
  3. Frictional unemployment can be generated by active population movements, changes in lifestyle, etc. This can often be observed during study, retirement or maternity leave, etc.
  4. Cyclical unemployment is observed when we are talking about a general decrease in demand for a large audience at the same time, for example, this can apply to national minorities, people of a certain gender or age, as well as belonging to a certain social field of activity.

The main problem of today's employment depends not specifically on unemployment, but on the inability to correctly distribute the labor market or on the improper use of labor force.

The labor market must be regulated at the state level. The problems of the population's labor and employment are of great concern to our state, because if the number of jobs decreases, budget revenues and funds for maintaining the country's defense capability, its education, healthcare and other subsidized areas also decrease. The state has set a course to determine high-quality and effective employment management.

Methods of government active influence on unemployment and employment regulation may include:

  • Direct – regulating the labor market at the legislative level. This includes all labor legislation in our country, control over the preparation and implementation of collective agreements, regulation of wage levels, etc.
  • Indirect – monetary and financial policies of the state.

But the types of government influence on unemployment can be classified as active and passive.

  • Passive policies are aimed at regulating only the consequences that unemployment brings. These include organizing and paying assistance to the unemployed population, paying so-called social benefits to the population who cannot get a job, making payments to dependents, organizing free lunches, etc.
  • Active policies are aimed at specifically reducing the existing level of unemployment. This determines the creation of activities that are aimed at improving the skills of existing employees in need of employment; conducting training for job seekers without education, changing professional orientation, organizing and conducting various job fairs. The definition of benefits for potential employers, including in the field of taxation, is also applied, as well as the establishment of additional incentive measures for employers who are able to carry out the employment procedure.

It is the state influence on the labor market as a whole that can become part of the regulator in relation to the economy and allow it to be managed at a high level, coordinated and directed in the necessary direction. The labor market becomes the connecting aspect between the domestic (national) economy and the world economy, which plays a large role in the formation of direct labor resources.

The labor exchange is an active method of combating unemployment

State regulation of the labor market can be partially carried out through its state bodies, the so-called exchanges for providing employment to the population in need.

State exchanges help the population not only provide actual employment. They also reassign citizens who already have relevant professions to professions that allow them to achieve greater success in employment. In addition, employment services collect information about the actual population who cannot find employment for various reasons.

In addition, exchanges identify the range of the most in-demand professions and areas in which employment can be carried out. With the help of exchanges, monetary support is provided to the unemployed population during the period of active job search, that is, the payment of benefits.

Also, with the help of exchanges, a population is identified that has a mobile specificity - capable, together with their families, of changing their place of permanent residence in order to obtain the desired place of work. Recently, such a feature as the mobile specificity of a potential applicant plays a very important role. This is due to the fact that often a region is not able to provide the full range of possible applicants from a given region. Thus, the existing freedom of movement of potential workers can not only create favorable conditions for the worker himself and his family members, but also have a positive impact on the entire state of the unemployment market.

Private companies

In addition to government agencies for the employment of citizens, there are also private employment agencies. Such organizations in their activities are also aimed at providing employment. However, they do this not so much on their own initiative, but at the request of the party contacting them. This party can be either a potential employer or an actual applicant for a specific job.

The potential of such organizations is very great, which makes them strong supporters of the fight against unemployment. The peculiarity of such organizations is that they are aimed at satisfying specific requests received by them. And since these are private organizations, they are able to put in a lot of effort because they receive a specific reward for each individual employment case.

Free movement of labor: difficulties and trends.

Indeed, the mobility of labor from region to region, from region to region, as well as from one area to another has a very positive effect on the level of employment of the entire non-working population. However, there are moments that do not allow you to calmly and unhinderedly use the opportunity provided.

For example, these are certain institutions at the state level that cannot allow relocation not only for the entire family of a potential employee, but also for him specifically. This is the institution of registration, that is, registration at the place of permanent residence for citizens of our country, as well as the institution of registration for citizens of foreign countries who wish to work in our homeland. Negative factors also include the lack of affordable housing for the mobile population, as well as conditions for obtaining good loans at real interest rates. The formation of an international employment market at the state level will allow:

  • significantly reduce the unemployment rate in our country;
  • provide jobs for the working population;
  • will allow you to receive additional tax inflows from wages received (officially);
  • and also reduce the cost of funds from local and state budgets, which are spent on paying various types of unemployment benefits.

The main directions for regulating the unemployment market in our country should be the following:

  • categorical prevention of the formation of mass unemployment;
  • combating “passive” unemployment;
  • taking active measures aimed at improving the social life of the entire population of the country;
  • active motivation of potential employers;
  • entering the world stage to conduct events aimed at developing the global labor market;
  • the struggle to maintain and stabilize the level of production in the country as a whole.


