...the shapes of demand and supply curves matter? Sensitivity of quantity demanded to price. Sensitivity of quantity supplied to price. Long run versus short run Effects of a sales tax. © 2009 Pearson Addison-Wesley. All rights reserved. 3-2 How shapes of demand and supply matter? The shapes of the demand and supply curves determine by how much a shock affects the equilibrium price and quantity. Example: processed pork (same as Chapter 2) Supply depends on the price of pork and the price of hogs. © 2009 Pearson Addison-Wesley. All rights reserved. 3-3 1 Figure 3.1 How the Effect of a Supply Shock Depends on the Shape of the Demand Curve This shift of the supply curve causes a movement along the demand curve… (a) A $0.25 increase in the price of pork causes the supply of pork to shift to the left. e2 e1 (b) A $0.25 increase in the price of pork causes the supply of pork to shift to the left p, $ per kg D2 p, $ per kg D1 3.55 3.30 S2 S1 3.675 3.30 e2 S2 S1 e1 0 176 215220 0 176 220 Q, Million kg of pork per year Q, Million kg of pork per year and a reduction in quantity. © 2009 Pearson Addison-Wesley. All rights reserved. But equilibrium quantity does not change since consumption is not sensitive to price 3-4 Figure 3.1 How the Effect of a Supply Shock Depends on the Shape of the Demand Curve (cont’d) p, $ per kg When demand is very sensitive to price… a shift in the supply curve to S2… has no effect...
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...price level *Recall that regarding the money supply, the Central Bank has tools that enables it to control money supply ( the capability of Commercial Banks to create deposits), most important tools: Open market operations by CB selling or buying governmental bonds, changing the discount rate which is the interest rate on loans from CB to commercial banks & changing the legal reserve ratio. So if the CB seeks to adopt a loose monetary policy it can decrease the discount rate, decrease the legal reserve ratio,& go through an open market operation by buying gov. bonds.( & vice versa if CB seeks to adopt a tight monetary policy). *In addition to the public`s demand for money for TRANSACTIONS that is affected by the general price level & real GDP..., do speculators demand money? Yes, as they try to achieve profits from the fluctuations in the market price of bonds, ie they buy bonds, when their market price is low & sell bonds ,when their market price is high, thus achieving profits. However, what determines the market price of bonds? the following example helps you to understand: If a bond promises to pay $100 ONE YEAR from NOW, & the interest rate was5%, WHAT IS THE MAXIMUM AMOUNT OF MONEY YOU ARE READY TO PAY NOW for that bond?ie what is its market price? We have to calculate the PRESENT VALUE of the $100 by using the following equation: Present value = Return / 1+5% 95.24 = 100 / 1.05 What do you notice? We notice that there...
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...Fulfillment Of the Requirements in the Subject “IT CAPSTONE PROJECT” For the Degree of Bachelor of Science in Information Technology Submitted by: Cristopher Jay Castro Gellyn Victorio Milady Delos Santos CHAPTER I THE PROBLEM AND ITS SETTINGS Introduction Water is essential in human living. It gives us energy everyday to do our daily tasks. According to Science, human beings can survive up to two weeks or even a month without food but cannot without water. Many projects had been proposed in order to get clean water such as deep-well; water pumps and etc., until water companies came wherein clean water were supplied in our house. It has been decades when water companies and corporations started to supply water to our communities. Through this, water supply is no longer a problem of our society. But at the present situation of our environment, nature is being harmed by over-using of its resources specially the trees. Green technology has been one of the solutions to conserve our natural resources. Experts and technologist all over the world are creating technologies like paper less systems to conserve the paper trees in our surroundings. As part and support of this campaign, also to help the water companies and the people lessened the charges they are paying for the cost of printing their bills and to solve the problem of sometimes delayed water bills. The researchers plan to develop an “Online Water Billing and Customer Application System with SMS”. Through the...
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...Exhibit 3 Current order book for dry bulk capesizes by delivery date | | | | | | | | 2001 | 2002 | 2003 | 2004 | | | | | | | | Number of vessels | 63 | 33 | 21 | 9 | | | | | | | | b). Market conditions dictated by demand and supply of basic industrial products drive average daily rates. For instance in 2001 the poor market demand for Iron ore drove the daily rates low because Iron ore trading countries would cut costs by trading within nearby trading partners. However, the optimistic Iron market conditions in 2003 between Australia and India increased the demand for capsizes to accommodate trading patterns dictated by distance between world Iron ore trading countries. c). Increase in daily rates is also a function of the age and size of the ship. According to the Ocean estimates in Exhibit 4, Ocean newer vessels tended to earn 15% average daily rates whereas older vessels gave 35% discount from the industry average. See exhibit below: Exhibit 4 Daily Hire Rate Adjustment Factor for Dry Bulk Capesizes Based on Age of Vessel | | | | | | | Over 24 years | 20 to 24 years | 15 to 19 years | 10 to 14 years | 5 to 9 years | Under 5 years | | | | | | | 0.65 | 0.75 | 0.8 | 1 | 1.05 | 1.15 | | | | | | | d). In terms of cash flow Ocean will have a positive Net...
