Assignment 2

Economics Assignment

Name of Student

Name of institution

Answer 1

I have assumed that the person above has two children who are fully dependent upon the person. Thus, there is a deduction allowed in the law for the person so we have provided $ 4000 deduction for him. The threshold level of the payroll is set at $500000.

The inequality of income in the society is measured by the gini coefficient. The variable has the values from 0 to 1. The value near to 1 shows higher inequality of income in the society. The inequality of income is not the problem in a single country. The global economy is suffering from this problem. Some economists say that the measure is not able to calculate the numbers accurately.

The above table shows the value of gini coefficient value of 0.30. This shows a low inequality of income a per the tax system depicted in the diagram. This means that the personal taxes are appropriate in the percentages.

There are certain measures that can affect the gini coefficient to rise or fall. The most important aspect in this regard is the increase or decrease in the personal consumption expenditures. This is because these expenditures are affected by the direct taxes. The direct taxes decide the actual sacrifice that the person has to bear in terms of taxes. The gini coefficient is directly affected by the direct taxes.

There are some other factors that affect the value of gini coefficient. The wealth and property tax also affect the value of gini coefficient. The indirect taxes like the sales tax does not affect gini coefficient because these taxes do not affect the disposable income of the people. Thus in order to adjust the inequality of income, the authorities must see the actual sacrifice made by the individuals.

Answer 2

The article has used the concept that refers to the external costs. Whenever an economic decision is made, there are some private costs associated to it. However, these are not the only costs that are associated with the decision. There are some additional costs that must be considered. These costs are the external or social costs associated to any economic decision. The article specifies some situations where the social or external costs are evident. The climate of the earth is changing fast which can have adverse effects on the future generations. These aspects have come to the forefront of the discussions more recently. The people must realize that the climate change has to be stopped. This effort will require certain resources and costs. These costs will have to be borne by quitting some other expenditures. I addition to the costs, there will be certain benefits of the climate control projects. These projects will create a large number of jobs and good amounts of revenues for the country. These will be the private benefits and the overall impact of the project will be calculated by subtracting the costs from the benefits. The project having more benefits than the costs should be continued. As per the article, the projects will have more benefits in the future as compared to the present. However, the costs will have to be incurred now.

Answer 3

In choosing the product, we have made sure that the concepts of elasticity can be properly applied to it. Keeping this in view, I have chosen the flour as the example. We will see the response of the quantity demanded to a change in price.

The quantity has changed from 3 to 2 in two years. The price has changed to $5 from $1. Taking this data, we will apply the following formula to calculate elasticity of demand:

%age change in quantity demanded/%age change in price

This formula can further be analyzed as:

Q1-Q0/P1-P0 * P0/Q0

= 2-3/5-1*3/1

=-0.75

The answer shows a minimal impact of the change in price on the quantity demanded of the product. The interpretation of the figure is that the unit change in the price of the product will bring less than a unit change in the quantity demanded. The nature of the product is that of the basic need which the people cannot quit in any case. The other consideration is the availability of substitutes which are less in case of a basic need. Generally the product under consideration has more importance in overall budget of the family or the unit under consideration. The basic need like bread has more importance in the budget of the people. This means that it is harder for the individual or family to quit the product.

Answer 4

The decision that was taken by me is regarding making the budget when there is an increase in the income. There were some products whose consumption was going to be decreased after the increase in income. These were the inferior goods and they have an income elasticity of demand as negative. There were some other goods whose quantity demanded was increased with an increase in income, these were the normal goods and they have a positive income elasticity of demand.

Assignment 4 Economics - Simple Linear Regression

RUNNING HEAD: REGRESSION ANALYSIS

Regression Analysis

Author

[Name of the Institution]

Regression Analysis

1. Purpose

The major purpose of this report is to see if there is any significant relationship between GDP and life satisfaction. This relationship is important for the purpose of policy making of a country. In the recent years, researchers aim to assess the relationship between the living standard of people and economic variables of the country. Any economic policy is aimed at increasing the wellbeing of the people, this wellbeing supports market economy and democracy, and it is important to study if there is any relationship between different indicators of wellbeing.

2. Background

CITATION Eug13 \l 1033 (Proto, 2013) analysed the relationship between life satisfaction and GDP on the individual country levels. A positive relationship was found between GDP and life satisfaction in almost all the countries. In the poorer regions, there is a positive relationship between life satisfaction and GDP but the same relationship is negative in the richer regions. A regression model was used to analyse the relationship between GDP and life satisfaction.

CITATION Min10 \l 1033 (Gaižutis, 2010) analysed the relationship between GDP and personal life satisfaction. The main purpose of the study was to test Easterlin’s paradox which claims that there is no impact of increase in wealth of nations on life satisfaction of the people. The analysis rejects the Easterlin’s paradox and concludes that there is a positive relationship between standard of living and GDP of a country. Countries are compared with each other and their data is also analysed.

3. Method

There are two variables in this report, average life satisfaction and real GDP per capita. The average life satisfaction is a dependent variable, and GDP per capita is the independent variable. Data on life satisfaction was taken from semi-annual standard Euro barometer surveys conducted in all EU countries. There are a variety of techniques used to sample and interview respondents in Euro barometer survey. Data on GDP was gathered from the Eurostat. In order to eliminate the differences of price levels between countries, the GDP per capita is taken in purchasing power standard terms. Regression model will be used as the data analysis technique which will help us to find the magnitude and direction of the two variables studied.

4. Results

LS

GDP

Means

6.591

$39,011.51

SD

0.745327

$14,006.21

Min

5.2

$17,122.53

Max

7.5

$86,788.14

Table 1

The maximum value of life satisfaction is for Norway, Switzerland and Iceland whereas the minimum value is for Greece and Portugal. The highest GDP is for Luxembourg and lowest is for Mexico. The mean is the average of all values and shows the measure of central tendency of the data. The distance of each value from its mean is calculated with the standard deviation. A lower SD for life satisfaction shows a lower dispersion in the data. There is a very high difference between the maximum and minimum value of the GDP which is also apparent in the value of standard deviation of the variable. There is a very high difference between the mean and highest value of GDP which shows the presence of some outlier in the data.

Fig 1.

Above diagram shows the scatter diagram between GDP per capita and life satisfaction level of the selected countries. There is a positive relationship between life satisfaction and GDP per capita. This relationship is shown by the trend line which passes through the data. There are only one or two points which are away from the trend line. This shows that there is no outlier in the data.

Satisfaction= ∝ + β GDP

The above equation shows regression equation to show relationship between life satisfaction and GDP. The alpha value shows value of Satisfaction if GDP value is zero. The beta value shows the unit change in satisfaction when a unit change in GDP takes place. This equation will help us to find the level of satisfaction given any level of GDP.

Regression Statistics

Multiple R

0.590689172

R Square

0.348913697

Adjusted R Square

0.329183809

Standard Error

0.610448073

Observations

35

Table 2.

The above table shows the power of model run in excel. The R-square value shows that there is a 34% variation in the independent variable which is explained by the independent variable. In the context of this study, approximately 35% of variation in life satisfaction is explained by GDP.

Coefficients

Standard Error

t Stat

P-value

Intercept

5.365181482

0.309314

17.34542

3.78E-18

X Variable 1

0.314329537

7.47E-06

4.205297

0.000187

Table 3.

The above table shows the values related to regression model. If the value of GDP is zero, life satisfaction will be 5.37 which is shown by the coefficient of intercept. A unit change in GDP will bring 0.314 units change in life satisfaction. This relationship is significant which is shown by a P-value of less than 0.05. This means that there is a significant positive relationship between life satisfaction and GDP.

Satisfaction = 5.365+0.314 GDP

There is a statistically significant relationship between life satisfaction and GDP as seen by the p- value of GDP.

A regression line provides a good fit when the trend line passes through most of the data points CITATION Jer01 \l 1033 (Miles & Shevlin, 2001). In the scatter diagram, we see that there are almost equal number of data points above and below the trend line. Only a few points are away from the trend line which can be considered the outliers.

When we remove the outliers for GDP, the following table and diagram show the results,

Fig 2.

The above diagram shows a better goodness of fit because there is a small number of values which are away from the trend line.

The power of model increases to 0.49 when these outliers are deleted. This means that 49 % variation in the dependent variable is explained by the dependent variable. The equation will be changed as follows

Satisfaction = 4.55 + 0.551 GDP

5. Discussion

There is a statistically significant relationship between satisfaction and GDP. The major strength of this method is that it is proven to be suitable as it is used by past researchers. Our analysis has shown that there is a significant impact of outliers on the regression equation. This impact is on the intercept and coefficient as well as the goodness of fit of the model. Our findings are consistent with both the articles presented in the literature review which show that there is a positive and significant relationship between GDP and life satisfaction. There are some policy implications which suggest that efforts to increase the GDP will result in an increase in the life satisfaction of people.

6. Recommendations

The first recommendation is to add some more variables in the regression analysis so that it can become more meaningful. This will help us to analyse the assumptions of the regression analysis. An alternate way is to test all the assumptions of regression model before running it.

Time series analysis of the same model can be run to see if there has been any pattern followed by the relationship.

The analysis should be run by deleting the lowest values of the GDP which may give an even better regression model.

Before deciding on the variables to be added to the model, it is recommended to test them for the presence of multicollinearity which shows that there is a significant relationship between some of the independent variables and relationship between these variables and the dependent variable is affected by their relationship.

Bibliography

BIBLIOGRAPHY Gaižutis, M. D. U., 2010. Relation between GDP and life satisfaction in the European Union. EKONOMIKA, 89(1), pp. 9-21.

Miles, J. & Shevlin, M., 2001. Applying Regression and Correlation: A guide for students and researchers. s.l.:SAGE.

Proto, E., 2013. A Reassessment of the Relationship between GDP and Life Satisfaction. PLOS one, 8(11).

Assumption Of Rationality And Consumer Behavior

Assumption of rationality and consumer behavior

Author Name

[Name of the Institution]

Market place choice behavior and decision-making is chiefly associated with Rational Choice Theory. Economics, typically discussing the organizational behavior about people in the enhancement of their well-being incorporates the assumption of rationality in the consumer behavior. The assumption maintains that consumers are rational agents and will always make those choices that maximize their utility. It also assumes that rationality of a consumer behavior is majorly an individual concept arising from the premises that consumers are able to define their specific needs, can prioritise their needs, and are able to make such market choices which satisy their desires to a significant extent. The assumption of rationality implies that people have objectives and they tend to take approporiate actions to achieve those objectives. The assumption, in its true essence does not meant that economic agents and consumers dwell in extensive calculations before making a decision, rather this means that consumers largely act in accordance with their preferences in the market place. This assumption directly advocates that consumers tend to be better off rather than being worse off. Additionally, the rational behavior does not aways refer to the achievement of monetary or material benefit, it also hints towards the satisafaction which is received from a non-monetary or emotional decision CITATION Bra08 \l 1033 (Bray).

Rationality in economics is different than the prevalent concept which many people are familiar with. In economics, the application of rationality in consumer behavior means that when an individual will make a decision, he will choose the thing which is best liked by him. Economic rationality also accepts that people want what they want, and the rationality assumption prevents anyone from categorizing those preferences as good or bad. This also helps in understanding the predictability and foreseeabiltiy of the consumer behavior as economic agents are expected to act in largely predictable ways. In addition to make attempts at understanding consumer behavior, the assumption of rationality is also incorporated to built economy models or lay out economic theories about consumption and production. One of the most direct application of this is the law of ‘demand’ stating that if a commodity costs more than its counterparts in the market, rational consumer will buy less of it and search for its substitutes in the market place, which cost less but give the same level of satisfaction as the former.

The assumption of rationality is vital for understanding consumer behavior and is largely considered reasonable because it propounds that economic agents and consumers have a tendency to maximize their own welfare. Even if their means of income are limited, they will spend it in such a way that allows them to achieve highet total satisfaction.

To capture the notion of rational behavior, the specific phrase that is used is known as ‘utility maximization.’ The utility part of this phrase refers to the satisfaction derived from achieving the desired goals. The maximization part refers to the highest posiible level of satisfaction which the consumers aim towards as rational agents.

For instance, if an individual strongly belives in the corporate social responsibility of businesses, the he or she will only choose to invest her stocks in the commercialization of organic produce rather than investing in a more lucrative or conventional production operation.

Another real life example of assuming rationality behind a consumer behavior can be that an economics professor uses the same textbook which he refered to in the previous module so that he can save time for other activities and only has to spend for the library subscription of that book.

Reference List/Endnotes

Bray, Jeffery P. "Consumer behaviour theory: approaches and models." (2008).

Behavioural Economics, Poverty And Health

Impact of Behavioral Economics on Health and Poverty

Name of Student

Name of Institution

Behavioural Economics

There are certain theories that have been presented by various economists to help understand complex situations. These theories should have the same arguments and conclusions over the period of time. Generally, the assumptions that are made in any analysis are either incorrect or make the model too much simplistic. There can be abstractions that should not be invalid or incorrect. The study of economics requires that some models are developed and some rules are applied. Behavioural economics is concerned with the study of the decision-making process and the challenges that are faced by the decision makers. This is different as compared to the traditional view of economics as in that aspect, there are certain assumptions that are false. This makes the lives of traditional economists much easier. When any person is taking a decision, the natural barriers of the human capacities do not allow him to be purely rational. Their theorists have identified two major kinds of people in the decision-making aspects. The Icons are the ones who are purely rational in all the decisions that have to be made in life. These people make only those decisions that will result in an increase in their economic welfare. Their decisions are least affected by the market conditions as their preferences have already been formed by themselves. There is nothing like satisficing in the lives of these people. They always opt for decisions that completely maximize their satisfaction. The only reason to make some decision for these people is the self-interest CITATION Tho13 \l 1033 (Rice, 2013). Some researchers say that human decisions are affected by bounded rationality. This aspect relates to the fact that human beings face certain limitations while making some decisions. They relate to the limitations of the information that a person can process or recall at the time of making some relevant decisions. The human brain can assess some limited information and it can also process some limited amount of information at a given point in time. This aspect is referred to as the procedural rationality CITATION Her55 \l 1033 (Simon, 1955). The behavioural economics aspects will simplify the information so that it becomes easier to use for the general public. Surgical errors and airline crashes may be prevented by making some checklists that identify some multistep procedures.

