"Italy remained poor and backward despite all of Mussolini's Attempts to promote economic growth"
"Italy remained poor and backward despite all of Mussolini's Attempts to promote economic growth" Mussolini had inherited an Italy with limited resources. The industrialisation of the north and modernisation of agriculture left the south behind with its mass poverty and lack of education. Mussolini believed in will power as a driving force in society. The battle for the lira, grain and marshes were used to mobilise the Italian people who struggled to achieve these targets. In 1926 Mussolini engaged in the Battle for the Lira. In October 1922, the lira was fixed at 90 to the pound and had been falling rapidly since. The economy was deflated to drive up the value of the lira, however this drove up the price of Italian exports seriously harming the economy. Small firms were taken over by larger ones. This serious deflation caused government imposed wage cuts of 20%. The battles' good intention of returning economic stability was a lost cause that forced the government to devalue the lira in 1936. The battle for grain in 1925 aimed to promote economic growth with autarky to reduce the need for grain imports and make Italy more independent. To make this possible high tariffs were imposed on imported grain and government grants were made available to farmers for machinery and fertiliser. Although cereal production doubled other forms of agriculture were hard hit, which raised
"Low pay is directly related to low productivity." Discuss.
"Low pay is directly related to low productivity." Discuss. Suggested answer : Wages are the reward for labour and is determined by the Marginal Revenue Productivity Theory in a perfectly competitive labour market. According to the Marginal Revenue Productivity Theory, marginal revenue product is the product of the marginal physical product and the marginal revenue, i.e MRP = MPP x MR. In a perfectly competitive labour market, the marginal revenue productivity curve is downward sloping and relates the quantity of labour employed to its wages, hence it is also the demand curve for labour. As all firms are price takers, thus at equilibrium, according to the theory, profit-maximising firms will employ up to the point where MRP is equal to the wages paid (since marginal factor cost = average factor cost.) Low pay is partly due to low productivity, but it can also be due to many other reasons, like the difference in the marginal revenue of the final good produced with labour, supply reasons or market imperfections. Hence low pay is related to low productivity but only partly and not all the time. Generally, when demand is high (D1), wages received are high (W1) and when demand is low (D2), wages are low (D2) as shown below. Hence, low wages can be due to low demand, (MRP) which in turn is due to low productivity (MPP) and/or low prices (MR) of the final product.
Outline the argument for and against smoking ban
Outline the main argument for and against creating a smoking ban in public areas. Is it good overall - justify your view Smoking is a de-merit good. This means that it is over-provided in a free market economy. The price mechanism has allocated too many resources than is socially desirable. Smoking is over consumed, as shown in the diagram below: The MSC (marginal social cost) and the MPC (marginal private cost) are not the same. They diverge. This is because society experiences a different cost from the good being consumed than the individual. The demand side is the same hence why MSB = MPB. The individual is happy when MPB = MPC, (10 a day). Therefore they consume where the red and green lines meet. Here their MPC = MSB so they are happy. Society is happy when MSB = MSC. So they want people to consume where the pink lines meets the green line. MSB = MSC (5 a day). Below 5 a day both the MSC and MPC are below MPB and MSB. So both society and the individual wants to consume the good. Above 10 a day the MSC and the MPC are above the MSB and the MPB so neither the individual or society wants more than 10 cigarettes a day. However in between 5 and 10 cigarettes a day, the MSC is above the MSB so society does not want to have that many cigarettes. The MPB is still above the MPC so the individual does want to have 6 to 10 cigarettes but society does not want them to. It can
" Discuss the argument that privatisation and deregulation of electricity supply in a number of advanced economies has led to an unusually high number of blackouts in the recent period."
Introduction to Economic Analysis (Micro) Essay Question - Autumn 2003 " Discuss the argument that privatisation and deregulation of electricity supply in a number of advanced economies has led to an unusually high number of blackouts in the recent period." As we have seen over the last few years in the world's leading countries, e.g. Britain, USA, and other European countries have faced the problem of blackouts which caused chaos in many regions of the country. There are several reasons which caused the recent blackouts - Privatisation and deregulation are among the reasons why recently blackouts have occurred. Thus, we will be looking at the structure of the market and why the electricity supply are differ during the state owned and after privatisation in terms of the cost structure of the market, and other factors which have an affect on post - privatisation market. The cost structure we are likely to find in the provision of electricity is what we called a "Natural monopoly" . By the term natural monopoly, means that a firm becomes dominant in the market resulting from another firm in the industry is not large enough to reduce their average cost to minimum while the average cost of natural monopoly firm keep falling as
"Discuss and evaluate the proposition that perfect competition is a more efficient market structure than monopoly."
ECONOMIC'S ESSAY "Discuss and evaluate the proposition that perfect competition is a more efficient market structure than monopoly." Adam Smith said that competitive forces function like an "invisible hand" to ensure that people pursuing individual interests simultaneously serve interest of society. Competition among economic agents would therefore narrow selfish interest of each person in a sociable desirable direction1. Therefore perfect competition would lead allocative or economic efficiency. On the other hand monopolies could lead to lower cost due to economies of scale. Although in the real world it is very difficult (almost impossible) to have a pure perfect competition or monopoly, both of them, in theory, bring benefits to society. In order to evaluate whether perfect competition is a more efficient market structure than monopoly, there has to be a direct comparison between the two market structures to draw conclusions. In theory, the existence of positive economic profits in any given industry attracts new firms, therefore the supply increases and the price lowers to the point where normal returns are earned by the representative firm. Perfect competition is a market model. It has various characteristics. The market contains a large number of buyers and sellers. Each buyer and sellers has a perfect knowledge about prices and product. The product being sold is
Monopolies that make super normal profits aren't in the public interest because they could charge a lower price than they do.
