...------------------------------------------------- ------------------------------------------------- | Week 6 Chapter 4: The theory of Individual BehaviorQuestion 1. Page 154 ( with some modifications) A consumer has $300 to spend on goods X and Y. The market prices of these two goods are Px = $15 and Py = $5. a. Draw the budget constraint. i.e provide a carefully labeled diagram b. What is the market rate of substitution? Give an interpretation. c. Illustrate the consumer’s opportunity set in part a) above. d. Show how the consumer’s opportunity set changes if income increases by $300. e. Does the increase of income by $300 in part d) above alter the market rate of substitution between goods X and Y?Answer: a. The total budget is $300. Px and Py are used to stand for market prices of two goods x and y. Hence, 300=15X+5Y. Now if the entire budget money is spent on good X, then Y=0, X=20. Also, if the entire budget money is spent on good Y, then X=0, Y=60. So the maximum amount of good X is 20 and the maximum amount of good Y is 60. Steps: 1. 300=15X+5Y 2. Y=-3X+60, if X=0, then Y=60 3. X=-(1/3)Y+20, if Y=0, then X=20 4. So Points (0, 60) and (20, 0) are on the curveTherefore, The budget constraint diagram can be drawn and is shown as follow: b. The market rate of substitution is the rate at which good X (or good Y) may be traded for good Y (or good X) in the market. It is the slope of the budget line. So if we calculate the slope of the...
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...Just a little background history on the organization I choose. Barbara Murray (2006c) explained the soft drink industry by stating, “For years the story in the nonalcoholic sector centered on the power struggle between…Coke and Pepsi. But as the pop fight has topped out, the industry's giants have begun relying on new product flavors…and looking to noncarbonated beverages for growth.” In order to fully understand the soft drink industry, the following should be considered: the dominant economic factors, five competitive sources, industry trends, and the industry’s key factors. Based on the analyses of the industry, specific recommendations for competitors can then be created. Market size, growth rate and overall profitability are three economic indicators that can be used to evaluate the soft drink industry. The market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry. Datamonitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. Further, the 2004 soft drink volume was 325,367.2 million liters. Clearly, the soft drink industry is lucrative with a potential for high profits, but there are several obstacles to overcome in order to capture the market share. The growth rate has been recently criticized due to the U.S. market saturation of soft drinks. Datamonitor (2005) stated, “Looking ahead, despite...
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...Economics for managerial decision making: Market structure Charles Brown Jr ECO/561 October 04, 2010 Frank Kingsland Economics for Managerial Decision Making: Market Structures Basis for the case study Each of the four cycles in this simulation relates specifically to the four market structures — monopoly, oligopoly, imperfect competition, and perfect competition. The learner plays the role of the newly appointed Chief Executive Officer of Quasar. As the CEO, the learner will approve decisions on the pricing of Neutron based on the cost and revenue structures for each market structure that Quasar transitions through. Cycle 1 – 2003 - Monopoly In this cycle, Quasar Computers introduces Neutron, the world's first all-optical portable notebook computer. This cycle is divided into three steps, each of which requires the learner to take a decision that will increase the profits for the firm. Decision points Step 1 - The price at which Neutron should be introduced to the market is ___2550_____? Step 2 - The advertising budget to be allocated and the price for Neutron is ____2,450___? Step 3 - The amount to be invested on internal processes improvements and the price for Neutron is _2200_____? Discussion question In spite of being a price-setter (a company that can set its own price), why would a monopoly player choose to pursue cost reduction and demand stimulation strategies? They would pursue a cost reduction and demand stimulation strategy by...
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...ecomonic B. Now decide whether the following would contribute to demand pull or cost push inflation. Try to explain your decision. 1. The Government increases taxes on alcohol by 5%. COST PUSH: The tax has to be paid by the seller, so it increases his costs of production; he will pass this on to the consumer as a higher price. 2. Consumers increase their spending on goods and services by 6%. DEMAND PULL: The biggest part of Aggregate Demand is C [Consumer spending] 3. Factory workers achieve an 8% rise in their wages. COST PUSH: Wages are an income paid to labour, and are a big cost of production. As well, since higher wages will then give the factory workers more disposable income, there will also be DEMAND PULL inflation. 4. The Australian dollar depreciates, increasing the cost of imports and imported raw materials. COST PUSH: when the Australian producer buys these imports, they will cost more in Australian dollars, so the producers’ costs of production will be higher. 5. The Reserve Bank decreases official interest rates by 0.5% DEMAND PULL: lower interest rates mean it is cheaper to borrow money, so both C and I will increase. [Consider what happens if the Reserve Bank increases official interest rates by 0.5%.] 6. The Government requires GST BAS (Business Activity Statements) to be completed by businesses every month. COST PUSH: this requirement means that each business will need more resources [ eg labour,...
