Question 1
All successful businesses thrive because the society exists to provide the market for their goods and services at a price. These firms therefore owe it to the society that the operations of their business should be conducted in a responsible manner and ‘give back’ to the society. This has led to the prominence of the term ‘corporate social responsibility’ (CRS). Under this concept, businesses are expected to conduct and participate in activities that improve the welfare of the society in which they transact in. some of the things that a business could do to benefit these communities include: ensuring that the environment remains sustainable, participation in the activities of the community, adopting marketing practices that ethical.
Question 2
Prices in a free market economy are determined by the independent forces of demand and supply. Supply refers to the amount of goods and services that producers are able to avail to the market at a particular point in time at a price. Demand, on the other hand, is the amount of goods and services that consumers are willing and are in a position to afford at particular point in time. Equilibrium is the point of intersection between demand and supply that leads to equilibrium output and price.
Surpluses refer to the excess of market supply over market demand. When there are more commodities supplied in the market than the actual market demand by consumers, prices of the commodities decline. On the other hand, shortages refer to the excess of market demand over market supply. During shortages, there is too much money chasing very few commodities. Prices are charged above the equilibrium price.
A shift in demand curve arises when there are changes in demand due to factors that influence demand apart from the price of the commodity itself. These include changes in the income of consumers, government policy, availability of close substitutes, tastes, preferences and fashion etc. The demand curve can shift either upwards or downwards. When the demand curve shifts upward (or to the right), holding other factors constant, the price of the commodity increases. When the demand curve shifts downwards (or to the left), the price of the commodity declines, ceteris paribus.
Question 3
The minimum wage refers to the minimum amount of remuneration that employees are supposed to be paid by their employers as required by law. Paying wages that are above the minimum wage prescribed by the government can attract many employees to work for a firm. Money is a powerful motivational instrument that can be used to attract qualified, skilled and competent employees to work for the firm.
