Congestion as an externality.
Congestion as an externality In economic terms congestion is a mixture of externalities, information failure and transaction cost. Negative externalities exist as cars produce emissions, which are harmful to the environment, the wear and tear of roads, and the opportunity costs are not included in the monetary costs of motoring. Drivers are both the cause of the externalities; and are the victims of others at the same time. One can say that the information failure is very clear, as drivers are not effectively told of delays and congestion before they take there journey, if this was to be done it would help reduce congestion on the roads. However the market that currently exists doesn't produce these kinds of signals to the consumer, so this solution wouldn't ever be perfect, as the congestion will eventually just transfer to the alternative rout. All these externalities represent market failure; this can be said because the socially efficient output is not produced. The social optimum amount of vehicles on the road must be exceeded if congestion results. When taking a journey motorists will decide whether or not to make a journey on the basis of their valuation of the benefits from the journey and their valuation of the alternatives in terms of time and money for petrol and other variable costs. They will not consider the additional cost imposed on other road users. This
The economic impact of a US led attack against Iraq will be felt across the globe. With the use of supply and demand diagrams analyse the impact of war.
Essay topic 2 "Oil is key as bush agrees month delay. All diplomatic, political and military considerations now point to war being timetables for the first week in March" (Sunday Herald, 26th January 2003) The economic impact of a US led attack against Iraq will be felt across the globe. With the use of supply and demand diagrams analyse the impact of war on the following; a) The market for oil b) The market for air travel with budget airlines c) The market for gas masks Another Persian Gulf War is the greatest risk facing the world economy. The availability of crude oil remains an important factor. A war could disrupt the availability of crude oil and trigger a sharp rise in oil prices. Even though Saudi Arabia currently has the capacity to raise its own production levels by more than Iraqi exports. But looking at a less favourable setting, the conflict could easily spread and significantly disturb the oil supplies if for example all the Middle Eastern countries such as Iraq, Kuwait and Saudi Arabia's oil production facilities are damaged. Other disruptions could occur through a possible boycott on OPEC. The demand for oil is exceptionally high, as the modern world needs a constant supply of oil especially industrialized countries such as Japan. As there consumption is met completely by imports from mainly the Middle East, Industrialized countries remain highly
The functions of consumer organisations.
Task 6 The functions of consumer organisations Consumer organisations may carry out on or more functions, e.g.: * Advisory: those that give advice to customers, for example Citizens Advice Bureau (CAB). * Regulatory: ensuring that organisations operate according to specific regulations, for example rail regulatory which oversees train operating companies such as Virgin. * Promotional: those involved in promoting and advertising consumer rights, such as the Office of Fair Trading. * Investigator: those that investigate reports of breaches of regulations, e.g. the Trading Standards officers. * Lobbying: those processing the government for changes in the law to further protect consumers, e.g. the Consumers' Associating. * Representation: those that represent consumer interest on committees or in consumer groups, e.g. the National Consumer Council or the Consumers' Associating, or represent consumers in court, e.g. Citizens Advice Bureau advisers. Consumer organisations The Office Of Fair Trading (OFT) The role of OFT is to: * Identify trading practises, which are against consumer interests. * Put these rights, wherever possible. * Regulate the provision of consumer credit. * Investigate and remedy activities by industry and commerce, which are against the interests of consumer (such as fixing prices or limiting the supply of an item.) The OFT produce a consumer
Chocoholics PLC Factory Floor Plan
Chocoholics PLC Factory Floor Plan Chocoholics employ 70 staff and over half of these work in the production department. From this, I can assume that there are 30 production staff, plus supervisors. As chocoholics has only 30 staff, there is a limitation to how much chocolate they can produce. The way Chocoholics currently operates is by producing chocolate on their production lines for 4 and a half days, and then the machinery is turned off and hand made chocolate is produced for half a day. This way of producing chocolate is very inefficient because for half the day, the machinery is not being used. The same applies to the area for making the hand made chocolate, as this is not used for 4 and a half days. If chocoholics were to make itself as efficient as possible then the machines should be all used at the same time and so should the area for hand made chocolates. This could be done by employing more staff. These new staff that are employed would be put on the machines as they have little experience and skills and the more skilled workers would make the handmade chocolates. Chocoholics produce its product on six different product lines, which are laid out, by product. This way of producing chocolate is dangerous, as a breakage on 1 production line will affect the whole business. If there is a reduction in 1 type of chocolate it will be very expensive to change the
Discuss why do firms want to grow and means of growth
"Discuss why do firms want to grow and means of growth" Mazin Abdel-Rahman The existence of internal economies of scale provides a major force encouraging firms to enlarge. There are different ways in which firms can grow, generally they can be described as internal and external growth. Internal growth occurs when firms use their own profits to finance an expansion of capacity. External growth occurs when firms integrate in the form of mutual agreement in the form of a merger or in the form of a takeover, where one firm acquires control of a minimum fifty-one percent of another firms equity. * Integration There are two types of integration, vertical and horizontal, vertical integration in further split into two types, backward and forward integration. Backward integration occurs when one firm integrates with another firm, which supplies input. Therefore firm (A) integrates with firm (B) which provides which provides firm (A's) raw material. Forward integration occurs when firm (A) integrates with firm (B), were firm (B) is the retail outlet of firm (A) products. Horizontal integration occurs when firm (A) integrates with firm (B), were both firms are at the same stage of production, in the same industry. Motives for vertical integration * Security When firms perform forward integration, firms safeguard their retail outlets for their products, therefore the firm
The Sino-British Dispute Over Hong Kong: A game theory interpretation.
