...Project 1 The purpose of this report is to investigate the impact of a proposed excise tax on consumers and the relevant industry. More specifically, this report discusses a proposed 1% “fat” tax (i.e. an excise tax) on a brand of soda and the resulting effect on its customers as well as the supermarket chain that distributes the soda. Using calculations derived from the demand function provided, this report analyzes the proposed excise tax and argues that an income tax, rather than an excise tax, would be a better alternative for the government to generate the same amount of tax revenues as the “fat” tax. In order to comprehend the situation at hand, one must have a basic understanding of the elements of demand, optimal output, price and revenues. Demand, along with supply, is the determining factor of the prices and quantities of goods that are bought and sold in the market. To take this case as example, demand illustrates the quantity of soda consumers would like to purchase at each price. Optimal output refers to the amount of soda produced that will maximize the supermarket’s level of profits. In terms of price, it is the amount of money that the consumer must spend to obtain one unit of soda. Knowing the price and the quantity of soda sold will allow one to obtain revenue, which is the income received by the supermarket from the sale of soda. According to the calculations done given the demand function, the pre-tax soda output is 29469 oz. at a price of $0.017037 or...
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...Milton Friedman in his article “The Social Responsibility of Business is to Increase its Profits” states that only people can have responsibilities, and that there is not such a thing like social responsibility of business. A corporation, according to Friedman, is an artificial person and, therefore, may have artificial responsibilities. The individuals who are responsible of the corporation are businessmen, which are individual proprietors or corporate executives. A corporate executive is employed by the owners of the business. And its responsibility is to conduct the business in a way that maximizes the profits while conforming to the basic rules of the society. A corporate executive, as any other person, may have many other responsibilities that he recognizes or assumes voluntarily, which can be referred as “social responsibilities.” These social responsibilities correspond to individuals, not to businesses. The main objective of corporate executives is to maximize the profits of all stockholders; therefore, they are to act in a way that is in the interest of those owners of the business. In this sense, a corporate executive shall not engage in social activities, unless they are done from an individualistic point of view instead of from a business point of view because, in the last case, he or she would be spending somebody else’s money, and not serving the interests of the employers. On the other hand, the situation of the individual proprietor differs because, if he reduces...
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...Environmental Analysis – Microeconomics Historically, the breakfast cereals industry had become prominent and successful due to its Oligopoly structure of market where there was small number of large players in the industry. Under Oligopoly, there was difficulty for the small players to penetrate the market. This was in fact evidenced by the “antitrust” complaint filed by the FTC which argued that the incumbent firms (the Big Three) had effectively discouraged small firms to enter the industry. How was it done? It was observed that the Big Three used marketing strategies such as but not limited to 1. Trade Dealings - which offers discounts to retailers or special promotion 2. In pack Premiums –where cereal packages include toys and gifts 3. Vitamin-Fortification 4. Distribution of coupon Indirectly these giants also took advantage of the economies of scale which also enhanced their profitability. Profitability is one big factor that makes a business remain and becoming a leader in the industry. The Big Three also made use of their influence in the food stores, supermarkets, etc. by taking display slots in their stores making their product visible to the buyers/consumers. Variations in the product offerings and product innovations/differentiation also played an important role in the success of branded cereal industry as these give the consumer large scale of options of which product to grasp. Cumulatively, above business tactics/activities apparently can only...
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...NATELLA SARGSYAN ECON545 MICROECONOMIC ANALYSIS Instructor: William Mapp Introduction Jenny, my niece, has asked me for an advice about a carrier choice that she is trying to make. Jenny wants to become a dentist. We discussed the topic of high tuition and hard work required on the way of achieving the degree. Jenny knows that I am taking a course in Business Economics and is waiting to my research based advice on whether to become a dentist or not. She also wants to know my opinion on the best location to practice it in the USA. Dental Market Demand. On the market of dental services two sides can be identified; they are the patients who represent the demand side and the dentists who are on the supply side. The suppliers-dentists- provide treatment for their patients in exchange of certain payments. These payments are to cover operating costs such as dental supplies and equipment, staff salary, marketing, space rental and so on. The patients who are in need of those services are concerned about the financial expenditures to receive it. There are two ways to pay for the services from the patients’ side: to purchase a dental insurance or to pay for the treatment. Most of the dental insurances are provided by employers. Some of the plans cover the treatment for 100% other plans cover a portion of the treatment leaving the other portion for the patients to pay. The demand theory states that services or goods are the objects of taste and preference of people. Individuals...