Title: Monopolies that make super normal profits aren't in the public interest because they could charge a lower price than they do. Introduction: Monopoly is an emotive word, and the immediate reaction is that it should be replaced with competition. In this investigation we are going to look at what is a monopoly, what are barriers to entry and what types of barriers there are, what are normal and supernormal profits and to they bear any benefits to the public. What is a monopoly? Monopoly is a market situation in which there is a single seller of a product and there are no close substitutes of this product in the market. The firm has all the market to its self and the customer depends on the firm for the supply of the product. The monopolists are the industry and the firms demand curve is also the market demand curve. In this case the firm has some discretion over the price it charges. The firm may increase or decrease the price with out fear of retaliation form other firms. We may consider that there is no interdependence in this market, there in one firm only. Finally it is worth mentioning that the firm may change its demand curve by for example, advertising. (Introductory Economics, a first approach to the study of economics by Mike Cunningham 1994) Why do monopolies exist? There are several reasons. The source of Polaroid's monopoly power is its
What will happen to houses prices in five years time?
What will happen to houses prices in five years time? Introduction For millions of Britons their property is not just a roof over their heads it is a passport to financial security and even a pension. Anything that endangers the seemingly never-ending rise in house prices is always news. The aim of this coursework is to find out what the house prices will be in five years time. I am going to research the housing market on the internet and send out questionnaires to a range of estate agents. In Gordan Browns 1997 budget speech he said, "I will not allow house prices to get out of control". However ten years on and they have spiralled leaving thousands of people unable get onto the first step of the property ladder. So do we now need a crash in the housing market to level the playing field once more? Are crazy house prices creating a new generation of renters unable to buy? I believe that house prices will steady and will not rise to much in the next five years as there is currently a crisis with first time buyers who cant afford to buy their own homes. However I don't believe there will be a decline in house prices as therer is still a great demand. Background On Tuesday the 2nd of October, the Office of National Statistics (ONS) said that UK house prices had raised by 204% in the past decade compared with a 94% increase in average wages. In the past year alone,
Outline and critically assess J K Galbraiths argument that it is not the market but a planning system that drives many capitalist economies
Outline and critically assess J.K.Galbraith's arguments that it is not 'the market', but a 'planning system' of large corporations that drives many capitalist economies. Over the past 30-40 years the world has seen a significant rise in the number of TNC's that operate and it is safe to say that they are very important to many economies as they dominate their business environment. Anyone who disagrees should consider the following facts; * 1/4 to ? of all world production is controlled by TNC's * The biggest 500 large corporations control 70% of world trade and 80% of all overseas investment (FDI) * The total combined revenue of the biggest 200 corporations is greater than the combined revenues of the 182 national economies that make up 80% of world population. * The combined profits of just two of the biggest automobiles companies in the world (General Motors and Ford) surpass the GDP of all of Sub-Saharan Africa. * In the early 1970's there were just 7000 TNC's whilst now there are almost 8 times as much with 53,000 TNC's (quote) Neo-classical economics (i.e. traditional textbook economics) views capitalism as a market system with government intervention where necessary (most often when markets fail). Power is spread between each small firm and decisions are made independently of each other. J.K.Galbraith in his 1967 book "The New Industrial State" argued
Microeconomics. How is elasticity a useful concept for firms and government?Consider a local bus company. How (if at all) does the marginal cost of providing transport for each passenger vary according to the time of day?
Microeconomics Coursework . How is elasticity a useful concept for firms and government? Elasticity, which according to A.Neale and C.Haslam "Economics in a business context" is a term "used in economics to describe the relationship between a proportionate change in one variable and a proportionate change in a related variable". Plain-speaking it is the measure of how one aspect of a products make-up, be it the price, or supply of available substitutes, will affect another. Elasticity demonstrates the relationship one factor such as price has on another such as demand. It is a useful concept for firms because the main goal of any organisation is to maximise profits. A firm will not just increase the price of a product without investigating the possible effects on demand. Elasticity can be used by a firm to clear a surplus. It is a useful concept for Government because it is important that they know what to collect indirect taxes from. Petrol, cigarettes and alcohol are often targets for taxation, whereby the government can receive an income to spend on public services. These items have a low price elasticity of demand, that is the consumer will be less likely to buy another product should the price be changed. The main determinants of elasticity include: Availability of substitutes, the period of time, the product price in relation to the income of the consumer, the price
Income and Price Elasticity of Demand
A guide for income elasticity of demand Income elasticity of demand measures the relationship between a change in quantity demanded and a change in income The formula IED = % Change in Quantity Demanded % Change in Income Levels The numbers If IED is LESS than 1 it is income INELASTIC. If IED is GREATER than 1 it is income ELASTIC. Higher the IED the more responsive demand is to a change in income. Lower the IED the less responsive demand is to a change in income. Plus or Minus Significance NEGATIVE - = INFERIOR GOOD POSITIVE + = NORMAL GOOD Inferior Good Inferior goods are when demand for a product falls, income levels rise. Normal Good Normal goods are when demand for a product rises, income levels rise. Necessities and luxuries are normal goods. Examples of necessity would be toilet roll. Examples of luxury goods are expensive cars and designer clothes. Between 0 and +1 is a normal necessity. Greater than +1 is a superior/luxury good. Example In this current climate people income decreased and started to buy more inferior goods. E.g. Before the recession people would have bought Andrex toilet roll, however in the recession they would have bought supermarkets own brand toilet roll which would be a lot cheaper. Usefulness Using the IED formula a business can work out the change in quantity demand if the income level changes. This way they can
