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Student name:
Senbati Asihati

CEG number:
CEG08114483

Programme (e.g. UFP) Undergraduate/International Foundation Programme:

Business, Economics, Finance and Management. (UFP)

Programme Start Date

(e.g. September 2018) September 2020

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Coursework submission sheet 1

Name of the Topic: Research assignment: Micro-economics

Student name: Senbati Asihati

Name of the tutor: Shiji Balan

word count: 1651

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 Table of contents

1.1 The concept of microeconomics 4

1.2 The economic nature of Germany 4

1.2.1 Renewable and non-renewable resources 5

1.2.2 Factors of production 5

1.3 Specialisation and division of labour 6

2.1 Supply and demand in the economy 7

2.2 Market failure and government intervention 8

1.1 The concept of microeconomics

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 Let me start with microeconomics. Taking an economic unit (a manufacturer, or a consumer or the

economic activity of a market) as the object of research, microeconomics analyzes the method for a

manufacturer to distribute its limited resources in manufacturing different products to maximize

profits. Care about the process of exchange between individuals and groups in society. Central idea is

free exchange makes the full use of resources, and put forward the microeconomic policies to correct

market failure, the basic theory of microeconomics is the equilibrium price theory, in accordance

with our consumers' mind, nature is a commodity price is lower, the better, but manufacturers don't

think so, they hope to offer more than produce cost is higher, the better, thus forming the advantage

of the profits, in the end, on the free market competition, the power can reach an equilibrium level,

referred to as the equilibrium price, it refers to a kind of commodity demand, prices and supply price

are relatively consistent.

1.2 The economic nature of Germany

I will introduce the economic situation of Germany. So, Germany is a social market economy.

Germany’s macro-control social market economies opposes both economy laissez-faire and strict

economic control. On the contrary, it hopes to combine individual freedom of creation with the

principle of social progress. It not only guarantees the private enterprises freedom and private

property, but also the public interest in exercising these rights. Regarding relationship between nation

and market, the principle is that the nation minimizes intervenes as much as possible, only intervenes

when necessary. The nation’s major role in the market economy is the regular, which provides an

overall frame for market operation. So, in fact, the social market economy implemented in Germany

is a market-oriented economy regulated by nation to ensure the balance between free market and

social justice. Whatever the market economy can adjust itself, it should be left to the market to

resolve. The state simply sets the rules for the proper functioning of markets and intervenes where

they fail. So, Germany's social market is based on the market.

1.2.1 Renewable and non-renewable resources

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In Germany, renewable natural resources such as soil, plants, and various natural biomes, forests,

grasslands, etc. Because Germany has plenty of rain and less sunshine, mountains and swamps are

not conducive to farming, but suitable for the growth of forage grass and feed crops. Therefore,

planting forage grass and feed and developing animal husbandry is the best choice for the

development of agriculture. In addition, planting grass or feed has another advantage, which is

conducive to the protection of ecological environment. Grass covers the land like a blanket, which

can not only conserve water, keep soil and water, purify air, but also beautify the land. Germany's

non-renewable resources such as coal. Germany is rich in mineral resources, especially its world-

famous coal mines. In addition to coal, Germany also has some oil and natural gas, etc. Although the

reserves of these minerals are relatively small, they are very important to the German economy.

1.2.2 Factors of production

Germany, one of the wold’s most developed countries, has been third in the world regarding GDP for

a long time, next only to the United States and Japan. The general characteristics of the German

economy are agriculture, industry, services and other sectors are very developed. For example,

agriculture in Germany focuses on animal husbandry, which is very developed and accounts for more

than 60% of the total agricultural output value. And Germany uses the euro currency. Manufacturing

industry is the main body of German economy, including automobile manufacturing, machinery

manufacturing, electrical and electronic products manufacturing and so on. Germany is among the

most developed countries in the world, and the quality of its products also ranks among the best in

the world. Germany is famous for its automobile manufacturing with the highest sales volume and

millions of employees. Most of the products are exported. Many world-famous automobiles are made

in Germany, such as Benz, which is made by Daimler-Chrysler, Volkswagen and BMW. In addition

to the above, many other industries in Germany are also developed. I think the advantage is that there

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will be fewer social conflicts and more social harmony because the great social security offered by

the government can solve social contradictions.

The main disadvantages are the passion of labor is not adequate and the national financial burden is

heavy. I think it is because of the strong social security provided by the government, the workers in

many enterprises are guaranteed. They will be motivated and improve their work efficiency, which

will have a great impact on the whole enterprise.

1.2.3. Opportunity cost

Germany has qualified as a country where goods should be manufactured because of its low cost of

making such products. Car production in Germany is appealing due to its lower opportunity cost.

Below is production possibility frontier in relation to opportunity cost in Germany.

1.3 Specialization and division of labour.

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 Specialization has been defined as the way an individual or country focuses and utilizes the

available resources to produce a certain product instead of producing many different goods and

services. Germany unlike other countries have specialized in heavy equipment and other

machineries. The car making industries are among the most successful models of produced. This

country is also leading in the exportation of visible goods such as the green technologies which has

been accepted in the world market. Germany being the most recognized producer of automobiles

such as BMW, Mercedes-Benz and the Volkswagen has brought potential benefits like a higher

yield: the absolute yield of merchandise and enterprises will increment and the nature of products

and ventures created will increment. A higher yield with lower costs will mean more needs will be

happy with the given measure of scant assets. Specialization on the other hand can be of

disadvantage in business in that the global prices might fall for the specialized product which will

lead to declined revenues.

