Abstract One of the functions of the government is to maintain stability in the economy and create an environment conducive for economic growth. The paper discusses the differing roles of the government from supply side and demandside perspective. In supply side economics, the government may reduce tax rates to create incentives for households to save and for business to invest. In demandside economics, the government may increase its expenditure level. The paper shows how both have the effect of increasing national output. The writer states that government expenditure, however, depends on revenues, the level of which is determined by the tax policy in place.
From the Paper "Supply side economics adheres to the idea that cuts in tax rates will lead to increase in potential GNP (Taylor, 1995, p. 549) Supply side economists claim that tax cuts have incentive effects on savings, investment and labor supply. (Dornbusch & Fischer, 1990, p. 697) Lower tax rates mean less tax on capital gains or asset earnings and this encourages people to save. A rise in savings increases the supply of financial capital or credit leading to a decrease in interest rates, the price of capital. This stimulates investment thereby creating jobs. At the same time, lower tax rates mean higher after-tax income or disposable income for workers, so reductions in tax rates encourage them to work more. This results to an increase in labor supply. Together with the rise in investments, this leads to an increase in production activities in the country boosting the national output and eventually expanding the tax base. "
Abstract The paper defines and discusses two policies used to reduce urban unemployment, namely the demand-side and the supply-side policies and the problems associated with them. In conclusion, the writer states that the workings of an urban community are complex and that to seek a single equation that solves the problem of urban unemployment is an enormously difficult task that involves a great deal of wise economics and forecasting.
From the Paper "Immergluck discusses the results for why a high proportion of blacks for a zone increases unemployment rates. This he attributes to three primary factors that include employment discrimination, a lack of job networks, and unmeasured skill or educational differences. He cites a study by Turner (1991) that indicates blacks continue to be victims of employment discrimination. A 1987 study by Wilson argues that "the increasing concentration of poverty in, and the exodus of middle-class blacks from black zones have left many blacks with few personal connections to working adults" (Immergluck 20). Immergluck reasons that the social isolation of many highly segregated, lower-income black zones leads to a disconnection from job networks, especially for lower-skilled residents (Immergluck 20). A 1990,1991 study by Orfield argues that educational segregation and differences in schooling between white students who reside mostly in the suburbs and black students of the central city have led to the large scale differences in the achievements between black and white students. Immergluck's finding that race as a large factor in employment may have been rooted in educational differences which is even more responsible for the affects of race on employment than discrimination or access to job networks. Those graduating from inner city schools may not have received as well an education as those in predominantly white suburban schools. That education is a key determinant in neighbourhood employment rates is corroborated by a thesis used by Immergluck of Kasarda in a 1993 study which states "the low skills of many urban residents explain a good deal of employment problems in an increasingly technological economy" (Immergluck 20). This would help to explain why skill mismatch creates more of the urban neighbourhood employment problem than spatial mismatch. Drawing from the very modest effects of increasing the number of jobs to labour force ratio, Immergluck concludes that "efforts that seek solely to increase the aggregate number of jobs very near high-unemployment neighbourhoods are not likely to improve resident employment rates in these areas substantially" (Immergluck 21). The focus instead should be on creating jobs similar to the occupation levels of local residents, and in urban areas with high unemployment, this focus should be on increasing numbers of lower-skilled jobs. Lower-skilled jobs pay less than moderate-skilled jobs, but moderate-skilled jobs are accessible only to a limited number of the unemployed (Immergluck 21)."
Abstract This paper takes a look at the two classifications of US airlines; legacy carriers with hub-and-spoke systems and newer low-cost airlines with point-to-point models. According to the paper, with only moderate changes in growth and spending predicted, legacy airlines are in big trouble. The paper reviews the problems that legacy airlines are facing.
Outline:
Introduction
Supply-Side Problems
Demand-Side Problems
Solution and Recommendations
Conclusions
From the Paper "In addition to the influence of economic conditions, the airline industry is characterized by other very complex demand dynamics, depending on travel distance, type of traveler, and domestic and international flights, to name a few of the many factors that determine the degree of price elasticity or inelasticity (Air travel demand elasticities: Concepts, issues and measurement). For long-haul international business travel, demand is not sensitive to fare changes because there are few close substitutes. On the other hand, long-haul domestic business travelers have much higher elasticities than international business travelers. Telecommunications has become more acceptable as a substitute in domestic markets due to common culture, laws, contracts, etc. International leisure travelers are more likely to either postpone their trips in response to higher fares or seek locations that are not as expensive. Currently, the dollar is weak against many international currencies, serving to make many destinations unappealing price- sensitive leisure travel."
