...Title: THE ECONOMY, MONETARY POLICY, AND MONOPOLIES Name: Jackie Harris Professor: Horvath Course: ECO 100 (Principles of Economics) Date: 12/02/2012 Analyze the current economic situation in the U.S. as compared to five (5) years ago. Include interest rates, inflation, and unemployment in your analysis. “The United States economy is the largest national economy in the world; it is a market orient economy with a GDP (purchasing power parity) of 15.08 trillion dollars in 2011.” (www.cia.gov/worldfactbook). The economy of the United States is continually growing, at present it has a “GDP growth rate of 1.8%.”(www.cia.gov/worldfactbook). Though, the economy is still in recovery from the recession, in my opinion, it is doing far better now than it was in 2007 and 2008 because of the recession. “Currently the unemployment rate in the U.S is estimated to be 9%.”(www.cia.gov/worldfactbook). Which is still high when compared to previous years, but that is due to the current economic situation in the country. However, according to the National Bureau of Economic Research website, the recession began in December 2007, and was spurred by “sharp downturns in U.S. stock, housing and labor markets” (http://www.nber.org). As a result of the economic recession in America, there were not only ramifications for the United States economy, but for the people as well, and ultimately the global economy. The...
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...Monopolies have been around in American since it began. Some of the first monopolies are the reason for Americas advancement. But, what is a monopoly? As the book Economics: Private and Public Choice define it as” A market structure characterized by (1) a single seller of a well-defined product for which there are no good substitutes and (2) high barriers to the entry of any other firms into the market for that product”(). Though laws are in place to help big business not control all business but, some companies find ways to get around it. With business leaders like John D. Rockefeller, to Sergey Bring, Larry Page and Jonathan Wall googles founder’s monopolies are still thriving today but, in a different way. Starting back in the late 1800’s...
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...stronger product as a means of edging its way into a new market. Perhaps the most famous example of this is Microsoft Corporation's bundling of various software applications. The comparative advantage of innovation and new technologies in the business activities made Microsoft become monopoly. If Microsoft acquires Linux, Microsoft will become still powerful. It would usually cause market failure. Moreover, considering the problem of market failure, Government intervention is inevitable in the case of Microsoft. Government filed a case as Microsoft acted as monopoly. Monopoly If a firm only one which can produces a certain goods, it has monopoly in that market for that good. There are so many buyers in the market and there is a restriction to new firm enters into the market. The monopoly firm produces and sells their output where MR=MC and get abnormal profits before the government regulate to them. The U.S vs. Microsoft case of 1998 may be considered as a best example in showcasing the effects of antitrust laws against monopoly power. Microsoft manufactures the Windows family of OS (operating systems) for personal computers and servers. The Court claimed that the Microsoft acquired the monopoly power in the Intel – Compatible PC operating systems by charging a higher price above the competitive market. The market share...
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...Antitrust Practices and Market Power Antitrust Practices and Market Power Content Introduction…………………………………………………………………………..Page 2 Case for Antitrust Behavior……………………………….……….…..…………….Page 2 Antitrust and Market Power…………..……………………………………………...Page 3 Benefit of Monopoly………………………………………………………….……...Page 4 Conclusion……………………………………………………………………….......Page 4 References………………………………………………………………………........Page 5 Antitrust Practices and Market Power Introduction First of all, what is antitrust? It was first introduced and advanced by the neoclassical economists. We also call the antitrust law as the "competition laws". The main purpose of developing the antitrust law is to ensure fair competition in an open market economy, thus protect the consumers and maximize social welfare. Case for Antitrust Behavior I consider the case of Microsoft as the perfect antitrust law case of the antitrust police. On May 18 1998, United States of Department of Justice initiated the lawsuit towards Microsoft Corporation. Microsoft was accused of becoming a monopoly and engaging in abusive practices contrary to the Sherman Antitrust Act 1890 sections 1 and 2. The accuser alleged that Microsoft was being monopolistic because its product Windows requires bundling IE, Intel, and MSO which are all it’s own products. In other words, people that wants to use Microsoft Windows has to buy all the sub-products in order to make the whole system run normally. The settle...
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...In the late 1800’s and early 1900’s, America began the Industrial Revolution. During this time the main source of power shifted from man to machine. America was rapidly becoming an economic superpower and new methods of production brought benefits and good economy to America. But such progress comes with many burdens and pain. While many view the American Industrial Era as progress because of the philanthropy and labor unions, it was more pain because of the harsh conditions and unfair wages. Many believe the American Industrial Era was progress because of the philanthropy and labor unions. After all, no pain no gain, right? Well what did we gain? If nothing else at least some of those rich business owners donated to society. For example, Andrew Carnegie built “...libraries in towns all across the country-3,000 of them, costing...