Decision making as a process

This process is started when the person identifies the existence of some problem and tries to figure out some possible solutions. All these alternative solutions have to be analyzed in terms of their ability to solve the problems faced by the people. The traditional economists ignore this long term process of the choice between the various available options. The person is able to make the decision about what to do in some particular situation after this process of choice. It may turn out that the decision that has been taken is not viable and it is not possible to implement it. In that case, the person will have to go to the plan B. The product may not be available in the first place about which the decision has been made.

If this aspect is applied to the health and poverty problems, we can compare the decision-making process to the psychological theories referred to as dual process theories. The decision-making process is either governed by some intuitive processes and these decisions are very fast and do not require much of the effort to be put in by the decision makers. On the contrary, in the case of some people, the decision-making process may be slower, controlled and will require a lot of efforts. This difference in decision making is attributable to the differences in human beings as they make decisions CITATION Ric17 \l 1033 (Thaller, 2017). Both the aspects of this study namely health and poverty require some quick decision for the solution to the existing problems but the lack of resources at the hands of the government and other authorities will make the decision-making process slower and time taking.

The Emergence of Behavioral Economics

The government wants to change the behaviours of the general public when it wants to implement some policies. In other words, the successful implementation of any policy means that the behaviours of people towards a certain aspect have been changed. The model shows that there are people who have consistent preferences over a period of time. They show the utility-maximizing behaviour over a period of time. If complete knowledge is not available, the public policy takes on the offer of information as an instrument. The model has been used by many researchers such as CITATION Her55 \l 1033 (Simon, 1955). The assumption of rational decision maker was challenged by the researchers and this laid the cornerstones for a new field named behavioural economics. The basics of this field can be seen in the research work by Daniel Kahneman in the 1970s. This branch of economics is based on empirical evidence on what is happening rather than what should be happening as was the case with traditional economics.

This subject emerges from the basic assumptions of the rational model of economic behaviours. Especially the assumption of complete rationality which makes the things very simple. Behavioural economics is based upon an empirical examination of how human beings make decisions. The decision-making agents that are used in behavioural economics are subject to the use of certain rules of thumb commonly known as heuristics. Use of heuristics leads to the systematic errors which may include that the decisions are made automatically and out of intuition. The behaviour becomes completely opposite to the self- interests of the people. The people pay lesser attention to the present benefit as compared to future benefits. This aspect helps to explain the tendency to save less and spend more.

Behavioural economics and public policies

The application of various aspects of Behavioral economics has been observed in public policy areas. The impact of many human factors on the behaviour of the people has been observed after behavioural economics has been studied. The factors studied in behavioural studies have been applied to improve the overall living standard of the people living at a given place. The options that are chosen by the people have a direct impact on the way people think about various things. Any program that has to be implemented for the improvement of people must be in line with the evidence from behavioural sciences. A small change in the medium that is used to communicate the information may have a significant impact on the decisions taken by the people. There are some default decisions that had been taken by the people in the past also have an impact on the decisions taken by them in the present CITATION Ant17 \l 1033 (Antonio Claret, 2017).

The application of behavioural economics concepts has gained popularity at the country as well as the global levels. The first specific team that was tasked to develop the insights for behavioural sciences was developed in the United Kingdom. Other countries of the world followed suit. Many international organizations have pointed out the importance of considering the conceptual aspects of behavioural research. The making of the teams for behavioural aspects by the UK and the USA served as a nudge for all other countries. This term is defined as any change in the architecture of choice that changes the behaviour of the people in a predictable way without restricting the choices by forbidding any alternative for them. The use of behavioural aspects is spreading across the world. The government of the US has asked the various agencies to experiment with different options that are cost-efficient and at the same time will increase the efficiency of the system. Some governments are taking insights from the various behavioural and social sciences subjects to make the lives of the people better. Other units have worked as a nudge in Australia and some other countries.

Health and Behavioural Economics

The outcomes of a decision process can be judged based on how fast someone can remind of a particular related example. This may include some aspect that is very popular or readily discussed in the news. Behavioural economics suggests that some behaviour can be related to a certain population. The youth can be more reluctant to take drugs if they hear about the death of some celebrity due to drug intake. The availability heuristic has been applied here.

The people were not able to adhere to their health issues if there were no costs to be borne over a period of time. In other words, people do not think about the long-term future benefits if they do not see any monetary loss in case they do not adhere to certain practices. The behavioural economics help in this by offering some devices to help the people make such choices in the future which will be less costly. People will feel much easier to quit smoking and other relevant problems if they have filled in a bond in the past that will break if they fail to achieve desired results. The concept used here is time inconsistent preference.

People will react to the same situation differently provided that the results have been presented in the form of losses or gains. The same scenario may be presented in the form of 80% chances of survival or 20 % chances of death. The role of behavioural sciences comes in, when the positive outcomes are desired then the gain-based outcomes are presented and when the desire is to curb some unhealthy behaviour then the loss-based outcome is promoted. These are the framing effects that the messages have on the people.

The role of behavioural economics in improving public health policy

The health department has been identified as a fertile area to apply nudges. Thaler and Sunstein bring in new nudges for health aspects such as the simplification of decision making in the health department. The system of the health insurance that was in place in the organizations turned into an opt-out option from the opt-in option. This means that the employees were not asked whether they want to avail the opportunity of the insurance, they were automatically entered into the insurance system once they are employed. The options were given of they want to quit this facility.

Nudges can be effective because people react to those influencers that are new and are visible more easily. Lonely if the person is asked to make a health plan, the person will start implementing some things to improve the health aspects. These aspects may include healthier eating and screening for various diseases. A study found that when the patients were emailed the time of their next influenza vaccination, vaccination increased by 36%. The other nudge was even more simple, instead of telling the persons that they will be vaccinated at a given date and time, they were emailed a card that needed them to write what time and date will be suitable for them to be vaccinated.

The framing aspect has been found very important in many situations related to the health aspects. This includes messages about the use of sunscreens and mammography utilization. The messages that highlight the gains more than the losses are more helpful in impacting the prevention. The message that was focused on the loss was more effective when the screening behaviours had to be encouraged.

The status quo bias is such that the people tend to follow the past decisions and they do not reverse the decisions. The behavioural science makes the healthy option, the default option. Thus adding some healthy food as a side to the children meals CITATION Jen16 \l 1033 (Jennifer L.Matjasko, 2016)

Poverty and Behavioral Economics

The subject of behavioural economics is defined as the study of various influences on the economic behaviours of the people that is easily observable. This branch tries to implement the researches from other disciplines to show a scenario that is closer to reality. In this regard, major help is taken from psychology. The neoclassical economic models were unable to provide a realistic view of human problems. The main reason is that they attempt to simplify the human being as an economic unit.

The humans are not always looking for the benefit of their own, they are not calculating the costs and benefits of various options available to them and their preferences are not stable over a period of time. All these things are affected by the lack of complete knowledge on the part of individuals. The ability of the people to interpret and comprehend knowledge is also limited. Thus, we as human beings are affected by the information that has already been stored in our memory.

CITATION Wor15 \l 1033 (World Bank, 2015) gathered information from a large number of papers from all over the world on human decision making. The report showed that there are three main ideas that should be considered while making and implementing any policy. First, there is automatic thinking while making judgements and choices and no deliberation is involved. The social thinking aspect states that the way people think is affected by the behaviour and thinking of other people. The mental model’s aspect shows that people living in a society share a common opinion on the functioning of the world around them. The things happening around us shape our thinking and the mental models shape the beliefs of the people about what is right, wrong and possible in life for them.

When we study the relationship between poverty and behavioural economics, we can find that these same points drive the materials interrelating these two things.

CITATION Snd14 \l 1033 (Shafir, 2014) worked specifically on the behavioural aspects of poverty, they argued that the poor will think more automatically as the price levels will continue to rise in the market. They will not be able to think deliberatively. This explains many behaviours of the poor people including excessive borrowing and almost no savings.

A well-known theory culture of poverty tried to postulate that the culture of the poor had some specific characteristics. This approach was criticized by many people because it concluded that the poor were themselves responsible for their poverty. The impact of poverty on the minds of poor people is such that they are not able to think about the other tasks that need mental attention. This will affect the long-term economic condition of the person. Some other experiments show that the scarcity aspects take up much of the mental resources of the people and they are not able to focus on the major aspects of their economic lives.

Theories and their relevance to the Scenario

Prospect Theory

Kahneman and Tversky presented this theory and came up with the following generalizations

Gains and losses are treated differently, the people show risk aversion for gains and risk seeking for the losses. People tend to give more weight to the outcomes that have confirmed outcomes than those whose outcomes are not definite. The structure of the problem also affects the choices. The prospect theory is given by the above-mentioned people that can assess the behaviour of people in situations where the expected utility theory does not work.

Maslow’s Hierarchy of Needs Theory

The central idea of this theory is that human needs are not reducible and there are certain needs that have to be fulfilled before the person can go to the other levels of the needs. The theory can also be applied in the field of happiness research. The most important needs that have the priority have to be satisfied before the higher-level needs. This can imply that poverty will not let a person remain happy. If a person has to be happy, the basic needs should be satisfied and there must be ample opportunities for the person to move up the hierarchy CITATION Sta13 \l 1033 (Grimani, 2013).

Cognitive Dissonance Theory

The economists have studied the various comparisons made by the individuals regarding social statuses but very little attention has been paid to the way these comparisons are taken out. The psychological research shows that the ways used to make these comparisons change and this change is systematic in nature. In order to alleviate poverty, the direct, as well as the indirect measures, should be taken into account. These indirect measures are concerned with social and psychological issues. These aspects create such dissonance that affects the poor to choose different ways to benefit themselves. Current policies like keeping up with the Joneses will increase the level of dissonance felt by the people of the lower class CITATION Rob \l 1033 (Oxoby, 2004).

Fast and Frugal Heuristics

These are defined as simple decision strategies for solving certain judgement and decision tasks. Unlike many other models in the behavioural sciences, this aspect does not involve many computations. The outcomes of the process and the process itself is studied in this model. They have three simple rules namely the search rule that shows how the information will be searched, the stopping rule shows when the search will be stopped and decision rule shows how will this information be integrated into the decisions. The recognition heuristic exploits the lack of knowledge that is a part of rationality economics and takes the best heuristic that deliberately ignores the information. Both these heuristics can be applied to choose tasks. CITATION Tor07 \l 1033 (ReisKamp, 2007)

Conclusion and Recommendations

Behavioural economics can be used to improve the situation in the public health aspects of society. This approach has its own limitations which have to be overcome. The term nudge cannot be defined with clarity and ease. Some aspects that have been introduced through nudges are parts of the traditional economic views. Some nudges simply provide information and change the marginal costs of marginal benefits associated with an option. An attempt to lower the level of salt in food and to reduce the levels of Alcohol are simple repeats of some health guidelines. The influence that defaults have in this regard shows the costs of taking up information or shifting between options which is consistent with the neoclassical thoughts.

We can have important insights into human behaviour when we study the concepts of Behavioral economics. When compared to the traditional economic theory of decision making, we can see that people are more prone to those decisions that will make they're present better as compared to the future. The loss of the thing that they already have will have a greater impact on them as compared to the consideration of things that they might have in the future. They are very sensitive to the monetary incentives especially those which are tangible in nature. People have limited capability on the mental fronts which makes them limited in certain decision-making aspects. Thus, they make use of the heuristics or rules of thumb to make such decisions. There is also a framing aspect to the choices that can affect the decision makers which can result in some inconsistent behaviours on the part of the people. The decisions that people make are mutable which means that they have evolved over a period of time and they are hugely affected by the environment around them. These preferences can be hugely affected by the advertising that is shown to the customers. All these aspects make the decision making more interesting than some people thought and also something that needs much more than the assumptions of hyper-rational consumers as in the traditional economic theory.

With regards to health and health care, the behavioural economic theory lends itself to the betterment of things. This is a domain where the consumers often lack the information. Further, whatever information they have, it is difficult for them to comprehend the most part of it. The things get worse because a wrong decision can be fatal in case of health and health sciences. The decisions taken by the people are not in their best interests in the long run. The nature of the health institutions is such that they offer a very fertile ground of applications of behavioural economics concepts.

Policy implications

The processes should be facilitated by the policymakers if they want to apply the concepts of behavioural economics to the system. Whatever system is implemented to improve the poverty situations and the health aspects of any society, there should be transparency in the process. If the process needs to fill up some forms, these forms should be made easier to fill. These forms must be different for all areas but the basic theme should be the ease of use. Some forms may contain the fields that are prefilled as they are unlikely to change over time. This will also help to speed up the process. The welfare programs in both fields should trigger more positive attitudes. The current programs offer some aspects that trigger negative feelings in the people. Some changes should be made to the structure of programs so that they earn a certain amount of goodwill. This will have a positive impact on the percentage of people that take up the initiatives. This will also encourage the people to participate in the programs more actively and to consider taking up the other aspects of the program. These programs should be decentralized from the federal governments. There should be two rules while running these programs at any level namely the minimum benefits rule that suggests that there should be some minimum benefits that the program should offer. The second rule is the maximum hassle rule that applies that there should be a maximum of effort in the minimum of time to achieve the targets. In my opinion, the most important aspect of behavioural economics that can be applied to the health and poverty problems is the framing aspect. The people should be given the information in such a way that they feel a win-win situation and feel happy to take up an option. The policymakers should also keep in mind that the people who are more affected by behavioural economics are more affected by decisions that affect their present situation more than their futures, so the policies should also be made accordingly. The policymakers will also have to study the past behaviours of the people and need to find out the major aspects that affect the decisions made by the people and then work on those aspects keeping in view the concepts of behavioural economics.