Today I want to tell you about how the government protects and tries to regulate the financial markets, how it tries to protect investors in stocks, how it tries to increase the level of confidence in securities and the interest of people in investing in securities.

Over the past 200-300 years of fairly active exchange trading in Europe and the United States, quite serious experience has been accumulated: during this time, more than one stock exchange crash occurred, the economy more than once plunged into recession. In the last 100 years alone, there have been 33 recessions in the United States, that is, 33 periods in which the economy contracted for more than three consecutive quarters. However, after each of these 33 recessions, stock markets recovered, the economy recovered, and reached new heights.

During the periods of all the crashes, all the disappointments that followed the euphoria, the rules of the game gradually appeared in the stock markets, the purpose of which was to maximize the level of confidence in these instruments, to protect investors from unscrupulous actions of both companies and intermediaries in this market. And now there is modern Western legislation, which is already quite effective. It allows you to solve a lot of problems and allows you to achieve a very high level of trust, in many ways making the infrastructure for investing in securities significantly more reliable than the infrastructure for investing in the same banking sector.

The United States developed its main regulatory framework for securities trading in the 30s of the 20th century. It was at this time that the act on trust in securities appeared, it was at this time that the act on banks and stock exchanges appeared, it was at this time that the activities of intermediaries in this market began to be significantly more strictly regulated, it was at this time that the volumes of lending in the market began to be more strictly regulated stock market, that is, in the United States, laws that were adopted in the thirties are still in force.

In America, the so-called Regulation T states that an ordinary investor for his long-term transactions should focus on the level of at least fifty percent security for his transactions, that is, if he wants to buy a million dollars worth of shares, he can borrow no more than half of this amount , that is, no more than 500 thousand dollars. And if you look at Russian legislation, it is quite similar. Our ordinary client, an ordinary investor, when buying shares, should focus on the same levels, the 50% level.

It is the broker's job to monitor this, and those investors who use borrowed funds to speculate in the stock markets are limited to this action. That is, at one time, when this loan was not regulated in the States, for example, this was largely the reason for the boom of the late 20s, a very serious fall in stock markets, when stocks began to fall in price. So many were unable to pay off their loan one way or another, and they had to quickly sell their shares to cover the loan, and this caused the financial markets to fall like crazy.

During this time, a sufficient number of instruments were introduced that increased profitability. These are requirements for issuers to disclose information, that is, now let’s say that in most Western countries companies are required to publish quarterly reports on how much they earn. In almost all countries, including Russia, companies are required to report according to international financial accounting standards, and are audited by auditing organizations so that investors have an objective picture of the state of the company's business, so that management cannot deceive its investors about the real state of affairs.

During this time, a certain institution for guaranteeing investor deposits was created in America. In the United States, absolutely any broker who provides services in the American market now has money insured for $100,000 in cash and $400,000 in securities in the event of bankruptcy or insolvency of the broker who provides the services. That is, a lot has been done there: firstly, the broker’s assets are separated from the client’s assets, if you buy any securities, then they a priori belong to you, they are recorded in the depository in your name, as a rule, the company cannot dispose of them without special permission client.

And in any case, to protect against any force majeure circumstances in America, there is a compensation fund that protects the investor’s interest in securities for almost half a million dollars. Accordingly, when a person opens accounts and trades on the American market, he falls one way or another, directly or indirectly, under this protection.

In Russia, in the same way, there are quite serious requirements. We have a stock market regulator - the Federal Service for Financial Markets, which issues licenses and monitors the minimum capital of companies that provide services. For example, a company now that minimally provides brokerage services and stores client assets in some other company must have at least 35 million rubles of equity capital invested in liquid assets, which is monitored by the regulator.

This is also a kind of guarantee that, firstly, these are not random people, and secondly, they have something to pay. Accordingly, if this company wants to keep records of clients’ securities, then the requirements are already growing to 60 million rubles, and in the future up to 100 million rubles for those brokers who want to lend to their clients, want to lend to so-called clients with a high level of risk, in order so that clients can carry out active purchase and sale transactions using borrowed funds.

The essence of the market and the functions of the market

The market is an essential component of a commercial economy. Without commodity production there is no market, without a market there is no commodity production. The objective necessity of the market is caused by the same reasons as commodity production: the development of the social division of labor and the economic isolation of subjects of market relations. These conditions arose and developed as a single whole, as a single process of interaction between production and sales of products.

Market- there is a type of economic relations between business entities, this is a social form of economic functioning. The market is a form of movement of social products and services.