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...Taimoor Qureshi By Appointment taimoor.qureshi@ucp.edu.pk COURSE DESCRIPTION Principles of Microeconomics is an introductory course that teaches the fundamentals of microeconomics. This course introduces microeconomic concepts and analysis, supply and demand analysis, theories of the firm and individual behavior, competition and monopoly, and welfare economics. Students will also be introduced to the use of microeconomic applications to address problems in current economic policy throughout the semester. COURSE OBJECTIVES After studying this course the students should be able to: Understand the basic concepts of the subject. Understand the application of the tools of demand and supply for efficient resource allocation and profit maximization. Identify core economic issues related to business firms. Comprehend the benefits of market efficiency. GRADING PLAN TYPE Quizzes Assignments Final Projects Midterm examination Final term examination Total PERCENTAGE (%) 10 10 10 30 40 100 CALENDER OF ACTIVITIES WEEK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 CONTENTS TASKS/ACTIVITIES Introduction to Economics • Basic Concepts – I Class Introduction Introduction to Economics • Basic Concepts – II Utility Assignment 1 Due Demand Supply Quiz 1 Markets - I Markets - II Mid-Term Midterm Exam Market Analysis: shares, currency, and labor markets Market Failures and Imperfections The Fundamental Economic...
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...AIU Abstract This paper’s objective is to discuss the differences between microeconomics and macroeconomics and examples of each. It will discuss a personal microeconomic example with the factors that contributed to the decision. It will also discuss an example of a macroeconomic phenomenon and the results of the decision. Economics for the Global Manager Microeconomics is an analysis of how individuals and firms will make themselves as successful as possible in a world of shortages and the penalty of those individual decisions for markets and the entire economy. It will study how individuals and firms make decisions and how the individual decisions will affect markets (Perloff, 2012). Macroeconomic is an analysis of the performance of the whole economic system. It can forecast the national income by studying the major economic factors that have predictable patterns or trends and the influence they have on one another. The factors used are prices, balance of payment positions, gross national product, and employment / unemployment (Macroeconomics, 2013). The difference between microeconomics and macroeconomics is clear. Microeconomics is the study of the individuals / firms markets. It looks at the allocations of resources and the prices of goods. Macroeconomics is a study of the whole economic system. It looks at gross national product and how it affects unemployment. A microeconomic phenomenon example is taking a looks at a specific company to determine how they...
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...known as the supply relationship. The demand for health care is limitless as is evidenced by the number of people who use health care services on a day to day basis. Supply, however, is limited by the availability of medical resources and the skill to administer care effectively. Macroeconomics Macroeconomics studies the economy as a whole. Macroeconomic analysis studies the roles of the government, exports and imports, consumption, investment, government taxes, and other factors in an economy. In health care, the macroeconomic market is the entire country’s health care system including the way that it performs in terms of profit, loss and efficiency. Macroeconomics of health is concerned with parallel sets of large scale system issues concerning spending for employment and other aspects of health as part of the economy. The biological health status which includes longevity, fertility and productivity are also taken into account. Microeconomics Microeconomics deals with single institutions and their interaction in the economy, the behavior of single consumers, firms and industries. Explanations of microeconomics are...
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...Microeconomics has a role in society as well as in the economy of a region. This field of study allows economists to determine not only the patterns of consumers, businesses, and other organizations that are spending money but also the factors that are affecting spending habits and production decisions. Microeconomics involves studying the concepts and ideas that establish supply and demand in a particular market and the way that consumers and businesses alike prioritize their spending. Essentially, the role of microeconomics is to determine how, when combined, small economic components are affecting the broader economy. Instead of looking at market indicators that represent a wide field of data, however, this type of study considers how individuals, households, or specific markets are responding to markets. Although this economic approach does not necessarily reveal or determine economic conditions, the process offers insight into the way that consumers and businesses alike decide the value of a particular product or service. This is expressed in the amount of resources that either the consumer or business dedicates to an item. Rather than tallying the way that consumers as a whole are responding to a particular product, for instance, microeconomics begins with the study of the extent of demand stemming from one single consumer. Once this demand has been determined, this study continues and expands to include a greater number of individuals in the assessment. Economists also...
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... ECON521 – Economics of Organizational Architecture and Strategy As many know management is a basic essential to any organization. Many different things fall under management in order to fulfill every aspect of that position. You don’t have to be a college Graduate in order to be a manager, but you do have to have many skills. When being a manager you must know how to cultivate a team, you must have great listening skills, you must be able to empower your staff, and have knowledge in an overall structure of an organization. Microeconomics plays a part of management. Roughly speaking, microeconomics deals with economics decisions made at a low, or micro, level. More precisely, I would define microeconomics as "the analysis of the decisions made by individuals and groups, the factors that affect those decisions and how those decisions affect others". Microeconomic decisions by both firms and individuals are motivated by cost and benefit considerations. Costs can be either in terms of financial costs such as average fixed costs and total variable costs or they can be in terms of opportunity costs, which consider alternatives foregone. Prior to formulating strategy, a manager must of course have knowledge of what he/she wants to accomplish. The key component of any strategy statement is to set the long-term objectives of the organization. It is known that strategy is generally a medium for realization of organizational objectives...
