Labour Economics Reservation wage
Labour Economics In this essay my aim is to provide a concise explanation to what the reservation wage is. I will firstly provide information on the term reservation wage, moving on to examples of how different people will have different reservation wages. I will convey information on each example adding possible variables which may affect their reservation wage. Then lastly I will conclude by using the information on reservation wage and different examples to conclude what I’ve learnt. What is the reservation wage? In simple terms this is the lowest rate at which a person will participate in the workforce or highest rate at which an individual chooses not to work. (Contemporary labour economics 4th edtition McConnell 1995)This may sound peculiar but there in fact many reasons why a person chooses not to participate in the workforce. We are assuming the world is indeed full of rationale people. If a person receives a higher income without participating in the labour force why would he work? The person may have an inheritance, professional gambler or lack the skills to gain employment which pays more than the welfare system. There many variables which affect a reservation wage someone’s age, sex, location, health and disability When talking about the reservation wage it is important to remember the compensating differential theory. This affects the reservation wage;
Briefly outline some of the main models of oligopoly in which firms compete according to output. Hence, discuss the contention that non-collusion is the inevitable outcome of oligopoly.
Microeconomics Briefly outline some of the main models of oligopoly in which firms compete according to output. Hence, discuss the contention that non-collusion is the inevitable outcome of oligopoly. An oligopoly is a market form which is dominated by a small number of sellers (oligopolists). An industry is considered oligopoly when 4 firms control over 40% of the market. Because there are few participants in this type of market, each oligopolist is aware of the actions of the others and one firm's decision will influence, and is influenced, by the decisions of other firms. An oligopolist will have to plan strategically, taking into account the likely responses of the other market participants. This makes an oligopoly firms profit maximizing decision more difficult than that of a monopoly or competitive firm. Because relatively few firms compete in an oligopoly, each can influence the price, therefore affecting rival firms. For example, when Sony slashed the European price of its Playstation 2 console in 2002, the price of its rival, the Xbox (produced by Microsoft) was reduced likewise within the hour. An oligopoly firm that ignores its rival behavior is likely to suffer a loss of profit. Oligopolistic firms may act independently or co-ordinate their actions in order to earn the maximum possible profit. Groups that agree on how much each firm will sell or on a
Consumer expenditure.
The behaviour of consumer expenditure is probably one of the easiest macroeconomic variables to understand because its determinants are relatively well known. Assess the merits of this statement using data available to you from statistical sources and in particular the Economic Trends Annual Supplement. Also, assess the extent to which it is possible to investigate patterns of consumer expenditure across the regions of the United Kingdom (you may wish to consult Regional Trends). Why is it important that property analysts have a good understanding as to what is happening to consumer expenditure in the United Kingdom when they offer advice to clients? Consumer expenditure is the largest element in total expenditure and so any fluctuations in consumption will have important implications for the overall level of economy in the economy. Consumer expenditure shows the cost of day-to-day living, which takes up the majority of income. However, day-to-day living varies in different households, with the amount of commodities such as food and recreation varying. Consumers' expenditure is an engine of demand which tends to stay around its long-run trend, thus suggesting there are no dramatic long-run shifts in the factors that determine consumption. Real disposable income affects consumption (every 1% change in real disposable income results in a 0.4% change in the consumers'
By means of one example, explain the advantages and disadvantages of linear programming as a management aid.
ECON 232 Management science Coursework assignment By means of one example, explain the advantages and disadvantages of linear programming as a management aid. Hand-in date: 28th November 2003 Written by Lin Zhang 200157394 Linear programming is a useful analytical technique for managerial decision-making and used to determine the optimal solution to a decision problem. This technique is ideally suited to solving decision problems that involve an objective to maximized or minimized. It is particularly powerful for the decision maker in solving business problems when constrains limit or restrict such as in the area of production related decisions, firms are often faced with a variety of capacity limitations. Limited availability of skilled labor, raw materials and so on, can all constrain production. When such capacity constraints exist, managers must exercise careful judgment to insure that scarce resources are used in the most efficient manner possible to produce only the products that provide the greatest returns or profits. Although linear programming is a valuable tool for solving maximization or minimization problems, it still has certain disadvantages. In the term of the linear programming cannot be used in the following three situations; First, if the strong economies of scale exist; second as the firm expands output, the prices of variable factors of production
The Digital Camera Market.
Digital cameras are now the hottest selling consumer electronic behind DVDs with seventy five percent of people having either already bought one or are planning to purchase one within the next year. After entering the market in late 1997 digital cameras were primarily a luxury good, therefore having fairly inelastic demand, however, with recent technological advances and increased competition between firms leading to lower prices for consumers digital cameras are now competing with conventional cameras which are rapidly become a thing of the past. The amount of a good consumers wish to purchase is called the quantity demanded. Lowering the price of digital cameras from P1 to P2 caused a movement along the demand curve and a resulting increase in the quantity demanded from Q1 to Q2. In the long run, complementary goods (goods which tend to be used together, e.g. cars and petrol) became cheaper and with developments in technology these goods (such as PCs, e-mail, photo printers and photo software) seemed to become "better" complements of digital cameras. With the majority of homes now having a PC with an internet connection the advantage of digital cameras are endless. Aside from the vastly enhanced quality of the photos themselves, and the opportunity to delete photos that turn out bad, the pictures can be downloaded onto a PC using a USB or serial connection, or by using
Analysis of Chinese rural economic policy of decision-making with models of rationality and incrementalism.
