Myeconomics

The role of supply side policies in improving rates of economic growth

2010-06-07T02:07:00.000-07:00

Supply side policies are government attempts to increase productivity and the efficiency of markets and the economy.

First of all, supply side policy can do better infrastructure and transport. This can increase the competitiveness of current industry. Also government spending on education and training can overcome the market failure. Better training schemes would increase labour productivity and increse rates of economic growth.

But also there are some disadvantages of supply-side policies, supply-side policies will take a long time to increase productivity, therefore the effect on economic growth will be limited. Also there is no any guarantee that government spending will actually increase labour productivity.

Supply side policies also try to make markets work more efficiently. For example, the government could try to make labour markets more flexible by reducing power of trades unions and making it easier to hire workers. Supply-side policies can make labour markets more flexible and could encourage new firms to enter the market.

Another supply side policy can reduce tax rates. Lower income tax may encourage people to work overtime and encourage more people to move to UK. However, there is no any guarantee that lower income tax will make people work harder.

Productivity growth is one of the most important factors for influencing long term economic growth. The growth of aggregate supply determines the long run rate of growth.

Arguments for and against protectionism of steel industry in the USA.

2010-03-17T15:34:00.001-07:00

Protectionism is an economic policy of restraining trade among countries, using methods such as tariffs on imported goods, quotas. Government through using protectionism, try to discourage imports.

Protectionism protect businesses and workers within a country by restricting or regulating trade with foreign countries. According to article about steel industry in the United States, because of high amount of steel imports, many companies bankrupted, more than 50,000 jobs destroyed, so many negative consequences happened, that's why the president of USA, decided to make tariffs on imports of steel products, he wanted to make protectionism system in the United States. The main problem is that people are becoming unemployed and companies lose their workers, so if American government make protectionism system in their country, they can improve quality of their steel market and they will spend less on imports, what is good for their economic system as a whole and it will improve their national production, but on the other hand protectionism can lead to monopoly, therefore it will reduce competition among firms and companies. Also, if USA government reduce the amount of imports, it can help to the current account, probably for United States it is much better to improve their steel industry rather than import steel from other countries, because USA is a country of massive abilities and they can make their own steel industry on a high level, and there is a huge amount of products which made from steel, for example cars, if USA develop their steel industry, it will be cheaper for consumers to buy American cars, because steel made from their own country. Possibly through supply side policy, by training and giving practice to steel manufacture workers, it will also help for country, and in this case protectionism is useful. The main problem of protectionism system is monopoly which can happen, if protectionism will be in USA, because the one steel company can be above all other companies and it will not be competition among countries, therefore it will be a monopoly in USA. Anyway, advantages for protectionism of steel industry in the USA more than disadvantages, through protectionism people will have their jobs and government will not lose a big amount of money on imports of steel from countries of steel industry such as India.

Does economic growth always lead to increase in living standards?

2010-03-01T13:00:00.000-08:00

I think that it is really difficult to give a particular answer on this question, because there are some ways in which economic growth leads to increase in living standards of people and there some disadvantages of it.

First of all,if we look on advantages of economic growth for standard of living, we can take an example of increasing in consumption, consumers can benefit from consuming more goods and services, so if consumption levels are high, prosperity will be bigger. Improving in public services, if tax revenues increase, the government can spend more on important public services such as health and education, if the quality of health services improve, the quality of life will improve as well.

Reduced unemployment and poverty. Economic growth helps to reduce unemployment by creating jobs and services and it is very important because unemployment is the main source of social problems such as crime, however in many countries of EU with high economic growth, in countries such as France, Spain or Italy there are still high levels of unemployment and in this case unemployment is not reduced by economic growth. Also there some disadvantages of economic growth, economic can leads to increase in inequality between people,if we look on UK or USA in 1980 and 1970, we can see the result of economic growth is inequality. Economic growth can lead to more hours of work, it means that if incomes are high, it can lead to people working longer hours and it looks that, people are unable to enjoy their higher incomes.

So, I looked at some advantages and disadvantages of economic growth for our living standards and we can see that there is no a particular answer, but I think that,economic growth leads to increase in living standards,because the economic growth can solve the most important problems with education and health or consumption of goods and services and these things are more important than an inequality or longer working hours.

Economic aims of conservatives

2010-02-02T13:10:00.000-08:00

How we know, in this May, in UK will be new elections of new premier minister. The is a main candidate who is more likely to win,David Cameron. He is a chairman of Conservative party and he is more likely to win against a representative of Liberal party Gordon Brown, because his economic aims look very efficient.

So, here some aims of David Cameron and Conservative party as a whole.