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...ONLINE SUBMISSION ASSIGNMENT COVER PAGE | Name: Anthony Radici Student number: S00110027 Tutorial time room: Monday 5pm. Room C3-07 Date: Friday the 2nd of May 2014 Course: Bachelor of Commerce Subject: Principles of Economics Instructor: Dr Jason koh “ An analysis of the key macro and micro economics factors which impact on the current Australian housing market” Introduction This paper explores the current situation of the Australian housing market. This paper will place a major focus on how macro and microeconomics impact the housing market in Australia. The paper starts off with the Australian economy and the housing market at the moment. The next section is the major part of this essay as it focuses on the macroeconomics factors, which have formed the housing market. The following section briefly explores the microeconomics factors, which have formed the housing market. And finally the last section of this paper ended by a conclusion. Australia and the housing market Throughout the years we have seen a massive change in prices when buying a house in Australia, this is due to many different factors, which have had a big impact on the economy itself. One of the main reasons why prices have been going up is because of the population growth. As we know as the demand increases, price also increases. Recently we have seen a change in people willing to buy a house, they are mostly aged between 22 to 42 years old and in most cases, they can...
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...Article Analysis University of Phoenix ECO / 365 Liliana Fargo November 1, 2009 Article Analysis Many consumers purchase products to use them because they like the product, it fits their lifestyle or just for the simple fact of it being affordable. The consumers hardly ever look at the purchase habits of other consumers that is the company’s job to do. There are many facets that a company has to look at, such as the trends and consumption patterns of the consumers that consumers are not too aware of. Taking all of this into consideration, the purpose of this paper will be to define economics, define microeconomics, define law of supply, as well as define the law of demand, ad to also identify the factors that lead to a change in supply and a change in demand. What is economics? Economics is more than just the “economy.” Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society (Colander, 2008). Merriam-Webster defines economics in a simpler way as a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services (2009). The key word in the definition given by Colander is coordinate. In the study of economics there are three central coordination problems any economy must solve, which are: what, and how much, to produce; how to produce it; and for whom to produce it...
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...were concerned with the economic system as a whole. In the 18th century, the Physiocrats adopted it in their Table Economies to show the ‘circulation of wealth’ (i.e., the net product) among the three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes. Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression. Contents: Nature of Macroeconomics Difference between Microeconomics and Macroeconomics Dependence of Microeconomic Theory on Macroeconomics Dependence of Macroeconomics on Microeconomic Theory Macro Statics, Macro Dynamics and Comparative Statics Transition from Microeconomics to Macroeconomics Stock and Flow Concepts 1. Nature of Macroeconomics:________________________________________ Macroeconomics is the study of aggregates or averages covering the entire economy, such as total employment, national income, national output, total investment, total consumption, total savings, aggregate supply, aggregate demand, and general price level, wage level, and cost structure. In other words, it is aggregative economics...
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..........................................................................02 ASSIGNMENT ...................................................................................03 REFERENCE ...................................................................................08 INRODUCTION 1] Description managerial economics relies on microeconomics and industrial organization to analyze business practices and design business strategies 2] Description the difference between price-taking and price-setting firms. ABSTRACT Overview of industrial organisation and micro economics related to managerial economics and difference between price taking and price setting. ASSIGNMENT 1. Why managerial economics relies on microeconomics and industrial organization? Answer: The new managerial economics design comprised three part that is: part 1: basic concepts [supply and demand analysis ,market demand analysis ,production and cost analysis and factor markets] part2: industrial organisation...
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...decisions related to supply and demand for the product or service that you would make based on the predicted changes in supply and demand on the market equilibrium. 5-2 Final Project Part I Milestone Two: Production and Costs This milestone, which covers Section III of Final Project Part I, should be a paper structured as follows: 1. Describe three key inputs (or factors of production) and fixed and variable costs involved in the production of your chosen product or service. 2. Analyze the factors that impact your choice of inputs to produce the chosen product or service. 3. Examine the production decisions that you would make based on the analysis of the factors impacting the choice of inputs to produce the chosen product or service. 7-1 Final Project Part I Final Submission: Microeconomic Analysis Paper The microeconomic analysis paper should be a complete, polished artifact containing all of the critical elements of Final Project Part I, including Sections I and IV , which...
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...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 affect this process. These factors significantly affect the sales and production level of a business organisation1. The following are few of the economic factors that affect the efficiency of a business organisation. All these factors are interconnected to each other. * Demand and supply: Two of the main factors that affect the efficiency of an organisation are demand and supply. The demand...
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