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International Baccalaureate: Economics
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* External Equilibrium- Balanced Payments, which are imports and exports. * Full Employment- This is when there is no unemployment rate, and all labour is in use. * Economic Development- The increase in standard of living. * Price Stability- When the average price level neither rises or lowers. Ways To Calculate GDP There are three ways to find the GDP of a nation, and in theory, they should all be equal. * First of all there is the expenditure method.
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last year, 14 per cent higher than in 2007, while sales increased 4.5 per cent to �114bn as VW sold 6.3m vehicles." This situation is shown in figure 1. There was a shift in demand curve to the right, from D1 to D2, as sales increased. VW sales increased from Q1 to Q2, and they could set higher price for their cars, which increased from p1 to p2. Car market is a type of a monopolistically competitive market. Monopolistic competition has two basic assumptions.
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The International Energy Agency said that demand among industrialized nations will fall 2.2 percent this year. To understand what's going on, we need to understand some key concepts. Equilibrium: Market equilibrium refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. In absence of external influences, equilibrium will not change 1: If there is a shift in the demand curve towards the right, there is an increase in price per unit quantity 2: If there
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Work Count: 279 Introduction Human rights are international norms that protect people from being politically, socially or legally abused and refer to such basic principles to which all people are entitled as liberty, freedom of expression, equality before the law and other social, cultural and economic rights. Gender equality is one of the most important parts of human rights. It is also one of the most significant and valued principles of democratic society. Gender equality is associated with equal presentation, positioning in the social hierarchy, possibilities and responsibilities for both, men and women, alike.1 It is also amplified that equal
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Thus more industries emerge in urban areas, a reason for urban biased development: 10 of the nation's top metropolis accounted for 30% of government's spending on infrastructure. With China's strong outward-led growth strategy, demand for industries that have a comparative advantage increase, eventually the urban bias will worsen. According to "trickle down theorists" the early stages of industrialization must be accompanied with inequality; as urban industries have a higher productivity, it should produce. Yet even as the general population of China experiences an increase in income, there are reasons that the trickle down effect will fail and inequality will not be resolved.
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in the airplane market has decreased for airplane production. To maintain a somewhat stable price, jobs will be reduced, shifting the short term aggregate supply curve (SRAS) inwards. The objective of most firms is to gain maximum profit, and if Rolls-Royce is thought to be amongst the majority they will be concerned about ways of cutting costs. The easiest factors of production (FoP, resources used in production of goods and services, i.e. land, capital, labour and entrepreneurship) to cut costs is labour costs.
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Rubber market in producing country Prubber S' S S'', Es < 1 S shifts due to changes in weather P' P fluctuates greatly P P'' Drubber, Ed < 1 q' q q'' Qrubber Since total revenue (TR) equals price times quantity, we see that when the demand is inelastic, rubber farmers will have a loss in incomes when supply increases and hence prices fall. Yet supply of rubber will increase in the long run as the number of countries increase, meaning more suppliers enter the market.
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Internal economies of scale are enjoyed by Novartis for the following reasons. Firstly, as Novartis becomes larger, it would increase its production quantity by bulk buying larger numbers of inputs, thus gaining from commercial discounts. Interest rates from borrowing will also be lower as the firms will have more assets and it would be less risky to lend to them. Secondly, with a larger scale specialists can be employed to monitor the production, leading to efficient production. Also, since Novartis is based in Switzerland, Hexon in Germany and Eon in US, by increasing the firm's geographical presence it is diversified into these different countries with different market demands, so the risk of fluctuating demand is lower and more stable.
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An ad valorem tariff refers to a tax that is expressed as a percentage of value of the commodity. The purpose of tariffs is to raise the revenue to finance the activities of the government; this can be imposed on both imports and exports. Another purpose is aim at restricting import. This will result in higher prices of imported goods relative to the prices of domestically produced goods. This will encourage domestic consumers to buy domestically produced rather than foreign goods. This in some way partially protects domestic industries. Considering the effect of a protective tariff in a case of a small country, it is a price taker and foreign industry is willing to supply as large a quantity as the country wants to buy at the world price.
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To avoid a possible government ban in exports, wheat exporters accepted in lowering their own sales abroad. After encouraging wheat exports in 2006/2007, the government finally rised taxes in wheat exports, which discouraged wheat cultivation. As the weather didn't helped the farmers, their output (the produced good) was reduced. The graph shows a shift right in supply (the amount of goods available to sell), which explains why the producers of wheat had to increse their prices since the drought really damaged the whole wheat plantation.
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Often, developing countries donate aid to developing countries in order to help them out financially or with materials. Recently, Dubai Cares had a joint venture with UNICEF (The United Nations Children's Fund), its third venture so far, to initiate primary education programs in Yemen. Their main goal is to promote girls' education and to get all Yemeni children to go to school.
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Recently, scientists predicted that in the future, countries will be going to war because of water supply. If countries start going short of water, then jealousies will start to arise which will lead to water wars and each country will do everything in its power in order to claim property over whatever water supply they can get; in this situation, the weaker country will fall and lead to more people who cannot have access to fresh water. They have also estimated the global demand and predicted that 'the world is heading for an ecological credit crunch as human demands on the world's natural capital reach nearly a third more than the earth can sustain.'