Faculty of Social Sciences Master of Public Administration G438PJ Full time 2004/2005 Module: PUP802J1 Policy Analysis The second assignment for this module Assignment Title: Analysis of Chinese rural economic policy of decision-making with models of rationality and incrementalism Module Co-ordinator: Pro. Andrew Erridge Student Name: JIANG Qingyuan (Daniel) Student Registration Number: 10193604 Student Email Address: [email protected] Date Submitted: 9th Dec. 2004 Word Count: 1951 Table of contents * Introduction 2 * Decision-making models of rationality and incrementalism 3 * Mao's Agricultural Reform 3 * Deng's Agricultural Reform 6 * Conclusion 11 * References 12 Introduction Decision making is recognised as a fundamental activity of public administration. The debate of rational versus incremental models of policy making is could be viewed as a debate over alternative political systems and values. Rational decision making has a centralising bias, while incrementalism tends to favour representative and pluralist decision making (Sabatier, 1991: 147). Additionally, the rational model tends not to favour any community contribution while
Assess Speer's contribution to the Nazi wareffort.
Assess Speer's contribution to the Nazi war effort. Speer, during the first years of the war, was primarily involved construction. During these years, he had been in charge of the construction of army bases, and three large aeroplane factories. Speer was still however considered an architect, despite the contribution these buildings may have made to the war effort. Speer as Minister of Armaments, 1942. Speer had to overcome many problems while Minister of Armaments. He knew that in order to have a successful war time economy, Germany needed to efficiently allocate economics resources to the production of armaments, make plans that would ensure the follow through of decisions regarding the weapons to be used, what resources were to be needed and how they would be produced. However, military leaders of Germany believed that the campaigns would be land focused, and the military ordered weapons which differed from the models previous to them. The military did not consider long term manufacturing. This lack of standardisation in German weaponary resulted in vast amounts of wasted time and resources, and made mass production virtually impossible. The navy and air force were only seen as backups for the army. The air force was especially essential for the protection of industry from allied raids. The choice of military tactics relied on the basis that the campaigns would be land
Are Tickets for Thorpe Park Price and Income Elastic?
Are Tickets for Thorpe Park Price and Income Elastic? INTRODUCTION During this project I am going to find out if Thorpe Park tickets are price and income elastic to help me do this I will be visiting Thorpe Park. If a product is price elastic it means that it is responsive to a change in price. So that a small change in price will lead to a bigger change in quantity demanded whereas if a product were inelastic a small change in price would lead to a smaller change in quantity demanded. It is measured by this equation: % Change in Quantity Demanded % Change in Price This can be shortened to be: Price x Change in Quantity Demanded Quantity Demanded x Change in Price For elasticity in general if the result of this equation is between minus one and one it means that the product is inelastic but if the result is greater than one or minus one it is elastic. The Relevant factors, which affect P.E.D for Thorpe Park tickets are: . The number of substitutes 2. The proportion of income on a commodity Price Elasticity Hypothesis: I believe that the price of Thorpe Park tickets is inelastic because: There are little or no substitutes for Thorpe Park. The nearest theme park is Chessington World of Adventures, which is at least 50 miles away. This means that if there was a change in the price of the tickets the customer would have no cheaper alternative to turn to. Therefore
Examine The Arguments For Governments Providing A Free Healthcare System - What Role Might A Price System Play In Overcoming The Disadvantages Of A Public (NHS) System?
Examine The Arguments For Governments Providing A Free Healthcare System. What Role Might A Price System Play In Overcoming The Disadvantages Of A Public (NHS) System? The question above challenges the ability of the free market to provide an efficient allocation of resources with regards to social and economic efficiency within the healthcare sector. Economic efficiency is defined as allocative (P=MC), productive (MPPl / Pl = MPPk / Pk) and x-efficiency (operating on the lowest possible AC and MC curves under monopoly); social efficiency results from the aforementioned three measures to create Pareto Optimality. Such a question is posed in response to the weakness of a publicly funded healthcare system despite the advantages that accrue from such a system. The rationale behind free healthcare is twofold; firstly, healthcare is considered by society to be universally desirable and to ration it through the price mechanism is seen as inequitable. This is taken from the moral standpoint of democratic governance and underpinned by welfare economics. Social indicators such as the public quality of life index (PQLI) illustrate the increase in societal well-being through the allocation of healthcare on the basis of need and not simply income or wealth. Secondly, healthcare, as a merit good, confers considerable positive benefits to society as a whole beyond those which the
Is it True to Say that any Pareto Efficient Allocation Could be achieved by Lump Sum Redistribution of Endowment? Elaborate your Argument by Using the Edgeworth Box.
Is it True to Say that any Pareto Efficient Allocation Could be achieved by Lump Sum Redistribution of Endowment? Elaborate your Argument by Using the Edgeworth Box. An Allocation is Pareto efficient for a given set of consumer-tastes, resources, and technology, if it is impossible to move to another allocation, which would make some individuals better off, and none worse off. A Pareto-Efficient Allocation must be consumption efficient; Production efficient; and Allocation efficient. Thus, a Pareto Efficient Allocation could only exist when the Marginal Rate of Substitution (a ratio of marginal utilities of consuming two products) and the Marginal Rate of Transformation (a ratio of the marginal costs of producing two products) were equal. Endowment refers to the Factor Endowments of nations, or other producers, and can be defined as the factors of production available to produce goods and services. The size of a country's resource base (natural resources, labour and capital) determines the amount of goods and services it can produce and the rate at which it can increase standards of living over time.1 A redistribution of Endowment therefore refers to the trade of Factors of Production between producers or countries in order to achieve a maximum output of goods and services. Thus, by definition, Redistribution of Endowment (in the rational sense) moves towards a Pareto