Market in in the narrow sense of the word- this is a place for buying and selling goods and services, concluding trade transactions. There is a spatial aspect to this definition. From an economic point of view, the market is an exchange organized according to the laws of commodity production and circulation.

In the broad sense of the word market is economic relations in the sphere of production, distribution, exchange of goods and services and their consumption based on the widespread use of money and related categories (price, credit, finance).

Birth of the market is associated with the formation of the following conditions.

Firstly, the need for denationalization and privatization;

Secondly, the elimination of commodity hunger (excess of supply over demand);

Thirdly, the most stringent antimonopoly policy and ensuring conditions for real competition;

Fourthly, a well-thought-out tax policy;

Fifthly, social protection of the poor and disabled segments of the population;

Sixth, state financing of the budgetary sector;

Seventh, protecting the population from crime. The market is developing two stages:

The first stage is a spontaneous market (XV-XIX centuries);

The second stage is the organized market (XX century), which operates under a certain influence from the state.

The market has a huge impact on all aspects of economic life, fulfilling a number of economic functions.

Regulatory function. The market provides an answer to the questions posed by P. Samuelson: What to produce? For whom to produce? How to produce?

Information function. Through constantly changing prices and interest rates on loans, the market provides production participants with objective information about the quantity, range and quality of goods and services that are supplied to the market.

Stimulating function. Through prices, the market stimulates the introduction of scientific and technological progress into production, reducing the cost of production and improving its quality, expanding the range of goods and services.

Sanitizing function. The market, developing competition, clears social production of economically weak, unviable economic units and, on the contrary, encourages the development of efficient, enterprising, promising firms.

Pricing function. With the help of this function, the process of formation and formation of prices for goods and services occurs. Distinguish two main pricing systems:

1) market pricing based on the interaction of supply and demand;

2) centralized state pricing based on the setting of prices by government agencies.

Connecting function. The market acts as a link between production and consumption.

The market ensures final recognition by society of the significance of a given product and the labor spent on its production. This market function only operates under the following conditions:

Firstly, the absence of monopoly on the part of the manufacturer;

Secondly, there is no shortage;

Thirdly, the balance between supply and demand.

To successfully compete in the market, any company first of all needs an accurate and thorough analysis of the range of customers and their needs. Need to know:

Who is ready to buy this product or service;

Why the consumer will buy your product or service;

In what form does the consumer want to receive your product?

What time does he intend to buy your product;

Where would he like to buy your product;

In what quantities and how often is he ready to buy your product, etc. You need to know the market capacity and much more. Market ability

Producing high-quality information cheaply is its greatest advantage. Information is information about what others want to do and under what circumstances.

Free market characterized by the following features:

Unlimited number of participants in market relations and free competition between them;

Free access to any type of economic activity for all members of society;

Unlimited freedom of movement of capital and labor;

Each participant has complete information about the market;

Spontaneous setting of prices in the course of free competition;

In a free market, no participant is able to change the market situation at his own discretion.

To a certain extent, we can say that the free market is a self-regulating mechanism. However, any system, along with its advantages, also has its disadvantages. In relation to the free market, these flaws are as follows:

The market leads to income differentiation, and therefore

living standards of the population; does not create conditions for the realization of the right to work;

Does not guarantee full employment of the population;

B does not create incentives for the production of goods and services for collective use;

Does not create motivation for basic scientific research;

Does not protect the human environment from pollution.

Pure capitalism and the free market have never existed. Market freedom has always been relative. Governments intervened in the market mechanism and sought to use it to achieve certain specific goals. Something was prohibited from sale, something was taxed, something was encouraged. With the development of society, the regulatory role of the state in the organization of economic life increased. With the transition to machine production, this process became especially noticeable. At the turn of the 19th and 20th centuries, it became obvious that large, highly concentrated production was simply unable to develop successfully without direct support from the state.

Due to these circumstances, says the outstanding American economist and sociologist P. Galbraith, today there cannot be a free market of the times of A. Smith.

In modern conditions, the economy is controlled not only by the “invisible hand”, but also by government levers, however, the regulatory role of the market continues to be preserved, largely determining the balance of the national economy.

Exists two methods of market regulation:

1) direct regulation. It is carried out through government order;

2) indirect regulation. Carried out through:

Income Policies.

Types of markets

The market can be considered by geographic location (local, regional, national, global), by the nature and volume of sales (retail, wholesale), by product range (fish, meat, clothing, footwear, housing markets) and by a number of other characteristics.

