https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22 (b) Identify and explain two factors that will affect the size of the government’s expenditure in its price fixing programme, in which surplus stocks were purchased. en-us 2020-04-14 02:00:54 UTC 2020-04-15 01:53:05 UTC hello@padlet.com lee_xueting1 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/505508208 Factor 1: ...
Factor 2: ...]]> 2020-04-14 02:04:42 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/505508208 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/505555007 Factor 1: Price elasticity of demand. The price elasticity  of demand affects the size of subsidy. If thr demand is more price elastic, for a given amount of subsidy, there will be a greater increase. Hence, a larger increase in the expenditure by the government on the subsidies.
Factor 2: The size of the subsidy. The greater the size of the subsidy per unit, the greater the increase in the price and quantity, hence a larger increase in the expenditure by the government on the subsidies.]]> 2020-04-14 03:02:35 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/505555007 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507549002 Factor 1: 
PED of the vanilla market. If PED is >1, demand curve would have a steeper gradient .The higher the PED the larger the government expenditure as when PED>1 for a given rise in price there will be a more then proportional fall in quantity demanded hence the degree of surplus increased(considering c.p), thus government has to spent more to buy surplus stocks and therefore expenditure increases.
Factor 2:
The extent of increase in price of vanilla.The larger the increase in price the the higher the fall in quantity demanded hence degree of surplus increases and thus government needs to buy more surplus stocks therefore expenditure increase.]]> 2020-04-15 01:25:26 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507549002 krish0753e https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507550448 1: Price Elasticity of demand. The higher the PED the greater the government expenditure. Since, the PED is greater than one for a given increase in price there will be a more than proportionate fall in quantity demanded. Thus there will be a larger surplus and hence will result in a greater government expenditure as they would have to buy more surplus stocks. 
2: The size of the subsidy. If the government gives a larger subsidy then it will result in an increase in expenditure. ]]> 2020-04-15 01:27:12 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507550448 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507550788 Factor 1: Price Elasticity of Demand. The value of PED will determine the number of surplus stocks present in the market in which resulting in the government's expenditure on these surplus stocks. On the assumption of PED having a value that is greater than 1 due to the good ]]> 2020-04-15 01:27:35 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507550788 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507555745 Factor 1: Price elasticity of demand. A PED value more than 1 will mean more surplus stock. As the government buys excess stock, a PED value more than 1 would increase the amount of stock the government will buy. Government expenditure will thus be increased. 
Factor 2: Subsidy. The size of the subsidy will affect the government's spending. A larger subsidy will result in more government spending, while smaller subsidy will lead to less government spending.]]> 2020-04-15 01:32:30 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507555745 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507559033 factor 1: price elasticity of demand. if PED is more than 1, an increase in price will result in more than proportionate fall in quantity demanded. there will be surplus and the government will need to buy the surplus stocks and expenditure increases.]]> 2020-04-15 01:36:10 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507559033 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507559756 Price Elasticity of Demand. The value of PED will determine how steep the gradient of the graph is, which thus affects the number of surplus stocks present in the market. This therefore results in the amount government's expenditure on these surplus stocks. ]]> 2020-04-15 01:36:59 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507559756 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507562571 Factor 1: If Price Elasticity of Demand (PED) is greater than one, the goverment's expenditure will increase ]]> 2020-04-15 01:40:03 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507562571 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507564062 1.  PED of vanilla, with a higher magnitude of PED, the government expenditure will be greater.  This is because the higher the PED, the steeper the gradient of the demand curve will be which then affects the amount of surplus stocks. This means that there will be an increase in the number of stocks that the government will need to buy and hence government expenditure increase. ]]> 2020-04-15 01:41:36 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507564062 https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507568801 Factor 1: PED of vanilla is greater than 1 so it is price elastic. Since the income of farmers can sometimes be too low if prices of vanilla increases and quantity demanded decreases, the govt. impose tax to maintain the income of workers. Since surplus stocks were purchased, govt's expenditure increases ]]> 2020-04-15 01:47:03 UTC https://padlet.com/lee_xueting1/x8aqew0nqk3x4y22/wish/507568801