Competitive markets, free from government intervention are the best means of allocating society(TM)s scarce resources amongst its members.
Competitive markets, free from government intervention are the best means of allocating society's scarce resources amongst its members. While economists theorise about markets free from government intervention, regulated markets, though generally less efficient, are also functionally viable. It is through the analysis of both types of markets, and their relative applications within society, that economists can critically evaluate their effect upon the allocation of society's resources amongst its members. A competitive market is an economic forum run by supply and demand, where "price is a result of voluntary transactions1". A market free from government intervention is known as a free market, and under 'perfect conditions' is theorised to be the most efficient. However, it is only through the introduction of regulation, that these markets can be seen as more equitable to members of society. While perfectly competitive markets, in the long run, achieve economic efficiency, in reality, government intervention provides a legal framework to enforce contracts, monopolies, and political, economic, and environmental conflicts. Perfect competition provides a framework to achieve the desired outcome of workable competition, through effective regulation. A market economy free from government intervention is theoretically preferred in many ways, however there are some aspects of its
In manufacturing companies, the medium & long term is usually static comparing to short term (more dynamic).
(i) Introduction: In a manufacturing environment, in order to meet customers' needs to maintain our competitive advantage & market positioning, and also give an accurate and relatively certain forecast of our business, we use operations planning to calculate and schedule our medium & long term production activities(aggregate planning) and short term production activities, such as detailed work plan for individuals and /or collective production resources, for instance, in manufacturing environment, machines, labour ,departments(operations scheduling.) In manufacturing companies, the medium & long term is usually static comparing to short term (more dynamic). It is difficult to compensate short term mistakes, which may lose customers loyalties, lose market share. Internally speaking, it will make chaos in different departments and their plans will be re-scheduled. In order to avoid this, we need different information when giving operations planning for a batch production in the organisation. Cause production control can only act upon the information that it receives. (Muhlemann, 1992, production and operations planning), so more precise information we can get, more flexible and reliable we can schedule production. Information requirement: The required information is similar for scheduling in manufacturing Includes both in Demand and Availability * Standard processing or
Price Elasticity "Have U.S. Drivers Reached Filling Point of No Return?" by Justin Lahart "Airlines Try Business-Fare Cuts, Find They Don't Lose Revenue" by Scott McCartney While price is the strongest factor affecting demand, there are several factors that heavily influence the price elasticity of demand. Inelastic products are much less resistant to affects from price increases, allowing managers the flexibility to raise prices with little to no concern for losing sales. On the contrary, elastic products are highly vulnerable to and influenced by fluctuations in price. The elasticity of a product can change over time, affecting firms and industries that utilize that product. "Have U.S. Drivers Reached Filling Point of No Return?" by Justin Lahart and "Airlines Try Business-Fare Cuts, Find They Don't Lose Revenue" by Scott McCartney discuss the affects of changing elasticity in gasoline and airplane tickets, respectively. The articles highlight the number of substitute goods, the percentage of a consumer's budget spent on a product, and the time period that the product is under construction as strong influences on the price elasticity of gas and airplane ticket prices. The price of gasoline has begun to show a shift from heavily inelastic to more elastic in recent history. Our textbook, Economics for Managers, discusses the affects of the inelasticity of gasoline
Polar Ices questions: Explain why Polar Ices needs to build up stocks in the early part of the year
Polar Ices Q. 2. [a] (i) Explain why Polar Ices needs to build up stocks in the early part of the year. (4 marks) Q. 2. [a] (ii) State and explain three likely effects of the company building up stocks. (6 marks) Q. 2. [b ] (i) Explain the meaning of the term "Just in Time production". (3 marks) Q. 2. [b] (ii) Discuss whether Polar Ices should switch to Just in Time production. (8 marks) Q. 2. [c] The managing director has thought about batch production of chocolate in the winter months. Would you advise him to do this? Justify your answer. (9 marks) . . . . . . . . . . . . . . . . . . . . . . . . .. . A. 2. [a] (i) The demand for Polar Ices' products are concentrated in the summer months and the firm currently only has the capacity to produce 140,000 units per month - which is insufficient to meet their period of peak demand, unless they build up stocks of finished products earlier in the year. These stocks can then be used during the summer months to supplement the monthly output from the plant. A. 2. [a] (ii) One effect would be that the holding of finished products as stock also allows Polar Ices to react to any sudden and unexpected increase in demand (e.g. as might happen if there were an unusually warm Spring). A second effect could be a detrimental effect on the firm's cash flow position. Holding stock is costly (for a number of reasons)
Activity Based Costing & The NHS
Activity Based Costing & The NHS Financial Analysis - (MN2007) Assignment 2 . Introduction As the Management Accountant of a local NHS hospital I am going to write a report for the senior management team at the hospital that analyses the issues raised in the view attributed to Gordon Brown. It is difficult to assume which allocation approach the hospitals have used, but I am going to describe the Traditional Costing approach and the Activity Based Costing approach, which I will describe in more detail. 2. The Definition of Activity Based Costing Activity Based Costing (ABC) is a 'costing method' (Fleming & McKinstry, 1998: 216), which recognises that costs are incurred by the activities, which take place within the organisation, and for each activity a cost driver may be identified. Those costs, which are incurred or driven by the same cost drivers, are grouped together into cost pools and the cost drivers are then used as a basis for changing the costs of each activity to the product. 2.1 Cost Pools A cost pool is a collection of costs, which maybe 'charged to products' (Bendry, Hussey & West, 2001: 465) by the use of a common cost driver. Examples of costs pools are the power, material handling, material receipt, and production planning, sales administration, get-up cost and buying. 2.2 Cost Drivers A cost driver is any activity or series of activities, which
Using indifference curve analysis, derive a negatively sloped demand curve.