1) Ensure macroeconomic stability, conservatives want to safeguard Britain's credit rating with a credible plan to eliminate a large part of deficit over a Parliament. And consevatives point out that, their fiscal policy will seek possibilities to help to keep interest rates lower for longer. The Bank of England is going to continue to target 2 per cent of CPI (Consumer Price Index) and will use it in new role to preserve financial stability.

2) Create a more balanced economy. How I understood, conservatives want to create better conditions for higher exports,investments and saving as a share of GDP.

3) Conservatives want give jobs for unemployment people and reduce the number of children in workless households.

4) They want to make Britain for business, to improve Britain's international rankings for tax competitiveness and business regulation.

5) Conservatives want to raise productivity growth in the public sector,to deliver better schools and a better NHS.

6) Also, conservatives want ot reduce UK greenhouse gas emissions.

Privatization

2010-01-18T12:59:00.000-08:00

I have read an article about privatization and the reasons of it.

So, first of all, privatization it is a process of transfering ownership of a business or public service from public sector to the private sector. if we look on privatization better, we can understand, that actually can not guarantee the progress in economics,but privatization increase rivalry on a market.

Also I have known some information that, there are three types of privatization: Share issue privatization, Asset sale privatization and Voucher privatization.

Share issue privatization it is a privatization,where selling shares on a stock market

Asset sale privatization it is a privatization where selling entire firm to a strategic investor, usually by auction.

Voucher privatization it is a privatization where sharing of ownership are distributed to all citizens, usually for free or at a very low price.

Actually privatization it is a positive thing for government, because privatization increase rivalry on the market, therefore economic growth will increase,what is good for a country.

Chapter 6, definitions

2010-01-18T11:26:00.000-08:00

Fiscal policy-the taxation and spending decisions of a government.

Monetary policy-central bank and/or government decisions on the rate of interest,the money supply and the exchange rate.

Supply-side policies-policies designed to increase aggregate supply by improving the efficiency of labour and product markets.

Relationary:of policy measures designed to increase aggregate demand.

Deflationary: of policy measures designed to reduce aggregate demand.

Discretionary fiscal policy-deliberate changes in government spending and taxation designed to influence aggregate demand.

Automatic stabilisiers-forms of government spending and taxation that change automatically to offset fluctuations in economic activity.

Economic cycle-the tendency for economic activity to fluctuate outside its trend growth rate,moving from a high level of economic activity (boom) to negative economic growth (recession)

Progressive tax-a tax that takes a higher percentage from the income of the rich.

Regressive tax-a tax that takes a greater percentage from the income of the poor.

Recession-a fall in real GDP over a period of six months or more.

Human capital:education,training and experience that a worker,or group of workers,possesses.

Tariff-a tax on imports.
Quota-a limit on imports.

Occupational immobility of labour-difficulty in moving from one type of job to another.

Protectionism-the protection of domestic industries from foreign competiton.

Voluntary export restraint (VER)-a limit placed on imports from a country with the agreement of that country's government.

Balance of payments

2010-01-12T13:26:00.000-08:00

I am going to tell you about some information about balance of payments. Balance of payments it is a record of money flows coming in and going out of country.

Balance of payments it is a monetary deals between country with another countries of the world. These deals include imports and expports of goods, services or financial transfers. Balance of payments is making deals for a specific periods and they are happening in a single currency, usually the domestic currency for the country concerned. Balance of payments usually is using for imports and exports, for example: if a country is importing is more than exporting, it will be a trade balance deficit.

Int he past, governments emphasised on achieving a satisfactroy balance of payments positions, particularly on trade in goods and services. But nowadays government may not be concerned on the short term of expenditure which exceeds export revenue. And for government is better to see an increase in competitiveness of their producers, because it will maintain aggregate demand and output high in the economy.

Economic growth

2010-01-12T12:48:00.001-08:00

I have read an article about economic growth and why governments try to achieve economic growth.

First of full, economic growth it is an increase in real GDP and an increase in productive capacity, which shows us the maximum output that the economy can produce.

Why governments want to achieve economic growth? The most important reason for that is that government wants to gain a benefit from it and it is including increasing material living standards. And government point out that economic growth has to include stability, because with stability, economic growth will be achieved.

For government of the country it is very important to have a sustainable economic growth, because it will stant for all the time, another words-stable economic growth, which can be maintained year after year and that can be enjoyed generation after generation. And I think that economic growth it's a really important thing for country, because in countries where economic growth is high, therefore conditions of living are much better and unemployment is lower.For achieving economic growth government should avoid the costs which arise from a negative output gap, such as unemployment and positive output gap, such as inflation.

Definitions

2010-01-12T12:35:00.000-08:00

Economic growth: in the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce.

Unemployment: a situation where people are out of work but are willing and able to work.

Labour force: the people who are employed and unemployed, that is, those who are economically active.