References

BIBLIOGRAPHY Antonio Claret, C. F. (2017, August). https://www.ipc-undp.org/pub/eng/PRB60_Behavioural_insights_in_poverty_reduction_policies.pdf. Retrieved from https://www.ipc-undp.org: https://www.ipc-undp.org/pub/eng/PRB60_Behavioural_insights_in_poverty_reduction_policies.pdf

Chaves, J. F. (2016). Misbehaving: The making of Behavioral Economics. Psychiatry-Interpersonal and Biological Processes, 320-323.

Grimani, S. A. (2013, October). https://mpra.ub.uni-muenchen.de/50987/1/MPRA_paper_50987.pdf. Retrieved from https://mpra.ub.uni-muenchen.de: https://mpra.ub.uni-muenchen.de/50987/1/MPRA_paper_50987.pdf

Jennifer L.Matjasko, J. H.-G. (2016). Applying Behavioral Economics to Public Health Policy. American Journal of Preventive Medicine, 13-19.

Lea, P. A. (2011). The psychology and behavioural economics of poverty. Journal of Economic Psychology, 284-293.

Oxoby, R. J. (2004). Cognitive Dissonance, Status and Growth of Underclass. The Economic Journal, 727-749.

Oyebode, V. M. (2004). Poverty, social inequality and mental health. Advances in Psychiatric Treatments, 216-224.

ReisKamp, T. R. (2007, October). https://www.researchgate.net/publication/228509269_Fast_and_frugal_heuristics/download. Retrieved from https://www.researchgate.net: https://www.researchgate.net/publication/228509269_Fast_and_frugal_heuristics/download

Rice, T. (2013). The behavioural economics of Health and Health Care. Annual Reviews of Public Health, 431-447.

Richman, B. D. (2005). Behavioural Economics and Health Policy: Understanding Medicaid's Failure. Cornell Law Review.

Shafir, S. M. (2014). Scarcity: The new science of Having Less and How It Defines Our Lives.

Silvia Cojanu, C. S. (2016). World LUMEN Congress, Logos Universality Mentality Education Novelty. A behavioural Economics Approach to Poverty - The case of Romania. Future Academy.

Simon, H. A. (1955). A behavioural model of Rational Choice. The Quarterly Journal of Economics, 99-118.

Simon, H. A. (1959). Theories of Decision-Making in Economics and Behavioral Science. The American Economic Review, 253-283.

Thaller, R. (1980). Toward a Positive Theory of Consumer Choice. Journal of Economic Behaviour and Organization, 39-60.

Thaller, R. (1985). Mental Accounting and Consumer Choice. Marketing Science, 199-214.

Thaller, R. (2017, October 3). https://www.nobelprize.org/uploads/2018/06/advanced-economicsciences2017-1.pdf. Retrieved from https://www.nobelprize.org/uploads/2018/06/advanced-economicsciences2017-1.pdf: https://www.nobelprize.org/uploads/2018/06/advanced-economicsciences2017-1.pdf

Thaller, R. H. (1988). Anomalies: The Winner's Curse. The Journal of Economic Perspectives, 191-202.

Tversky, D. K. (1979). Prospect Theory: An Analysis of Decision under Risk. Journal of The Econometric Society, 263-291.

World Bank. (2015). World Development Report, Mind, society and Behavior. World Bank.

Bibliography

Ehsan Faraz

Instructor Name

Course Name

Date

Annotated Bibliography

Marianne, Bertrand, Mullainathan Sendhil and Miller Douglas. "Public Policy and Extended Families: Evidence from Pensions in South Africa." The World Bank Economic Review (2003): 27-50. <https://doi.org/10.1093/wber/lhg014>.

In South Africa where most of the women and men work beyond their prime age which is 65 for me and 60 for women. The research paper aims to see the impact of a Public Policy Program which had been launched in South Africa. People of prime age get pension compensation in the form of money which is around double of the per capita earning. It is evident from the data that people after getting pension compensation discontinue working. This research paper has included both men and women in its study and data reveals that the number of women with prime age discontinuing work out numbers that of men. Overall elderly in the family stop working after being eligible for the compensation package. This pension compensation has resulted in decline of labor supply. Study of also reveals that supply of labor decreases depending on relative, absolute and sex of the workers

Bibliography

BIBLIOGRAPHY \l 1033 Colin, Cameron, Gelbach and Miller Douglas L. "Robust Inference With Multiway Clustering." Journal of Business and Economic Statistics (2007): 238-249. <https://doi.org/10.1198/jbes.2010.07136>.

Farber, Daniel A. "Emissions Trading and Social Justice." UC Berkeley: Berkeley Program in law and Economics (2011). <https://escholarship.org/uc/item/9z66c05g>.

Farbes, Daniel A. "Law, Sustainability and the Pursuit of Happiness." UC Berkeley: Berkeley Program in Law and Economics (2011).

Guzman, A.T. "Food Fears: Health and Safety at the WTO." UC Berkeley: Berkeley Program in Law and Economics (2005). <https://escholarship.org/uc/item/41g0w05t>.

Guzman. "The Case Against Consent in International Law." UC Berkeley: Berkeley Program in Law and Economics (2012). <https://escholarship.org/uc/item/45n4k4sj>.

Kevin D., Hoover and Perez Stephen J. "Truth and Robustness in Cross-Country Growth Regression." Oxford Bulletin of Economic and Statistics 66.5 (2004): 765-798. <https://doi.org/10.1111/j.1468-0084.2004.101_1.x>.

Kevin, D. Hoover. "Lost Causes." Journal of the History of Economic Thought 26.2 (2004): 149-164. <https://doi.org/10.1080/1042771042000219000>.

Marianne, Bertrand, Mullainathan Sendhil and Miller Douglas. "Public Policy and Extended Families: Evidence from Pensions in South Africa." The World Bank Economic Review (2003): 27-50. <https://doi.org/10.1093/wber/lhg014>.

Scotchmer, Suzanne. "Ideas and Innovations: Which Should be Subsidized." UC Berkeley: Berkeley Program in Law and Economics (2011). <https://escholarship.org/uc/item/45n4k4sj>.

Scotchmer, Suzane. "The Political Economy of Intellectual Property Treaties." UC Berkeley: Berkeley Program in Law and Economics (2003). <https://escholarship.org/uc/item/11s2502z>.

Book Reivews

Name of Student

Name of Professor

Name of Class

Day Month Year

Book reviews

The article “The Development of Underdevelopment" was written by Andre Gunder Frank in 1996. In the article, he criticized the modernization theory. He explained that in order to develop any development theory and policy, the economic history of the country should be known. Past experiences of underdeveloped countries and colonial countries are always different. Therefore ignorance of underdeveloped country's history leads to the failure of policy and development theories to measure the development and structure of the capitalist system in underdeveloped countries. It is believed that the contemporary developed countries may never be underdeveloped countries instead they were non-developed countries. The difference in income distribution and culture indicates the dual economies and societies in such countries. Due to this reason, only one part got positively affected by the outside capitalist relation while others faced the same problem which results in more underdeveloped. The statement of dual societies is false because even there is more than one society, the influence of the capitalist system is so high that it penetrated even in an isolated sector of the country. Underdevelopment of Latin America can be seen an example which is the result of world capitalist development. The industrial establishment had the largest impact on Latin America during the first and second world's war, also during the great depression. Therefore it can be concluded that underdevelopment is not due to the dual society or capitalist shortage.

Amin in his article “The Origin and Development of Underdevelopment” discussed Marx's work on non-European societies. Marx stated that the main factor that came in the way of capitalist development was lack of private ownership. He explained the issues of India during British rule and process of development during this era. Amin wrote this article on the basis of Marx's work. He stated various theses some are: economic theory itself develops an interest in the problem of transition to the money economy. Also, inequality within international specialization creates distortion in development. Thesis claim that the multiplier effects theory of investment cannot be increased in mechanical ways. Analysis of foreign monopoly strategies indicated that in the world market, dogma need to be challenged otherwise periphery would be without any economic mean. The high level of unevenness, disarticulation and economic domination by the center made underdevelopment manifested in the level of structural characteristics. The argument of Amin is correct as Marx only focused on a certain point and ignored the remaining there were many other factors that caused the underdevelopment issue in India which Amin discussed through his theses.

The writers Sokoloff and Engerman wrote an article, “History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World” in 2000. In the article, differences in development among different countries were discussed. Among many countries, America and Canada are far more successful but development level had a significant difference. To find out these differences, the authors used a different aspect. They used data history of GDP per capita of various countries. They explained the effort of the country's through factor endowments to inequality and the role of the institution for this inequality persistence. From the data showing factors like GDP per capita, literacy rate, the extent of voting and franchise governed by laws concluded that the whole world enjoyed a significant level of production in the past. Divergence can be observed through US and Canada growth during late eighteen centuries. The difference in growth rate was due to various reasons including political power, wealth inequality, and human capital. The inequality leads to the limiting population from different economic opportunities. Another aspect that affected the economies was the presence of elite class who were differentiated by human capital, politics, and wealth from the rest of the population. Therefore we can say that inequality was the main reason for the unequal development. This argument is correct because inequality leads to an increase in unemployment and also the capacity and effectiveness of every country is different from the other while collectively decide the progress of the nation.

The author P. Baran wrote “On the roots of Backwardness” in which he discussed the problems of developed capitalist societies whose economy showed surplus still unable for their rational utilization. He used data on world income distribution to analyze the performance of underdeveloped countries. The issues of no advancement can be studied now by recalling the condition in which underdeveloped countries worked. The author discussed India and China progress. He stated that there was feudalism combined with the mode of production, politics and social orders. The basic increase of capital leads to rapid progress shook the pre-capitalist order’s foundation. This can be noticed through the progress pattern of either Europe, Russia, Latin America, or even India and China. All these countries did not follow the same path they had the difference of climate, geographical location, politics, culture, and religious background. The author discussed the progress of Japan which is difficult to compare with India, and there was a British impact in India. Japan progressed by investing in railway, communication and another mode of production. On the other hand, India's development was slow due to various factors. History of India is so clear that it is accessible to analyses the conditions of that era. British work mainly for their own interest and due to the religious and diverse cultural background India faced various hurdles in the way of development.

Abhijit Banerjee and Lakshmi Iyer wrote "History, institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India." This article is really well executed with all the useful tools to analyze the issue. With the help of both qualitative data and quantitative data, authors concluded that economic behavior of India in a different era. The condition during British rule and before, i.e. during Mughal rule. During pre-British rule, property rights were in the hand of the rulers. During British rule mode of production changed. Landlords had considerably lowered the investment in agriculture and production level, education, and health. The landlord system in India leads to the various problems in the path of progress. The reason for underdevelopment during British rule other than landlord system was the cultural and religious difference between British and local people of India.

The author Nathan Nunn, in her article "The Long-Term Effects of Africa's Slave Trades" discussed the underdevelopment in Africa. Africa's performance during the late half of the twentieth century was really poor. The two main factors for this underdevelopment were colonialism and slaves’ trade. Through different qualitative and quantitative data author explained that a large number of slaves were exported from Africa. There was a negative correlation between the slave trade and the country's development. This relationship was spurious as the negative impact of trade war was on the most developed area of Africa, not the least. Therefore the increase in the number of slave exports leads to a decrease in the development of Africa. This trade created a broader ethical group that leads to ethnic fractionalization. The argument of the author is correct as the slave trade was one of the reasons for the backwardness of Africa. The country is still underdeveloped and fighting for basic necessities even today. The impact of past is great in contemporary time.

BUS 310

Discussion Questions

[Author Name(s), First M. Last, Omit Titles and Degrees]

[Institutional Affiliation(s)]

Discussion Question 1

In order to determine the value of the seminar, it is necessary to evaluate the value the stock market technical analysis can help. If one wants to utilize the knowledge learned from technical analysis seminar and is looking forward to making investments in the stock market, then it is suitable to pay the price for the seminar, which offers learning in technical analysis of the stock market ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a1ramu3es3g","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}Advantages of Technical Analysis,\\uc0\\u8221{} n.d.)}","plainCitation":"(“Advantages of Technical Analysis,” n.d.)"},"citationItems":[{"id":1821,"uris":["http://zotero.org/users/local/FGhKhGPG/items/3JP4DTUR"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/3JP4DTUR"],"itemData":{"id":1821,"type":"webpage","title":"Advantages of Technical Analysis","URL":"https://www.binaryoptions.net/advantages-of-technical-analysis/","accessed":{"date-parts":[["2019",5,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Advantages of Technical Analysis,” n.d.). Before jumping on the offer, the analysis must be made regarding the value seminar is going to offer. If one really wants to make an investment in the stock market? What other benefits technical analysis learning can offer ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a2nfmrk5kak","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}Cost Benefit Analysis | Better Evaluation,\\uc0\\u8221{} n.d.)}","plainCitation":"(“Cost Benefit Analysis | Better Evaluation,” n.d.)"},"citationItems":[{"id":1825,"uris":["http://zotero.org/users/local/FGhKhGPG/items/YMGDSJHH"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/YMGDSJHH"],"itemData":{"id":1825,"type":"webpage","title":"Cost Benefit Analysis | Better Evaluation","URL":"https://www.betterevaluation.org/en/evaluation-options/CostBenefitAnalysis","accessed":{"date-parts":[["2019",5,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} ("Cost-Benefit Analysis | Better Evaluation," n.d.)? Does it enable the learner to predict the stock market situation in both short-term and long-term? Does the three-day program offers enough learning and knowledge? In addition to these questions, one must make a comparison with the price of other stock market technical analysis seminars and the values and learnings they offer to predict if it is expensive or not.

