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Macro & Microeconomics Essay

Outline the main features of Monopolistic Competition as a market structure. Using appropriate diagrams, explain why firms in a Monopolistically Competitive market structure can only make normal profits in the long run
In contrast, through product differentiation, a firm in a monopolistic competition has a portion of the market in which he has a monopoly. For instance, the pants industry has Levis and Wrangler, for example, and each brand has a set of customers loyal to the brand. For their respective loyal customers, each firm is a monopoly facing a specific demand curve. Varian (2005, p. 461) pointed out in a monopolistic competition, “each firm faces a downward-sloping demand curve for its product.”
Pages: 4 (1000 words), Essay
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Outline the cases of, the Equitable Life pension scandal and the mis selling of precipice bonds. Comment in both cases on how far these were the consequence of regulatory weeknesses.
In addition, the guaranteed policy holders could still make any amount of further investment at the guaranteed rate. This made equitable life’s liabilities not hedged and unlimited.In essence, therefore, the company was getting around 6% for any investment it made while it paid the guaranteed policy holders a minimum of 11%. This left equitable life with a colossal black hole that culminated with the company using profits made from investing the money from the majority of the policy holders
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One should not be unduly alarmed by the size of government debt as it does not need to be repaid and that this is is a debt that we owe to ourselves. Discuss
Dornbusch et al. 267) articulated that the combination of fiscal and monetary expansion has been known as “monetizing the budget deficit.” In situations in which the budget deficit is monetized, the monetary authority prints the money “to buy the bonds” that government will use to finance its deficits (Dornbusch et al. However, monetizing deficits is inflationary and citizens acquire the budget deficit with a higher inflation rate.The effect of and expansionary fiscal policy will
Pages: 6 (1500 words), Essay
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One should not be unduly alarmed by the size of government debt as it does not need to be repaid and that this is is a debt that we owe to ourselves. Discuss
It is worth denoting that a gigantic government debt should not be a bother to the citizens, as payment of this lump some debt will result to citizens bearing the complex consequences of an expensive lifestyle.It is imperative to state that a range of factors determine the coupon payment including the face value, frequency of payment and maturity of the bonds. It is vital to consider the yield on comparable investment plans in the loan repayment schedules. The government thus gets enough time
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Ongoing Financial Crisis and the Prospect of Euro
Celente concluded that: “Given the current economic and geopolitical conditions, the central banks and world governments already have plans in place to declare” it “with the possibility of military martial law to follow” (Lendman, 2012).The countries are on the verge of their economic collapse. It is possible to summarize that some of the countries would benefit a lot, but the rest of the countries would remain with nothing. There is a need for social changes and the Europeans are
Pages: 7 (1750 words), Essay
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Oil is a commodity which is important for any economy. You are required to produce a report on the oil industry and its impact on the UK economy. This should be based around the issues discussed in the article written for the BBC news as well as your own
The conflicts in countries like Libya can seriously reduce the overall supply of oil in the market.World oil market is considered as relatively inelastic because changes in prices normally do not result into reduction in the demand for the oil. Increases in prices also do not induce increase in production because it takes time actually to develop infrastructure facilities to meet the additional demand. However, it is also important to understand that the overall consequences of this will be
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One of the aims of EMU was that only the global balance of payments of the European Union with the rest of the world be of importance and not those between members.
The essay mainly emphasises the two main components of balance of payment (BoP) account, i. current account and capital account. The current account looks into the trading affairs mainly of tangible goods and services; on the other hand, the capital account looks into the inflow and outflow of financial assets in an economy. A nation can have either a fixed or a floating exchange rate. If a country has a fixed exchange rate, then the central bank of the nation accepts foreign fund inflow
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Opportunity cost
In both the cases the person has to pay an opportunity cost for choosing one option over the other (Samuelson 17).The concept of opportunity cost is used mostly in the context of production decisions. The main factors of production include capital and labor. Suppose a person works in a factory and he earns $10 per day. On the other hand he could have worked in his own farm and could have earned $ 7 a day and could have enjoyed labor for a longer time. Therefore by earning $3 extra per day by
Pages: 4 (1000 words), Essay
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One the one hand - on the other hand
He is now old and who explicitly announces that such painful events are perhaps clarifications of some things happening in the country. The dilemma is the narrators motive towards remembering or misremembering such events. This could be that, through the presumed lifestyles through the world wars, and achieved the importance of social standing across Germany, his hindsight is questionable. In the film’s heart is the pastor who takes an outstanding performance for Burghart Klaussner (Brunette
Pages: 5 (1250 words), Essay
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One of the arguments for the use of juries in legal trials is that the defendant is being judged by a representative sample of society. As such, it may provide a means of interjecting community norms and values into judicial proceedings. Will the punishme