Economically inactive: people of working age who are neither nor unempoyed.

Deflation: a sustained fall in the general price level.

Balance of payments: a record of money flows coming in and going out of a country.

Elastic: responsive to a change in market conditions.

Inflation rate: the percentage increase in the price level over a period of time.

Trend growth: the expected increase in potential output over time. It is a measure of how fast the economy can grow without generating inflation.

Full employment: a situation where those wanting and able to work can find employment at the going wage rate.

Hyperinflation: an inflation rate above 50 per cent.

Nominal GDP: output measured in current prices and so not adjusted for inflation.

Informal economy: economic activity that is not rec[orded or registered with the authorities in order to avoid paying tax or complying with regulations, or because the activity is illegal.

Demerit good.(Mcdonalds)

2009-12-03T13:18:00.000-08:00

I am going to tell you about demerit goods and Mcdonalds company.

So, firts of full, demerit good it is a good where consumption of goods is more harmful than it's actually realised, therefore when people consume product, probably they have a harm on their health. Nowadays the most urgent demerit good it is a burger, fast food etc. Every day in many countries in the world people use fast food and the don't recognize, that it's really bad for their health.

Mcdonalds it is a main representative of demerit goods, and it's such a global company, it exists in many countries. So, Mcdonalds it is american company which created in 1940, it became the most popular food since 1947. Nowadays it is the largest food company in the world, their revenue makes up about 22 billion american dollars for 2008. It looks absolutely amazing, because many people know, that mcdonald burgers make a big harm on their health, but they still continue consume this products. Government in many countries try to decide this problem with obesity, for example, in USA, it becomes a political problem, people don't understand that they lose their health and pay money to this company. In some countries government banned Mcdonald cafes and restaurants, for example in my home country Kazakhstan, president has made a law, that in Kazakhstan won't be any Mcdonalds cafes, and I think that it is a great decision to avoid obesity. Also there is another problem, many years ago Mcdonalds company was a monopoly company, but few years ago, there appeared another fast food companies such as Subway, King Burger. It's a problem, because people have substitutes to one fast food company for another fast food company, if Mcdonalds make high prices on burgers, people will go to King Burger and over and over will be becoming fatty. But I think that the main problem in people, not in fast food companies, because people like this food and it is cheap food that's why people eat in fast food cafes. So, I think that government don't have to ban fast food companies, but maybe government can reduce create fast food cafes on every corner.

Russia - Gazprom monopoly

2009-11-23T10:04:00.000-08:00

I am going to tell you about the biggest company in Russia, it is a gas company called Gazprom. Tis company is a gas monopoly in Russia.

So, first of full, this term exists when a specific individual or an interprise has sufficient control over a particular product or service.

So, Gazprom company is the largest company of natural gas and largesr Russian company. Also Gazprom is only one gas company in Russia. The main office of Gazprom is situated in Moscow also Gazaprom has some areas in United states, East Europe, Japan, South Korea and in Germany.

The president of company is Alexey Miller. Gazprom company produce about 540.7 billion cubic meters of natural gas and it is 21% of the worldwide gas production. Also Gazprom produce about 32 million tons of oil. Gazprom activates and increase about 10% of Russia's gross domestic product(GDP). In 2008 Gazprom sold 316 cubic metres to domestic consumers in Russia, 162 cubic metres to Europe and 98 cubic metres to countries of Baltic sea. Gazprom has deal with big companies such as oil company Shell and Exonmobile. Gazprom it is a big assistance for maintaining Russian economic system,Gazprom reduced taxes from domestic concumers of Russia and that's great because in Russia there are no many rich people who can pay expensive taxes for gas and since 2007 Gazprom have increased costs on gas for European countries, what is good for Russia as a whole. It is a vertically integrated company. It own all gas-processing facilities in Russia. Gazprom also controls assets in banking, insurance, agriculture and media. Also in 1999 Gazprom took over another russian gas company Novatek and Gazprom made a horizontal integration and it was horizontal monopoly. Gazprom became only one gas company in Russia. Nowadays Gazprom is a second largest gas company in the world after Exonmobile company.Income of Gazprom company for 2008 is 87 billion american dollars.In 2007 Gazprom made a deal with Kazakhstan, Turkmenistan and Azerbaijan, the deal means that Russia will build pipes in these countries for oil and gas transiting. In 2006 Gazprom made a contract with German government. According to this deal, German government will buy gas from Gazprom for nearly 10 years for 285 euro for 184.4 cubic metres.In 2009 Gazprom dealed with Japanese car company Mitsubishi and German energy corporation E.On. Gazprom is a main sponsor of all sport facilities in Russia.

Etihad helps to drive economic growth in UAE.