Discussion Question 2

Amin Smith is known as the father of economics, but he is not the one who came up with this significant concept of ‘Comparative advantage' in economics. David Ricardo, a 19th-century 19th-century British economist, first developed it ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a2na5nmsoib","properties":{"formattedCitation":"(Rose, n.d.)","plainCitation":"(Rose, n.d.)"},"citationItems":[{"id":1829,"uris":["http://zotero.org/users/local/FGhKhGPG/items/ZPJ4QKV6"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/ZPJ4QKV6"],"itemData":{"id":1829,"type":"webpage","title":"A Brief History of the Concept of Comparative Advantage","container-title":"Econlib","abstract":"On November 9, trade ministers from most of the World Trade Organization’s (WTO) member countries will gather in Doha, Qatar for meetings that could launch a new round of global trade talks. WTO planners must sensibly believe that Qatar’s remote location, limited number of available hotel rooms, and (according to the State Department) somewhat lackadaisical …","URL":"https://www.econlib.org/library/Columns/Teachers/comparative.html","language":"en-US","author":[{"family":"Rose","given":"Morgan"}]}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Rose, n.d.). His comparative advantage theory is attributed to the benefits and antecedents of international trade owing to the differences in the opportunity cost of producing good and services in different countries. His theory was mainly based on the labor theory of value. Ricardo’s theory of comparative advantage can be taken in favor of specialization and free trade among the nations. The overall argument of his theory of comparative advantage is that two countries capable of producing same goods if engage in an international trade, they can increase the overall consumption by exporting and importing the goods, provided the differences between the labor productivity of two countries ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"aj9ds0j40u","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}comparative advantage | Definition, Economics, & Facts,\\uc0\\u8221{} n.d.)}","plainCitation":"(“comparative advantage | Definition, Economics, & Facts,” n.d.)"},"citationItems":[{"id":1831,"uris":["http://zotero.org/users/local/FGhKhGPG/items/5F7LGTB7"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/5F7LGTB7"],"itemData":{"id":1831,"type":"webpage","title":"comparative advantage | Definition, Economics, & Facts","container-title":"Encyclopedia Britannica","abstract":"Comparative advantage: Comparative advantage, economic theory, first developed by 19th-century British economist David Ricardo, that attributed the cause and benefits of international trade to the differences in the relative opportunity costs (costs in terms of other goods given up) of producing the same commodities among countries.","URL":"https://www.britannica.com/topic/comparative-advantage","language":"en"}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“comparative advantage | Definition, Economics, & Facts,” n.d.).

Discussion Question 1

The difference between a variation in demand and change in quantity demanded is one of the key concepts in economics. It is understood that demand increases with the reduction in price and it decreases with the increase in price. This inverse relationship is the law of demand ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a1kag1gd1pm","properties":{"formattedCitation":"(Case & Fair, 2007)","plainCitation":"(Case & Fair, 2007)"},"citationItems":[{"id":1835,"uris":["http://zotero.org/users/local/FGhKhGPG/items/IUKA5RXV"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/IUKA5RXV"],"itemData":{"id":1835,"type":"book","title":"Principles of microeconomics","publisher":"Pearson Education","ISBN":"0-13-156389-0","author":[{"family":"Case","given":"Karl E."},{"family":"Fair","given":"Ray C."}],"issued":{"date-parts":[["2007"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Case & Fair, 2007). The change which comes in demand, either positive or negative, owing to the price is referred to as ‘change in quantity demanded'. On the other hand, the price of the product is also impacted by some other factors as well, such as a change in weather, availability of substitute products, or income or choice of the consumers. In case of a change in quantity demanded, movement is made along the demand curve, while in case of a variation in demand, which is due to the factors other than price, there is a shift in the demand curve. Price remains constant in case of a variation in demand ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a29dq2qhi39","properties":{"formattedCitation":"(Nitisha, 2015a)","plainCitation":"(Nitisha, 2015a)"},"citationItems":[{"id":1833,"uris":["http://zotero.org/users/local/FGhKhGPG/items/QJBYYU8S"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/QJBYYU8S"],"itemData":{"id":1833,"type":"post-weblog","title":"Changes in Demand and Quantity Demanded – (With Diagram)","container-title":"Economics Discussion","abstract":"ADVERTISEMENTS: In economics the terms change in quantity demanded and change in demand are two different concepts. Change in quantity demanded refers to change in the quantity purchased due to increase or decrease in the price of a product. In such a case, it is incorrect to say increase or decrease in demand rather it …","URL":"http://www.economicsdiscussion.net/demand/changes-in-demand-and-quantity-demanded-with-diagram/3393","language":"en-US","author":[{"family":"Nitisha","given":""}],"issued":{"date-parts":[["2015",1,8]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Nitisha, 2015a).

Discussion Question 2

The price elasticity of demand is the receptiveness of quantity demanded with respect to the variation in price. It is actually the percentage variation in the quantity demanded resulting from the percentage variation in the price of the product ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a12q7kqr5g7","properties":{"formattedCitation":"{\\rtf (\\uc0\\u8220{}Price Elasticity of Demand | PED | Economics Online,\\uc0\\u8221{} n.d.)}","plainCitation":"(“Price Elasticity of Demand | PED | Economics Online,” n.d.)"},"citationItems":[{"id":1838,"uris":["http://zotero.org/users/local/FGhKhGPG/items/GD3CVKWX"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/GD3CVKWX"],"itemData":{"id":1838,"type":"webpage","title":"Price Elasticity of Demand | PED | Economics Online","URL":"https://www.economicsonline.co.uk/Competitive_markets/Price_elasticity_of_demand.html","accessed":{"date-parts":[["2019",5,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Price Elasticity of Demand | PED | Economics Online,” n.d.). The magnitude of price elasticity of demand is mainly dependent on three factors such as its closeness to the substitute, income proportion spent on the good and the time period ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"a21qai4lhmf","properties":{"formattedCitation":"(Nitisha, 2015b)","plainCitation":"(Nitisha, 2015b)"},"citationItems":[{"id":1840,"uris":["http://zotero.org/users/local/FGhKhGPG/items/T52WH58P"],"uri":["http://zotero.org/users/local/FGhKhGPG/items/T52WH58P"],"itemData":{"id":1840,"type":"post-weblog","title":"9 Factors That Influence Price Elasticity of Demand","container-title":"Economics Discussion","abstract":"ADVERTISEMENTS: i. Nature of Goods: Refers to one of the most important factors of determining the price elasticity of demand. In economics goods are classified into three categories, namely, necessities (or essential goods), comforts, and luxuries. Generally, the demand L essential goods, such as salt, sugar, match boxes, and soap, is relatively inelastic (less than …","URL":"http://www.economicsdiscussion.net/elasticity-of-demand/9-factors-that-influence-price-elasticity-of-demand/3493","language":"en-US","author":[{"family":"Nitisha","given":""}],"issued":{"date-parts":[["2015",1,9]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Nitisha, 2015b). If people will be having more options to buy in case of increase in price, the price elasticity of demand will be higher. If more time was spent after the change of price then the price elasticity is also higher, and if people spend a larger portion of their incomes on an item, its price elasticity is also higher. This is due to the fact that if the consumer spends a high portion of their income on a product then a little change in price will lead to more spending and more change in quantity demanded.

References

ADDIN ZOTERO_BIBL {"custom":[]} CSL_BIBLIOGRAPHY Advantages of Technical Analysis. (n.d.). Retrieved May 12, 2019, from https://www.binaryoptions.net/advantages-of-technical-analysis/

Case, K. E., & Fair, R. C. (2007). Principles of microeconomics. Pearson Education.

comparative advantage | Definition, Economics, & Facts. (n.d.). Retrieved from Encyclopedia Britannica website: https://www.britannica.com/topic/comparative-advantage

Cost Benefit Analysis | Better Evaluation. (n.d.). Retrieved May 12, 2019, from https://www.betterevaluation.org/en/evaluation-options/CostBenefitAnalysis

Nitisha. (2015a, January 8). Changes in Demand and Quantity Demanded – (With Diagram). Retrieved from Economics Discussion website: http://www.economicsdiscussion.net/demand/changes-in-demand-and-quantity-demanded-with-diagram/3393

Nitisha. (2015b, January 9). 9 Factors That Influence Price Elasticity of Demand. Retrieved from Economics Discussion website: http://www.economicsdiscussion.net/elasticity-of-demand/9-factors-that-influence-price-elasticity-of-demand/3493

Price Elasticity of Demand | PED | Economics Online. (n.d.). Retrieved May 12, 2019, from https://www.economicsonline.co.uk/Competitive_markets/Price_elasticity_of_demand.html

Rose, M. (n.d.). A Brief History of the Concept of Comparative Advantage. Retrieved from Econlib website: https://www.econlib.org/library/Columns/Teachers/comparative.html

BUS 310 DQS

Economics

Client Name

University Name

Economics

3dq1

Under the circumstances when a firm is not able to meet a break even for its sale i.e. not even getting back what it invested in the first place, the firm is at a severe loss. The firm must at that time recognize if it can do a cost benefit analysis and meet the supply to demand ratio all the while mitigating its losses. If it sees that such losses can never be reimbursed, the firm should shutdown. (Frank, 2004; Goggans, 1965)

3dq2

The concept of economics teach us about a notion of market saturation. As the offered products and services by a company grow higher on the demand curve, their substitutes start appearing in the market. These substitutes offer additional services and features at a much lower cost more than often. Hence, the intensity of competition and the tendency of customers to switch assert to a higher degree of market saturation. As market saturates, if the offered product or service has no competitive advantage over its substitutes, the product matures and soon its value goes to zero with no demands from the buyers. (Barney, 1986; Frank, 2004)

4dq1

The economists put a direct emphasis on efficiency when it comes to shaping public policies as efficiency ensures that resources are used in a most optimized manner. A perfectly efficient market would take any decision with a cost benefit analysis and divest its current resources in a most profitable manner to ensure that none of the limited resources are wasted. (Frank, 2004; Goggans, 1965)

4dq2

The important characteristics held by imperfectly competitive companies include

A very large number of businesses producing different products.

All those businesses are not about the same size.

They all have different cost of production.

They do engage in advertising because customers don’t have perfect knowledge and the product most advertised gets an advantage by retaining its image in customers mind. (Barney, 1986; Peteraf, 1993)

5dq1

The alteration in any prisoner’s dilemma may take place if one realizes that they are playing the game not only for a small span of time or a limited no. of days but forever. The lack of a desire to play the game in the long run with the same partner can cause parties to lose interest and one side will choose to surrender over the other. (Nowak & Sigmund, 1993; Rapoport, Chammah & Orwant, 1965)

5dq2

Research shows that negative externalities take place when a product or service consumed by one party causes detrimental consequences to another party. An example of this in our everyday life is the air pollution caused by every day transport and vehicles. Each vehicle omits different gases like carbon monoxide and carbon dioxide and harm the environment causing immense global warming and adversely affect the population. However, since the products are sold between customer and seller, the third parties can do nothing about it. Similar is the case with smoking. The smoker inadvertently effects the people sitting next to him (via passive smoking) and third parties can do nothing about it. (Reisinger, 2004; Tybout, 1972)

5dq3

The discussion by Robert Reich shows that the income disparity in US has always been gregarious however, the increase in the poverty gap has always been in the favor of the 1% of rich members of the society sitting at the top. Even though such proposed policies entail that the poor would gain health and other benefits, they only receive a minor chunk of these profits and the aim to create a balance between rich and the poor fails miserably. (Gustafsson & Lindblom, 1993; Hall & Patrinos, 2012)

6dq1

This may be a good investment even though he is unable to afford monthly payments owing to two reasons. The first one refers to the phenomenon of asymmetry of information. The fact that only the holly wood film producer knows that he is unable to make payments, but other parties don’t is a huge advantage for him. A Porche would give him a marginal benefit by announcing his position as a potentially successful producer in the long run which would aid him get more fan base. (Miller & Rock, 1985; Sharpe, 1990)

6dq2

Asymmetric information is a phenomenon which occurs when one party has more information than the other parties in any business transaction. For instance, if a potential person A is selling his home way below a market price for 1.5 million dollars and the other party readily agrees. Person A knows that the house will soon be taken by the government since the land comes under their jurisdiction and is illegal. This gives person A an investment advantage. (Miller & Rock, 1985; Sharpe, 1990)

7dq1

Many people have this unrealistic goal of achieving zero car accidents. That is never going to happen whilst we have humans controlling the vehicles and potential mechanical failures that may cause the automobiles to careen out of control. The socially optimal level takes into account a percentage of inevitable crashes, but aims to limit that number. For example we can install a breathalyser device in every car so that drivers cannot be drunk behind the wheel. Whatever methods we employ to minimise accidents and especially fatalities, driver education is key. (Lee, 2002; Neckermann, 2015)

7dq2

Progressive tax is a tax culture in which the redistribution of income is taken into consideration. It means the rich pay more tax as compared to the poor. Such arrangement is made in form of your Income and hence there are slabs according to which you are taxed. Example of such taxes are Direct Tax. (Diamond & Saez, 2011; Roberts, Hite & Bradley, 1994)

8dq1

Ethics can be defined as “moral principles that govern a person's behavior or the conducting of an activity.” Ethics plays a positive role in shaping our society since it not only influences the society but every person individually. Ethics can serve as a guiding mentor to shape our decisions into morally sound and good ones which would contribute positively to the society and promote individual wellbeing. By following ethical principles one can make sure that each individual is given their due rights and they are not usurped. By making use of ethical principles and a good managerial style of leadership focused on problem solving, I would lead my organization to success. (Koppenjan & Klijn, 2004; Trevino, 1986)

Reference

Goggans, T. P. (1965). Break-even analysis with curvilinear functions. The Accounting Review, 40(4), 867-871.