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...and a bonus. The bonus B is to be 20% of the income after deducting income taxes T but before deducting the bonus. So B = 0.20(100,000 - T). Because the bonus is a deductible expense, the amount of income tax T at a 40% rate is 40% of the income after deducting the bonus. So T = 0.40(100,000 - B). a) Use the accompanying graph to estimate the values of T and B that satisfy both equations. (35, 15) b) Solve the system algebraically to find the bonus and the amount of tax. B = .2(100,000-.4(100000 – B)) B = .2(100000 – 40000 + .4B) B = 20000 – 8000 + .08B .92B = 12000 B = $13042.48 T = .4(100000 – 13042.48) T = .4(86957.52) T = $34783 106. Free market. The equations S = 5000 + 200x and D = 9500 - 100x express the supply S and the demand D, respectively, for a popular compact disc brand in terms of its price x (in dollars). a) Graph the equations on the same coordinate system. S = 200x + 5000 S = 200(0) + 5000 S = 5000 S = 200(5) + 5000 S = 6000 D = -100x + 9500 D = -100(0) + 9500 D = 9500 D = -100(5) + 9500 D = -500 + 9500 D = 9000 b) What happens to...
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...rate of unemployment is unaffected by policy change. AnswerA. False. The participation rate has increased over time.B. False.C. False.D. True.E. False.F. Uncertain/False. The degree of bargaining power depends on the nature of the joband the employee’s skills.G. True.H. False. Page 2 2 Question 2. (Ch6. Q3)The natural rate of unemploymentSuppose that the markup of goods prices over marginal cost is 5%, and that the wage settingequation is W = P (1 - u )A. What is the real wage, as determined by the price setting equation?B. What is the natural rate of unemployment?C. Suppose that the markup of prices over costs increases to 10%. What happens to thenatural rate of unemployment? Explain the logic behind your answer. Answer a. W/P=1/(1+μ)=1/1.05=.952b. Wage setting: u=1-W/P=4.8%c. W/P=1/1.1=.91; u=1-.91=9%. The increase in the markup lowers the real wage.Algebraically, from the...
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...EAST CENTRAL OHIO FREIGHT By: Aadish Bansal B16001 Anirudh Kudva B16009 Bhawna Manocha B16015 Pratik Agrawal B16034 Richa Gupta B16039 Background: East Central Ohio Freight (ECOF), headquartered at Cambridge, Ohio, started off their business in the 40’s as a moving & storage business. However, the same was dropped shortly and the company moved to freight business focussing on less than truckload (LTL) hauling. In the 80’s it expanded to TL (full truckload) business which has been performing well. The LTL business, on the other hand had to be dropped owing to union contracts, health care amongst other union related issues which were becoming too costly in the face of increased competition in the deregulated market. Further, in the early 2000s, the business bought two agency companies which exposed it to the VLTL (volume less than truckload) hauling which it can further expand into in Cambridge. With this purchase, the company was now into four geographical markets - * Cambridge * Indianapolis * Cincinnati * Wheeling Problem Statement: The company’s business was drying down majorly at the headquarter city, and other areas primarily because of the following reasons: 1. Two of the largest TL Customers in Cambridge, closed operations or moved from the area. 2. Conditions in the freight industry had become increasingly difficult because of costs of fuel, insurance, maintenance, and new equipment were all increasing 3. The economy was...
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...FINAL EXAMINATION Name of Student: ________________________________________________________ Student Number: ________________________________________________________ INSTRUCTIONS: This exam is in two parts. PART A (multiple choice questions) is to be answered on the examination paper itself. PART B should be answered in the exam book provided. Print your name clearly and give your normal signature and student number above and on the cover of the exam book(s) used. PART A: Multiple Choice Questions (30%) 1. Market supply curves tend to be more price elastic if the time period is long rather than short because— a. Firms are better able to adapt their output rates to price changes in the long run. b. External economies will be realized. c. Consumers are better able to find substitute goods. d. Input prices would be expected to increase with the length of the time period. e. Economic profits are reduced to zero in the long run. Marginal product exceeds average product when— a. Total product is increasing. b. Average product is increasing. c. Average product is decreasing. d. a and b. e. a and c. A frequently cited reason for increasing returns to scale is— a. Increased input prices. b. Greater specialization. c. External diseconomies. d. Larger fixed costs with a larger plant size. e. Difficulty of managing a huge enterprise. 2. 3. C5, Economic Environment of Business, Final Examination, page 1 of 8 1 4. In determining whether to add an additional flight to...
