This would increase the costs and result in the firms passing on the costs to the consumers, this would increase the prices of the goods causing negative externalities and discourage them from being bought. If there is an over production in the goods due to negative externalities, it means (s) has shifted to (s1). Which results in too many goods being supplied out to the public. The prices are also very low which makes it easier for them to buy goods, especially those with lower income. At the point the social cost [s1] is not taken into account only the private cost is.
Another tax indirect tax that is useful is plastic bag tax. As this requires people to pay for the use of bags, it lowers the demand for new bags and encourages the demand to reuse bags. Also there’s road tax which people needs to pay otherwise people will not be able to own a car as it causes emissions of CO2 which pollutes the air. This also another Way of the government being able to get money and use it for government spending within the economy. However there are problems with taxation to get rid of the negative externalities.
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.
Furthermore, proposed indirect taxes on luxury goods such as motor cars and petrol would have affected the Lords as they were among the few rich enough to afford such luxuries. The Lords set up a budget protest league and denounced the budget as “confiscation and robbery”, and breaking with convention overwhelmingly vetoed the budget. A less important reason was that the Lords believed the budget amounted to a social revolution. They were worried by the idea of progressive and redistributive taxation which taxes the rich more heavily. They feared once these principles were established they could be extended to ‘soak the rich’ and even out the unfair distribution of wealth in Edwardian Britain.
1. From your understanding of the Sarbanes-Oxley Act, explain how you feel it may negatively affect America’s stock exchanges. The higher than expected costs for many public companies caused some companies to abandon their public status. The costs of SOX compliance negatively affect companies, markets, investors, and economic growth. Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly.
Do you think price ceilings and floors are more helpful or more harmful to consumers and the economy? Explain. (2-4 sentences. 1.0 points) A disadvantage of these is they lower the cost for any consumer and will encourage consumption, if they are not properly treated, they could have no purpose. Describe at least two negative outcomes of having too little money and credit in the economy.
Economic- The market, if we are in a recession or not. Social Cultural- Changes in income of consumers, having too much personal debt which doesn’t allow customers to get credit cards at store and buy more goods. Technological- Updating supply change and other everyday equipment and technologies they sell. Ecological – environmental and green movement Legal- Employee disputes and worker comp issues. Ford Ecological- Green movement and demand for better gas milage.
Or in other words Inflation occurs when the supply of money far exceeds the supply of goods and services. The functions of money are to serve as a medium of exchange, a unit of account, and a store of value. Inflation mainly affects the ability of money to serve as a store of value, since inflation erodes money's purchasing power, making it less attractive as a store of value. Money also isn't as useful as a unit of account when there's inflation, because stores have to change prices more
Those who consider it to be a negative term, mainly the average consumer, would define price gouging as taking advantage of or exploiting in times of need by charging unfair and unreasonable prices beyond normal. On the other hand, a business owner or an entrepreneur would define it as turning a profit on goods which have suddenly become much more expensive to obtain or produce because of increased demand possibly due to an emergency or sudden event. However, some free market economists reject the term altogether and suggest that “higher prices can be viewed as a valid system for rapidly distributing scarce resources to those who need the highly desirable resources and sets off an economic chain reaction that ultimately remedies the shortages” (Price gouging, 09). Over thirty of the states in America have anti-gouging laws but the definition of price gouging vary from “excessive and unjustified” price increases or “unconscionable pricing”, to percentages amounts of previous prices, to “unjust or unreasonable profits in the sale of necessities” (Antitrust - Fuel and Energy Committee, 06). So price gauging may not be easily defined but it does mean something to those it affects.
If a good or a service has a negative externality, then the cost to society is greater than the cost a consumer is paying for it. Since consumers make a decision under the assumption that their marginal cost equals their marginal benefit, they forget to take into account the cost of the negative externality. This usually results in market inefficiencies or market failures. Cigarette smoking is a prime example of a negative externality. Individual smokers can be harmful not only to themselves but also to the people around them who in turn are coerced to become passive smokers.