Gustafsson, B., & Lindblom, M. (1993). Poverty lines and poverty in seven European countries, Australia, Canada and the USA. Journal of European Social Policy, 3(1), 21-38.

Hall, G. H., & Patrinos, H. A. (Eds.). (2012). Indigenous peoples, poverty, and development. Cambridge University Press.

Reisinger, M. (2004). Two-sided markets with negative externalities (No. 2004-27). Munich Discussion Paper.

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Business Essay

Effect of climate change to the economy

Student’s Name

Institution

Table of Contents

TOC \o "1-3" \h \z \u 1.0.Introduction PAGEREF _Toc22974748 \h 2

2.0.Impact on the Economy PAGEREF _Toc22974749 \h 3

2.1.Agriculture PAGEREF _Toc22974750 \h 4

2.2.Infrastructure PAGEREF _Toc22974751 \h 6

2.3.Tourism PAGEREF _Toc22974752 \h 7

3.0.Solution PAGEREF _Toc22974753 \h 8

4.0.Linking climate change with the economy PAGEREF _Toc22974754 \h 9

5.0.Conclusion PAGEREF _Toc22974755 \h 11

6.0.References PAGEREF _Toc22974756 \h 13

Introduction

Climate change is one of the contentious issues in the 21st Century. The research effort being conducted to establish understanding is enormous and the media attention on it is intense. Studies have been conducted to establish measures, which can be taken to address the problem of climate change in several areas. The impacts of climate change have increased worldwide and it continues to create a negative impact on various sectors of the economy. Recent research conducted by Tol (2015), concluded that the increased climate change affects various sectors of the economy such as agriculture, infrastructure, tourism, and other others. Economic research on climate change mainly focuses on three main questions. What if? So what? And What Should we do? This paper, therefore, focuses on these questions to address the effect of climate change on the economy.

The climate change taking place around the globe is the main concern to several countries. Over the last decade, the occurrences of the hurricane and other natural disasters have increased along the coastline compared to the previous year (Hood, 2017). The increased hurricane is due to climate change. Global warming, is, therefore, caused by greenhouse gases, which destroyed the ozone layer. However, it causes increase hurricane along the coastline and other natural disasters. The impact of climate change on these sectors directly affects the performance of the economy in every country around the globe. The Fourth National Assessment, which was published in 2018, indicated that if appropriate measures are not taken to curb the emission of greenhouse gases, climate change could seriously disrupt the economy of the United States CITATION Ric153 \l 1033 (Tol, 2015). The rising of temperature above the sea level would likely impact various sectors of the economy negatively and therefore, climate change is a serious issue that disrupts the economic growth of a country. This paper, therefore, investigates the effect of climate change on the economy and to the general population worldwide.

A study conducted by Ellis and Bygrave (2003) established that the rise in temperature above the sea level along the coastline and other regions could coast cost countries more than $650 billion every year CITATION Lis19 \l 1033 (Cox, 2019). It is also reported that if the U.S. economy suffered lost because of climate change, other countries such as India, China, Australia, and others, which directly trade with the U.S. could be affected as well. Therefore, the effect of climate change on the economy is huge and its impact on various sectors, which play an essential role in the living standard of billion of people around the world.

Impact on the Economy

Research indicates that since 1980, constant extreme weather condition has cost $1.6 trillion CITATION Kim19 \l 1033 (Amadeo, 2019). It is pointed by Munich Re, one of the largest reinsurance companies that California has experienced over $24 billion of wildfires due to climate change. The cases of fire have been reported in several forests such as Amazon and others in Australia and Canada and the increased occurrence of fires could be a result of climate change. The firm made a warning that insurance companies would be forced to increase insurance premiums to cover the rising cost from the extreme weather. This could make insurance cover very expensive for several people. Scientists have also estimated that the increase of temperature by only 20 Celsius could cause the global domestic product to fall by at least 15% CITATION Mar171 \l 1033 (Hood, 2017). Therefore, the constant rise of temperature due to climate change could cause a big fall in the global economy if drastic actions are not taken immediately to address the problem. It is estimated that the gross domestic product (GDP) would fall by almost 35%. This could be the worse economic depression more than the Great Depression, which made the global trade to fall by 25%. However, the major difference is that this depression would be permanent because it is due to climate change. The industries, which are likely to be affected, are fisheries, agriculture, tourism, and forestry. Fishermen are already seeing, the decline of lobster catches. There is also an increase in natural disasters, which have already cost almost 23 million working life years.

Moreover, climate change also creates a mass migration of people around the world. A report by the United Nations High Commissioner for Refugee indicates that since 2009, bad weather has managed to displace over 22.5 million people. It is estimated that by 2050, the number of immigrants would increase to 700 million people if serious actions are not taken to address climate change. The World Bank estimated that climate change could increase draught by 25% by 2030. This is due to increased drought and the change of rain patterns, and extreme weather, which destroy crops leading to food insecurity around the world CITATION Kim19 \l 1033 (Amadeo, 2019).

Figure 1: Climate change effect on the global economy

Agriculture

Agriculture is the most vulnerable sector to climate change. Environmental economist Professor George Heal from the Columbia School of Business pointed out that although agriculture makes up a small part of the U.S. economy and other economies especially in the developed economies, the effect of climate change to agriculture could be big CITATION Buc18 \l 1033 (Buckland, Robinson, & Zaelke, 2018). Several states and people depend on agriculture and increased climate change could impact the economy hence decrease economic growth. Lack of proper rains and increased temperature due to climate change could affect agricultural production. The Midwest states in the United States have been experiencing a lot of rainfalls, causing abnormal floods. The historic flooding washed away farms and therefore, the products become low in most agricultural areas. The historic flood also washed away livestock, which caused a lot of losses to farmers. A study conducted by Agriculture society established that Nebraska lost approximately $440 million worth of cattle and Iowa suffered estimated $1.6 billion losses due to flood. The increased flood due to change of weather of climate change could cost several lose not in the United States, but other countries like Canada and Australia as well.

Though the hurricane has been a component of our natural weather system, the latest research points out that there have been powerful hurricane movements in the North Atlantic since the 1970s CITATION Mar171 \l 1033 (Hood, 2017). In the future, it is predicted that there would be a more powerful hurricane due to climate change. The impact created by this trend is likely to be made worse by the rising sea level and the constant growth of the population along the coastlines. These do not affect only agricultural activities but also affect the infrastructure and other sectors of the economy. A research conducted by Guemide (2015), established that hurricane is the worse weather pattern, which has a huge impact on the agricultural sector. The hurricane washes away produce from the farms and it leaves the land bare, which cannot be used for agricultural production. For instance, regions where hurricane normal occurs like Texas in the United States, and Haiti cannot do well in agriculture and therefore, mostly depend on other states for agricultural products.

The National Oceanic and Atmospheric Administration (NOAA) experts have stated that high floods that occur affect the food supply chain and this makes it difficult for farmers to access the market. It is also stated that the rate of the planting of crops such as corn have reduced and farmers only plant 67% of the corn compared to the previous years, which was about 96% CITATION Ell03 \l 1033 (Ellis & Bygrave, 2003). The lost of yield being experienced by farmers could cause an increase in prices of animal feeds and ethanol and therefore, it reduces the agricultural produce of farmers. It is important to establish corrective measures to address the problem associated with climate change in order to increase the production of food, which can help in increasing food supply in the marketplace.

Scientists are working around the clock to refine our understanding of how global warming affects the activity of a hurricane CITATION Mar171 \l 1033 (Hood, 2017). Modern research has started to attribute individual hurricanes to increased global warming around the globe. For instance, research indicates that as the Earth gets warmed, the chances of a storm with rainfall like Hurricane is become common in places like Texas recently compared to previous years. Because of climate change, the occurrence of the storm has changed and it occurs more often. It is, therefore, evident that the rise of temperature, which causes the rise of sea level, is driven by the constant release of gases to the atmosphere CITATION Mar171 \l 1033 (Hood, 2017). Climate change can be reduced by taking measures to reduce the release of greenhouse gases. Therefore, it is important to implement the use of natural gases and energy.

Infrastructure

Studies have indicated that much of the important infrastructure is at risk due to flooding CITATION Irm19 \l 1033 (Irma, Harvey, & Katrina, 2019). The rise of sea-level rise could easily cause a serious loss of value of assets worth trillions of dollars. It is expected to increase by double-digit within the next decade. The flood and hurricane have caused damages of rail line trunk, electricity line and roads are damaged more often by the flood. A report on Hurricane Katrina indicates that the value of infrastructure lost is worth billions of dollars. It is, therefore, evident that climate change has destroyed several infrastructures. Military bases have also become vulnerable because of climate change. A report published by the Center for Climate and Security policy institute indicates that the rise of sea level could cause a big flood on parts of the military bases situated along the Gulf and East Coast for almost three months a year. The inland military installations have also been destroyed in several countries. This destroyed cause most governments billions of dollars to repair and provide efficient maintenance of the installations destroyed by floods. A report by the Australia natural disaster management committee shows that the Australia government spends billions annually for repair and installations of equipment and other infrastructure destroyed by floods and other natural disasters including fire. The resources being used for repair of the infrastructure damaged by the flood and other disasters could be used for other economic development. Extreme weather conditions could increase the cost of rail, road and other installation and therefore put a lot of economic burden on the country.

Tourism

The tourism sector plays an important role in the economic development of the global economy. During winter a close to two billion dollars is lost due to less snow and ice. For instance, rapid warming which occurs in the Adirondack Maintains could easily result to decline of winter activities, which could cause the decline of the economy by almost 30% CITATION Ell03 \l 1033 (Ellis & Bygrave, 2003). As the level of water temperature rises, the quality could reduce due to several frequent and more intense algae bloom that could result in toxic. This, therefore, reduces the recreational water activities and freshwater needed for fishing activities. The rise of sea level could result in deforestation due to the submerging of islands and coastal areas. There are other destructions to the biodiversity that could make a tourism destination less attractive. The less attractive tourism destination becomes the fewer tourists would be registered. This would directly affect the country because most countries depend on tourism as direct foreign income. With fewer tourists visiting a country or regions which are known for tourists to visit the rate of revenue would decrease as well. Therefore, climate change directly affects the tourism industry and it makes a country lost billions of dollars. As illustrated in the graph below, increased decreases in the performance of an economy.

Solution

For the last decades, several attempts have been made to address the issue of climate change. The United Nations, through its chapter UNEP, has organized workshops on environmental issues and adopted several resources. In 1992, the United Nations Convention on Climate Change was formed to address problems related to climate change. Research indicates that in December 1997, the United Nations held a consultative meeting with various stakeholders and adopted the Kyoto Protocol. The protocol highlighted measures, which must be taken by every country globally to reduce the emission of greenhouse gases. The European Community and 39 industrialized nations made a promise to reduce the emission of greenhouse gases. The committed was made by every country to reduce the emission of greenhouse gases by 18%. Recent studies have also discovered that countries have agreed to adopt green energy. According to the study conducted by Gurría (2017), the use of green energy is likely to reduce the emission of gases by almost 15% and this could be the best method to reduce the impact of climate change. Studies show that global warming is the cause of increased hurricane along the coastline. The constant warming of the Earth is the main cause of global warming resulting in the increased occurrence of the hurricane along the coastline. It is, therefore, important to use natural energy and other measures to reduce the effect of global warming globally. With the use of green energy, the greenhouse gas emission would reduce. As a result, the temperature would be reduced resulting in less hurricane and other natural disasters, which affect the agricultural, tourism and wildlife sectors.

In Australia, the use of solar and wind energy has been adopted by the government. The government has taken various initiatives to encourage people to use solar energy for lighting and other purposes. The public vehicles are also required to use natural gas instead of diesel and other oil and gas which can pollute the environment. Australia has policies which require people to reuse recyclable materials, require proper disposal mechanism to be used by every state and individuals CITATION Cho19 \l 1033 (Renee, 2019). The cleaning of oceans and seas is also being undertaken to minimize to reduce climate change in the country. Though compared to other countries, Australia policies on environmental matters are vague. It does not have properly established policies on how to reduce the emission of greenhouse gases. In order to obtained permanent solutions to climate change, it is important to plant trees, cut off the usage of cars which consumed a lot of fuel and use natural gases instead of diesel and other unleaded gases, which are commonly used in developing countries. However, the drastic actions including shutting down of nuclear power plant which contributes a lot to the greenhouse

Linking climate change with the economy

The climate change reduces agricultural production hence increasing the demand for food supply to the marketplace. Current research has indicated that when food produced decreases in a country, the demand becomes high, and supply gets low affecting the prices of farm-produced across the globe. The law of demand and supply states that when the demand is high, the price is high and the supply is low. Therefore, the supply of food supply has reduced drastically worldwide, increasing the prices of food. Research conducted by Ellis and Bygrave (2003), concluded that the living standard is increased in 2018 compared to the last two decades. The prices of food whether agricultural products or other foods have increased due to high food demand and low supply. The high demand for food is also due to an increased population of people in Australia and other Western nations. Research has indicated that in the last decades, there has been the immigration of people from other regions such as sub-Sahara Africa and the Middle East and Asia to Europe. This has increased the demand for food. However, due to less or low supply of food needed to the marketplace, the food prices have increased and the inflation constantly increased over the last years. It is, therefore, evident that climate change has a huge impact on the economy of every country. As shown in graph 1 a single year temperature change against the GDP, it is evident that an increase in temperature due to climate change negatively affects the economy over time.