2009-11-22T06:09:00.001-08:00

I have found some interesting information about economic achievements of UAE Etihad airlines.

So, Etihad airlines of United arabic emirates, which based in Abu Dhabi (it is a capital of UAE). It operates in many countries in the world, include Australia, countries of South America, and some countries of Africa. Etihad were established as national airlines of UAE in 2003. Since this year, Etihad airlines achieved absolutely astonishing aims in economics concepts, they rise their economic growth for 35 %, and every year this number is increasing and it is first airlines which made this progress. Etihad airlines have economic stability, their economic growth never fallen below 40% a year. In the financial concepts during 2008 year Etihad carried 6 million passengers and 330.000 tonnes of cargo. Nowadays Etihad airlines ranked on 4 place in the world in terms of economic growth. During last 10 years Etihad is set to support the creation of more than 100.000 jobs in the UAE during the next 10 years. Financial Times reported that Etihad airlines is playing crucial role in driving economic growth and supporting and driving tourism, business and investment.It is very significant and growing contribution to the economic growth of UAE. Researching in economic contribution defined at four levels: direct (within Etihad), indirect (suppliers to Etihad),induced (spending of direct and indirect employees) and catalytic(impact on many other industries). According to the Financial Times Etihad is already making significant contribution to Abu Dhabi's gross domestic product (GDP). Etihad airlines have made a direct economic contribution of Abu Dhabi non-oil GDP in 2007, employing 4.107 people within UAE. This report shows that Etihad make a positive role for UAE and Etihad is improvig links between Abu Dhabi and the rest of the rest of the global economy. With Etihad assistance UAE will increase their GDP for 28 billion AED (AED-UAE currency) supportin 140.565 jobs.After 3 years Etihad will make an investment at the airport infrastructure in Abu Dhabi. Also Etihad airlines make a big contribution to many other big companies such as Ferrari, where both companies made a deal where Etihad airlines are making a profitable sponsorship for Ferrari. Also last year Etihad became the main sponsor of English football club Manchester city, where Etihad invest about 50 million pounds for a year.

Climate change a market failure.

2009-11-22T02:16:00.000-08:00

I have read a really interesting article about climate changing in a market failure.

So, the term market failure means that when the free market mechanism fails to achieve efficiency.

In 2007 at economic public lecture in Manchester, economist Sir Nicholas was talking about that climate change is a result of the greatest market failure that the modern world has seen and he clamed that climate change because of market failure in the world. Sir Nicholas believes that the problem of climated change involves a fundamental failure of markets and they damage others by emitting greenhouse gases and they generally do not pay. The evidence of the seriousness of the risks from inactivity or delayed action is now overwhelming. This problem is global and it must be a cooperation on a global scale. Also he discussed about that rich countries must lead the way in taking action. It means that: adopting ambitious emissions by reduction targets, encouraging effective market mechanisms, supporting programmes to combat deforestation, promoting rapid technological progress to appease the effects of climate change. The first involves rich countries by reducing their greenhouse emissions by at least 80%. Also Sir Nicholas claimed that countries must make a substantial trade between countries, including rich andpoor countries, in green gas emissions. He also said that for an international programme to combat deforestation, which contributes 15-20% of greenhouse gas emissions.And rich countries have to respect their commitments to 0.7% of GDP in aid by 2015. This will yield increases of 150-200 billion per year. The extra costs developing countries will face as a result of climate change more likely to be rising of 80 billion per year and it is massive that extra resources re avaible for new initiatives. Sir Nicholas claimed that this global deal includes effectiveness, efficiency and equity. In many countries there will be different choices of instruments such as taxes, trading, conditions and different technological mixes. In many countries there is a range for energy efficiency, which both reduces emissions and reduces money. So, rich countries have to reduce their gas emmisions otherwise market failure in the world will continue.

Government policy.

2009-11-17T07:16:00.000-08:00

Government policy to reduce market failure, includes fiscal policy, where government takes taxes from producers to reduce negative externality as pollution.

Economy in Kazakhstan.

2009-11-10T14:51:00.000-08:00

I am going to tell you about economics in my home country Kazakhstan.

So, Kazakhstan it is a former country of Soviet union republic. It is situated in the Central Asia. Kazakhstan became independent in 1991. Kazakhstan has borders with Russia, China, Uzbekistan and Kyrgystan. Kazakhstan it is a ninth country in the wrold of territory.

Nowadays Kazakhstan has 9.3 % of GDP, it is no so much, but it increasing every year. Kazakhstan is a very rich country in oil, gas, uranium etc. It has a special deal ''oil deal with close neighbours with Russia, China and with Turkmenistan. These deal means that these four countries exchange their land resources and to help to each other in economic concepts. Except oil and gas, Kazakhstan also provides many countries with wheat, livestock and textiles. Also Kazakhstan has a big aim, is to be a country number one in the world which provides uranium to countries such as USA, Russia, China, India and Iran. Also government of Kazakhstan wants to increase an amount of energy in country for selling it to other countries.