They are able to determine without favour a verdict that favours the victim and punishes the accused if found guilty with a higher sense of justice. Chen and Li (2009) argue that participants are more humane toward an in-group match than otherwise. Since justice is highly psychological, having one’s trial handled by his own people (in-group member) gives the accused a sense of assurance and acceptance. When a case is handled by a jury, one is assured that justice will be done because people
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Oil Subsides impact on a government budget in Indonesia Iran and Venezuela
According to Davis (2013), energy subsidies are believed to avert possible barriers to growth although this concept has been proven ineffective especially in stimulating economic growth. According to Gavish & Gavish (2012), there are studies that show that energy subsidies hamper economic growth and therefore eliminating them (subsidies) may provide incentives for a more efficient resource allocation and spur economic growth. Moreover, energy subsidies pauses environmental threats by increasing
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Olympics impac on a country's economy
This means that the economy was greatly boosted. There has been opened opportunities in other sectors such as in developing new business contracts, expanding foreign investment and additional sales. Britain became exposed to the world through the games, hence there were many opportunities realized in the process. There have been opportunities for British companies in building Olympic and other facilities in countries like Russia and Spain. The construction sector is a major beneficiary of these
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Ocean economic (two reading)
For example, marine biodiversity is an impure public good in the sense that it is non-excludable and rival good (Arriagada and Perrings p. Marine biodiversity is an international environmental public good that anyone can consume, but it can be finished in case of overexploitation. Perhaps the major distinction between pure and impure public goods is that a pure public good is fully non-excludable and non-rival while impure public goods could be partially non-excludable or non-rival (Arriagada
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Outline the marginal productivity theory of labour demand and explain how the model can be adopted to explain the demand for labour of a perfectly competitive firm in the short run and in the long-run. Discuss the implications your analysis has for the el
On the other hand, marginal revenue refers to change in total revenue as result of incremental changes in the final quantity of products while marginal revenue product refers to changes in total revenue due to changes in other input variables factors of production ((Hall & Lieberman, 2013). The identified marginals are related by the following equationFrom the marginal productivity theory, it emerges that demand for labor depends on the marginal revenue product (MRP). However, it also paramount
Pages: 12 (3000 words), Essay
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Other Topic
For example, while making a decision to either go to college and attain intellectual enrichment at a given cost or leave school and spend the fee in a luxurious life. The opportunity cost of an item is the cost foregone to acquire another piece. When making economic decision, managers ought to be conscious of the opportunity costs that go along with each imaginable decision made (Gregory 2012).According to Laurence Sideman and Gregory economist, will usually assume that people are rational. A
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Outline and assess the theory of contestable markets and its impact on industrial policy.
In other words, when a company leaves the market, it can recover all the costs incurred to enter. If a company can leave the market without costs this means it has not incurred sunk or sunk costs (Coccorese, 2005, p.Perfectly contestable markets are characterized additionally because they are very vulnerable to hit-and-run competition. Any opportunity to benefit will be taken into consideration by a potential entrant, since it can enter the market and make a profit before the price change and
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Outline the main approaches taken to tackle child poverty over the past decade. What lessons can we learn from these for the current government's approach to tackling child poverty?
Scheme that the government introduced in April 2003 exists as the contemporary system of refundable tax credit that aims at providing relief for poverty stricken families. The program also remains available to childless parents with adopted dependent children besides working families who need external support to manage their families. In addition, citizens may claim working tax credit mainly if they remain responsible for any child within United Kingdom. The central government of United Kingdom
Pages: 6 (1500 words), Essay
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On the 4th September 2014 the European Central Bank (ECB) cut its benchmark interest rate to 0.05%. It will also launch an asset purchase programme, which will buy debt products from banks.
The central bank in Europe reviewed the policies in 2013 and included different values in the policies in the MO there were different assets included which were the total stock and coins in the circulation and includes also the operational deposits of the banks that are held in the central bank. Another asset that is included in the policy is the MO with also the inclusion of deposits that are held residents at banks and also in the building societies (Krugman, and Wells, 2009). The policies
Pages: 10 (2500 words), Essay
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Oil Markets
In the subsequent years, the prices continued to drop until it lowest at $12 per barrel in December 2008. However, in July the same year the price has risen to $ 145 (Smith, 2009). At the end of the same year had the price at $40 for a barrel (Smith, 2009). Smith cites a number of economic circumstances behind the trend in prices.There are a large number of factors that prompt changes in the global market for crude oil. The 20th century has witnessed increased and declined consumption of oil at
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Oil Markets
And given that price elasticity of demand a minimum reduction in supply lead to an increased rise in the price of oil. The 1970s saw the price range between $12 to and $ 53 per barrel and shoot to $ 75 per barrel in 1981 (Smith, 2009).In the subsequent years, the prices continued to drop until it lowest at $12 per barrel in December 2008. However, in July the same year the price has risen to $ 145 (Smith, 2009). At the end of the same year had the price at $40 for a barrel (Smith, 2009). Smith
Pages: 6 (1500 words), Essay
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