How+to+answer+Essay+questions+in+Economics+HL

=How do I answer Essay questions in Economics Higher Level?= Questions in Economics may be very diverse, this particular question is from a Test on Supply and Demand.

Using supply and demand analysis, explain why the price of agricultural goods tends to fluctuate more than the price of manufactured goods. Evaluate the possible role of price controls in agricultural markets.  · Explain how agricultural goods are inelastic in demand.  · Explain how supply of agricultural goods is PERFECTLY inelastic.  · State that demand and supply are price inelastic.  · Define volatile.  · Explain why agricultural goods prices are volatile.  · State how crops can be plentiful some years and low on others, generating surplus or a scarcity in the product.  · Give a solution to the scarcity and surplus of agricultural goods and their unstable prices. ( Buffer Stock Schemes )  · Explain how setting minimum and maximum prices affect buffer stock schemes.  · Explain how the ** target price **of a buffer stock scheme determines min and max price boundaries.  · State that max prices or min prices may begin a parallel market.  · Give an example of a buffer stock scheme.  · Give examples of how they may go wrong ( perishable foods or no demand for a good. )  · Explain how manufactured goods are elastic in comparison with agricultural goods.  · Explain how manufactured goods are not price inelastic or supply inelastic.  · Explain how an increase in demand for a scarce manufactured good is easier to attend rather than an increase in demand for a scarce agricultural good. ( supply for manufactured goods is elastic. )  · State how manufactured goods are not perishable and they are not affected by weather conditions. <span style="margin-left: 18.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; tab-stops: list 18.0pt; text-indent: -18.0pt;"> · Conclude in a few sentences the main details and your opinions.