...inflation and type of unemployment are decided upon. Table of Contents 1. Introduction 5 2. The perfectly competitive firm 6 2.1 Market equilibrium 6 2.2 Time periods in Economics 7 2.2.1 Short run 7 2.2.2 Long run 7 2.3 Theory of Costs 8 2.3.1 Fixed cost (FC) 8 2.3.2 Variable cost (VC) 9 2.4 Shut-down decision 9 2.4.1 Short run 9 2.4.2 Long run 10 3. Monopoly market 10 3.1 Output and price level comparison of perfectly competitive and monopoly market 11 3.2 Monopolies in the economy 11 4 Inflation 11 4.1 Calculation of inflation 11 4.2 Inflation types 12 4.2.1 Type of inflation in T&T 13 5. Unemployment 13 5.1 Types of unemployment 13 5.1.1 Cyclical Unemployment 13 5.1.2 Frictional Unemployment 13 5.1.3 Structural Unemployment 14 5.1.4 Classical Unemployment 14 6 Unemployment costs to an economy 14 6.1 Costs to the individual 14 6.2 Costs to society 14 6.3 Costs to country 15 7. Conclusion 15 References 16 Appendices 17 1. Introduction Economics exists in all aspects of society and is defined in many ways. Contemporary economics textbooks have definitions including economics is the study of; the economy; the coordination process; the effects of scarcity; of human behaviour and the science of choice. These concise definitions of economics are seen to be inadequate as Economists are not generally guided by formal definitions but rather by logical or methodological views, resulting from...
Words: 2598 - Pages: 11
...KELLER GRADUATE SCHOOL OF MANAGEMENT MBA - PROJECT PAPER 1 NAME: - BOCKARIE LANSANA COURSE NAME: - BUSINESS ECONOMICS COURSE NUMBER: - GM545 FALL SESSION B-JANUARY-FEBRUARY 2011 Email address:-lans58@yahoo.co.uk 2. EHTICAL ISSUES IN BUSINESS One of these issues is the over reporting and under reporting of net income. The company management seeks to show that every quarter the net income of the business has grown. In order to show this they adopt unethical means and or illegal means in the operation and financial reporting system. One such method is the indiscriminate use of stock options for employees that enable companies to take employment costs off balance sheet and inflate earnings. This method will reduce the equilibrium price and increase equilibrium quantity for this company's products and services. The reason for this is that the wage is bill shown lower than what it actually is. This causes the supply curve to shift to the right. With an increase in supply, if the firm is a monopoly or an oligopoly or a monopolistic competition, there will be a decline in the price of the product of the firm. In case the firm is operating in perfect competition, there will only be an increase in the quantity the company sells in the market. The scenario described above indicates that there is a shift in the supply curve, in other words the costs are shown to be lower than what they actually are. The supply curve shifts to its right but...
Words: 1064 - Pages: 5
...Student Full Name : Fikreselassie Betelie Geressu Student Number : R1405D135465 Course Code : MBA-608 Course Name : Business Economics Assignment : Assignment I Submission Date : 01-November-2014 Question 1: Since the recent Great Recession of 2007-2009, there has been increasing disillusionment with the free market system. Critically analyze the view that the free market system is the best and only realistic alternative for determining the allocation of resources in an economy. Solution 1: A general slowdown in economic activity, a downturn in the business cycle, a reduction in the amount of goods and services produced and sold—these are all characteristics of a recession. The recent Great Recession which officially lasted from December 2007 to June 2009 has many factors of which the main root problem is the bursting of a huge trillion dollars housing bubbles and loss of confidence by investors and the public in the strength of key financial institutions and markets. One example of this is the housing crisis morphed into a financial crisis since banks held mortgage backed securities and other assets. Irrespective of such seasonal situations, the market should be free for competition and regulate itself only based on the fair and free competition, which sets the best price for the goods and services a buyer pays for depending only on the market supply and demand. Free market system is the best and realistic, which can give the efficient and optimal resource...
