Sub-module 1 - Economic role of prices
Introduction
Prices and price mechanisms are very important in the workings of a modern economy in terms of directing decision making in the allocation and distribution of the scarce resources to various production, marketing and consumption activities. In the free market economy there is an ‘invisible hand’ that affects price. This hand is shaped by amongst other factors, supply and demand. Counter to this is the ‘visible hand’, the role of the government and other external forces which can influence price directly for social or political reasons. In this sub module we will introduce the functions of price in the economy and also how government intervention affects these functions.
Sub-module 1 Objectives
- Understand the role played by price in production and marketing decision making.
- Analyse impact of price changes on supply and demand.
Sub Module 1 Time Schedule
|
1 |
Lecture/Reading Time | 1 hour |
| 2 | Case Study Review | 30 mins |
| 3 | Seminar Activity | 30 mins |
| 4 | Self-study | 2 hours |
| TOTAL | 4 hours |
Licensed under the Creative Commons Attribution Share Alike 3.0 License
This module was developed by Moi University, Department of Economics and Agricultural Resource Management with support from OER Africa and Bill & Mellinda Gates Foundation