Also Kazakhstan has some debts, about 2 billion dollars, how we know, banking system in Kazakhstan is not so good, because government haven't solve a problem about banking system and in 2007 the one of the most popular banks in Kazakhstan is ATF bank became bankrupt and the main problem of it was that the guidance of these bank lend too much credits to people, but many people haven't give back these money properly and bank had big debts and scarcity of their own money. Also Kazakhstan has the largest operational space launch facility calls Baykonur. But there is a problem with that, because government hasn't got enough money to keep space launch facility in good conditions and Kazakhstan's government decided to lend it to Russia government for 25 years and for cost of 130 million dollars and it was quite a good deal because on these money Kazakhstan government can improve their economic system and to increase their GDP. Nowadays Kazakhstan's president Nursultan Nazarbayev has a big target to be in first 40 countries in the world in GDP and GNP. That's a really good aim and it is not just words because nowadays the two main cities in Kazakhstan Almaty and Astana are really big financial centers and business centers in the Central Asia. Nowadays Kazakhstan has already achieve some aims of it, first of full Kazakhstan's banking system is developing rapidly. And the profit of banking system is 1 billion dollars. The National bank of Kazakhstan is Halyk bank has big communications with world banks such as RBS, HSBC bank, Unicredit and Swiss bank.

About mixed economy in Norway.

2009-11-02T12:13:00.000-08:00

I have read a really interesting article about mixed economy in Norway.

So, let's know more about term Mixed economy. Mixed economy it is an economic system which includes a variety of public and government control. Mixed economy is a very good possibility for private firms and their entrepreneurs for making finance desicions independently, but there is a big minus: is that state or government have a superior priority for making finance decisions.

So, in Norway there is a developed mixed economy with many private sectors (firms) which can produce their own product, independently of Norwegian government. Norway is the one of the richest countries in the world, their GDP is 246 billion $ and their inflation is only 0.6% and it is absolutely astonishing achievement. Norway also has a really good statistic of GDP because they have a lot of resources such as oil and gas and they provide many countries of EU. Also Norway has the public sector which among the largest in the world as a percentage of the overall of gross domestic product. And that's why Norway has a very high or maybe highest standard of living if you compare with other rich countries in Europe such as Switzerland, Germany, Great Britain or Sweden.But in recent years, Norwegian government raised taxes and that's why many private sectors and firms reduced their production because they can't pay these huge taxes to the government.

Also there is a raisng of wages of labour and other structural features of the Norwegian environment which caused concern about Norway's ability to maintain their cost of living in post-petroleum era. Since 1970, many things have changed, such as government helps to develop and to encourage many new industries in the private sector. They have made a high-tech industry,because of an interest of growing in encouraging in small private firms and it is a source of emploment in country for the future.

Since 2007, Norway made a huge growth of their economy, they look much better that other western nation.

Remember!!!

2009-10-21T12:29:00.000-07:00

Name and formula

1) PED= %change in quantity demanded/%change in price

2) XED= % change in demand of product A/% change in price of product B

3) PES= % change in quantity supplied/% change in price

4) YED= % chane in quantity demanded/ % change in income

Interpretation

1) XED= +4-substitute
-0.6 complementary

2) YED= +3 normal goods
-2 inferior goods

3) PED= -3 elastic demand
+0.6 inelastic demand

4) PES= +5 elastic supply
+0.5 inelastic

Economic system of Hong Kong and Singapore

2009-10-14T14:39:00.000-07:00

Well, at first glance Hong Kong and Singapoure are undeniably similar, because both they are small, with small population,they haven't got any important resources on their land, but these countries are on of the richest and highest GDP in the world. Hong Kong controls big and very important economic system in the world, for example, Hong Kong's very famous bank HSBC make a lot of finance operations in many modern and third world countries. They cooperate with famous banks such as RBS, Unicredit, Swiss bank. In spite of Hong Kong spent lots of money on resources such as oil, water,etc but they can make a really good profit on it and maintain their economics. And the most important part of economic system is that Hong Kong has included in group of Four tigers, with Singapore,South Korea and Taiwan and they have a special deal between each other. They have skilled workforce and have specialised in areas where they have competitive advantage. Singapore and Hong Kong became the world leading international finance centres and that's a big success while other big finance cities drop behind. Also Singapoure is very famous in electronic technologies, they make a massive amount of electronic things and they have a huge sea port, which maintain a big production with other big ports and improve their economic system. And one several years ago, Singapoure's government signed a deal with other countries of Four tigers group that Singapore will improve their education system because it will improve their productivity more and more. So, stability and one of the best economic system and biggest and modern financial centre attract many foreign companies and other biggest corporations to cooperate with each other.