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...decrease as additional units are added. C. Marginal cost is calculated as additional costs that are incurred for each additional unit of output that is added. For Company A, marginal cost follows a steady increase as additional units are added. D. Company A can reach profit maximization when they produce 8 units of product. It is at this point that marginal cost and marginal revenue intersect and they are able to attain the highest level of profit. E. If marginal revenue is greater than marginal cost then output should be increased until they are equal F. Subsequently, if marginal cost is greater than marginal revenue then output should be decreased until they are equal References Campbell McConnel, Stanley Brue, Sean Flynn. (2012) Ecomonics: principles, problems, and policies. New York:...
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...OPPORTUNITIES: M&S are targeting to linked up or merger with the international companies to grow at the faster rate globally.This company are needed to identify and overcome to attract not only the youngsters but also the older generation. THREATS: Economic changes are slightly down because of the changing needs of the customers.Due to the varities of retail markets the competition level has increased at a higher rate. Customers demand are increasing but somehow they are unwilling to fulfill needs and wants of the customers demands. PEST ANALYSIS OF M&S POLITICAL FACTOR: In modern organization there was a lage affects of the global politics. With this political factor it may impede the development of the better organization. ECOMONIC FACTOR: M&S these organizations are highly allocated with the economic factors. In this stage while standard of living of people results to rise the business senerio. SOCIAL FACTOR: The foundation of the progress of the society is considered mainly with inspiration, outlook and activity of the...
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...interior of the country. Furthermore the exports that U.S.A. can make will be almost nule due to the fact that they have a stronger currency compare to these nations. 5) There are two reasons why ppp does not exist: the first is that due to the fact that we have to deal with scarcity of resources, this leads to lach of sustitutes for traded producs, goods and services. The second is due to compounding effects. More specifically, it means that the exchange rates are affected by some factors, except from inflation rates, like government interference and differences in interest rates and disposable income. 6) The basic limitation about ppp theory and mostly relevant to the absolute form is the fact that they do not take into consideration reaal ecomonic factors like tarrifs barries to entry and trasportation costs. These three elements are vital because can determine if a transaction will take place or no. 7) The I.F.E. claims that foreign currencies with high interest rates will depreciate due to the fact that high nominal interest rates reflect expected inflation. Furthermore, according to that theory, nominal risk free interest rates include a real rate of return and an anticipated inflation. A firm that purchases on a frequent period of time foreign treasury bill,it may yield on average the same return as a domestic treasury bill. This concept is based on the differences on interest rates and are related with the fluctuation of exchange rates. 8) The I.F.E. is an important theory of...
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...In discussing and evaluating Alice’s goals, I will use the SMART planning model in the form of answering and evaluating her goals to see how achievable the goals are. a) Pay off student loan Specific: Alice has to pay off her student loan of $ 53,000. She is paying $7,720 annually. Measurable: At the end of the year she has to make a total payment of $7,720. Achievable: It is possible for her to make this payment since she does this from her income. Results: She has to pay back this loan in order that she will have sufficient disposable income that can be saved to acquire assets Time: Paying $7,720 annually will mean she will complete the student loan in a little after 6 years. b) Buy a house and save for children’s education Specific: Alice needs to buy a house and save for her children’s education Measurable: Presently she saves $400 annually. Saving this amount annually cannot enable her to buy a house and save money for her children’s education. It will be difficult to accomplish this goal. She will have to have more income to accomplish this goal. Achievable: It will be possible for her to buy a house and save for the education of her children if she increases her income. Alice is already paying her student loan, and when she finishes payment, she will have more income to save for education and buy a house. Saving enough money for her children’s education will what Alice has to look into seriously as she will need more income to do that. Results:...
