#### To what extent will does correlation and extrapolation assist Nintendo in forecasting sales?

To what extent will does correlation and extrapolation assist Nintendo in forecasting sales? (34 marks) Correlation is the relationship between two variables. Extrapolation is related to correlation, as it involves plotting a linear regression curve (also known as a line of best fit) which is based upon how two variables are correlated, and extending the line to predict future values. For Nintendo, a computer game and console manufacturing company, a common example would be the relationship between the level of advertising expenditure and the effect of this on sales of its products. The graph to the left shows a strong positive correlation between sales and advertising, meaning if Nintendo increases its advertising, they can expect to see an increase in sales. Because all values are close to the line, as advertising expenditure increases on the x-axis, sales on the y-axis increase proportionately. The regression line can be extended past the '80' figure (meaning £80million) to predict what sales will be like if they spend £100million or even £900million. The uses of such analysis to Nintendo are to an extent very valuable. By creating a scatter graph like the one above, Nintendo can spot trends and forecast future events. For example, they could estimate demand at a certain point in the coming year. One would expect demand to surge at Christmas time when people are

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#### Explain how economists model how an increase in government expenditure can lead to a greater increase in national income.

Explain how economists model how an increase in government expenditure can lead to a greater increase in national income. Ans. National income is the total amount of wealth that accrues to the permanent residents of a country as a result of the production of goods and services within a country during the course of a year. It is important to measure national income because it shows whether the standard of living in a country is rising or falling and it can be used as a means of comparison between other countries. It is also useful to measure income against past income in the same country to see whether the economy is growing or declining. An increase in government expenditure is an injection in the circular flow on income. An injection is an addition to the circular flow of income. The diagram above illustrates some of the injections and leakages in the economy. It is however very important to find out exactly what will be the effect on the economy from an increase in injections. Economists do this by calculating the multiplier effect of the increase in the government expenditure on the economy. The multiplier indicates how many times that the injection of original spending circulates through a local economy. As a result of re-spending, it benefits the local people. The formula for calculating the multiplier effect is 1/(1-MPC). When there is an increase in the

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#### Sainsbury's organizational structure.

Task 3 (E4, C2, A1) Sainsbury's organizational structure Businesses are structured into different into ways according to the way they operate and according to their culture. The structure of business can affect the way it works and performs. You need to understand the differences between the following types of structure: * Tall * Flat * Matrix * Hierarchical Flat and tall structure:- The term 'scalar chain is a rather old fashioned one and stems from the days when large organizations were bureaucratic, with lots of layers between the top and bottom. Scalar chain refers to the number of levels within the structure or hierarchy of an organization. The scalar chain set out the authority, responsibility and the framework that determined superior and subordinate relationships. The idea of setting out everyone's role and position is to make it clear who is responsible for what, and that there is clear line of authority. Matrix structure:- A matrix structure can be used to combine the grouping method we have identified. In such a matrix it is probable that each member of the organization will belong to two or more groups. A matrix is thus a combination of structures, which enables employees to contribute to a mix of activities. The matrix enables the organization to focus upon a number of aims at the same time, and gives it the flexibility to respond to new markets where

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#### Econmoic Concepts behind the uk oil industry

.Explain the following economic concepts in the context of the UK oil industry: a) Economic Resources b) Specialisation c) Money and Exchange d) Markets A. There are four types of resources available for use in the production process. These are land, labour, capital and enterprise or entrepreneurship. These resources are called the factors of production. With land it doesn't only deal with the actual land itself but all the natural resources about and below the land and sea. Land is split up into two types of resources, these are renewable and non-renewable, which then filter down further into sustainable and non-sustainable resources. Renewable resources are resources which once used are able to be renewed. For example fish stocks and forests. These are then only sustainable if even with economic exploitation, like fishing and commercial logging, the number of fish and trees don't diminish or run out. If for example it was found out that under the forest there is a large amount of oil then the forest would be totally cleared to make way for people to dig and collect for the oil. In this case the forest would have ceased to be a sustainable resource. Non-renewable resources are non-renewable in the fact that once used, will never be replaced. Oil is an example of a non-renewable resources as once it has been used, say for fuel for your car, there is no way to again use

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#### Would It Be Economically Beneficial to Britain to Introduce An Obesity Tax?