Economic problem: is it possible to have no scarcity?

2009-10-13T13:44:00.000-07:00

There are many interesting questions in economics, I have found a really urgent question nowadays, is it possible to have no scarcity?

So, if you look on many countries in the world you can see that scarcity is everywhere and in every economics system, of course in modern countries there is a less scarcity,but there is.

I think that scarcity in economics happens because government and people of many countries don't economise their budget properly and that's a big problem. People have to learn how to make a good economic system, for example: Germany country which glorifies by their economy system, they produce lots of good and different types of goods, they produce one of the best cars in the world, they know how to make their economics very stability without much scarcity and that's great. I think that stability and ability to save budget properly it is a main way to success. But I think that it is impossible to live without scarcity,if it is no scarcity in economics it will be not interesting to deal with economic and to solve problems also it will be derangements in all economics. Scarcity is an integral part of economics.

The formula of the cross elasticity of demand

2009-10-11T03:04:00.000-07:00

This formula of the cross elasticity of demand. It uses to calculate the coefficient cross elasticity of demand.
In the example: two goods cars and fuel-consist of fuel consumption,they are complements,because fuel and cars uses for each other and in this case cross elasticity of demand will be negative because it shows to us the decrease in demand for cars when the price of fuel is increased so and in this case of perfect complements, the cross elasticity of demand is negative infinity.

Cross elasticity of demand

2009-10-11T02:36:00.000-07:00

In economics the theory of cross elasticity of demand plays a very important part in economics.

The cross elasticity of demand shows to us the responsiveness of the demand of a good to change in the price of another good.

So, on this diagram we can see that both the price elasticity of demand for beer and the cross price elasticity of wine with the price of beer depend on the shape of price-consumption curve.

The price elasticity of demand for beer is the percentage reduction in the quantity of beer demanded. The cross price elasticity for the quantity of wine with respect to the price of beer is the percentage change in the quantity of wine demanded in response to a percent increase in the price of beer. When the price of beer falls,people buy more wine at the same constant price,so people should spend more on wine,because their budget didn't change and they spend more on wine,people must spend less on beer.

Costs of production

2009-10-05T11:49:00.000-07:00

I have read a very interesting article about costs of production in the world. And there are some difficulties in the world with costs on products.

So, in last two years oil and other important resources such as gas, colour metall are rising in costs more and more.

And this changes impact upon firm's production costs. Oil and other resources are very important for our world, it's very hard to imagine our world without oil, gas, metall, etc, because most of our technologies move and develop by these important resources.

In case of oil, it's increasing in price and it gives some effects on all types of business,small as well as large. And in many companies with global production such as cars production. Metal prices become really expensive also oil prices become very expensive correspondingly prices on fuel are becoming expensive and all these things affect the distribution costs of all business. Now many people prefer go by buses or by bycycle because it is much cheaper.

Very interesting article about fatherless families

2009-09-29T14:09:00.000-07:00

I have read a very interesting article about families, where children haven't got a father. So, according to the American sociologist Charles Murray, there are many increasing numbers of young, healthy,low-income males who choose not to take any jobs. Many of them start to do some crime, such as violence on the streets and regular drug abuse.

The main problem of that, because these boys brought up by female and they didn't have any right strict advices from male and their disciplines and responsibilities of society have broken down. They have many big psychological problems in their lives because the should become "real fathers" in family instead their father which they havent'got.

Nowadays in Great Britain it becomes larger and larger numbers of children who lost self-control and concept that actions have consequences. To solve this problem, teenagers have to change their structure of their mind, to avoid problems such as violence, drug abuse etc.

Mali's farmers discover the power of jatropha

2009-09-29T12:30:00.000-07:00

Mali is the african country which constitutes one of the most poorest countries in the world, because there are not any quantity and quality of factors of production that are needed to increase their productive.

Once in Mali was found a very interesting fruit, jatropha, which was originated from South America. People used this fruit for fence agains wild animals, because its smell and taste repel animals. Also, it used for eliminating erosion.

After some years, people in countries like Mali, India, China, Malaysia have found that this fruit can be used for biofuel, which is very important and valuable in the world. In Mali people use jatropha for making electricity in poor areas. And government with this fruits assistance solved many problems with electricity which they haven't got for many years. And now in many countries like Brazil,Argentina, Peru, government make many plantations of jatropha for making biodiesel fuel which is very useful for many types of machines. Also many airline companies use a biodiesel from jatropha. And here is a massive economy of many, because biodiesel fuel is much cheaper than a fuel which making from oil, and it's a really big economy. Every year demand for jatropha fruit is increasing more and more.

