As stated in extract 1, it tells us that the goods we import are not made in the UK and so makes it impossible to replace the imports, therefore meaning that we still have to import goods, despite the high prices due to the low exchange rate of sterling. This is partnered with the fact that some suppliers (shown in extract 1) have agreed long term supply contract with cheaper overseas suppliers before the depreciation of the sterling and so they are now paying high prices. This may mean that these suppliers may have to increase the prices of these goods, therefore leading to cost push inflation due to trying to maintain a decent profit margin in the hope the demand for the good does not drop dramatically. However, it is stated that there still may be a large price differential with countries such as China and India, even after sterling's depreciation. On the other hand however, as stated in extract 1, line 8, volume of good imported has also increased by 16% and inflation has continued well above target.
Both buyers and sellers are worse off when goods are taxed (Mankiw, 2008). Corporate Level Taxes Corporate level taxes are explicitly designed to reduce the firm’s input prices which consequently reduces the output prices, this is of utmost importance in discount retailing industry where the strategy is based on price, in fact Jennigs, Weaver and Mayew (2012) points out that consumers are the primary beneficiaries of lower corporate tax rate and the reverse will be true, an increase in corporate tax rate limits industry participants ability expand and seize economic opportunities. Personal Taxes Taxes levied on individuals and household reduces disposable income which threatens the level of consumer spending within the industry,
Lastly organizations must all seek the greatest profits meaning nothing else but profits. When these conditions are meet which isn’t often, organizations can supply goods following their own self-interests in a predictable manner to the market. Suppliers utilize the demand curve to determine the amount of productivity and the right cost for the market. The requirement that all the firms are large ensures no organizations will be able to gain more than another. These types of conditions keep firms from monopolizing the market.
Supply and Demand Simulation Amanda Huenefeld ECO/365 Sadu Shetty January, 14, 2013 Introduction Supply and demand are the two influences that govern pricing in the larger picture of a viable economic market. The two factors are like two forces. Equally the conclusive levels of supply and demand, and the comparative levels of the two in contrast to one another, are significant. The standard of supply and demand is that if one or both varies, there will be a transient difference in the amount of product manufacturers are equipped to sell and the quantity that consumers are willing to buy. This difference will cause the market price to increase or decrease when necessary until the quantities are the same.
Obama’s plans to make jobs through stimulus have failed. Everything in our economy is high: Utility bills, health premiums, and gasoline prices. Obama’s own plan to tax the small business owner more instead of giving him a break during these tough economic times. His TRILLION DOLLAR DEFFICIT will slow our economy; take away jobs and causes the wages to stall. His plan to raise taxes on small business won’t add jobs, it will eliminate them.
The company also felt the higher end jobs were being paid too little. The union agreed to lower the rates of the foundry janitors and increase the rates of the more skilled jobs. The company also agreed to “red circle” the current janitors at the Class 1 rate. To “red circle” means that the company would not lower the rate of the current foundry janitors. Move forward to 2006 where the company has abolished all foundry janitor jobs and outsourced the work.
Final Exam Answers just a click away BUS 475 Capstone Final Examination Part 1 (100% Accurate) 3. From the point of view of consumer surplus and producer surplus, what problem was created when Thailand subsidized the cost of energy to consumers to help alleviate the burden of higher energy costs? a) It encouraged the consumption of too much fuel at the expense of other goods. b) It has no effect; consumers gained consumer surplus, but taxpayers lost the same amount because they had to finance the subsidy. c) It hurt the poor and benefitted the rich.
However in the long-run, this price raise is not enough to make people quit smoking so since cigarettes are a demerit good, it will have a negative effect on the environment and it will increase the number of health issues from second hand smoke, not to mention the high unemployment rate and less taxes for the government. Work Cited: BusinessDictionary.com. 2013. What is inelastic demand? definition and meaning.
This is unusual because basic economic concepts should tell that if less people are employed, there will be less demand for goods, which will drive down the price of goods to attract remaining customers. Stagflation came about in the recession during 1973 – 1975. President Nixon had set price freezes which prevented price increases from U.S. businesses. When import prices rose, businesses could not raise their prices so they had to lay workers off. President Nixon’s actions caused import prices to rise such as removing the U.S. from gold standard.
Where American energy policy is far less sensible is when it comes to the price reflecting the true cost. Tiny petrol taxes take no account of the damaging effects of pollution. This newspaper has long argued for a carbon tax to make dirty energy more expensive and thus curb demand. If that happened, some of the new oil might not be worth extracting: Canada’s heavy oil, for instance, emits about 6% more carbon dioxide than normal oil, which in turn can be 30% dirtier than gas. The biggest bonanza from all this new energy would be if the users paid the real cost of consuming oil and