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...i c l e i n f o Article history: Received 25 July 2011 Accepted 5 September 2012 Available online 11 September 2012 Keywords: Pricing Complementary products Market power Stackelberg game a b s t r a c t This article reports the results of a study that explores the pricing problems with regard to two complementary products in a supply chain with two manufacturers and one common retailer. The authors establish five pricing models under decentralized decision cases, including the MS-Bertrand, MS-Stackelberg, RS-Bertrand, RS-Stackelberg, and NG models, with consideration of different market power structures among channel members. By applying a game-theoretical approach, corresponding analytic solutions are obtained. Then, by comparing the maximum profits and optimal pricing decisions obtained in different decision cases, interesting and valuable managerial insights are established. Ó 2012 Elsevier B.V. All rights reserved. 1. Introduction Pricing policy has long been recognized as a significant tool for use in the profit maximization of firms. Regardless of whether it is applied to areas in revenue management or supply chain management, it is used in the daily operations of industries to manipulate demand, and to regulate the production...
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...Microeconomics Project Paper Course Project 1 Economics 545 Summer 2014 Session B Prof. William Mapp Patricia Shomo September 13, 2014 Situation C Last night about 7pm, I went to fill up on gas at the closest gas station by my home in Merrillville, Indiana. The Speedway gas station had gas for $3.49 a gallon for regular unleaded gas. Midgrade gas was $3.69 a gallon, Premium was $3.89 a gallon, and Diesel was $3.89 a gallon. I always try to fill up before the work week, as I do not want to get stuck in Chicago, Illinois where I work, and have to fill up on gas. Gas prices are dramatically different in my 40 mile radius. Today, gas prices in Chicago off my exit for work are $3.99 a gallon for unleaded gas at the Marathon gas station at the corner of South Blue Island Ave and Western Ave (Gas Prices in 60608 Zip Code, GasBuddy). That is 50 cent savings per gallon. If I just filled up 10 gallons, which is a savings of $5. It doesn’t sound like much, but I used to fill up twice a week on my about 46 mile commute to work. For the month, that would be an estimated savings of $40 if I do not use my vehicle for anything else but work. Now my cousin Edgar, who is always thinking about the next get rich scheme, is thinking about possibly opening up two gas stations. He believes that he will make a good profit if he also sells convenience items at both of his gas stations. He found out I was taking this Economics course and figured I would be happy to help him research...
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...Consumers [Consumer Choice & Elasticities] (Section 6) I. Definitions Utility [Felicity] (Satisfaction)- The benefit or satisfaction a person gets from a choice or action Marginal Utility (MU)- The additional utility someone gets from consuming an additional unit of a good. Marginal Utility Formula = ∆ Total Utility ∆ Quantity Law of Diminishing Marginal Utility- As someone consumes more of a good marginal utility will eventually decline (as consume more the increase in utility will be smaller each time) ExsMarginal Benefit (MB)- Maximum price a consumer is willing to pay for an additional unit of a product. The dollar value of a consumer’s utility of consuming an additional unit: So it f______ as consumption increases 1 II. The individual: Demand curve & consumer choice Marginal Benefit reexamined What does it really mean if a consumer is willing to pay up to (at most) $10 for an additional unit of the product. Marginal Utility per $ spent: MU Good A Price of good A Interpret: MU A P A Ex: Buying one more burrito (from 1 to 2) gives you an ↑ in utility of 10 & costs $5 2 A. Deriving a demand curve for slices of pizza for Carlos Slices 0 1 2 3 4 5 6 7 8 9 10 Total Utility 0 200 390 570 740 900 1030 1130 1200 1240 MU if P MU X 200 P=$2 MU if P P=$1 MU if P P=$0.50 10 Cheeseburgers That cost $0.50 Total Utility 130 240 340 430 505 555 580 595 605 610 Slices 1 2 3 4 5 6 7 8 9 10 MU 130 MU P Carlos’...