Words: 2777 - Pages: 12
...Business Economics II Group Nº in Moodle: Surnames and names: Homework 3 (Due on April 26) Exercise 1: Analyze the specific investment case between the firms Alcoa and Essex. You can find information in the article in Moodle. The extra information found in other sources will be valued (cite the bibliography or source used). In particular, answer the following questions: a. Describe the initial relationship between the two firms and justify it in an economic sense. b. Describe the problematic (time line and more relevant facts) c. Describe the outcome of the case, consider other possible alternatives and analyze them in economic terms. Exercise 2: Soft drink industry case (Using the article in Moodle) Briefly answer: a) What is the prevailing contract in the 80s-90s between CSD and the bottlers? b) According to transaction cost theory…Why did they pass from one contract to another? Did asset specificity increase? b) What is the "fountain channel" distribution? Were there differences between Pepsi and Coke? Why? Exercise 3: A wheel manufacturer is considering to install a production plant adjacent to the car assembly factory of SEAT. The required investment is 240 million Euros and it will allow the wheel manufacturer to produce a total of 10 million wheels over the entire useful life of the production plant. The variable costs of producing each wheel are 66 Euros. The maximum price SEAT is willing to pay is 100 Euros. a) Calculate the rents of...
Words: 377 - Pages: 2
...Shikha Neupane ID: 32330 Business economics Economics is a branch of social science which deals with study of how fright merchandises and properties are assigned to please apparently infinite requirements and needs. The fundamental theory in economics is that shortage involves that selections be made. Similarly business economics is the branch of applied economics that deals with the idea of relevance to the contemporary business, in order to improve a complete understanding of the supply distribution matters opposite the business organisation and the environment that it functions in. It uses various economic theory and other quantitative methods to scrutinise a business organisation and the issues that influences the enterprise with the labour and its market. Question 1 Business Economics is a useful toolbox for understanding the business environment and making better decisions. Consider you are the managing director of a manufacturing company based in UK; describe the different aspects of the business that you should be looking at from an economics perspective in order to run the company efficiently. Consider both the microeconomics and macroeconomics perspectives. The entire business organisations around the globe have one similar goal and that is to increase the profit. By scrutinising the demand of the clients, supplying good quality and suitable supply, the profit can be maximised. Conversely there are various microeconomic and macroeconomic factors that...
Words: 2142 - Pages: 9
...| Peter F. Drucker is the management scholar. He is thought to be the establishing father of current management. Peter Drucker, whose life crossed the previous century (1909 – 2005), was an exceedingly instructed native of the world: an innovative soul who composed thirty-nine books including numerous fantastic chips away at business management. He was a man of numerous parts: a sharp eyewitness, a long lasting understudy, an educator, mentor of eminent corporate pioneers, and the organizer of an official school in Claremont, California, that bears his name. Peter Ferdinand Drucker was an author, management advisor and college teacher. His written work concentrated on management related writing. Peter Drucker made well known the term information specialist and is thought to have unknowingly introduced the learning economy, which viably challenges Karl Marx's reality perspective of the political economy. George Orwell credits Peter Drucker as one of the main journalists to foresee the German-Soviet Pact of 1939. Much has been said and composed of his accomplishments, but then there is a lesser-known side to Peter Drucker; that other side is the subject of this paper. He was hesitant about his own reasoning of life. He additionally emphatically protested being known as a ‘management master’ – a sobriquet frequently attached to him. As opposed to being a supplier of answers, Drucker constantly remained an examiner: his showing strategy was Socratic. What mattered most was the...
Words: 3933 - Pages: 16
...Week 6 You Decide: My Recommendation to the President Business Economics Professor Gary Smith April 10, 2013 Al Quarles III Dear Mr. President, After carefully reviewing the information from my fellow colleagues, I have come up with the following recommendations after listening to each person. Kathy Lee believes that raising taxes and reducing government spending is the way to go but all that will do is discourage businesses, lower motivation of individual workers and overall increase government control. Patricia Lopez thinks the Feds should leave interest rates alone, but strongly sell bonds and raise the bank reserve requirement. Although it is an interesting idea, raising the reserve requirements forces banks to withhold a larger portion of their funds, thereby reducing the money supply. It will ultimately restrict the bankers’ ability to make more loans, and those banks that were already operating just barely above the old reserve requirement will be forced to re-work their existing loans to meet the new restrictions which will lead to eventually raising interest rates. Allison Tanney believes that you should focus on increasing government spending and lower taxes and have the Feds work on buying bonds, raising interest rates and if only necessary, raising the reserve requirement. Increasing government spending can become a problem down the line because the government becomes larger than what it already is. Raymond Burke recommended that you should lower...
