Microeconomics

Thirlwall’s growth model: Thirlwall in his model argues that for true form of growth to exist the growth must be export oriented and there should be balance of payment equilibrium. As a starting point he takes the (Keynesian) demand-turned approach to know the major limitations on demand. He argues that instead of national income (output) being the sum of investment, consumption expenditure and exports, minus imports, it should be in growth perspective that national income growth be the weighted…

3. What are the determinants of price elasticity of demand? [10] For some products buyers are price sensitive (products are elastic), and for some products buyers are not price sensitive (products are inelastic). People are very sensitive to one products price change if the product has a similar product in the market. But sometimes when the price of a motor bike increases by 15%, the consumers are affected by it, but on the other hand when price of salt increases by 20% people aren’t…

Application to Leontief input-output model Introduction In order to understand and be able to manipulate the economy of a country or a region, one needs to come up with a certain model based on the various sectors of this economy. The Leontief model is an attempt in this direction. Based on the assumption that each industry in the economy has two types of demands: external demand (from outside the system) and internal demand (demand placed on one industry by another in the same…

Price discrimination Price discrimination is a pricing strategy whereby firms charge customers different prices for the same product or service that the offer. It is often that the seller charges each customer the maximum price that he or she is willing to pay. Such discrimination will allow a company to generate higher profits compared to standard pricing as it allows the firm to capture every last dollar of revenue available from each of its individual customers. (Anon., 2015) The Budget…

Q1. What are the reasons for the increase in variability in Barilla’s supply chain? Variability in supply chain arises due to variability in demand which can be attributed to the following: 1. Volume and Transportation discounts: A full truckload entitled the distributor to a 2-3% discount by Barilla. In addition, the sales reps could offer 4% discount on a purchase of minimum 3 truckloads. This may have wrongly incentivized the distributors to wait for longer durations and in turn reduced…

Making an attachment on how in the future across a given period of time with limited or scarce production resources concerning what goods to produce, how much each the goods to produce, to whom the goods are to be produced and which among the goods are to be given. According to Roger Le Roy Miller (1998), the author of Economics, today and tomorrow says Economic goes to a situations in which attachment must be made about how to get with limited resources, when to apply them and for what…

The neoclassical economic approach assumes that working time is perceived in terms of time allocation and related choices taken by a rational actor with regards to the consumption of time. Thereby, time is considered as a scarce resource, as a day is limited to 24 hours and therefore the main aim of the rational actors is to achieve a maximization of personal time utility (Sirianny & Negrey, 2000). This implies that the actors act in order to achieve their individual preferences and this…

There is currently a situation occurring with two of the country’s biggest sugar producers. The two companies, Mega Corporation and BIG Enterprises, are considering a merger of their two companies to become one company, the Mega-Big Corporation. If this merger proceeds as planned, then the Mega-Big Corporation will control over 80 percent of the market share in Brazil. With such a large market share, the Mega-Big Corporation would be considered a monopoly of the sugar market. In the discussion…

Economists have long been interested in the way that consumers behave. One of the main determinants of the consumer behaviour is the concept of utility. Economists define utility as the satisfaction someone gains from the consumption of a good or service. A person buys a product because it provides satisfaction. The more a person buys the greater the total utility he or she will receive. Total Utility (TU) is the total satisfaction gained from consuming a given number of goods. However, total…

Industry and the organization As part of this project, we have selected the consumer apparel and footwear industry, which is represented by Nike Inc. About the company Nike Inc. is an American multinational corporation that designs, develops and markets sports footwear, apparel and accessories under its brand name. The company was founded in the year 1964 as Blue Ribbon Inc. , but was then named as Nike Inc. in 1970. The company is listed on New York Stock Exchange, under the ticker symbol of…