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...When one considers historical development from 1607-1865 in what eventually would become the United States of America, one must consider that a game of Monopoly was implemented to play with people’s lives in order to promote economic democracy. In 1607, Europeans initiated the game of Monopoly by acquiring their first title-deed in the eastern shore called Jamestown, Virginia. At the time, colonists were subject to British rule and all of their rent went to profit the bank Great Britain. Great Britain wanted to become the wealthiest player on the board and concluded that if one must profit, they must exploit. At first, England imported some Irish homes and bankrupted white homes to make them pay rent. Although there was a dilemma, wealthy...
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...Who were the “Robber Barons?” How did they work to concentrate wealth and reform capitalism? How could they be called “Robber Barons” by many, and “Captains of Industry,” by a few? In what ways were they both? Throughout history there have been very important men who have had a big impact on our industries. Without these men we would not have some of the greatest industries we have today. Men like Cornelius Vanderbilt, John Rockefeller, J.P. Morgan and Andrew Carnegie. These men were some of the richest men in their times, they each were very successful business men. Cornelius Vanderbilt made his fortune off of steam ships and railroads. John Rockefeller controlled the oil companies. J.P. Morgan was a successful banker and investor whose company J.P. Morgan & co is still around today. Andrew Carnegie took over the steel industry making him one of the richest men in the world when he died. (Zinn Ch 10 & 11) All these men were successful and could be called Captains of Industry but at the same time were also known as Robber Barons. In this essay I will be giving a brief history of each of those men and in what industry he made his fortune. I will also explain how each one had different aspects of their life that made people think of them as Robber Barons. Finally I will talk about how they can be considered to be both Robber Barons and Captains of Industry. The dictionary has two definitions for a Robber Baron. The first is “an American capitalist of the latter part...
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...“The Men Who Built America” “The Men Who Built America” was based off of three men, Rockefeller, Vanderbilt, and Carnegie, each played a very important role in making America what it is today. Rockefeller made a monopoly off of standard oil. Vanderbilt made a monopoly of the railroad system in America while Carnegie made a monopoly from steel. The men had many accomplishments throughout their lives. John D. Rockefeller was born on July 8, 1839 and was an American industrialist and philanthropist. He founded Standard Oil which dominated the oil industry and became the first great U.S. business trust. Standard Oil began as an Ohio partnership formed by John D. Rockefeller, his brother William Rockefeller, Henry Flagler, Jabez Bostwick, chemistSamuel Andrews, and a silent partner, Stephen V. Harkness. Adjusting for inflation, he is often regarded as the richest person in history. Rockefeller spent the last 40 years of his life in retirement. His fortune was mainly used to create the modern systematic approach of targeted philanthropy. He was able to do this through the creation of foundations that had a major effect on medicine, education, and scientific research. When he died on May 23, 1937 he left his son John D. Rockefeller Jr. was entrusted with the supervisions of the foundations. Cornelius Vanderbilt was born on May 27, 1794 and was also an American industrialist and philanthropist. Vanderbilt made his fortune in the shipping and railroads industry. He was also the...
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...Antitrust , Monopoly and Oligopoly Introduction Prior to the United States Civil War the market was limited. After the war the market opened up into a more competitive market due to increased transportation and production abilities. Some large companies emerged leading to a monopoly market structure in which “one firm is the sole seller of a product or service” (McConnell, Brue, Flynn, 2012, p.164). When a monopoly market exists, companies have control over several key factors such as price, production, and distribution. A monopoly market creates high and difficult barriers for entry, preventing other companies from entering the market. Monopolistic companies “tend to produce less output and charge higher prices” (McConnell, Brue, Flynn, 2012, p. 375). To keep the market in competition, the United States government developed Antitrust Laws. What this law provide is a means of prevention of “monopolization, promote competition, and achieve allocated efficiency” (McConnell, Brue, Flynn, 2012, p.375). These Antitrust Laws are still being exercised today and one such example is Dean Foods. Antitrust The United States has Antitrust Division (DOJ) that monitors companies. In 2010, the DOJ brought suit against Dean Foods Company for violation of antitrust laws. Dean Food Company was in the process of acquiring Consumer Product Division of Foremost Farms USA. The suit alleged that this was a violation of the Clayton Act, an act that “sought to outlaw techniques that firms...
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...Assignment Answer two questions: 1) What do you see as the three main turning points that have created the internal political and cultural tensions in the Central America region from the colonial period to the present day? Describe these turning points in terms of the people who were involved in creating change and the controversies of the times. The history of Central America is considered to be a colorful one but rather complicated and even tragic because a lot of historical events took place and influenced greatly the political, economic and cultural development of the Central America region. (Perez-Brignoli, 1989) It is known that Central America has seen wars and dictators, foreign interventions and economic crises. (Booth & Walker, 1999) To my mind, the three turning points that have created the internal political and cultural tensions in the Central America region from the colonial period to the present day are the following ones: • Colonization of Central America by Spain in 1523. • When Central America declared Independence in 1821 and on June 1, 1823 five countries of Central America were united. • Revolution in 1944-1954 in Guatemala. The first turning point can be related to the period of colonization. The local population tried to stand against the Spaniards but Indian tribes had no chances to win. All the cities were captured by the colonizers. Some cities were burned and great deals of local people were killed. The Spaniards had control over the whole...