It is also possible to divide markets by types or objects of production resources:

1. Market for means of production. Trade in means of production is a huge market where direct producers of products interact with each other. All enterprises are organically connected with each other as suppliers and consumers of machinery, equipment, raw materials, and fuel resources.

2. Labor market. The labor market is closely connected with the market for means of production. They arose and developed simultaneously, in parallel, complementing each other. The labor market is the most complex of all existing in the economy. Market demand for labor is the sum of firms' demand. The elasticity of demand for labor depends on the elasticity of demand for the firm's products, on labor productivity, and on the ease and efficiency of replacing living labor with machines.

3. Capital and financial market. In the movement of capital value, the monetary form of capital is the most sensitive to all disruptions in the process of implementing expanded reproduction. The need for borrowed capital has always existed. Credit is an indispensable condition for any business activity. Moneylenders, owners of large capital, and banks acted and continue to act as sellers of capital (loaning for a certain period of time for a certain fee - interest). In the 19th century, the securities market - stocks and bonds - developed and is now thriving. Capital trading ensures its constant movement between types of business activities. Thus, the activity or industry where goods or services are produced to satisfy production and personal needs is created, narrowed or expanded. The capital market gives proportionality and balance to the entire economy.

4. Consumer goods market. On it, the entire population interacts with producers and sellers of food, clothing, shoes and other consumer goods. Without the development of this market, the social meaning of exchange relations is lost. The state of the consumer market determines the security of the population, the level of consumption, and the stability of money circulation.

5. Market of information materials and information services. For a market economy there is a fairly high degree of uncertainty. The costs and benefits that influence supply and demand decisions are always expected costs and benefits. Producers and consumers, sellers and buyers make decisions based on expected conditions. The quality of the decision made is higher, the more information is available when making a decision.

LAWS OF THE MARKET

Economic laws- stable, significant, constantly recurring connections and interrelationships of economic phenomena and processes. In a market economy, its inherent economic laws apply: value, demand, supply.

Law of Value

Law of Value is a law regulating relations between commodity producers, distribution and stimulation of social labor in a market economy. According to this law, production and exchange of goods are carried out on the basis of their value, the value of which is measured by socially necessary labor costs. This is the labor time that is required to produce any use value at the average level of skill and intensity of labor in a given society

Socially necessary labor costs act as a kind of social standard, which is revealed in the market into which commodity producers must fit. Extra labor costs do not create value, that is, they are not recognized by society and are cut off by it. In the market, no one will pay for actual labor costs that exceed those that it costs to produce the bulk of goods of this type.

What are the functions of the law of value? The law of value stimulates producers so that their individual time to produce a unit of goods is either equal to socially necessary or is

socially necessary, which means that the law of value

requires constant development of productive forces. The law of value operates not directly through a comparison of individual and socially necessary time, but through price, which is based precisely on socially necessary time. Price is also affected by supply and demand.

Demand. Law of Demand

If we consider the situation developing on the market of any product, we will easily notice that there is a certain connection between the price of the product and the quantity of the product sold (sold). The lower the price of a product, the greater the quantity of it (all other things being equal) buyers are willing to buy, the higher the demand for it.

Demand- a fundamental concept of a market economy, meaning the desire, the intention of buyers to purchase a given product, supported by monetary opportunity. In other words, demand is an effective need.

The inverse relationship between price and quantity demanded is called the law of demand.

This dependence of the quantity of goods sold on the price level can be depicted graphically.

Demand curve- a curve showing how much of an economic good buyers are willing to purchase at different prices at a given point in time.

The law of demand can be depicted graphically. In economic theory, it is customary to plot the independent variable (price) on the vertical axis, and the dependent variable (demand) on the horizontal axis.

The depicted curve characterizes the state of prices and volume of purchases of product X at a certain point in time (for example, on January 1, 2000). It has a negative slope, which indicates the desire of consumers to buy more goods at a lower price.

In general:

where Qd is the quantity of demand (demand); P - price.

The quantity demanded will be influenced by the price per unit of the good at a given moment. We have already found out that the lower the price, the higher the demand, and vice versa. A change in prices means a movement along the demand curve.

Demand itself will be influenced by non-price factors: 1) an increase (or decrease) in consumer income, 2) changes in tastes and preferences, 3) price and scarcity expectations, 4) fluctuations in advertising costs, 5) changes in prices of substitute goods and complementary goods, 6) increase (or decrease) in the number of buyers, etc.

These factors cause the demand curve to shift to the right or left.

For example, an increase in the monetary income of consumers (in the absence of inflation) means an increase in demand, that is, a shift in the curve D in

position D2. At the same time, demand can increase faster or slower than income growth, depending on the quality of the product, its place in the consumer’s budget and a number of other properties that will be clarified later.