What is economics?

2009-09-29T11:52:00.000-07:00

What is economics?

So, everyday I know many new things about economics, such as economics is the study about how to allocate scarce resources in the most effectime way.

Economics is everywhere in the world, every person and every big organisation in the world try to to do the best quality and to save their money. Managers of companies try to decide what to produce and in what qualities.

Also many people in the world try to find the special way where they can make a profit even they don't have much resourses or these countries are poor: for example there are some poor countries in the world such as Senegal, Madagascar, Republic of Kenya, these countries don't have a good economiocs system and they don't have useful resourses, but they make a really big profit by tourism, and that's a great economy and great possibility to eliminate poverty.

Also in many rich countries such as Germany, Great Britain, Belgium, Sweden etc, government try to do many advantageous things to save their profit, for example they employ lots of people from third world countries to work in shops, some companies, and government of these countries save much money, because they have cheap work force and it is a big economy.

Also I have known about command (planned) economy.

Everyday government think about how to improve their economy and be in the leaders in the world. They think about special decisions such as what to produce and how to produce. For producing government needs much resources, like oil, gas to make some inventions for using, but there many countries that don't have any resources and they buy them from many other countries.

Supply demand curve

2009-09-28T09:14:00.000-07:00

http://www.youtube.com/watch?v=ynPaKPYWGO8

2009-09-26T16:55:00.001-07:00

2009-09-26T16:29:00.000-07:00

The reasons of rising prices of cocaine.

So, As far as I am concerned, cocaine is inelastic product, people buy it everytime and it doesn't matter how much does it cost, and the main reason of rising prices, because people who sell cocaine know that every drug addict will buy cocaine, because they depend on it. But there is a problem in many countries, such as prohibition on using and selling drugs and it's very difficult to find any cocaine and that's why people rise prices on cocaine, for example: in Afganistan there are biggest drugs manufactures in the world, but now it becomes more difficult to supply with cocaine to many countries and bosses of it rise their prices because they know that anyway many people will use cocaine in spite of prices on it.
Drugs business is one of the most profitable occupation in the world and demand for it will be very big in any time.

2009-09-23T01:21:00.000-07:00

Let's talk about benefits and the cost of using the biggest ship to transport!Benefits:I think there will be less pollution for unit carried, also the massive capacity, because they can transport a lot of containers. Also it will reduce the price for consumer, because the cost of transport will decrease by the big ship. Low labour cost as well, because there are only 13 crews which case study mentioned. Also low fuel costs per container carried.Costs:To Build the biggest ship should cost a lot, also if a ship is very big, the speed will reduce because when they want to pass some canal, for example Suez canal, they will use a lot of time. Also there are railway line needed. If they want to save money, the capacity of this ship must be full.Then, I would like to talk about another thing, If UK trade with China, they can spend less money to import, also when they transport some products from China to UK, they can create jobs for transport. Also it's leading to lower cost push inflation, because the products from China are cheaper, which reduce the price of goods. However, trade with China might reduce the manufacture job in UK.

2009-09-20T15:15:00.000-07:00

How can EF increase profit?

Well, I think that, EF is a really good system for study, for example I study here on a A level programme and I see a high quality of teaching here. I think that EF can make a really good profit every year more and more, if they do a lot of advertising on TV channels, they will have a good profit and will become more popular in many other countries. Many people in the world know about EF, but personally I think that EF have to try to put their advertising on TV, because advertising on TV is the most beneficial thing.

2009-09-20T13:17:00.000-07:00

2009-09-20T09:22:00.000-07:00

Public debt hits £ 800 billion-the highest on record

Britain is clocking up debt at a rate of £6,017 per second as the Government struggles to balance the books. With tax receipts plummeting because of the recession, state borrowing grew by £16.1 billion last month — almost twice the entire budget for the 2012 Olympics.
Net borrowing for the first five months of the financial year stood at £65.3 billion, compared with £26.1 billion at the same stage last year. Total borrowing soared past the £800 billion mark for the first time and total state debt as a proportion of national output reached 57.5 per cent.
Just to pay the interest on its ballooning debts the Government must find more than £30 billion a year — about £500 for every man, woman and child in the country.
The figures from the Office for National Statistics (ONS) show that tax receipts in August dived by 9 per cent compared with August 2008, while public spending rose by almost 3 per cent. The widening gulf was bridged by borrowing. Spending on benefits grew by £900 million to £13.5 billion as unemployment soared.
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Taking fright at the figures, foreign exchange dealers sent sterling diving to a four-month low against the euro. The value of the pound fell by more than 1 per cent against the dollar.
Analysts said that the Budget forecast by Alistair Darling, the Chancellor, that additional borrowings would be £175 billion this year was not pessimistic enough and predicted that borrowing would be between £15 billion and £50 billion above that forecast.
John Hawksworth, chief economist at PricewaterhouseCoopers, said: “It seems likely that budget deficits will overshoot Treasury forecasts not only in 2009-10 but for years to come.”