Would It Be Economically Beneficial to Britain to Introduce An Obesity Tax? Although obesity is a worldwide phenomenon in the 21st century, its impact varies between countries. Across the Channel in France less than one person in ten is obese, while in Japan it's less than one in twenty (see Figure 1 below). In England, at present 1 in 4 of all Britons have been declared medically obese - with obesity rates for both men and women surging in recent years (see Figure 2 below). It has recently been predicted by several tabloid newspapers and the BBC that - "Britain is an Obesity Time bomb"- 30th August 2009 (Sunday Express) with "Half of Britons Obese by 2050"-17th October 2007 (Daily Mail). However in this piece of coursework I intend to look at what has caused the rise in obesity over the last 50 years and whether an 'Obesity Tax' is a viable option. Ali Muriel - Taxing the Fat - 2005 - www.ifs.org.uk The Cause So why are the obesity rates in the UK rising at such an alarming rate? Many factors have been blamed such as the press, fast food outlets, TV's and a lack of exercise. However the implication seems to be that either people are getting hungrier (eating more) or they're getting lazier (exercising less). It is true that if you do less exercise and eat more calories then you will put on weight, therefore since more people are putting on weight it must mean that they

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#### Devaluation By Rughoobar Chidanand

Devaluation I. Introduction Devaluation, in economics, official act reducing the exchange rate at which one currency is exchanged for another in international currency markets. A government may choose to devalue its currency when a chronic imbalance exists in its balance of trade or overall balance of payments, which weakens the international acceptance of the currency as legal tender. The lowering of a currency value by devaluation occurs when a country has been maintaining a fixed exchange rate relative to other major foreign currencies. When a flexible exchange rate is maintained-that is, currency values are not fixed but are set by market forces-a decline in a currency's value is known as a depreciation. II. Causes The free-market value of a national currency is determined by the interaction of supply and demand. If the quantity of the currency demanded is greater than the quantity supplied, a nation will experience a balance of payments surplus. A balance of payments deficit exists when the quantity of currency supplied is greater than that in demand. The demand for a nation's currency depends on the amount of its exports, domestic investments, and assets held in domestic currency. A nation's currency supply on world markets depends partly on the amount of imports, investments abroad, and assets held in foreign countries. Ultimately, the supply of a currency

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#### Explain the main features of the behaviour of firms which operate in an oligopolistic market (10)

Explain the main features of the behaviour of firms which operate in an oligopolistic market (10) An oligopolistic market is one which has several main firms that dominate the market and the labour supply is concentrated around them. All firms are interdependent and the actions of one firm will directly affect another, all products are differentiated but there are close substitutes to them. Within the market there are high barriers to entry and exit and collusion may occur. A firms behaviour in an oligoplistic market is much dependant on that of the other firms. As there is no competition on price they must compete on other aspects of the marketing mix such as place and promotions, this means that firms will have to invest into Research and Development in order to improve their product and make it seem more attractive to consumers. In an oligoplistic market there are no diseconomies of scale due to the L shaped average cost curve as firms cannot compensate for them because of the kinked demand curve. Firms have to behave in this way as there is no room for price reductions as soon as one firm puts its prices down the other firms will lower their prices and this can lead to a price war. The kinked demand curve model assumes that a business might face a dual demand curve for its product based on the likely reactions of other firms in the market to a change in its price or

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Business Costs In a business there are three different types of business costs these costs are: Direct & Indirect Direct costs are expenses that can be attributed making a particular product such costs include factory labour, raw materials and operating machinery. Indirect costs are the general overheads of running a business for example; salaries, telephone bills and rent. Firms that make more than one product will want each one to earn enough sales revenue to cover its direct costs and make a contribution to indirect costs. If all the products together make enough contribution then the business will make a profit. Fixed & Variable Fixed costs are costs which do not vary. They are mostly indirect costs - Management salaries, telephone bills and office rent. They have to be paid even if the firm produces nothing. Variable costs are costs that cab change every time a bill etc... must be paid, these are mostly direct costs such as factory labour, raw material etc...Some costs are semi variable, they only vary slightly because they have a large fixed element, for example workers wages - most people receive a basic salaries and only part of their pay is linked to output. Fixed costs are usually only fixed over a short period of time, if a firm is expanding, it will take on more managers and rent more offices so the fixed cost will increase. A firm can work out their

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