Discuss the extent to which buses can be seen as a sustainable method of transport.
Discuss the extent to which buses can be seen as a sustainable method of transport. During the recession, buses have become an important part of people’s day-to-day routines, with many people using buses instead of cars as a mode of public transport. The preferred method of transport has changed over the years due to changes in technology, congestion and changes in incomes. There are various modes of public transport: cars, trains, air travel, trams and buses. The 1968 Transport Act meant that the National Bus Company served bus routes within England and Wales, yet in the 1980’s under Margaret Thatcher’s powers the bus companies become privatised. The reason she made the government have no direct intervention was to stimulate competition within firms and create a monopolistic competition. The main company in the market is Stagecoach and is still running and providing a service. Compared to other modes of transport such as privately owned vehicles such as cars, buses provide a service that allows less carbon emissions to be produced and more people to travel in one vehicle. This means that buses (if they are being used at full capacity) are helping prevent the negative externalities that arise from cars. Cars produce pollution and congestion and buses help reduce both of these. Social costs arise from using cars such as the vulnerability to fuel price increases and
Given the degree of government interference in market economies and the increased economic freedom in command economies, do you think the two types of economic systems will converge into one?
Introduction of Economic System An economic system is the combination of the various agencies, consumers, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money and so on are continuously flowing. In short, economic system is an organized way in which a state or nation allocates its resources and apportions goods and services in the national community. Market Economy Market economy is the economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning. Market economies work on the assumption that market forces, such as supply and demand, are the best determinants of what is right for a nation's well-being. These economies rarely engage in government interventions such as price fixing, license quotas and industry subsidizations. Free market system in which decisions regarding resource allocation, production and consumption, price levels and competition, are made by the collective actions of individuals or organizations that are seeking their own advantage. Command Economy Command economy is an economic system in which the means of production are publicly owned and economic activity is controlled by a
Discuss the effect on the behaviour of firms in spectator sports when profit maximisation is not their primary objective
Discuss the effect on the behaviour of firms in spectator sports when profit maximisation is not their primary objective (15) Spectator sports are a very complex type of market structure, with 2 main features of profit maximisation and club success, an issue for clubs is that weather they put sporting success ahead of profit, supporters surely want supporting success, rather than profit maximisation. The premier league has seen great diversity between super elite clubs, whilst others are facing falling revenue, endangering the competition of the league. The market structure is heavily segmented, with a larger number of spectator’s sports in any one sport, with different sports being a Weak substitute this is due to brand loyalty, as viewers will often mainly watch team For instance both Chelsea and Manchester city have spent vast amount of money in the transfer market to improve their strength of their team, by purchasing talented player and other staff. These clubs are backed by wealthy owners. Profit maximisation of player sales is not required; owners are more willing to peruse to improve the success of the club, this includes beating rivals, winning cups and leagues in the future. Number of owners of UK sports clubs especially within football, which don’t see their club as a business, owner of football club may see that success on the pitch may be in turn paying
In recent years, British Telecom, the supermarket industry and 50 private schools have been investigated by the competition authorities for limiting competition. Evaluate different ways in which governments could make markets more competitive.
In recent years, British Telecom, the supermarket industry and 50 private schools have been investigated by the competition authorities for limiting competition. Evaluate different ways in which governments could make markets more competitive. The term competitive markets is used to describe an economic environment where those selling and those buying exchange goods and services at a price controlled by that market. If the government wanted to make the markets of British Telecom (hence forth known as BT), the supermarket industry and the private school industry more price competitive the government could use policies which could be through removing or significantly reducing barriers to entry. An example of when this was used is when BT was privatised by the government, OFTEL forced BT to allow other companies to use its network. This made prices more competitive as it meant that they had to fight for customers with other companies. The government may also want to make the industries in question more quality competitive by encouraging more to be spent on research, development and design. This could be done by giving tax relief through tax credits specifically for research, development and design. The roles of the policies would be to increase competitiveness in both price and quality which shows a significant part of the industries which would make the markets as a whole
Using the data and your economic knowledge, evaluate the view that the benefits resulting from a more equal distribution of income exceed the costs.