Abstract This paper explains the economics of supply and demand, as well as examines those factors that can cause a shift in supply and demand. Supply is the amount of goods producers are willing and able to sell at a given price. Demand is the amount of a good that consumers are willing and able to buy at a given price. Factors influencing supply and demand include the price of the good and the income of the consumer.
From the Paper "Supply and demand are at the heart of how free market economies work. Under normal conditions, the price of any product is determined by two factors, the demands for the product and the available supply. The selling price serves as a mechanism to inform consumers and the producers of the relative scarcity of the product. This will encourage the merchant to adjust how much they sell it for and the level of demand by the consumers. When the market for an item is cleared of excess supply or demand equilibrium is achieved. Therefore when demand exceeds supply the prices will rise. This will cause increased profits and will motivate sellers to increase their supply. Buyers will continue to drawn into the market until demand is fully satisfied. "
Abstract The paper looks at an article entitled "Going Crazy for Ethanol" by S. Pearlstein and explores economic issues associated with the supply and demand of a gasoline substitute, ethanol. The paper provides a synopsis of the article in relation to economic theory and explains why changes have occurred in the supply, demand and price of ethanol. The paper examines the invisible hand theory that is proposed to facilitate the equilibrium of price and demand. The paper concludes that understanding how economic conditions affect the marketplace provides managers with vital tools necessary for making effective business decisions.
Outline:
Abstract
Economic Issue
Economic Influences
Supply and Demand The Invisible Hand Theory
Conclusion
From the Paper "Pearlstein, the author of the article, reports that the price for ethanol has reached an all time high of $2.90 per gallon which is twice as high as a year ago. With the manufacturing cost around $1.25 per gallon, the operating margin exceeds 50%. Ethanol is a colorless, volatile alcohol derived from the fermentation of grains and sugars or by the hydration of ethylene. Ethanol can serve as an environmentally friendly substitute for gasoline. Many oil companies are exploring options for production of ethanol to mix it with gasoline to reduce costs. Data indicate that adding ethanol to gasoline would reduce current prices at the pump by 30 cents per gallon (Donaldson, 2006 12)."
Abstract This paper discusses supply and demand in the United States. Specifically, this paper addresses six questions that are based on aggregate supply, aggregate demand, equilibrium of supply and demand, real gross domestic product (GDP), unemployment, and full employment concepts. This paper also includes a graph of a AD/AS diagram, which is demonstrative of United States economic indicators in the 4th quarter of 2004.
From the Paper "This paper discusses and demonstrates supply and demand curves that represent U.S. economy in 2004. All data and information is taken from statistics provided in class as well as lecture notes. Aggregate demand is the total demand for goods and services in an economy, whereas aggregate supply is the total supply of goods and services in an economy. By defining the aggregate supply curve in terms of the price level and output or income, we can analyze the effects of other variables, such as the interest rate, on aggregate supply. An AD/AS Model represents aggregate supply and aggregate demand, an approach used to evaluate the effects of economic policy decisions."
Abstract This paper examines the concept of supply and demand by giving clear definitions and examples. Basic economic terminology is presented and is further illustrated with concrete examples. The paper uses the demand for physicians in the US to describe supply and demand, with practical ideas of how to increase supply.
From the Paper "The rate of supply and demand may vary depending on the trend in the environment. One instance is when the people in one community are so keen in holding or keeping some supplies for their own future personal use. While the people are keeping their stocks on hold, there will surely be dramatic changes in both the supply and demand, as well on the price of the commodities (Lee, 1992)."
Abstract The paper reviews the definition of "economics", the concepts of supply and demand, and the functioning of supply and demand in the air passenger industry in 2003. It looks at the effect of 9/ll on the industry.
From the Paper "If one searched diligently one could find dozens of definitions of the word economics or of the concept of economics The most widely accepted and used definition of economics as an ..."
Abstract The degree of price elasticity of demand for Hoffmann-La Roche's anti-fat drug Xenical is examined. The price elasticity was found to be low due to a high presumed demand. Competition and its effect of their pricing strategy is also examined.
From the Paper "Xenical is an example of a recently developed class of weight-loss medicine that is used to treat obesity. Unlike appetite suppressants it helps reduce body weight by diminishing the amount of fat absorbed in the stomach..."