As indicated by research, "Abundance of countries", the financial development (the increment in

the estimation of products delivered in a country in a time) of an area lies in the idea of division of

work. Under this system, every specialist turns into a specialist in one secluded zone of creation,

subsequently expanding his effectiveness. The way that workers don't need to switch errands during

the say further sets aside time and cash. Obviously, this precisely permitted German ventures to

develop all through the nineteenth century and create themselves and their nation at the same time.

Division of work is significant because a specialist become extremely capable and viable int their

single distributed undertaking. This is claiming the laborers who spend significant time in a solitary

undertaking have a ton of time and event to rehearse their apportioned work. This can prompt speed

up and precision and expertise in the restricted scope of errands he performs. Laborers in a

production line who are answerable for just a single piece of the cycle become as talented as possible

in that interaction without the interruption of mastering different abilities in different regions. This

expands the efficiency (yield per laborer each hour) just as nature of work done by a specialist.

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While on the other hand, division of labour can be cause a structural job loss due to working

immovability.

2.1 Supply and demand in the economy.

Mercedes Benz, a luxury automobile brand and an automobile inventor in Germany, is regarded as

one of the world’s most successful high-end automobile brands. Due to high technological level,

strict quality standard and innovation capacity, Mercedes Benz has been one of the world’s most

well-known automobile and brand marks.

The car's interior, seats, power and safety are all needed by people, because it is very secure, people

need this type of car. Mercedes Benz is recognized for its high quality all over the world

The main analysis points of the supply and demand analysis report of Benz industry are as follows:

1) Import and export analysis of Benz industry. It refers to the statistical analysis of the import and

export volume and import and export price changes of Benz industry in the same period

2) Benz industry supply analysis. Production is not equal to the supply of production in the market

3) Benz industry demand analysis. It refers to the total demand of Benz industry goods;

4) Analysis on the supply factors of Benz industry. Including price factors, production technology,

government policies and future development.

5) Analysis of the influencing factors of Benz industry demand. It includes changes in disposable

income, personal preferences, costs and changes in population size and education level.

The supply and demand analysis report of Benz industry is based on the theory of supply and

demand in economics. Market demand of Mercedes Benz industry refers to the desire to be able to

buy and willing to buy a specific commodity. It shows the quantity of a certain commodity that an

individual is willing to buy in each period with other factors unchanged.

Shifts of demand and supply occurs in the production of Mercedes models due to the rise in demand.

Its consumption has grown globally. Below is a curve showing the shift due to rise in demand and

increase in supply respectively.

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 Figure showing the effect of a shift of the demand curve.

Figure showing the effects of shifts of the supply curve.

2.2 Market failure and government intervention

In the market economy system, the existence of many small and medium-sized enterprises is

conducive to maintaining the order of competition and achieving employment expansion. As the

promotion policy of small and medium-sized enterprises occupies a very important position in

German economic policy, we should strengthen the cooperation with private forces and establish a

set of socialized service system to promote small and medium-sized enterprises, to better correct the

"market failure" and make the small and medium-sized enterprises become the pillar of German

economy.

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I think in the most circumstances, in addition to the allocation of the social resources well, market

mechanism can also balance the whole economy. Nevertheless, "market failure" often happen,

namely, resource allocation will be ineffective because market mechanism fails to play functions

fully. Reason for market failure. For overcoming market failures and remedying the shortcomings

and deficiencies of the market mechanism, government should intervene and administrate the

market, and remedy "invisible hand" by using the "visible hand". Government need intervene in the

microeconomic activities, especially the fields below: Firstly, to promote and protect competition and

to improve the resource allocation efficiency, government could use legal means to oppose unfair

competition and restrict monopoly; secondly, eliminate externalities through taxation and subsidies,

and mergers of related companies; thirdly, government assumes main responsibility for providing

appropriate levels of public goods, for example public security, national defense, public health and

fire control; fourthly, government can eliminate asymmetry on information. By enacting right

microeconomic policies, the influence of market failures on economic operations can be eliminated

by the government to a large extent, to increase the efficiency of resource allocation. Government

interventions are essential in providing for law and order for public goods that are not supplied in the

free market. It also provides protection for market environment, workers and consumers by

stipulating regulations. This on the other hand can cause disincentive effects of taxes and lack of

efficiency in public sectors.

In conclusion，Germany is a highly developed capitalist country, and a country that attaches great

importance to education with high quality. From various surveys and analyses, I also found that The

German people attach great importance to technology and high quality.

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 References

Websites
. Ministry of
Government Provided commerce ， PRC,
Data; Website Ministry of commerce ， PRC. (N/D) “Basic situation of 30-06-2020
(Policy) German economy. [Accessed: 02-12-2020] Available:
http://www.mofcom.gov.cn/article/tongjiziliao Ministry of
/sjtj/xyfzgbqk/202006/20200602978847.shtml. commerce ， PRC
OR with a quote:
(Ministry of
commerce ， PRC
ND, para 1)

Television or Microeconomics 2016)

Radio Netease open courses (2016) “Open classes at Khan Academy.
Or with a quote:
Programme (02-12-2020) Selection of 70; 11:05)

China report hall (2020) . Report of supply and demand of Germany car www.chinabgao.com
[Accessed 02-12-2020]

URL: http://www.chinabgao.com/tag/supplydemand/benchi.html

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