Words: 295 - Pages: 2
...Business Economics ABC Complete Kitchens, Inc. will look at the economic factors that may influence the plant’s operations and legal considerations. The organization will focus on the economic considerations before making any long term financial decision or any decision regarding the acquisition of capital. ABC Complete Kitchens Inc. will have a clearer picture as to how this can impact the operations of the new plant. ABC Complete Kitchens’ Inc. will examine two areas within economics, Macroeconomics’ and Microeconomics’ and some of their factors with a section on legal considerations. Macroeconomics The study of total effects of choices that individuals, businesses and governments make on the domestic and global economy . Macroeconomics is one of the most important elements of national policy and used as the foundation if any decision regarding taxation or monetary policy concerns. Decisions regarding the balance of payments and interest rates are related to the overall macroeconomics situation of the country. There are many factors used to described macroeconomics and here are a few; Gross Domestic Product, Unemployment Rates and Price Index. Gross Domestic Product (GDP) The GDP is the market value that recognizes the goods and services produced within a period of time, usually this is over a one year period. The GDP is used as an indicator within macroeconomics to show the country’s standard of living. If a country is showing increased improvement and growth...
Words: 1311 - Pages: 6
...Question 1 Part A: (i): (ii)(iii)(iv): (iii): If the price for the orange set at 6, the market will provide 110 oranges per day while the demand for that will be just 60,so it means that we have surplus of 50 oranges per day. Because the equilibrium price is 5, so when the price increase the market provide larger amount of oranges to make more profit while the number of costumer decrease in order to the price. (it is in the previous diagram) (iv): In this case if the price set at 3, the market will provide just 80 oranges per day but the demand for orange will be 180 because the price is cheap so costumer want to buy more of it, On the other hand sellers don't want to sell orange because if the price will be low, the amount of profit would be low for them. (it is in the previous diagram) (v):In the case of increasing in demand it will affected on price and also quantity of supply, here demand increase by 40 cases so it means that we have shortage of 40 and equilibrium rise to the approximately 108 and price increase to about 5.80. The reason for this action would be several factors, for example increases in population, so number of buyers will be increase or market export this goods to the new country Another reason is change in tastes, for instance some product would be popular for period of time as a result of advertising or fashion and so forth, so it may increase the demand (vi): if government give subsidy the supply curve shift...
Words: 4371 - Pages: 18
...AD 501 TOPICS IN BUSINESS ECONOMICS – FALL 2012 QUIZ ANSWERS Below are the quarter-end balance sheet figures of CBRT [pic] a) Find the magnitude and sign of (short/long) FX position in the beginning and end quarter. Find the changes in FX position, domestic assets, central bank money, reserve money, other central bank money Answers: [pic] (long) [pic] b) Interpret the change in valuation account (incorporate the FX position in your line of reasoning) In the case of long FX position, a depreciation of TL (appreciation of FX) leads to a net profit. Since the valuation account is recorded on the asset side, this increase in profit leads to a decrease in the valuation account on the asset side. FX gain is 4,9 billion TL. c) Interpret the change in central bank money. What actions of CBRT may be the source of this change? (Include the change in valuation account in your analysis) Total FX position change is 9.1 billion TL. Appreciation of FX vis-a-vis TL caused FX gain of 4,9 billion TL (in the case of long position). So FX purchase is 4,2 billion TL. Increase in other domestic assets is 0,4 billion TL. So the increase in central bank money (4,5 billion TL) comes from FX purchase of 4,2 billion TL and other domestic asset increase of 0,4 billion TL. (Collect FX from the market or extend credit to the public and issue equal amount of TL) d) Compare the changes in central bank money and reserve money and interpret the result...
Words: 495 - Pages: 2
...driving force in this market, providing the consumers with the most favourable product at the most affordable price. According to Pmiranda2857 (2009), a new product is priced high in the market. After sometime, the major competitors in the market begin to imitate the innovation in the market. This leads to price reduction in the once expensive product since new and similar products begin to emerge. Pricing therefore becomes a sensitive issue in competition. Rothbard (n.d.) also concluded that competition leads to the betterment in the standards of the market competitors compared to other markets. ii. It promotes entrepreneurship and innovation (Pmiranda2857, 2009; Rothbard, n.d.). The ability of a business to produce goods and services for consumers brings out the best in any business entity. Competing businesses are always busy looking out for new ways to get ahead of each other by introducing new products and technology in their quest to stay on top. Entrepreneurship basically involves taking risks for success or failure. This...
