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microeconomic reform (1 Viewer)
- Thread starter Rickdog
- Start date
In regards to microeconomic reform, what you are looking at is the typical firm (the supply side). Microeconomic reform is the quest to increase technical and dynamic efficiency- look for a long run average total cost curve for the typical firm.
Achieving technical efficiency is represented by moving down the LRAT curve, achieving dynamic efficiency is represented by shifting the whole curve downwards.
Technical efficiency is concerned with using existing productive resources more efficiently.
Dynamic efficiency is concerned with having access to and using the most productive resources (eg: using new technology etc).
When both these efficiencies increase across all firms there is an increase in aggregate output (increasing real GDP and therefore increased real incomes). Isn't this exciting!
Policies to achieve microeconomic reform:
-Deregulation
-National competition policy/workable competition framework
-Reduction in protectionism (trade reform)
-Labour market reform (including the very topical, recent proposed industrial relations changes)
There are heaps!
Achieving technical efficiency is represented by moving down the LRAT curve, achieving dynamic efficiency is represented by shifting the whole curve downwards.
Technical efficiency is concerned with using existing productive resources more efficiently.
Dynamic efficiency is concerned with having access to and using the most productive resources (eg: using new technology etc).
When both these efficiencies increase across all firms there is an increase in aggregate output (increasing real GDP and therefore increased real incomes). Isn't this exciting!
Policies to achieve microeconomic reform:
-Deregulation
-National competition policy/workable competition framework
-Reduction in protectionism (trade reform)
-Labour market reform (including the very topical, recent proposed industrial relations changes)
There are heaps!
Conspirocy
Member
from the good ole syllabus
Microeconomic policies
• rationale for microeconomic policies including shifts in aggregate supply,
efficiency
i guess that means that you need to use Without Wings's diagram
also from the syllabus
Structural change
• effects of microeconomic policies on individual product and factor markets and
the economy
• regulation and deregulation
so i guess that means you could draw a simple demand and supply model, and show what happens because of the policy (micro reform) being implemented
this also includes trade (even though its not a micro reform under the syllabus).
- i liked talking about removing tariffs a lot, so u can throw in a tariff diagram, and say that we get cheaper prices in the economy because of the micro reform, or our industry becomes more effecient. OR you could show what happens if australia becomes effecient
again, i wouldnt put a diagram in unless i was 100% sure i nailed it, dont aim too high with diagrams because sometimes u havent been taught them properly or because you are rushing you get someting wrong -- whereas if its written, then its pretty safe
Microeconomic policies
• rationale for microeconomic policies including shifts in aggregate supply,
efficiency
i guess that means that you need to use Without Wings's diagram
also from the syllabus
Structural change
• effects of microeconomic policies on individual product and factor markets and
the economy
• regulation and deregulation
so i guess that means you could draw a simple demand and supply model, and show what happens because of the policy (micro reform) being implemented
this also includes trade (even though its not a micro reform under the syllabus).
- i liked talking about removing tariffs a lot, so u can throw in a tariff diagram, and say that we get cheaper prices in the economy because of the micro reform, or our industry becomes more effecient. OR you could show what happens if australia becomes effecient
again, i wouldnt put a diagram in unless i was 100% sure i nailed it, dont aim too high with diagrams because sometimes u havent been taught them properly or because you are rushing you get someting wrong -- whereas if its written, then its pretty safe