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...ECONOMICS FACTORS 1 ECOMONICS FACTORS TERRY BENNINGFIELD AMERICAN INTERCONTINTENTAL UNIVERSITY ECONOMICS FACTORS 2 ABSTRACT In this paper I am going to explain the ins and outs of a closed and an open system. Explain what leakage and injections ECONOMICS FACTORS 3 In a circular flow, your money will enter a system then in turn will exit a system. The circular flow will help you understand how consumer’s money will travel through a complexes economic system with household, business, government and foreign agents. In closed and open systems, there are two kinds of consumers. One is the consumers because they purchase good and the other services and business that purchase production. Each group will enter different markets that they will enter different markets on their wants and their needs. In a consumers needs it will enter the market to produce their goods. While your business will enter a factor market with which t will buy products from sellers and or providers. In the exchange of monies enter the household and then from there will enter the firms that produce the goods and services. All businesses need factors of production for example; land would be needed to grow crops, labor to take care of the crops and capital is needed...
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...lacking the evolution of medicine and technology, putting into context just how significant the invention really was. The world has gone astray, today, almost half of the planet does not have full coverage for imperative health services and around 1,000,000 of those people are being pushed into poverty (World Health Organization, 1). This is just because of the elevating costs of private health care. However, breaking out of this calamity is very possible as the Universal Healthcare System offers care to all citizens of a particular country. Through this type of coverage, health services are granted without any financial hardships, in some countries, being free. Everyone is given an identical quality of service, no matter your social and ecomonic status. Lastly, it will improve the general public health of the area as fewer people will be ill as they possess the medication they need. These are all the beneficial aspects of Universal Healthcare which promote the welfare of a country. Therefore, it is logical to propose, in order to ensure equity and shared prosperity through healthcare in present societies, countries should abandon private healthcare and switch to Universal Healthcare, where the compulsory care they need is granted regardless of one's dignity through cash. Firstly, the Universal Healthcare System takes the resposibility to offer assistance to all of the public in the absense of economic privation. This aspect of Universal Healthcare is not incorporated with private...
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...Vaccines should be mandatory The invention of the vaccinations has been one of the greatest health interventions, saving millions of people from infectious diseases (Ehreth, 2002). The vaccine program has had extraordinary success in decreasing the spread of preventable diseases (Zimmerman, 2000). Research shows vaccines are safe, provide a way to protect your child and society, and help avoid wide spread disease. Vaccines are not completely 100% safe, but it is safer than the infectious disease it is preventing (Concerns about vaccine safety, 2009). With any drugs, there are side effects, but serious ones are rare (Concerns about vaccine safety, 2009). Children are given vaccines at an early age when other development issues also come to light, and vaccines are given the blame (Concerns about vaccine safety, 2009). It is a coincidence that those developmental issues have surfaced at the same time. Most developmental issues surface in early childhood. Vaccine side effects are very rare. Before a new vaccine can be administered, vaccines endure many years of testing, making vaccines even safer (Wharton el al, 2001). Making the side effects even rarer. In 1999 most childhood vaccinations were reformulated to not contain Thirmosal as a preservative. Thimosal is 50% mercury containing organic compound most widely used in vaccines. It was used as a preservative in vaccines starting in the 1930’s. It has since been removed from vaccines for children...
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...Running Head: WRIGHT WAY COMPANY Wright Way Company Kathy Wrightway AIU Online Currently Wright Way Company is facing, like many companies during this economic downslide decisions on whether to downsize, reorganize, or close one or both of their production plants. They are currently presenting before their Board of Directors, shareholders, and Management team the economic forecast for plant one and plant two of Wright Way Company. In reviewing the current statistic and data submitted by the COO of plant one they are currently using 50,000 workers to produce 200,000 units of output per day. At plant one, the daily wage per worker is $80 and the price of the firms output is $25. The cost of other variable inputs is $400,000 per day with the total fixed cost equals $1,000,000.00. In order to determine whether this plant will require a reduction in force or if they can maintain at the current rate for a short period of time or longer they must run the following statistics. Total variable cost = (number of workers *Workers Daily Wage) + other variable Costs which equals to (50,000 *80) + 400,000 = 4,400,000.00 Average Variable Cost = Total variable cost/units of output per day which equals to 4,400,000.00/200,000 = 22 Average Total Cost = (total variable cost + total fixed cost)/units of output per day which equals to (4,400,000.00 +1,000,000.00)/200,000 = 27 Work productivity = units of output per day/number of workers which equals to...