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...machines, monopolies, harsh industrial conditions, and many other horrendous happenings. The goal of the Progressive Era was to fix these issues. (Contextualization) Progressive reforms were remarkably successful in achieving the improvement of society, primarily by implementing more tolerable working conditions and ending corruption in politics....
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...The Boston Tea Party Movement the boston tea party, december 16, 1773. on this day many years ago more than 180 men went to the bay at boston harbor. as a ct against taxing tea they dumped 92000 pounds of tea. that night changed history forever. could it also been that start to the monopoly ban? why were the americans to angry about this? this movement changed us today because it was the start to the american revolution, us getting our freedom. they passed the tea act May 10, 1773. the taxation granted British a monopoly on tea sales in the american colonies. the colonists hated the ta tax because they say it violated their rights “no taxation without representation”. the boston tea party came from two issues involving the british empire. One that they had financial issues and two how much authority they had over the british american people. the movement was really the resistance throughout the british americans. americans drank 1.2 million pounds of tea each year so the taxation was a huge this for them. the colonist felt every strongly about this. “5000 people gathered at the old south meeting house, to decide what was to be done about the tea”, also at this time they...
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...In reference to the Telefonica case set out in the text book (and referred to above) QUESTION 1: What changes in the political and economic environment allowed Telefonica to start expanding globally? QUESTION 2: Why did Telefonica initially focus on Latin America? Why was it slower to expand in Europe, even though Spain is a member of the European Union? After being a stated opwned monopoly until 1990s, Telefonica started an aggressive international expansion in the late 1990s due mainly because of a wave of deregulation and privatozation processes aroun d the world. This expansion process was mainly focus in Latin Amrica because its cultural ties with the region and the deregulation and privatization processes that where occurring in the region, similar to the one made in Spain that brought Tleefonica to be a private com-pany. The expansion didn’t start in Europe, mainly due to a tacit agreement between te;lecommunication companies in Europe, that stated that they shouldn’t invade each other’s market. ( Youngs, R 2000 )“ The single market had opened the floodgates to EU investment to come pouring into Spain. In order to survive, Spanish companies were obliged to begin looking for new markets. Few companies in Spain were competitive enough to prosper in other parts of the EU, needing easier markets elsewhere [CEPAL, 1997: 92]. This was a more robust explanation of Spanish FDI trends than those predicated on cultural factors. While frequently alluded to, the role played...
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...compete in each one, competition levels, coming into and exiting the economy, the price range of goods, and product variety. I will relate Auto Edge’s market structure to pricing concepts. The demand for goods is related to price sensitivity. This differs. I will align market structures with elasticity of demand structures. A monopoly involves no pressures as related to competition. This can well be related to government regulation. Consumers have no freedom as related to choices. Monopoly is an example of perfect inelasticity. Government regulations are hard to keep without legal restrictions. The post office is a great example of a monopoly. They only deliver envelopes (Hagen, 2014). De Beers is a great example of a monopoly. They offered diamonds very openly. They put a complete lockdown on the whole chain of supply. De Beers put quite a bit of pressure on retailers to just sell their diamonds. The company would buy up all diamonds; so that the diamond supply was limited because of De Beers’ monopoly and ways of doing business. Until a few years ago, another monopoly was seen as related to the commercial airlines. Boeing had a monopoly over certain product lines until now. Pure competition involves many competitors. It has no leader. Competitors come and go. These are very competitive surroundings. No restrictions are in place. Pure competitions...
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...changes in the society. There is no doubt the gilded age was a key historic moment in the developing of the United States of America to become the place that now we know, during this period the economy growth thanks to the combination of certain factors such as the appearance of great businessman who built the corporations that were the bases of the economy and a huge improvement in the technology. This historic moment set the path to became into the society that now we are. The assembly line together with the mass production and was established during this time. It also was a time of corruption one of the most important things that this time gave to the world is the institution of monopolies. Henry Demarest wrote an article called “wealth against commonwealth” in 1894 This article was written with the intention of showing what was really happening in the world of the monopolies during the gilded age. The author probably was motivated by what he was watching; the inequality between the rich and the poor, too many were poor and just a few were extremely rich. He described the wealth as some kind of infection, He thought that we were losing the liberty that we earned by falling into corruption trying to be wealth. Demarest mentioned that many rules were established to avoid the acts of corruption by the monopolies leaders, but they had not too much success an all remained the same. According to henry Demarest who said “if our civilization...
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