Using the data and your economic knowledge, evaluate the view that the benefits resulting from a more equal distribution of income exceed the costs. The distribution of income is defined as the distribution of wages earned across a company, industry or country. I will be focusing on the distribution of wages earned across a country. There are both advantages and disadvantages of the equal distribution of income. If it was equalised and everyone earned the same amount, people would have less incentives to do more challenging but vital jobs (e.g. doctors) as they could get paid the same amount for doing an easier job (e.g. window cleaning). The graph shows the inequalities in the wage rate that would be removed but there would be a cost of implementing the more equal distribution of it. This would come from both people in the higher quintiles of wage rates shown in extract A. These are both major disadvantages showing that it may not be practical to implement equal distribution as they don’t outweigh the costs which would be public outcry, striking and many others. The advantages of implementing are that society would be more equal, making debts, mortgages etc easier to manage for banks as everyone has the same income. Also people are more likely to have a job as it would be the same as everyone else and far more worthwhile, as benefits would be far less. The inequality
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Discuss the view that government policies aimed at reducing wage differentials always do more harm than good. [20 marks]
Discuss the view that government policies aimed at reducing wage differentials always do more harm than good. [20 marks] The government can intervene and solve the problem of wage differentials in different ways. However there are different ways of tackling this problem therefore they use different polices for the short and long term. In a market economy individuals receive different incomes based on different supply and demand conditions, rewards will vary. If employees have a rare skill set and are limited and highly demanded then their earning will be significantly higher that someone who is pursuing a career with high supply and demand. Similarly individuals who own assets eg: homes and cars and so on. The value of theses depends on supply and demand as well. One way the government can reduce wage diffentials is by setting a minimum wage. A minimum wage will help those who’s bargaining power is weak, therefore individuals will have sufficient income to pay bills and have a fairly good standard of living. However it is hard to set a minimum wage as it is hard to put a price on the minimum amount one must be paid an hour. Also it raises cost for firms as they have to pay employees a certain amount, when the money could be used to expand the business. Another short term method of reducing wag differentials is by using progressive taxation. With a progressive tax,
Economics- Markets on the Move Questions
James Young “AS” ECONOMICS F581 STANDARDISED ASSESSMENT 2 MARKETS IN ACTION MARKETS ON THE MOVE Question 1 A market is either a place of trade or willingness to trade or exchange goods or services; markets allocate the scare resources within our economy. A competitive market describes a market a substantial amount of buyers and sellers, meaning that no single buyer or seller can influence market price or any other aspect of the market. In a competitive market, no single buyer or seller has market control. A competitive market can achieve full efficiency in allocating our finite (scarce) resources if there is no market failure or disequilibrium. The economist Adam Smith coined the term ‘Invisible Hand’ which illustrates the importance of a free and competitive market. Smith concluded that society is in turn better off when individuals try to maximise their own good and wealth, through trade within a competitive market, without any government intervention. He concluded that the ‘Invisible Hand’ can guide an economy in a free market, through competition for scarce resources. Although these economic principles may have applied at the time, this is not necessarily applicable now to some sub-markets- e.g. the education market. Presently, the economy is not as much of a free market as it once was in Smith’s time, as the government has a much larger input into
Herd Behavior in Financial Markets
Herd Behavior in Financial Market Definition of herding On Friday 14 September 2007, when Northern Rock in the UK opened it branches, many customers wanted to withdraw their savings and £1 billion, about 5% of the total bank deposits were withdrawn that day. And on Monday 17 September, a similar situation happened in front of Northern Rock branches in the UK. Even though every customer does not have the same amount of information, they all decided to behave in the same way and some were following the others on the following days without any clear plan. People thought that they were going to lose their bank deposits and that type of bank customers' behavior caused liquidity problem and made the situation even worse. However, none of the clients who kept their deposits lost due to the fact the British Government and the Bank of England would guarantee the safety of the deposits. How can we explain that kind of behavior? Originally Herding is a term meaning animal flocking behavior. And according to the definition of Wikipedia Herding is the act of bringing individual animals together into a group (herd), maintaining the group and moving the group from place to place-or any combination of those. Apart from this bank run case, Herd behavior describes how individuals in a group can act together without planned direction. POSSIBLE EXPLICATION AND MECHANISM OF HERD BEHAVIOR
Explain the Environmental effects of increased demand for road & air transport
Explain the Environmental effects of increased demand for road & air transport L1. Transport - the movement of people and goods for personal and business reasons Air Pollution - The combustion of fossil fuels causes most of the air pollution we experience in our towns and cities today. In the main, these combustion fuels come from engines and power stations in the form of carbon monoxide, carbon dioxide and sulphur dioxide. The conditions are often made worse by the congestion and high traffic levels we experience, as more and more people take to the roads. Negative externality - these exists where social costs of an activity is greater than the private cost, congestion is an example of a negative externality L2. An example of the environmental effects of increased demand for road an air transport would be: The USA and China are the worlds greatest polluters, and in the case of china, the fastest growing emitter of greenhouse gasses. Emerging economies such as Poland and India are also growing contributors to global emissions of CO2 although largely through industrialisation it is also a result of rising vehicle ownership levels. Overall, the UK is responsible for around 4% of all CO2 levels worldwide. L3. The ever increasing demand for passenger and freight transport in the form of both road and air is forecast to continue to increase in the foreseeable future.
Discuss the merits of road pricing (25)
Discuss the merits of road pricing (25) 4 L1. Road Pricing - a direct charge for the use of road space Negative externality - these exists where social costs of an activity is greater than the private cost, congestion is an example of a negative externality L2. For example, The London Congestion Charge - a flat rate indirect tax levied on all vehicles entering a designated charging zone between 7 am & 6 pm, Monday-Friday. It was introduced in Feb 2003 at the rate of £5 per day. It was ? to £8 per day in July 2005. In Feb 2007, the charging zone was doubled in size to cover a substantial zone in London. This is an example of hypothecation (a situation where revenue from tax is directly allocated to some other purpose) as most of the new revenue has been used to improve bus services Another example of road pricing is in Singapore you must buy a car permit for 10 years, which costs up to £75,000. L3. Road Pricing is beneficial to an economy as it is a way of internalising the external costs of congestion and makes the polluter pay. The fact that the 'polluter' now has to pay for the negative externalities exerted by the congestion they cause, means that they will be less likely to use their cars as often, to avoid the charge, or use alternative (more economical) means of transport such as the train or tube, or they may simply think twice about using their car if