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...Chapter I Project background This Chapter deals with the proposed Business Name, Title of the Study, store location, Business Logo, Brief Description of the project, General Objectives, Research Methodology and Survey. Proposed Name of the Business The future entrepreneurs come up with Golden Glow as the name of the business. The word “Golden” describes the color of deep fried empanada. The word “Glow” comes from how vegetables can contribute on our health. ''Golden Glow’’ is an easy name to recall. Title of the Study The Profitability of Veggie Empanada in Barangay Bubukal, Sta. Cruz, Laguna Store Location The business will be located in Barangay Bubukal, Sta. Cruz, Laguna. The location is merely developed and accessible to the market. In addition to this, less traffic as to compare to other places and less crime related incidents. Business Logo Figure 1 Business Logo of Golden Glow Logo Description The future entrepreneurs decided to attach '' Golden Glow'' to its business Logo. The color portrays the appearance of veggie empanada after being fried. Lastly, the rolling pin represents as a tool that will shape the young entrepreneurs to become successful in the future. Brief description of the Project The main product of the business is vegetable empanada. Its main ingredients carrots, chayote, cabbage and bean sprout. This vegetables can be used as alternative to meat in the preparation of empanada. The future entrepreneurs will start a business...
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...CHAPTER 1 Introduction The Proposed Project Nowadays, establishing food kiosk has gasconaded all over the world as they are easy to conduct and relatively easy to start. The food service industry is and will always remain in high demand because food is one of the basic needs of men. This industries which deals with preparing food items and/or product including the restaurants, fast foods, school and hospital cafeterias, catering operations, food trucks, kiosk and etc. wherein the basic necessity is food. School canteens, commonly referred to as cafeterias, provide a range of food options from complete, nutritionally-balanced meals to a' la carte choices. Faced with an overwhelming array of choices, and with little nutrition knowledge to guide those students often struggle making wise meal choices. Too many food options can lead to poor food choices for students who may be overwhelmed with their new freedom to choose what they should eat in a meal. Food is the first and the greatest need for every person to live, to enjoy life, to a healthy lifestyle and to fit the eagerness of wanting something delicious. This could be the reason why some of people want to establish a kiosk where they could eat preferred foods at the same time, to relax their mind and body from all the tensions that the whole day brings. Kiosks are becoming quite popular and incredibly profitable for many small business owners. They were initially considered an option for only low-end markets, but now...
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...Discussion Paper 99 JOBLESS GROWTH IN INDIAN MANUFACTURING: A KALDORIAN APPROACH Michele Alessandrini* November 2009 Abstract Despite the remarkable economic performance in the last twenty-five years, India maintains a high discrepancy between the rate of growth of the economy and the rate of growth of employment. Labour elasticity to output has decreased over time and the capability of the Indian economy to generate employment seems to be limited. As a result, more than 60 percent of Indian workers are still employed in agriculture and 94 percent of total labour force can be found in the unregistered segment of the economy. This paper analyzes the jobless growth problem in India in terms of a Kaldorian framework where the linkages between agriculture and industry enter the labour demand through the changes in the terms of trade between the two sectors. Moreover, we investigate the role of the unorganized sector in influencing the growth of the registered employment. Using a dynamic panel dataset on registered manufacturing from the 15 major Indian states over the period 1980-2004, our System-GMM estimates show that states with a higher growth of demand for industrial goods originating from agriculture also exhibit a higher growth of employment. In addition, in those states where the weight of the unregistered manufacturing has risen over time, the jobless growth problem has worsened. Keywords: India, jobless growth, manufacturing, intersectoral terms...
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...Highlights Introduction Economic and Labour Market Outlook Occupation Outlook Conclusions Appendix 1 Appendix 2 Appendix 3 02 03 05 05 07 09 10 12 13 British Columbia Labour Market Outlook: 2010-2020 [1] Labour Market OutlookL { } B.C. Labour Market Outlook, 2010 - 2020 Preface The Ministry of Jobs, Tourism and Innovation is pleased to present the second edition of the B.C. Labour Market Outlook in partnership with BC Stats and the Ministry of Finance. This edition provides labour market demand and supply forecasts for B.C. and its regions from 2010 to 2020, based on output from the B.C. Labour Market Scenario Model. Over one million job openings are expected in B.C. from 2010 to 2020 The B.C. Labour Market Scenario Model is a tool that helps us understand the likely future of regional and provincial labour markets. Developed by the Province in 2009, the information the Model provides helps citizens, employers and government to accurately forecast future demand and supply for a range of occupations. The Outlook seeks to identify significant trends for the labour market of the future that can inform decisionmaking, based on statistical data, assumptions, and consultation with industry and other stakeholders. However, within particular occupations and regions there may be unique conditions that are not captured in this analysis. Assumptions and conditions may also change over time. Thus, despite best efforts, actual conditions may differ from those presented in the B.C....
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