Maria Dimech Group 2 25th January 2005 A) Using indifference curve analysis, derive a negatively sloped demand curve. An indifference curve is a line that shows all the possible combinations of two goods between which a person is indifferent. In other words, it is a line that shows the consumption of different combinations of two goods that will give the same utility (satisfaction) to the person. The basic assumption about tastes in indifference curve theory is that of a diminishing marginal rate of substitution: the less of one good and the more of another good the consumer has, the less willing he or she will be to give up some of the first good to get more of the second. The aim of indifference curve analysis is to analyse how a rational consumer chooses between two goods. In other words, example how the change in the wage rate will affect the choice between leisure time and work time. For instance, in the figure above, the indifference curve is I. A person would receive the same utility (satisfaction) from consuming 4 hours of work and 6 hours of leisure, as they would if they consumed 7 hours of work and 3 hours of leisure. The shape of the indifference curve implies that indifference curves are negatively sloped and convex to the origin; thus if you are looking at the curve from the origin it will be bowed in. It is telling us how much hours of leisure we are
Warren Winter 11/01/04 AP American History The Gilded Age of American industry in the late 19th century marked a period of massive change. Widespread urbanization transformed the economic and social climate of America such that it became conducive to massive industrial and agricultural production. Richard Hofstadter writes, "The industrialists of the Gilded Age were such as one might expect to arise where great waste is permitted for great accomplishment, where temptations are offered and few restraints imposed... They directed the proliferation of the country's wealth, they seized its opportunities, they managed its corruption, and from them the era took its tone and color" (213). This period of economic boom saw the emergence of American labor as an organized economic and political force. The vigorous demands presented by labor resulted in unprecedented conflict between capital and labor, with over six million workers involved in over thirty-six thousand strikes. Impotence, not efficacy, furthermore characterized the contemporaneous Presidents, who invested extensive power in the hands of the legislative branch and were disinclined to exert strong executive action against the trusts and monopolies that had begun to burgeon. By 1894 the United States had become the largest manufacturing nation in the world. In 1860 nearly one out of every four Americans
"Utility is a theoretical concept that cannot be observed or measured in the real world. Hence, it has no practical value in decision analysis."
Assignment "Utility is a theoretical concept that cannot be observed or measured in the real world. Hence, it has no practical value in decision analysis." Module: Managerial Economics Instructor: Student's name Contents Definition of utility.............................................................3 Total and marginal utility...................................................4 Graphic description of total and marginal utility....................6 The utility of different goods and services, and the balance of the consumer...................................................................8 Application of the theory of utility.........................................9 Indifference curves..........................................................14 Uncertainty and the consumer..........................................17 Definition of utility "The assumption of rational economic behavior leads logically to a further assumption fundamental to economic theory, that economic agents decide their market plans so as to maximize some target, objective or goal believed consistent with self interest. In demand theory, the objective function which households are assumed to wish to maximize is the utility obtain from the set of goals and services consumed. Utility means the usefulness or fulfillment of need which a consumer gains from consuming a good, though for many goods
In operations management, our focus is on efficiency in order to reduce unit costs and improve quality. This also includes speed of operation.These three factors - speed, quality, cost - are the key factors in determining a firm's competitive advantage.
Operations Management In operations management, our focus is on efficiency in order to reduce unit costs and improve quality. This also includes speed of operation. These three factors - speed, quality, cost - are the key factors in determining a firm's competitive advantage. Job Production: This occurs when a firm produces specialised or one-off items for its customers e.g. Artist, furniture maker, wedding dress designer. It is usually labour intensive and always very expensive to produce the product. However, the costs of production are reflected in the price which is high as a strong U.S.P. accompanies the product. Batch Production: In batch production groups of items move through the different stages of production process at the same time. For example paint, wallpaper, cakes etc. Batch production requires a huge amount of planning and high stock levels because the firm must wait for all the items to finish one stage before moving to the next. In batch production there is often `downtime' - this is the time taken to re-set the machines and change batches. Flow Production: This is used to produce high volumes of similar or the same product. The production process is synchronised and continuous meaning that it is highly capital intensive. It is difficult to use this method if demand is small, fluctuating, or consumer taste is individualistic.
State and federal wage
State and Federal Systems Paper The following essay will address the differences and similarities between state and federal systems of government in their application of employment laws. Several examples of employment protections that are provided by state systems but not by the federal system will be also provided. In order to understand why some federal laws differ from state laws we must first begin by defining the powers of our government. Federalism is the principle that divides the powers between governments and makes provisions for change within the various levels. The United States Constitution divides some powers between state and federal governments, designates which powers are to be shared, and also disallows some power to each level. The three types of power that are delegated to the federal government by the Constitution are defined as expressed, implied and inherent. The majority of federal laws that apply to employment and labor are inherent powers and are those which give the federal government power to carry out the U.S. Constitution. The powers which the Constitution provides to state governments are known as reserved powers. The 10th Amendment defines reserved powers as those not expressly delegated to the federal government or held by the people not prohibited to the states. (Texas Education Agency Social Studies Center