As the costs of consuming Petrol and Diesel are not fully taken into account by the consumer, the difference between the social costs and private costs results in a negative externality. Negative Externalities occur when an economics activity affects third parties; those not directly involved in the making of a decision. As producers are only interested in maximising profits; they only take into account private costs and benefits that arise from their decisions. Therefore they would supply a higher amount than optimum that would result in an overproduction at Q1. As the producer creating the externality does not take it into account and the consumer does not fully pay for the resulting externalities, market inefficiencies result in the form of market failure.
In the short run, Kudler was able to maximize its profits and minimized losses. They were making profits because they were producing quantity where marginal revenue was equal to marginal cost and charged prices based on their demand curve. The demand for their goods was very high at first because they had little competition. Another positive effect of a monopolistic competition is that it promotes product variety and improvement. When Kudler makes business improvements, it causes their competitors to either imitate them or get out of the business.
The government wants low unemployment and high economic growth which are generally linear; however this can cause difficulties in maintaining a stable rate of inflation which is another economic objective. The government wants the unemployment rate to be as low as possible, and often say they try to reach “full employment.” Full employment does not mean that there is nobody left unemployed in the country in a literal sense, it factors out hardcore, frictional, and seasonal unemployment. They do this by stimulating the economy to increase aggregate demand, causing firms to increase their employment in order to increase their supply to meet demand and increase their profit margins. However if unemployment falls below the full employment margin and breaches the NAIRU (non accelerating inflation rate of unemployment” then the economy grows at an unsustainable rate, inflation quickly increases, and this causes problems for the economy such as a reduction of purchasing power for consumers and a vast reduction of real income for individuals on nominal wages. Poor price stability reflects poorly on the government’s economic management.
Selling products online will make it easier for Innocent to reach to wide range of customers. Another challenge that Innocent could face is being able to keep its current employees because during recession Innocent might struggle to pay wages so they might think of paying minimum wages. This may makes employees to leave the jobs and look for better jobs with higher wages. So it is essential for Innocent to provide as fair wages as they can to keep their existing employees. During recession Innocent would mostly want to survive.
Decisions are based on what will maximize profits, thus serving the owners of capital, and not necessarily workers or the communities where factories are located” (Social Problems, pg 427). To prevent this, in relation to the article, I think we should move towards a protectionist society. By doing so, I believe that American workers would have to settle for working for less, but in correspondence, marketable products and the base values of good would decrease proportionally, while American workers would be allowed to maintain their jobs without fear of
A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital. It also indicates how well a company's management is deploying the shareholders' capital. In other words, the higher the ROE the better. Falling ROE is usually a problem. CAGR: Operating income, % Operating income (EBIT) measures a company's earning power from ongoing operations and it largely used by investor because it excludes the effects of different capital structures and tax rates used in different companies.
There are governments that totally control their economy and do not do business with other countries. There are governments that rule monetary policy and tax business, but do not become concerned in the markets otherwise. Similar to mixed economies, the positions of a government in the configuration of an economy is crucial to understand in order to understand the economics of the country. Concepts of Macroeconomics and Understanding Business or economic cycles focus on the variations, both anticipated and unexpected, within an economy. Variations in business cycles are able to be seen as short-term and long-term progression developments and they could shift.
3. People often feel that tariffs, quotas, and other import restrictions will save jobs and promote a higher level of employment. But trade restrictions that reduce the volume of imports will also reduce exports. Question 4: What do researchers have to say about the relationship between firm’s productivity and exposure to global competition? Answer: Question No.5: When is international trade an opportunity for workers?
America Outsourcing. By Dwayne Berry This paper will walk through many of things that go on in America. Outsourcing jobs is one of the main things that are not helping America grow as a greater nation. Outsourcing jobs are taking away from us “AMERICANS” who have tried to work hard with what we are giving. The outsourcing of jobs is not a bad thing for the company because it makes them more money, but for the people who don’t have what young people talk about as bank!
They should set up a system that encourages the employees to “go the extra mile” without penalizing them on their hours. Also, employees would be paid accordingly to work extra time, which it was not the case based on the reading. I would also change the commission system so that slow hours of work get a better commission rate than the busy hours. That way working the slow hours would not be so bad and the SPH’s of both different times of day will even out. Additionally, I would suggest a more centralized management since mid-managers had too much freedom, and sometimes focused on their own personal goals and not the team or corporation goals.