Abstract This paper discusses the supply and demand simulation for an Economics for Business course. The simulation utilizes the example of the apartment industry in the fictional city of Atlantis. Chiefly, the supply, demand, and equilibrium within the 2 bedroom housing market are examined in relation to the market. The simulation is further complicated by the introduction of a price ceiling to demonstrate how market forces can be artificially manipulated.
From the Paper "The simulation uses the example of a fictional city, Atlantis, to demonstrate the impact of market forces in the 2 bedroom housing market. In the housing market there are many forces that affect supply and demand; some natural, some artificial. The supply and demand of 2 bedroom units in Atlantis is affected by both natural and artificial forces. The natural forces affecting supply and demand in the simulation were the natural influx of people into the city which, those people needing affordable housing caused a greater demand of 2 bedroom units and a temporary shortage until supply caught up with demand. Another natural force affecting supply and demand is housing preference. In Atlantis the example was given that the local population, regardless of price of 2 bedroom units, began to prefer single-unit, free-standing houses."
Abstract This paper discusses the petroleum industry and specifically that of fuel and gasoline products in relation to the economic theory of supply and demand. The paper examines supply and demand as separate components and how consumer conceptions of wants, needs, and desires can be, and often are, manipulated to keep the petroleum industry from being fully governed by normal market forces.
From the Paper "Gas, Economics, and the Power of Demand The Nature of Demand for Fuel Overview The character of the concept of supply and demand in economic terms is confined by the wants, needs, and desires of the individuals in a given society. This character of supply and demand is further restrained by scarcity in that even if supply is strong the relative scarcity of an item has an intrinsic effect on its value. Of all commodities in the world today fuel, alone, seems to operate within its own unique parameters beyond the standard confines of supply and demand. When Adam Smith averred that man was a trader at heart he implied that man seemed to define the value of things: It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Abstract This paper reviews the article "China's Rising Demand for Oil and Pipelines Has Worldwide Implications," in which Gordon Feller discusses the unexpected negative impact that the ascendancy of China's economy into a major global economy has had on international markets. The paper goes on to discuss how for years companies all over the globe and especially in the West, have viewed China as an emerging market with vast potential for increasing sales for many years to come. Yet, most analysts seemed to overlook the fact that China's economy was expanding for a reason and that its emerging modern infrastructure and middle-class population with greater income levels would have the same energy demands as any other developed nation.
Abstract In the paper, supply and demand are examined as separate components and how consumer conceptions of wants, needs and desires can be and often are, manipulated to keep the petroleum industry from being fully governed by normal market forces. The paper explains that nevertheless, the petroleum industry is often used to illustrate the characteristics of supply and demand.
From the Paper "One of the most important economic theories in relation to the oil industry, oil as a commodity and oil use is the theory of supply and demand. Simply put, as world markets are pressed to supply higher utilization rates in existing markets and by the addition of newer consumption markets such as China to the overall petroleum market, the price of oil inevitably increases. The petroleum industry is not like other product industries where if a product is selling well then new factories are built to supply the additional demand. In the petroleum industry, it takes years to source and develop oil supplies and the central commodity is a finite product as it is. The world's supply of oil only gets smaller with the passage of time."
This paper is designed to show the demand function of gasoline in the United States and how it affects consumers' buying decisions and automobile manufacturers.
Abstract This paper first address the inelasticity of the price of gasoline and then describes the reasons for it. The paper discusses American consumers' high demand for gasoline being unaffected by changing gas prices due to the lack of available substitutes for gasoline. This does however change the consumers' demand for automobiles. This paper includes charts and graphs to illustrate the data propounded in the paper.
From the Paper "Gasoline's elasticity has and always will remain under 1.0. This just shows that no matter what the price of gas may be, consumers will still purchase gas. In 2007, gas prices were at a record high of almost $5/gallon in Los Angeles and yet, traffic was still awful. Why are people still driving cars and demanding gas when prices are so high? Being inelastic, there is no substitute for gas. What the increasing prices in gas do affect is the demand for cars. Consumers will find alternative ways for transportation such as carpooling, public transportation, walking, bicycling, etc. Even for those who do drive will get deterred from buying SUV's or high gas consuming cars. So with the lower demand for cars, car manufactures have had to change their production strategies. They have reacted by making cars that are gas efficient and more attractive for consumers to drive even with high gas prices."
Tags: economics, supply and demand, hybrids suv's consumer automobiles