Recession in football world

2009-09-17T02:37:00.000-07:00

So, I think that, the biggest problem of recession is spending a lot of money on new players of Real Madrid football club. That they spent a lot of money this summer, about 200 million euros only on 4 players, so, another big clubs looked at this and also increase their prices on their players. After that football world transfer market brokes down. It's a big problem, because these clubs also raise their prices on tickets, t-shirts, food and many people can't go on the match because it becomes really expensive.

2009-09-14T11:09:00.000-07:00

The Netherlands typefies a European Fear that any big fiscal stimulus might just benefit others

So, the main idea of this article how to find a solution of world economic crisis. At the G20 summit in London on April 2nd it was a disagree on the need between two sides Europe and America. How I understand, Europe members want to eliminate the crisis with fiscal policy assistance.
European government who is leading by Germany government want to try a first attempt before they make a big decision.
But there are another problems in politicks of EU government such as unemployment. soaring deficit and public debts. Unemployment is a national problem of EU, and it's a really big problem that should be solved.
The Dutch prime minister, Jan Peter Balkenende pointed out that EU governments were under "intense pressure to use scarce tax revenues mainly for our own countries". In Netherlands developed a vast finansial industry, but some parts of Dutch government such as Centre-right Christian Democrats worry about long-term solvensy of the country because the Dutch government doesn't give any guarantees to a massive financial groups as ING. After vising The Hague, somebody said that the Netherlands is crowded country with tough environmental laws, it means that in this country.
In the Netherlands unemployment forecast rises from 3.9% to 9% next year, so it's smaller than in USA. Dutch government want to make a stability in their country, to create higher welfare payments and to reduce the taxes. But there is another problem such as brutal deterioration of public finances, deficit has been revised to a 5.5%.
Lans Bovenberg of Tiburg University, says that Dutch government knows what to do for their sake and for another countries of Europe.

2009-09-14T07:58:00.000-07:00

Vince Cable Liberal Treasury spokesman
Break up the banking system

Vince Cable shows that there are many problems with banking systems in the world, he took some examples of 2 banks such as RBS and Lloyds banks, these banks have problem with their economics system, that's why government want to sell off these banks because these banks give many problems to government and if RBS and Lloyds banks will continue be nationalised banks, their government will lose a lot of money and it's going to be a massive crisis if government doesn't solve this problem. But, on the other hand Vince Cable points out that if government sells out these banks it will be unprofitable, that's why government should be more pathient. Maybe for a season leadership of RBS and Lloyds bank will find a solution of this problem.

2009-09-14T07:25:00.000-07:00

Robert Greene Strategist and author
Become a nation of hustlers

As far as I am concerned, many people make money or profit in many illegal system of job, but they have big troubles with police and there are many problems with hustlers in many countries, because government can't devise any methods of decision. But we live in a modern world, and it's possible to solve this kinds of problem.
Greene shows that our world becomes degraded more and more.And personnaly, I think that Greene right about Great Britain, because many people in this country think that their nation is the greatest in the world, also Greene shows that it's really hard to become the leading country in the world, but Great Britain can be the leading country in Europe if they stop thinking about their superiority over other countries and Britain have to rise from the ashes and solve some problems with hustlers if they want to be the leading country in Europe.

2009-09-13T15:24:00.000-07:00

What is the importance of economics?

So, personally i think that an economics is one of the most important science in the world,because everyday we have to make a choice among many things.
Nowadays an economics becomes more and more important especially in poor countries, because people in these countries need to econom many things, for example in countries like Angola, Senegal, Ghana etc, people have to econom their water and food because it's really hard to find any sources of water in these countries.Also many people in rich and modern countries like USA, Germany, Great Britain, France, etc, people are trying to keep their resources like oil,gas,electricity, because they are really important for our modern life, everyday we use petrol which makes from oil and uses in cars and other machines, gas and electricity we use everyday and everywhere, but we have to econom them because there are no much oil and gas in the world and it can be finish off,so nowadays people make special programme which can help to econom and to keep resources on our planet. Also in a crises time there is an inflation in many parts of out world, prices and taxes become higher and it's a big problem because people who don't have much money they can't pay for their taxes.It's very important to have a good economic system like in many countries of Europe, if people know how to use an economic system in a right direction they will know how to sort out any problem in the world.

2009-09-13T11:13:00.000-07:00

Hi everybody!!!