This situation is typical for most products with the exception of

low quality. An increase in income switches consumer demand for goods of better quality, while the demand for low-quality goods decreases, that is, the curve moves from position D to position D1.

An increase in prices for a product that is a substitute for a given product increases the demand for that product. For example, an increase in the price of red carnations may shift some of the demand to pink (or white) carnations, causing their price to also begin to rise. This allows us to conclude that if two goods are interchangeable (they are substitute goods), then there is a direct relationship between the price of one of them and the demand for the other. Rising prices for red carnations led to an increase in demand for pink carnations.

On the contrary, an increase in prices for a complementary good reduces the demand for it. For example, an increase in the price of skis will lead to a decrease in the volume of their sales. The consequence of a decrease in ski sales will be a drop in demand for ski bindings. A fall in demand for them will force sellers to reduce their prices.

Thus, if two goods are complementary, then there is an inverse relationship between the price of one of them and the demand for the other.

In our example, an increase in ski prices led to a decrease in demand for ski bindings.

An important factor influencing demand is the number of buyers. Consumer tastes also influence changes in demand, but their influence is sometimes quite difficult to determine unambiguously. In addition, the same factor can have different (often opposite) effects on different groups of the population.

In economics, it is customary to talk about elasticity and inelasticity of demand.

Elasticity- this is a measure of the change in one indicator in relation to the change in another, on which the first depends. Elasticity of demand refers to the degree to which demand changes with changes in prices. The measure of this change is the demand elasticity coefficient:

KS= Change in volume of demand for goods in % / Change in price in %

Elastic demand occurs when the quantity demanded changes by a greater percentage than the price.

Inelastic demand occurs when a significant reduction in price leads to a slight change in demand.

A.2 Indicate an action that is not a form of citizen participation in political life: 1) written appeal to the local administration 2) election of deputies to the legislative body 3) participation in the organization of a political party 4) participation in the activities of a trade union
A.3 In the state of Latvia there is a unified system of legislative, executive and judicial power, as well as a unified financial system and one Constitution. The state of Latvia is divided into states, which do not have independence. What is the form of the state-territorial structure of the state of L.? 1) confederation2) unitary state3) federal state4) monarchyA.4 In the state of T., citizens do not have the right to make political choices, as well as political, ideological and economic pluralism in the country. Citizens cannot influence the government, which exercises complete control over all spheres of society. What political regime exists in the state of T.? 1) democratic2) authoritarian3) totalitarian4) tyrannicalA.5 Party “S.” defends the ideas of the rule of law, democracy, and human rights. This party is 1) conservative2) democratic3) anarchist4) fascistA.6 Are the following judgments about state sovereignty correct? A. State sovereignty is not the main feature of the state.B. Unlimited state sovereignty really does not exist and cannot exist.1) only A is true 2) only B is true3) both judgments are correct 4) both judgments are incorrectA.7 Are the following judgments about the referendum correct? A. A referendum is a form of direct democracy that allows citizens to make the final decision on the issue put to a vote.B. Questions concerning the most important problems of political life are put to a national referendum.1) only A is true 2) only B is true3) both judgments are correct 4) both judgments are incorrectA.8 Which of the following provisions does not apply to human rights? 1) the right of property2) the right to freedom of creativity 3) the right to have friends4) the right to honor and dignity A.9 The goals of criminal punishment include (are) 1) restoration of justice2) correction of the convicted person3) prevention of the commission of new crimes4) all of the aboveA.10 The highest value The Russian Federation, according to the Constitution of the Russian Federation, is (are) 1) a person, his rights and freedoms2) land and other natural resources3) the principle of separation of powers4) citizenship of the Russian Federation.11 The main functions of the President of the Russian Federation include 1) the appointment of the Prosecutor General of the Russian Federation2) the appointment of the Chairman of the Federation Council3) appointment of the Chairman of the State Duma4) appointment of the Chairman of the Government of the Russian Federation with the consent of the State DumaA.12 Having been released after serving his sentence, citizen B. met a group of minors and decided to accustom them to the romance of a new life. According to his plan, minors entered the dacha of citizen P. and took away his jewelry, video recorder, and currency. This act of citizen B. is 1) an unfortunate accident 2) a crime 3) a misdemeanor 4) has nothing to do with offenses A.13 Are the following judgments about the rules of law correct? A. Rules of law determine generally binding boundaries of possible or proper behavior of people in society. B. Rules of law are ensured by the use of state coercion. 1) only A is true 2) only B is true 3) both judgments are correct 4) both judgments are incorrect