Market failure refers to a situation in which the market does not allocate resources efficiently. ANSWER: T TYPE: T KEY1: D SECTION: 2 OBJECTIVE: 7 RANDOM: Y [cxxii]. Since taxes affect only the price paid by the buyer, they cannot have an adverse impact on the allocation of society’s resources. ANSWER: F TYPE: T KEY1: C SECTION: 2 OBJECTIVE: 7 RANDOM: Y [cxxiii]. A monopolist has market power.
Variations in business cycles are able to be seen as short-term and long-term progression developments and they could shift. Cycles are calculated using the real gross domestic product of a country. Not like the more organized phases of economics, business cycles do not follow a foreseeable or mechanical form. However, they should be factored into considering an economy.
There are external factors that could affect Walmart and these are out of their control. These factors include unemployment rate and the labor market. Unemployment rate and the labor market status cannot be factors because Walmart can only hire base on their need, but if they discharge an employer, they become part of the external problem. Supply and demand of products that consumer no long desire is out of Walmart control they cannot make the public chose their product. Legal matter can affect Walmart in a negative manner and this will affect the demand of their products as well.
In the next chapter we learn how sellers set the prices in which we pay for an item, why things cost what they do and not what they are worth. The key to prices are sellers that can sell their products as close to the cost of making the item. In a regular market, prices are the key. Businesses cannot afford to charge a higher price, customers are normally looking for a lower price and the lower the better, in today’s economy. Many customers ask the question, “What affects prices?” We learn that things happen beyond the sellers’ and buyers’ control to raise and lower prices in today’s market.
Certain problems in this case are having an outdated and no comprehensive inventory that causes their control system to reflect improper supply amounts. Another issue is the fact that all of their purchase orders need to be on a “rush basis”, an issue that is derived from their outdated inventory control system. Also, this company has no type of forecasting system that can aid them in their understanding of how large their purchases need to be. Some solutions to these problems would be adopting a forecasting group that can use previous sales data in order to draw best estimates regarding their future sales. This way the company can decrease the amount of shortages they undergo during production.
E&Y reasoned this as it creates an exception to the general rule of reserving for expected future product returns at the gross sales price and deferring the recognition of an equal amount of revenue. This justification is invalid. The company’s customers are not “ultimate customers,” but are wholesalers that sold their product to retailers. In addition, Medicis’s returns were not returns of products in exchange for products of “the same kind, quality, and price,” but of unsalable product for
Governments may choose to increase minimum wage on an arbitrary basis, making it difficult for companies to hire individuals at a consistent market rate. Government price controls distort the economic theory of supply and demand. Supply and demand is a significant underlying feature of free-market economies. This theory allows individuals and businesses to make decisions based on self-interest. Businesses often pay individuals a wage based on current market standards.
Because every dollar paid from Tipal to International Dam was one more that would have to be borrowed, this portion of the negotiation was distributive. In this case, the two sides had to negotiate on position, Tipal was willing to pay A and International Dam was willing to accept B. If there were no Zone of Potential Agreement, then there would be no need to attempt to work out underlying interests. Because there are multiple ZOPAs, Tipalese government officials have to weigh the material interests of economic benefits to citizens against the personal interest of the Tipalese agent to look competent by settling on a fair price for a potential
What you will learn in this Module: Module 8 Supply and Demand: Price Controls (Ceilings and Floors) Why Governments Control Prices You learned in Module 6 that a market moves to equilibrium—that is, the market price moves to the level at which the quantity supplied equals the quantity demanded. But this equilibrium price does not necessarily please either buyers or sellers. After all, buyers would always like to pay less if they could, and sometimes they can make a strong moral or political case that they should pay lower prices. For example, what if the equilibrium between supply and demand for apartments in a major city leads to rental rates that an average working person can’t afford? In that case, a government might well be under
It has been long seen that the States individually cannot, with any success, pretend to regulate trade. The duties and restrictions which one State imposes, the neighbouring States enable the merchants to elude; and besides, if they could he enforced, it would be highly unjust, that the duties collected in the port of one State should be applied to the sole use of that State in which they are collected, whilst the neighbouring States, who have no ports for foreign commerce, consume a part of the goods imported, and thus in effect pay a part of the duties. Even if the recommendation of Congress had been attended to, which proposed the levying for the use of Congress five per centum on goods imported, to be collected by officers to be appointed by the individual States, it is more than probable that the laws would have been feebly executed. Men are not apt to be sufficiently attentive to the business of those who do not appoint, and cannot remove or controul them; officers would naturally look up to the State which appointed them, and it is past a doubt that some of the States would esteem it no unpardonable sin to promote their own particular interest, or even that of particular men, to the injury of the United