Words: 3199 - Pages: 13
...of oil mainly because of two main factors; one being the role played by the country and impact of oil in the world economy are both experiencing a decline. The development of OPEC back in 1960, however, changed the scene of the oil industry to an oligopoly oil industry characterized by cartels. This is an institution characterized by few productive members who control the product price. When it comes to OPEC, the treaty between the groups controls how much oil each company is allowed to produce. Despite the increase in oil prices experienced back in 1970, the price of oil has not shifted much in later years (Yizraeli 4). The demand and the supply of oil in the long run and the short run due to this model would differ depending on some economic factors.  2. Hypothesize the basic short-run and long-run behaviors of the model in the...
Words: 1950 - Pages: 8
...Keller Graduate School Business Economics 26 July 2014 Project I The price of gasoline fluctuates due to the price of crude oil. Gasoline is made from crude oil (found in the earth). Gasoline prices have been on the rise due to increasing crude oil prices. West Texas Intermediate (U.S) and Brent Crude (World) are two of the most important crude oil market suppliers (Dent & Sakurai, 2014). These organizations crude oil price is mandated by the Organization of Petroleum Exporting Countries (OPEC). Private business owner for gasoline stations seeks a higher maximum profit per gallon when prices increase. But, when the price of gasoline increases it affects the economy. Consumers are hit with a tight budget on their finances to sacrifice a gallon of gas. As, prices increase gasoline stations become competitive; usually prices are slightly close. Driving within my city, I notice that station prices are higher or lower, and as I research the topic gasoline it gives me a clearer understanding. It’s noticeable that the same amount of vehicles is at each station. From personal opinion, I believe it depends on the location (which side of the highway) and brand name. I’m a consumer that is more concerned with price; therefore if the station on the other side of the highway is offering a lower price, I’ll go the extras to get that price. Grocery stores have made it convenient for consumers to save at the pump, by turning one’s grocery bill into...
Words: 2251 - Pages: 10
...CALIFORNIA STATE UNIVERSITY, FULLERTON International Law for Business (Mgmt 346) Section 20579 Course Syllabus for Fall 2016 MIHAYLO COLLEGE OF BUSINESS AND ECONOMICS Professor Carl Pentis DEPARTMENT OF MANAGEMENT Office: SGMH 5385 Law Office telephone: (714)385-9682 Cell (text or call me!): (310)594-0869 Office hours: Tuesday, Thursday 5:00-5:30 pm; and by appointment School Office e-mail: cpentis@fullerton.edu Law Firm e-mail:carlpentis@gmail.com Law Firm fax: (714) 385-9682 Class day, hours and location: Tuesday and Thursday 5:30 to 6:45 p.m.; SGMH 1109 Course Description From the CSUF Catalog Prerequisite: Management 246 or equivalent. Textbook and Other Course Materials The course text is International Business Law and its Environment, by Schaffer, Agusti, Dhooge, Cengagge Learning, (9th ed. 2015). This can be an expensive textbook so you should consider purchasing the eBook at the Titan Bookstore. Also, I will provide links to PowerPoint presentations and other select added course materials on the course website. Course Mechanics and Procedures Open-Door Policy. My policy has always been “open-door.” Therefore, you should not hesitate to contact me in person or by e-mail1 or telephone. Reading. We will cover many chapters from the text during the semester. Course readings will include chapters from the text plus the assigned cases cited below. Bring your text to all class sessions since we will refer to it frequently. 1 ...
Words: 3880 - Pages: 16
...Case Study Business Economics Jimmie C. Tolbert Professor Melton 20 August 2012 Responds to Mr. Burke: As the senior economic advisor to the president, I would have to say that your recommendation of lowering interest rates could potentially have positive effects under the economical principle of short-run. Lowering the interest rates would mean that the money supply in the economic will increase, thereby, giving consumers the opportunity to spend more which, will help to stimulate the demand for goods and services. This will, in turn, signal businesses to increase production of goods and services. In addition, higher production means that more units must be supplied to meet increasing demand. At this point, employers must increase their workforce by at least hiring temporary workers to match output demands, which essentially reduces unemployment rate for the short-run. However, lowering the interest rate could negatively impact those people who depend on saving investments to survive. When the interest rates are low, this also affects the return on investments for CDs, investments such as stocks and, other saving accounts. Furthermore, when interest rates are low, people will not be willing to invest with banks because of low or little ROI. This can further damage the deposit reserve by limited the amount of money the banks can loan at any given period. Respond to Ms. Lee: Maintaining the right amount of taxation is a very...
Words: 510 - Pages: 3