THE SINO-BRITISH DISPUTE OVER HONG KONG: A Game Theory Interpretation1 by Ma Ngok The author reviews, in this article, the history of Sino-British negotiations over the future of Hong Kong. Sino-British negotiations had a history of volatile relations and significant twists, with significant moments in their negotiation history being 1982-1984, when China was generally acknowledged to have "won", as well as 1992-1993, when the British negotiating team was seen to have changed their negotiation tactic from one of cooperation to confrontation. In the article, the author sets out to fulfill two main objectives - to argue a detailed analytical review of Sino-British negotiations from the 1980s to the 1990s and to propose and argue for a "game theory" metaphor that provides reasons for Sino-British negotiation tactics. The "Game Theory" Metaphor The author proposes the "game theory" metaphor to represent the benefit and loss situation faced by both Great Britain and China during their negotiations from the 1980s to the 1990s. Upon explaining why both parties had a common interest in "maintaining Hong Kong as a free and prosperous city"2, the author then explains the workings of the "game theory" metaphor - DD being the worst case scenario for both parties (where a break off in negotiations could destroy Hong Kong), DC being the best scenario for both parties (where greater
The Principles of Consumer Rights.
The Principles of Consumer Rights The modern consumer movement is largely a product of the 1960s with the foundation of the Consumers' Association in Britain. Ralph Nader was well known for his consumer campaigning in the United States of America and US President John F Kennedy declared to the US Congress that consumers have four basic rights. These were: * the right to safety * the right to be informed * the right to choose * the right to be heard. * To these 'Consumers International' added four more rights: * the right to satisfaction of basic needs * the right to redress * the right to education * the right to a healthy environment. Consumer rights were finally elevated to a position of international recognition and legitimacy, acknowledged by developed and developing countries alike. This single most important document for consumer protection serves as a vital lobbying tool for those campaigning for change. They provide both a framework and benchmark for government, particularly in developing countries, and for establishing their legal basis for consumer protection. The basic consumer rights are: * The right to satisfaction of basic needs - Access to basic, essential goods and services: adequate food, clothing, shelter, health care, education and sanitation. * The right to safety - To be protected against products, production, processes and services
Economic Theory - The Short and the Long Run & Economies of Scale
HNC Management Assignment By Vikki Carpenter Economic Theory The Short and the Long Run & Economies of Scale Reference: MicroEc' Outcome 2 pc(a) Give short written answers to the following questions (1) In economic theory what is the definition of: a: The Short Run The short run is a period of time when there is at least one fixed factor of production i.e. a factor input that cannot be altered. This is usually fixed capital such as machinery, the amount of factory space available, staff issues or even the area of land being leased or owned. In the short run a firm will have fixed and variable costs of production. Total cost = fixed cost + variable cost. b: The Long Run In the long run, all factors of production will be variable, for example a company may wishes to expand so they may take on additional premises, or staff levels may increase to cover increase productivity. (2) Explain in your own words, what may happen to a firm's average costs of production in the short run and long run. As a firm starts its production or services it creates its first SAC (short run average cost curve), this is shown in diagram by curve SAC1. Once it becomes successful it will increase size, staff, output etc and each time its fixed factor cost changes as the production output changes (rent, staff costs, raw materials etc) a new SAC begins (represented by SAC
"Decoding At the Moment of Consumption".
Margarita Banting FDNS 102.002 K2C September 30, 2002 "Decoding At the Moment of Consumption" In "Encoding, Decoding", Stuart Hall identifies with the moment of consumption. In that moment, the process of decoding occurs. Although the process of decoding may seem simple at first thought, it is actually complex. People's different ways of interpreting events is what makes decoding complex. There are social, economical, and cultural differences that should be considered. Thus, rather than simply decoding a message and absorbing everything that the producers wish to convey to the consumers, we must look into the denotative and connotative aspects of the decoding process, as well as "three hypothetical positions" from which the consumer can interpret the message. Once the "sign vehicle" has left the hands of the distributor, it is up to the consumer to decode and interpret the signs, or codes. But before decoding a message, we must take into account the social, economical, and cultural aspects of the consumer. Though there are simple signs that seem to have an almost natural interpretation with most populations of the world, there are also codes or signs that will be interpreted differently. How might the consumer interpret the message, based on their social, economical, and cultural background? For example, a statue of the Virgin Mary is shown to a third class person
Motorola Inc -Case Analysis.
Motorola Inc -Case Analysis ) What are the key success factors for Motorola's ASIC Division? * Ability to adapt changes in the industry and provide new products. * Product Development time. * Strict Quality assurance measures. * Production system and plant designed to fit the needs of the division. * Shorter development to manufacturing cycle 2) Does a traditional standard cost system address these key success factors? The traditional standard cost system was designed for a old style or traditional production system. The dynamic changes, rapid volume production, number of different outputs of the ASIC division doesn't fit into the framework of the current accounting system. The traditional system was a functional based accounting system, while ASIC needs a product oriented accounting system. In many case functional based accounting would not be a meaningful measure for ASIC division. Currently, when variance was detected it was too late. Tied the variance to a specific product or to pinpoint the cause and correct the problem was not feasible under the traditional system. The larger time frame of monthly variance in this quick phase production system failed to account for the accumulation of positive and negative variance. 3) What are good measures of these key success factor? Deciding on a measure or a scale for a success factors for any industry a hard