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...Health Care Spending Paper Becky Perez HCS/440 Michele Burka March 6, 2012 Affordable health care is a part of the “American dream.” This dream is slowly turning into a nightmare with “42.6 million Americans uninsured including 10 million children” (govspot.com, 2012). The needs of the current health care system need to be addressed and changes need to be made because many Americans are also underinsured. The issues that will be discussed are the level of current nation health care expenditures, whether spending is too much or not enough, where the nation should add or not, and why, and how the public’s health care needs are paid for and financed by various payers. The level of current nation health care expenditures is currently at $2.1 trillion. This translated into $7,026 per person and 16% of the Gross Domestic Product (GDP) (ajronline.org, 2008, pg. 1). 31% of this is for hospital spending, which is above the nationa health care expenditures. 5.9% for physician expenditures, which is currently lower than the overall expenditure rate due larglely to the 2% medicare fee for physicians. 19% for overall Medicare part D which caused a spike in prescription drugs. 8.8% in admisistravie fees, which grew faster than the overall rate because of the of the high number of members who joined the Medicare Advantage plan. Medicaid for the first time in history shrank because of the high number of people who enrolled in Medicare Part D. Heath care spending is to high and...
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...St Peters Catholic School BTEC Level 3 Diploma in Business Unit 3 Introduction to Marketing QCF level 3: BTEC Subsidiary Diploma in Business 2013-14 Learning hours: 60 Credit Value: 10 Unit code: Y/502/5411 Aims and Purpose of Unit 3 The aim and purpose of this unit is to give you an understanding of how marketing, research and planning and the marketing mix are used by all organisations. You will initially study two business organsations, but you will focus on the products at Denbies Vineyard and we will work in collaboration with them. Issue: 8th September 2014 Deadline: 1st December 2014 Learning outcomes On completion of this unit you should: 1. Know the role of marketing in organisations 2. Be able to use marketing research and marketing planning 3. Understand how and why customer groups are targeted 4. Be able to develop a coherent marketing mix. Assignment 1 You work as a marketing assistant for a large marketing company called “Creative Dreams” . The manager of your department has asked you to carry out the following task. The organisations you will investigate for unit 3.1 are “Thorpe Park” and “Surrey Wildlife Trust”. www.thorpepark.com www.surreywildlifetrust.org Task 1 (P1, P2, M1) Write up a brief introduction for both organisations, this must include size, location, nature of the business, objectives and marketing objectives to provide an introduction to the two businesses. (a) P1: DEADLINE THORPE PARK P1 15/09/14, DEADLINE...
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...11/02/1998 Gender: Female Marital status: Single Ethnic origin: WHITE - British Sexual orientation: Heterosexual Religion or belief: Christianity Education & Professional Qualifications I studied at Kingston school for 3 years , for the next 2 more years we joined another school and become The Horizon Community College. I always got involved in extra activities outside of school, for example baseball, net ball and cheerleading. At school my goal was to become a famous actress, I was always rehearsing and practising my acting skills for upcoming shows. I took part in les miserable’s ,the main part in blood brothers and the main part in a horror show. At the Horizon Community College I have achieved the following : • HOME ECOMONICS : CHILD DEVELOPMENT AT GRADE C • DRAMA AT GRADE D • ENGLISH AT GRADE D • MATHEMATICS AT GRACE C • PRINCIPLES OF SCIENCE AT GRADE PASS • CHEMISTRY AND OUR EARTH AT GRADE MERIT • ENERGY AND OUR UNIVERSE AT GRADE MERIT • BIOLGY AND OUR ENVIRONMENT AT GRADE PASS • DEVELOP TECHNIQIE FOR PERFORMANCE AT A CREDIT VALUE OF 5 • REHEARSE AND PERFRORM AT A CREDIT VALUE OF 6 • SPORT AT A GRADE MERIT • SPEAKING , LISTENING AND COMMUNICATION AT GRADE PASS • WRITING AT GRADE PASS I am very please of my outcome in school. However I think I could of worked on my English a little more. I want my GCSE English qualification so in Barnsley college I have took a GCSE English...
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