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This is illustrated in the following diagram: As is evident from this diagram, the SRAC curves have a U-shape. The first part of the curve shows that the average costs decrease as the output increases. Yet in the second half of the curve the opposite is shown; the average costs actually increase as the output continues to increase. This has to do with diminishing marginal returns (DMR). Up to the point on the curve that hits the dotted line, the marginal physical product (which refers to an addition to total physical output as a result of using one more unit of input)
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Figure 1: Production Possibility Frontier Curve (of $700 billion): A B National Debts C E D Bailing Out Figure 1 demonstrates that if the $700 billion is prioritized to for reducing national debts, then there will be an opportunity cost for the that decision since the bailing out the banks become the second best choice (represented by A). On the other hand, if government provides the $700 billion to overcome the financial crisis then they have to abandon in reducing the national debts as it becomes its next best alternative (represented by D).
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According to the National Cancer Foundation of the United States "Approximately 3,000 lung cancer deaths occur each year among adult nonsmokers in the United States as a result of exposure to secondhand smoke" (National Cancer Institute) The National Cancer Institute also states that not only does second hand smoke increase the risk of lung cancer but research shows that it also increases the risk of adults developing breast cancer, nasal sinus cavity cancer. Second hand smoking not only affects adults but children too.
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In this case the US government has to decide whether to save the polar bear's habitat or to allow the energy companies to use that territory for oil extraction. So we have an opportunity cost, because we have a scarcity of resources, here we have 30 million near the Chukchi Sea acres to be used in one way or another. This situation represents very well the economic problem, where we have a scarcity of resources and unlimited wants, and this lead us to choice so opportunity cost.
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Marginal revenue (MR) is the change in total revenue that arises when the quantity sold changes by one unit. Since perfect competition is a market form in which no producer or consumer has the market power to influence prices. Therefore, in this form of market marginal revenue always equals the average revenue because the demand (D) is perfectly elastic. As a consequence the price equals average revenue and marginal revenue, P=MR=AR. Profit maximization always leads the marginal cost (MC) to equal marginal revenue (MR).
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This will tell us whether or not the branded retail stores (which are present in the mall itself) have made an impact on local clothes stores, and whether it was positive or negative. How did the malls affect the demand for the products in the local retail stores? This is an example of the different aspects that could be examined during this investigation. Another aspect to be looked at could be whether the local stores would be able to endure the heavy competition brought in by the new malls set up in the area. It is important to realize that malls have an advantage in terms of advertising and capital (in terms of labor).
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Although cartels are illegal in many countries because they drive up prices and profits against the public interest, some firms simply break the law or find a loophole. With loopholes firms may only tactically collude by regulating their prices in a similar fashion to others' and avoid price wars or aggressive advertisement campaigns.
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* Constant returns to scale. Diagram-1, 2 are the production possibilities frontier for both countries before trade. It explains all the possible outputs of these two goods given the employment of all the available scarce resources. Therefore, an increase in the production of one good means a decrease in the other. Note that before Country A entered into the trade agreement with Country B, it is consuming 150 units of computers and 150 yards of clothes. Country A has an absolute advantage in the production of clothes (employing all the available labor hours). And that Country B has an absolute advantage in the production of computers. However the concept of absolute advantage is not always necessarily true.
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Merit goods mean healthcare, education and training for workers and unskilled labors. Through the investment in merit goods the economy will achieve skilled labor and unemployment will decrease. The Egyptian government suffers from job losses which came as a result of privatization (transfer of property from public sector to private sector). This is because the government stopped subsidizing the firms and therefore the firms gave up some of their employees. However, increase in investment will decrease unemployment in the economy because when investment is increased there will be more business and firms, there are more jobs that are available for workers especially if they are skilled.
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Mr Kant said Jaguar and Land Rover managements remained autonomous but he felt they should pursue the India opportunity quickly to help make up the deficit in western markets. Jaguar, which has recently released popular new models, has been selling relatively well in spite of the crisis but Land Rover sales have been hit badly. Mr Kant suggested Tata Motors also facilitate other opportunities for its new subsidiary, particularly Land Rover, in areas such as defence. Tata Motors is already a significant supplier to India's defence industry.
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Externalities can either be positive externalities (exists when the production and consumption produce external benefits that may go valued improperly by the market this means that the marginal social benefit of production and consumption rise above the marginal private benefit) or can be negative externalities (exists when the production and consumption produce external costs that may go undervalued). In this article throwing uneaten food by householders in United Kingdom is considered as a negative externality. When families throw away a lot of uneaten food it will keep piling up to form a mountain of rotten food.
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The exchange rate on the black market is primarily determined by the bond market. A government bond is considered to be the most secure investment in Venezuela. The government owes the holder a debt and is obliged to repay the principal and interest at a later date. When the Venezuelan government sells bonds, the money used to buy the bonds is being removed from the economy. This decrease in the money supply will increase the value of the Bolivar on the parallel market. Conversely, the money supply would increase if the government were to buy bonds on the open market.
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China's government is not pleased with this and it is try to protect its industry. U.S is using protectionism, which is the restriction of international trade. It prevents consumers and producers reaching the equilibrium price and quantity that would happen in a free market. One way to enforce protectionism is Quotas take the form of a physical limitation on the quantity of a commodity which is allowed to enter the country in a given year. What U.S is doing to Chinese textiles is that it is dropping its quota by $ p million dollars from the "$6 billion annual quota".
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