Graph 1: Temperatures affect the economy

Climate change affects the performance of the economy over some time. The tourism sector could be easily affected due to climate change. As illustrated in the diagram below 2, below increased temperature affect the result to increase in the number of tourists visiting Greek. As indicated in the diagram below, a reduced temperature reduces the number of tourism and therefore, climate change is a serious issue to the growth of the economy of the country.

Diagram 2: Climate change and economy of Greek

Conclusion

Research has indicated that climate change impacts negatively every sector of the economy. It reduces agricultural produce hence the high demand for food supply which results in increasing prices of food in most countries. The effect of climate change on the economy is huge and its impact on various sectors, which play an essential role in the living standard of billion of people around the world. In the future, it is predicted that there would be a more powerful hurricane due to climate change. The impact created by this trend is likely to be made worse by the rising sea level and the constant growth of the population along the coastlines. These do not affect only agricultural activities but also affect the infrastructure and other sectors of the economy.

References

BIBLIOGRAPHY Amadeo, K. (2019). Climate Change Facts and Effect on the Economy. Journal of science and

climate change, 2-18.

Buckland, P., Robinson, B., & Zaelke, D. (2018). How we can combat climate change.

https://www.washingtonpost.com/news/opinions/wp/2019/01/02/feature/opinion-here-are-11-climate-change-policies-to-fight-for-in-2019/, 2-18.

Cox, L. (2019). Australia's record on emissions and sustainability condemned by the OECD review.https://www.theguardian.com/environment/2019/jan/30/australias-record-on-emissions-and-sustainability-condemned-by-oecd-review, 2-15.

Ellis, J., & Bygrave, S. (2003). Policies to Reduce Greenhouse Gas Emissions in Industry -

Successful Approaches and Lessons Learned. Organization for Economic Co-operation and Development, 2-18.

GUEMIDE, B. (2015). The effects of climate change on the economic growth of ASEAN

countries. Unity of Research of Human Resources Development, 2-23.

Gurría, A. (2017). The Economic Consequences of Climate Change. OECD Publishing, Paris. ,

2-34.

Hood, M. (2017). Cyclones and climate change: Connecting the dots.

https://newsela.com/read/cyclones-climate-change/id/34439/, 2-115.

Irma, M., Harvey, S., & Katrina, A. (2019). Hurricanes and Climate Change.

https://www.ucsusa.org/resources/hurricanes-and-climate-change, 2-15.

Renee, C. (2019). How Climate Change Impacts the Economy. State of the planet, 2-18.

Tol, R. S. (2015). The Economic Impact of Climate Change. International Journal of Science

and economy, 2-15.

Business Study Report On YANCOAL SCN LIMITED

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BUSINESS STUDY REPORT ON YANCOAL SCN LIMITED

Your Name (First M. Last)

School or Institution Name (University at Place or Town, State)

Business Study Report on Yancoal SCN Limited

Introduction to the Business and General Business Environment

Name and Location of Business, the Type of Business (e.g retail, manufacturing)

YANCOAL is the first famous Australian company that deals in Coal and Mining. It has first established back in 2004. Since then, it has been operating with business expansion through strategic acquisition becoming Australias most innovative coal exploring company.

What the business produces or sells

Yancoal deals in exploration of coal and mining. It is known for introducing the pioneer coal mining method in 2006 which is known as LTCC, after acquiring former Southland Coal Min, in Hunter Valley, NSW. Yancoal produces a variety of metallurgical and thermal coal products for export. The product split in 2013 was 45 Metallurgical coal / 55 Thermal Coal, with a similar split forecast for 2014. In New South Wales, Yancoal produces low ash, high fluidity, semi-hard coking coal product from its Austar Coal Mine a low phosphorous semi-soft coking coal product from its Ashton Coal Mine and a number of thermal coal products from its Moolarben Coal Mine. In Queensland, Yancoal produces a Pulverised Coal Injection (PCI) product from its Yarrabee Coal Mine located in the Bowen Basin. These coals are used by steel mills and power companies across Asia. Yancoals diversified product mix and its sale ability across Asian markets provide the company with a strong base for future growth.

Who the customers are

Customers of Yancoal are the ones who utilize thermal and metallurgical coal for different purposes.

Where most of the customers are located

The major customer bank of Yancoal is located in New South Wales, Queensland and Western Australia. Yancoals New South Wales region includes the mines of Hunter Valley Operations, Mount Thorley Warkworth, Moolarben and Stratford Duralie, with the Queensland region comprising of Yarrabee and the Middlemount.

Who the main competitors are (i.e those producing similar products, and selling to similar customer base)

The main competitors of Yancoal limited include but not limited to Auster, Cameby Downs, Donaldson, Hunter Valley Operations, Middle Mount Operations, Moolarban. Mount Thorley, Warkworth, Standford Duralie.

Where the competitors are located and

The Competitors are Located in various parts including New South Wales, Queenland and Western Australia.

The approximate market share of key competitors including your business

According to market assessment Yancoal enjoys 80 of market share as compared to its competitors, whereas 20 market is captured by respective competitors.

Given the major market share it can easily be assessed and claimed that the company is the major player in the target market, with other competitors having minor share. However, in such a business environment competitive threat can never be ignored, unless products are delivered to the customers with the best quality along with ensuring to manage competitive threat.

Production cost and scale

Provide a description of the required factors of production

The Basic factors of production include extraction and refining of mines. This involves using of multiple mechanical advanced techniques in extractions and exploring of metallurgical and thermal mines. Consequently, different fixed costs are associated during completion of the exploring procedure.

Fixed and hence unlinkely to vary much according to the quantity of goods produced or sold or variabcel and hence likely to increase with increased production or sales.

The fixed cost incurred during the production process includes the plantation costs, machinery cost and supplies cost, whoever, the cost of supplies may vary depending upon the economic changes occurring in the respective countries. Moreover, variable costs including electricity utilization and other administrative and operational costs are also associated with production process.

Use above information to comment on the likely overall cost structure of your business. For example are fixed costs large or small relative to variable costs Does this mean that firms optimal size is likely to be small, medium or large

Given the nature of fixed and variable costs concerning the Yancoal operational production process, it is revealed that the size of fixed cost is higher as compared to variable cost. Meaning thereby the companys optimal size is likely to be large, rather than small or medium, as it encompasses huge number of installations, machinery and production material to export the final products in the international market.

2.2 Macro Business Environment

Provide a description of the macroeconomic environment in which the business operates

The macro economic environment in which Yancoal operational its production activities is quite stable with regard to political, economic, technological, environmental and legal point of view.

2.2.1 The overall stability of the political system/government of the country in which the business operates.

The political environment of Australia and other areas where Yancoal operates in favorable for undertaking of production process as well as performing overall business activities. Given the stable political situation, any dramatic change in near future in political atmosphere can never be ignored. Therefore, company needs to have contingent strategy to cope with any sort of expected emerging political challenge in future.

2.2.2 The general level of inflation, unemployment and average interest rate of the country in which the business is physically located ( and also countries in which most customers live if different from the location of the firm). Discuss any recent changes in those variables. Does economy seem to be in a recession, boom or otherwise

Assessing the general level of inflation, unemployment and interest rate of Australia and other relevant areas where Yancoal operates, it is revealed that the rate of inflation is stable, unemployment is not so alarming against the standard benchmarks of unemployment. Moreover, no recent abrupt change have been observed in macroeconomic indicators. Furthermore, the economy does not seem to have undergone any sort of recession or economic depression in the recent past.

2.2.3 Use above information to comment on whether or not the overall macroeconomic conditions faced by the firm are likely to become more or less favourable over the coming years. In this part you should consider such things as

Given the macro-economic conditions faced by the firm it is likely to predict that the business environment is going to be favorable in order to undertake operational activities.

Whether the main products are likely to be normal or inferior and hence whether demand is likely to rise or fall during recessions and thus whether the economic climate of the countries in which most of the business customers live is likely to reflect well or poorly on businesss sales.

The macro economic conditions as prevailing in the concerned countries are not likely to affect the quality of the product and it is going to normal rather than being inferior. Resultantly, it will not have any considerable impact on the demand of products. Furthermore, climate change also does not have any considerable effect on business customer live since it is coal exploration company.

Where the business is likely to face problems getting access to key factors of production (e.g are skills shortages), and whether this is likely to affect the business future operating costs.

As for current operational skills are concerned, the company has enough resources to undertake current operational activities. However, from future perspective, Yancoal needs to develop and polish skills of employees through training and development to cope with advanced technological challenges emerging in future course of time.

If the business exports its products or import factors of production. Are recent trends in exchange rates likely to be good or bad for costs and/or revenues

Since the business operates in Australian market and vicinity. The external environment indicates stability, therefore, it unlikely that the trends in exchange rates are going to affect on cost of production or revenues.

3. Sustainability practice of the business

Since the business deals in exploration of thermal and metallurgical coal, therefore, it pose concern with regard to environmental challenge, therefore, it is necessary to minimize the environmental pollution using advanced technological technique.

3.1 Does consumption of good produced by the business generate any positive or negative externalities If negative, has the government (or anyone else) put in place any measures to mitigate What is done to mitigate by the business If positive what is done to take advantage of it

3.2 Use the information from above to comment on how the sustainability practice by the business and other businesses in the same industry would affect their long term business viability.

In order to have sustainable business, Yancoal needs to build environmental friecndly initiatives to mitigate environmental challenges resulting from production of coal.

4. Conclusion

After carefully analyzing the internal and external business environment of YANCOAL limited, it is hereby concluded that, currently the business operates perfectly in a competitive environment, however, from strategic perspective the business need to careful enough in coping with the forecasted external environmental problems, so that operational activities of the business are not affected much in future.

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Case Analysis Of Risk, Uncertainty, And Managing Incentives

Case Analysis of risk, uncertainty, and managing incentives

[Name of the Writer]

[Name of the Institution]

“Tesla”

Risk and Uncertainties

Tesla has been facing different risks and uncertainties in terms of financial investments, business opportunities, market competition and the productivity of newly launched projects such as SpaceX. Under the impact of those issues, Tesla has made some major decisions to address the complication, which have claimed to be productive in the present year. The actions taken by Tesla to deal with risks and uncertainty discussed as follows

Open Financial Investments

It is asserted that the Tesla is facing some financial crisis in the recent year, where the stock price was less than 22%. In order to address those financial challenges, the owner of Tesla has formulated strategies that could help them incorporate equity, which means Tesla has opened the doors to fresh equity. Although it is not sure that the investors would be greatly attracted or not, but it is one of the best actions taken to address financial crisis (Perkins, et al. 2018).

Model 3

According to the report that was published by Forbes, it is found that Tesla has been facing some quality issue because the demand for vehicles was becoming low. In order to address this issue, Tesla has made an electric car which is both environmentally friendly and travel 50 -70 miles per hour within five seconds. It is one of the most positive actions that has been taken by Tesla to mitigate and overcome the vulnerabilities in terms of quality (Perkins, et al. 2018).

Space X

Taking into account both, economic and technological complications and uncertainties, Tesla has made a number of actions to promote SpaceX. As a result of these actions, today, SpaceX is considered of more worth as compared to Tesla. Tesla has launched 60 links satellites that have increased fresh funding of more than $1 Billion in the year 2019. Today, SpaceX is of more value than $33.3 billion just because of strategic planning (Perkins, et al. 2018).

Advice for improving risk management

There some specific advice that can be given to Tesla in order to manage risk

Quality Management and Improvement

As Tesla is an automobile company and this department is evolving and becoming technologically strong with the passage of time so Tesla should take significant steps that can help to manage the quality and improve the quality of the products. These improvements and management should be addressed in terms of a competitive market, adhering to the opportunities that can allow customers to prefer it on other opportunities (Perkins, et al. 2018).

Stress on green economy

It is suggested that Tesla should give special significance to green economy because it is one of those strategic platforms that can help this organization and industry to keep growing. In accordance with the assumed trends of future, only environmentally friendly products would be able to sustain, it affirms that Tesla should try to mold its industry more towards green economy so that both economic and safe products can be launched (Perkins, et al. 2018).

Finance management

With the information collected from financial reports, it is found that Tesla has made a lot of financially risky investment that has compromised the growth and productivity of industry in this area. It is suggested that Tesla should make stable financial adjustments that would be parallel to the economic paradigms. Moreover, Tesla should try to keep its all projects on the same paradigms of financial adjustments such as SpaceX as well as Automobile industry because primary business is one of the strong support in terms of both economy and expertise. Although SpaceX is also important it should be treated as a secondary business because making it primary business would challenge the basic expertise of the industry (Perkins, et al. 2018).

Adverse Selection Problems in Tesla

Taking into account the reports and announcements made by Tesla, it is found that the use of term "Autopilot" used by Tesla for Model S Sedan in Florida in May. It is recorded that the word autopilot is meant for the commercial airline pilots which are meant to relieve the human operator from the aircraft control (Ir.tesla.com, 2019). The Tesla Autopilot was supposed to be a driver system in terms of activating the system, where a driver is presented with a warning that safe operation should be ensured. Controversy occurred when some of the drivers were tempted to explore the novelty of system which ultimately resulted in the posing a threat to the lives of the drivers. Here, it is found that Tesla has used a connotation that is actually misguiding drivers and the service of “Autopilot” is not with the efficiency and productivity with which it is presented and supported for the people. Ultimately, it has caused massive threats for the people and drivers (Ir.tesla.com, 2019).

Taking into account the severity of the issue, it is inferred that the negative impact on the transaction can be minimized by following the code of ethics. According to the code of ethics, Tesla should highlight and work on “Trolley Problems” in ethics. It will help tesla reduce the transaction because the automobile would be made and programmed to retake the control and serve in case of any emergency. Another recommendation that could be suitable for Tesla is to incorporate Automatic Emergency Braking where the vehicle computer twill use the cameras and radars sensors so that distance from different objects can be determined. It will help Tesla to regain the effectiveness of Autopilot term where at least the drivers and passengers could be saved from different accidents and mishaps (Ir.tesla.com, 2019).

Moral Hazard Problem

As Moral Hazard Problem refers to the problem for which it is assumed and inferred that the borrower knows that someone else will pay for the mistake that the buyer will make. In the case of Tesla, it is highlighted that "Autopilot" is a moral Hazard Problem because it is a general understanding that Tesla is claimed for some wrong or miscommunicated connotation of the services that are incorporated. Research highlights that the number of fatalities that are linked to Tesla is the product of cars that are produced (McCain, et al. 2019). The company has produced about 122,000 models of S and X vehicles by the year 2012 which affirms that there would be a handful of crashes every year. As it is one of the major problems that are being faced by Tesla, there are some major steps that are taken by Tesla, such as evaluation of the reported that are filed against Tesla under the title of “Trolley Problems” and “Laws of Robotics”. Moreover, Tesla has promoted its business and the complications that were taken for granted under the impression for “Autopilot” by improving the technologies that are added to the new models. According to the reports addressing the efficient of Tesla Motors, it is found that the stance of Autopilots has been addressed by the critical evaluation of the cases of accidents where drivers and passengers did not come up with any kind of authentic reports and it resulted in the evaluation of the product itself. So, Tesla has incorporated references to different legal obligations in the forms of Good Samaritan Laws and the availability and application of Advanced Sensor’s in the new models that can mitigate and help to overcome the misconception and mis-ideologies that were associated with the term, autopilot (McCain, et al. 2019).

Principle Agent Problem

Principle Agent Problem refers to a problem that occurs when a principle creates an environment in which the incentives of an agent does not align with the one who is working on the behalf. It is more like a conflict of priorities that occur between an asset and the controller of the asset that has been delegated. It is asserted that the Model 3 of Tesla is one of the examples that proposes Principle Agent problems because it does not seem to satisfy the mainstream buyers. There are two aspects of this issue, both in terms of commitment of quality and then of product. Addressing the principle agent problem in terms of quality it is asserted that “Auto industry” is a huge question mark in Model 3. Customers and analysts are of the view that Tesla has bought additional shares that are sold and it was expected to build a market value of established automakers much like General motors and Fords having an annual profit in million. Even the customers have paid deposits of about $1000 for each of the cars and the quality of the cars is of no values in comparison to the investment. The car is having an imminent cash crunch along with a lot of incidents and accidents that question the “automotive potentials” (Ahmad, et al. 2019). However, another principle agent problem framework highlights that Tesla had promised to provide with 1,026 vehicles per week that were aimed to be a big jump from the earlier fourth quarter but after evaluation, the overall achieved target was 2,500 per week that does not even make half of the promised target. This has also placed tesla at the end of the third quarter, it is questioning the credibility of the company by creating a question mark on the choices and contributions that are made by different investors (Akakpo, et al. 2019). Tesla has used sensor systems and better technologies to evaluate the align with profitability.

The organizational structure of Tesla

Tesla has a business supporting organizations structure. According to research, Tesla is using a functional or Unitary form of organization structure in which the function of an organization is one of the most defining factors. It is asserted that the corporate structure of the organization and its system is the illustration of the patterns of intersection that exist among different component of the organization. However, it would not be wrong to say that Tesla follows a traditional organizational structure where major significance is given to the control and focus of the material department along with a limited and operational expansion in the global market. It is also added that the Tesla’s Operation Management is dependent on the effectiveness of the business sector that could help to supply the strategic implementation and changes. New ideas and plans are always welcomed taking into account a strong belief in the corporate structure that has to be outrushed with innovation and technology in order to ensure success. Under the impact of this culture, different national millstones are achieved despite strong and competitive international operations. It has centralized, divided and function-based hierarchy (Ahmad, et al. 2019).

There are several ways that can play a major role in managing the overall efficiency of Tesla. It is asserted that Tesla should try to incorporate transactional leadership. It would help Tesla to improve its organization structure because employees are the only asset that can make an organization to progress by leaps and bounds. The transactional theory would direct Tesla to exchange rewards in return of good performed and it would help to achieve more targets. Tesla should invite more strategic planning so that novelty and productivity can be brought on the same board and both customers and employees can gain benefit from it. Moreover, Tesla should try to speed up its supply chain so that commitments can be addressed (Akakpo, et al. 2019).

References

(2019). Ir.tesla.com. Retrieved from https://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0

Ahmad, S., & Khan, M. (2019). Tesla: Disruptor or Sustaining Innovator. Journal of Case Research, 10(1).

Akakpo, A., Gyasi, E. A., Oduro, B., & Akpabot, S. (2019). Foresight, organization policies and management strategies in electric vehicle technology advance at Tesla. In Futures Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham.

McCain, C. (2019). A Strategic Audit of Tesla, Inc.

Perkins, G., & Murmann, J. P. (2018). What does the success of Tesla mean for the future dynamics in the global automobile sector?. Management and Organization Review, 14(3), 471-480.

Catch Me If You Can

[Name of the Writer]

[Name of Instructor]

Economics

[Date]

Catch Me If You Can

A handwriting has to play a central role as evidence in a crime or forgery. When a handwritten note is found from the place of incidence, then the handwriting experts check the note and match it with the writings of suspects. There are different ways to conduct an analysis in the field of forensic sciences. The crime scenes inquiry includes various ways, and handwriting analysis is one of them. In case, the document is available the document examiner observes the handwriting and the signs by comparing to rule out the authorship. It is a tiresome and systematic process that needs a vast knowledge of the way people write, the appearances of letter formation are distinctive and the functional processes behind the writing. The expert of handwriting analysis can quickly identify the fine-motor skills of a person and its effect on the handwriting of a person. They can also find out the clues in the handwriting about the writer's identity. Moreover, it is believed in the handwriting analysis that every person has a unique handwriting. In early ages, everyone learns the style characteristics at school. While learning, every kid writes the same way, but with the passage of the time, the writing style is modified by the person. People develop individual characteristics that distinguish the handwriting of one person from another with the time.

The first thing in handwriting analysis demands a proficient comparison of style characteristics and individual characteristics. They examine the documents of one known author with the document of the unknown author. However, for the sake of accuracy the analysts do not look for the similarities; instead, they check for the differences. Moreover, they look into the matter that whether a person can write both pieces of the paper or not. They also look for stimulation. Stimulation is an attempt to disguise one’s own writing or to copy someone else’s writing.

In the movie “catch me if you can” Frank W. Abagnale was able to live with forgery for so many years because of his multiple identities. At a very young age, Frank managed to conduct many illegal activities like tax elusion, cheque, and identity scam. He was able to forge his personal checks. When he learned that some banks do not deposit checks issued by other banks, he faked out to be a pilot. He realized that pilots were having a glamorous life and they were treated specially at that time. He changed the routing number on the checks and used to deposit at different branches across the country. It would take time for the checks to reach the central bank and processed back to local banks. Frank was able to deceive the people with multiple identities. At the same time, it was easier for him to conduct forgery because of the manual processes at that time. There were no scanners to scan cheques or identity cards; that's why it was easier for people to conduct a crime.

It depends on the type of crime he would commit. Many things have been changed since that time. For him, it would be easier to steal because he will have to deceive the digital cheque reader, not a specialized teller. People nowadays mostly rely on machines for their practices. However, the identity frauds are impossible with certifications today that Frank did. Now, there are digital systems, and it would be difficult with false certifications. However, still, it is not impossible to conduct a forgery. Many people still manage to do it.

On the other side, the rules and regulations for forgery are stricter today. Various ways are developed to detect a fraud. It can minimize the chances of attempts. Frank had easily manipulated people that is still possible today. Therefore, it depends on the type of crime a person wants to commit today.

Causes Of The Great Depression

Causes of the Great Depression

[Name of the Writer]

[Name of the Institution]

Causes of the Great Depression

The great depression brought a wider change in the society and economy of America. Its affects leave the questions for economists and researchers when almost all the economic theories become unable to cope with the situation. The main causes of the depression include stock fall, bank failure, smooth-Hawley tariff, failure of money supply strategy by Federal Reserve, and ineffectiveness of policies developed by presidents Hoover and Roosevelt. Some of the factors affect the aggregate supply while others had an impact on the aggregate demand of the economy, but bank failure was the factor that brought more complications and concerns in the nation. The bank collapsed, 700 banks failed in 1929 and 3000 more in 1930. In 1932, a new banking panic led to the loss of more than 1/3 of all banks in the country.

The bank failure starts after the crash in the stock market. In October 1929, the stock market collapsed due to which investors became worried about the future financial disaster. The sudden panic due to the bad condition of the stock market resulted in the withdrawal of money from the bank. People reached the bank and withdrew their deposits, this situation was known as "bank runs" where everyone in a hurry to get his money back before anyone else does. The withdrawal of a large amount of money resulted in lower investment rates and consumer spending. Due to the low consumer spending and investment, the employment level and production also start decreasing. Researches indicate that unemployment increased upto 20% because forty percent of all bank failed. The increase in unemployment and failure of banking resulted in the fall of GDP upto 30%. This factor was also crucial because it developed not only panic in consumer but also bank holders. About nine thousand banks were failed in the 1930s, which developed the situation of risk and concerns in bankers. Bankers were not confident to create new loans due to the fall in investment. All this situation leads to a rapid fall in expenditures and then great depression ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"uW6pHDWG","properties":{"formattedCitation":"({\\i{}5causesofthegreatdepression.pdf}, n.d.)","plainCitation":"(5causesofthegreatdepression.pdf, n.d.)","noteIndex":0},"citationItems":[{"id":1504,"uris":["http://zotero.org/users/local/mlRB1JqV/items/JK7SQYZQ"],"uri":["http://zotero.org/users/local/mlRB1JqV/items/JK7SQYZQ"],"itemData":{"id":1504,"type":"article","title":"5causesofthegreatdepression.pdf","URL":"http://www.cland.k12.ky.us/userfiles/13/classes/441/5causesofthegreatdepression.pdf?id=8459","accessed":{"date-parts":[["2019",10,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (5causesofthegreatdepression.pdf, n.d.).

Economist explains this situation largely caused by a series of negative aggregate demand shocks. Before 1929 both aggregate demand and aggregate supply were balanced, and the economy was growing with zero inflation. However, because of the stock market collapse in 1929, the situation began to change. Due to the failure of banks, the aggregate supply of money decreased, and investors lost a large proportion of their wealth. Bank failure happened in four waves, and each wave lead to low investment which decreased the aggregate supply furthermore. People were not confident upon consumption, and they hold their money which results in aggregate demand shocks. Investment falls upto 75% till 1933. In this situation, the Federal Reserve allowed the money supply to plunge upto 30%, but it resulted in the largest negative shock in aggregate demand. These shocks resulted in a deflation where inflation was -10%, and economic growth was also negative. This was a critical situation because the fall in aggregate demand increased the burden of debt ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"6iS1Vi6D","properties":{"formattedCitation":"(\\uc0\\u8220{}Understanding the Great Depression,\\uc0\\u8221{} 2017)","plainCitation":"(“Understanding the Great Depression,” 2017)","noteIndex":0},"citationItems":[{"id":1503,"uris":["http://zotero.org/users/local/mlRB1JqV/items/YRL75GAY"],"uri":["http://zotero.org/users/local/mlRB1JqV/items/YRL75GAY"],"itemData":{"id":1503,"type":"webpage","title":"Understanding the Great Depression","container-title":"Marginal Revolution University","abstract":"Imagine that we’re in the late 1920s in the United States. Times are great. World War I is behind us and we’re in the early days of the “Golden Age of Hollywood.” Jazz music is blossoming. Automobiles are new and novel. As Art Deco style peaks, there’s glitz and glamour sprinkled across the country. What a time to be alive! If only it could stay so grand.","URL":"https://mru.org/courses/principles-economics-macroeconomics/business-fluctuations-great-depression-ad-as-model","language":"en","issued":{"date-parts":[["2017",5,23]]},"accessed":{"date-parts":[["2019",10,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Understanding the Great Depression,” 2017).

The bottom line is that due to the failure of banking, the bridge between consumption and investment fall. People lost their wealth and were not willing to spend money that was in hand. Everyone wanted to spend less and save more which resulted in a sharp fall in aggregate demand. Bank lost its investment and became unable to offer new loans which effected the aggregate supply. The theory that says, with the decrease in supply, demand increases failed here. This is because with the fall in aggregate supply, people become more worried about the future and hold their consumption for the sake of future conditions. This means the economy faced a fall in both aggregate demand and aggregate supply which ultimately resulted in the great depression.

References

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY 5causesofthegreatdepression.pdf. (n.d.). Retrieved from http://www.cland.k12.ky.us/userfiles/13/classes/441/5causesofthegreatdepression.pdf?id=8459

Understanding the Great Depression. (2017, May 23). Retrieved October 16, 2019, from Marginal Revolution University website: https://mru.org/courses/principles-economics-macroeconomics/business-fluctuations-great-depression-ad-as-model

Chapter 1-5

Economics assignment

[Name of the Writer]

[Name of the Institution]

Answer 1

A financial plan is prepared to show the expected figures to be attained in the future. Thus this allows the person to continuously check the achievements made by the subject under consideration.

The goals are the long term statements made by the companies to be achieved. It is important to set goals because they give the direction to the company to proceed. A goal is generally broken down into shorter objectives and then these objectives are achieved step by step.

Goals

Short term

Medium Term

Long term

Education expenses

√

Buy a car

√

Buy a house

√

Buy a vacation home

√

Other large purchases

√

Take a vacation

√

Start a business

√

Have children

√

Retirement funds

√

Provide for survivor

Answer 2

The net worth is the difference between the total assets of the companies and total liabilities of the company. Specifically it shows the ability of the company to pay off all its debts.

The cash flow shows the movement of cash in and out of the business. This generally is related to the operations of the business.

A budget is an estimate of the future or expected financial aspects. This entails all the financial information required to run a business over a period of future time generally taken as one year.

Answer 3

Current income

Expenses

Earnings

$50

Transport

$15

Allowance

$20

School supplies

$10

Gifts

$10

Lunches

$35

Other

nil

Entertainment

$13

Total income

$80

Total Expenses

$ 73

Total income $ 80

Total Expenses$ 73

Net $7

Answer 4

Saving is an important component of the national economy along with consumption and investment. This is important from two aspects. One is the investment aspect because in general the investment is made by the amount of money saved in the past. The second aspect is the consumption because not always the amount of income is enough to support the consumption requirements of any person. Thus the person will use whatever savings are available for him to use.

Answer 5

Option

Advantage

Disadvantage

Savings Account

Generation of income

Cannot with draw funds

Certificate of Deposits

Higher rate of interest

Prone to fluctuations in the economy

Money Market fund

Easily traded

Risky

NOW accounts

Interest earned

Notice required for withdarawal

Chapter 16

Assignment

MCQs

Correct option is c) Mutual savings banks

Correct option is b) provides with checking accounts and loans

Correct option is d) interest earned on their loans

Correct option is c) liabilities

Correct option is c) $9400

Questions

a) The main functions of a bank are accepting deposits, granting loans and transfer of funds. These services resemble the activities carried out by the families and individuals in the ancient civilizations.

b) The development of paper credit money in the seventeenth century by goldsmith bankers is incorporated into modern banking. Also some goldsmiths dealt in home and foreign coins. Then civil war interrupted the normal goldsmith business, so they managed to facilitate deposits of silver and gold safely and kept record of the deposits from depositors also. Goldsmiths also lent out the gold and silver to borrowers and created profits. To make up for the high demand of borrowing, they paid interests to the depositors and introduced fix deposits.

2. In the United States, there are the following three thrift institutions:

a) Commercial banks: these are the banks that make profits for their shareholders by acquiring deposits and then using them in different profit generating ventures.

b) Savings banks: these banks specialize I lending loans to individuals and families particularly for construction of houses and other buildings. Originally these banks only offered savings accounts and later dealt in DD and enable people and businesses to borrow money and also mortgages.

c) Credit Unions: Credit unions are groups shaped by individuals with a "common bond." By common we mean they work for the common organization, or share the common religious institution, or societal strata or being base in the same locality. They gather the money to form the deposits. Anyone can’t become a member of a credit union but those who share the common bond of the credit union. Credit unions are not for profit organizations but they enable savings and make the availability of money for the members at minimal costs. Credit unions aren’t bound to pay taxes and may get subsidized as in availability of space etc.

3. If a bank had to keep all of its deposits I the reserves, then the bank won’t be able to lend out any loans and will not make profits. In this way, the banks will not be able to affect the money supply in the economy. The money will not circulate and will not be able to earn more money.

4. a) A banks loan creates money as the bank lends out loan, it doesn’t hand over the loan amount to the borrower, rather it credits his/her account with the amount of the loan. Now the borrower has to pay back the principal amount and the additional interest on the loan. In this way, more money is created by lending out loans.

b) The extent to which bank can create money is limited by these two b/c firstly, a bank cannot lend money that it doesn’t have. A bank needs to have the amount of money that it wants to lend out as deposits. Secondly, the reserve ration requires the bank to reserve a certain amount of money with the central bank. This is the amount of money that the bank can’t invest or lend out. So inability of the bank to invest and lend out hinders it from creating more money through interest earnings.

c) The amount to which the deposits can be expanded can be found out by the following formula.

ADD= AER/ r,

Where AER is the excess reserves I the banking system and “r” denotes the require reserves ratio. So the money that banks lend out circulates through the economy and creates more money.

Chapters 1-3

Economic Questions and Answers

Student’s Name

Insitution

It means that without scarcity there would be no need for economics. Scarcity means unlimited resources, which are used in the economics.

Production possibility curve is defined as the curve, which indicates the combinatiions two sets of goods that can be produced with limited resources. It is used to measure the highest output of goods or products using the input.

K 80 tones

Production cost is the benefit, which is given up when one investor or a business decided to pursue an altenative over the another. It is simple the opportunity, which is missed when an an investment means.

85

I would tell the government to increase production is going on well. The government need to produce more neccessities and reduce luxuries. This is because majority of citizens need neccessarities than luxuries and therefore, it is meeting the objective of the economic growth.

The chances of success if high it has more neccessaritie than luxuries.

I disagree. Market economy is more efficient because it is determined by market factors such as competition, prices, demand and supply and others. The demand economy is directed by government and therefore, very rigid and always scared investors.

The U.S. abondoned central planning so that it ignite its economic growth. The central planning was highly critized by the European and therefore, it was abondoned so that it can attract investors.

Former Soviet Union countries are trying to develop market economy to attract investors, and to expand its economy beyond the central ideas.

To reduce overhead expenses and increase sevrices delivery to customers. Technlogy is meant to help an organization to increase profit and improve services to the people and therefore, these are what insurance company, a dress market and sales clerk would consider.

I agree. It is because in market economy suppliers and other stakeholders determine their own prices and sometimes hold products to spaculate and this hurt the economy.

I agree. Because it does not affect the majority of people.The U.S. has the highest GDP while majority of its citizens are also live in poverty. This means that the economic impact to the lives of people is less. The poorest does not gain from the economic growth and this is an injustice to the people.

Graphic and Supply and Demand

Graph

Figure 1: demand and supply graph

The grpag shows a supply curve

It moves negative because it indicates the a decerese in supply of goods.

It shows a demand curve

It shows a increase in demand, which is a positive effect

The equilibrium is $4

Analyze the political Carton

It represents the people or citizen of middle or upper income class in the society. The property on the background can indicates the possession of the property.

The eminent domain limits the right of people to own property because the government has the right to possess an individual property and convert to puiblic use. This therefore, limits the owenrship of property by individuals because nobody knows when or how the government would claim possession of his or her property.

Class Assignment

Milton Molina

Class Assignment

8th April, 2019

Throughout the life of the United States, international immigration has played and continues to play a major role. The United States is fully indebted for its rise in international immigration and, above all, immigration from European countries. Immigration is one of the fundamental factors for the growth of the US economy. The contribution of immigrants to the production of GDP was particularly significant in the postwar years. A number of enterprises founded by immigrants are considered to be the flagships of the American economy. Despite significant public spending associated with immigration, in the end, the balance between income and expenditure from immigration is positive, which contributes to the welfare of the whole nation and the country's stable geopolitical position on the world stage (Chiswick, 1982).

The main factors of immigration to the United States throughout the time were economic, political and religious. The problem of immigration in any country always has several aspects - economic, social and political. The economic aspect is directly related to the nature and pace of development of the national economy, with the state of the internal labor market. The higher the growth rate, the higher the need for labor, which cannot always be satisfied with internal resources. At the same time, employers are interested in expanding the flow of labor, as this leads to a decrease in its cost and an increase in production efficiency. The current financial crisis has had a different impact on the American labor market. It was immigrants who suffered the most from it, the unemployment rate among immigrants exceeds that of the local population, and especially this disproportion is observed in the low-skilled segment of the labor market (Kerr et al., 2011). The main source of international immigrants at the stage of formation of the United States has become the countries of Western and Northern Europe. Gradually, their share began to decline, first they were pressed by people from Central and Eastern Europe, and, subsequently, from Asia, Africa and Latin America (Benhabib, 1996).

Proposed solutions

Firstly, it is necessary to create conditions for attracting immigrants to permanent residence, primarily for compatriots from the CIS and Baltic countries in the quantity necessary to replace the natural decline in the population of USA.

It is important to pay special attention to the search for mechanisms to attract labor immigrants, primarily highly skilled workers and young people. To address this issue, it is necessary to use the accumulated experience of developed countries, in particular the United States, as the main magnet of attraction for highly qualified personnel.

create a new immigration channel for USA - business immigration. In all developed countries, legislation provides for significant preferences for those immigrants who are willing to invest their money in the economy of the host country. Taking into account USA specifics, a differentiated approach is proposed to establish the minimum amount of investments and create jobs for local residents. In order to stimulate migration to the border areas of Siberia and the Far East, the minimum amount of investment should be significantly lower than, for example, for the central part of USA. Also the branches in which immigrants invest funds should be subject to differentiation. For example, if an immigrant plans to open a manufacturing enterprise, the amount should be significantly lower than if he opened an enterprise. It engaged in trade or services. We have proposed an appropriate method of calculation, allowing potential immigrants to choose the most suitable option for them.

The potential of educational immigration should be more actively used. USA has a unique educational and scientific potential.

It is necessary to reduce emigration from USA. The solution of this problem requires the adoption of immediate measures aimed at reducing emigration, especially of the working-age population.

References

Chiswick, Barry R. "The gateway: US immigration issues and policies." (1982).

Kerr, Sari Pekkala, and William R. Kerr. Economic impacts of immigration: A survey. No. w16736. National Bureau of Economic Research, 2011.

Benhabib, Jess. "On the political economy of immigration." European Economic Review 40.9 (1996): 1737-1743.

Class Evaluation 1

Class Evaluation 1

[Name of the Writer]

Student I.D

[Name of the institution]

[Date]

Class Evaluation 1: The Economics of Collective Choice

Economics is the field of social science that deals with all the problems and issues related to the economy and economic agents. Government is considered as one of the key economic agents in the field of economics as it has the power of decision making, to implement and change economic policies that may affect the country in one way or another. In this essay, the summary of a book "The Economics of Collective Choice" written by Joe B. Stevens published recently in 2018 is analyzed with respect to all the crucial concepts of the economics of collective decision making (Stevens, 2018). This book is the in-depth description of all the matters concerning the government's ability and role in the economics markets, rational public choice and the collective decision making for the economy. The book comprises of eleven chapters, all of which are addressing the different dimensions of political economy.

The chapters relate to the concept of collective choice in economics covering the elements and examples with the linkages (Stevens, 2018). The basic objectives of the book are to make the students understand the strengths and shortcomings of the political system under the economic efficiency criterion. The main idea behind the comprehension of those concepts in the book is to inform the readers about the economic reasoning behind certain political actions. All the political representatives that take charge of the official seat they are appointed to work according to the efficiency and equity criterion of economics models. Political institutions and economic approaches strive together only when the entities like voters, entrepreneurs, elected representatives, firms and markets have self-interests in the political outcomes (Hardin,2015). This is not a favorable situation but it still exists due to the mechanism of how markets actually work.

The problems we have in the economy today is the interaction of government with the markets and conflicts that arise due to their clash. Not always will be the markets efficient and same goes to fairness. Markets can also give unfair competition due to the unequal distribution of incomes which will lead to market failure at this point. This is why here political stance comes into play to turn the self-interest into collective interest and the joint provision of public goods and services to reduce the unfairness. The government will intervene in this case and will participate to make some entities worse off by voluntary acceptance of coercion and through voting (Tideman, 2017). Due to this reason, there is a need to have a representative government which can tackle the problems he markets failed to solve for the economy (Brim, 2017). There is a strong demand of citizens and firms both for political actions as they want to be protected under the shadow of an institution that has the power to bring legislative change. The supply for this political action is provided by the legislators when they are elected in the elections with the help of voting done by citizens, interest groups, firms, and businessmen.

Like markets, governments often fail too and the leading reason behind this failure is their shift from collective interest to self-interest. They are formed to serve the collective interests of the whole economy and not the self-interests of the legislators. The objectives of the markets and government are entirely different from each other and they should be used to facilitate one another not to replace each other in competition. Working of market and government together is very e essential for the whole economy as one will ensure the efficiency and effectiveness while other institution will manage to bring equity and fairness in the economic system.

References

Brim, O. (2017). The economic theory of representative government. Routledge.

Hardin, R. (2015). Collective action. RFF Press.

Stevens, J. B. (2018). The economics of collective choice. Routledge.

Tideman, N. (2017). Collective decisions and voting: the potential for public choice. Routledge.

Classical Or Keynesian

Classical or Keynesian

[Name of the Writer]

[Name of the Institution]

Classical or Keynesian

Question 1

Classical theory is based on the premise that how the monetarism plays an important role in the progress of the economy. The only concentration here is to make sure that how the management of the money supply is needed to be carried out. They are of the perspective that how it can be made sure that the monetarism plays an important role in terms of the stimulus is needed to be provided to the economy. Comparing that with the Keynesian perspective, it can be seen that the government needs to make use of the money and other considerations to make sure that the fiscal policy is setup in an appropriate manner. The idea is that the government must be driving the economy at any point of time. Keeping in mind the current state of the economy, the classical perspective where more hands-off style is being used is needed to be pursued to bring level of control the economy.

Question 2

The government has an important role in terms of how the management of the resources is supposed to be done. The idea is to make sure that the government should be taking care of the economic matters and intervening in the market correction or should they allow the market forces to dictate the term is something that has been a subject of discussion among economists for a very long time. The key fact that has to be kept in mind though whenever there is an attempt by the government to bring about the control in the market failure, more often than not that attempt has not been successful. In the well-functioning society, the government would ideally take care of the fact that how the maintenance of the contract is being done and would also make sure that the environmental and other market constraints are being looked after.

References

Fisher, I. (2016). Elementary principles of economics. Macmillan.

Loasby, B. J. (2018). Equilibrium and evolution: an exploration of connecting principles in economics. Manchester University Press.

Marshall, A. (2017). Principles of economics: unabridged eighth edition. Cosimo, Inc..