Use Economic Theory - Free Essay Example

Sample details Pages: 5 Words: 1637 Downloads: 4 Date added: 2019/05/18 Category Law Essay Level High school Tags: Minimum Wage Essay Did you like this example? Â  The objective of this essay is to analyse and discuss the potential effects of a minimum pricing strategy on the alcoholic beverage industry. It will focus on three main economic agents: consumers, producers and the government. In doing so, the essay will first provide a definition on minimum pricing and its purpose in the economy, before discussing the potential effects it will have on each agent according to economic theory. Don’t waste time! Our writers will create an original "Use Economic Theory" essay for you Create order Finally, the economic theory covered will be applied to the Scottish alcohol market to analyse the extent to which such a pricing strategy is a benefit and/or a disadvantage to each economic agent. Minimum pricing, also known as a price floor, is defined as a method of government (or other economic agent) intervention that aims to correct or lessen instances of market failure by setting the price above the equilibrium level. Figure 1 depicts a model market for a good (or service); at equilibrium, the quantity of the good being produced is qE units, and the market price is P. If the government then intervenes by setting a minimum price above the equilibrium, the new market price will be associated with an increase from P to P. In theory [assuming ceteris paribus], the rise in price should create a market surplus meaning that the quantity of the good being demanded (qd) would be greater than the quantity being supplied (qs). The law of supply states that a rise in the price of a good/service will generally increase its suppliers incentives to produce (higher prices will allow suppliers to earn a profit), suggesting the increase in the quantity supplied from qE to qs. Meanwhile, the law of demand dictates that the rise in price should prevent some consumers from purchasing the good, leading to a contraction along the demand curve from q to qd. This method of intervention is often used in instances where the equilibrium conditions of the market lead to a social [or economic] outcome that is less than desirable e.g. negative consumption externalities that arise from the overconsumption of demerit goods such as tobacco and alcohol (to be covered later), or in a price support scheme to protect producers incomes (Sloman et. al 2018:56) in markets prone to fluctuations in supply, such as the agricultural market. Hence price stabilisation is often used to help the government achieve one of their key macroeconomic objectives and serves as an example of how governments can intervene to prevent, correct or lessen market failure). Imposing a minimum price on a good or service will have various effects on the community surplus (the sum of consumer surplus and producer surplus) as the consumption and production of a good can also impact unrelated third parties who are not directly involved in its consumption or production. One reason why a minimum price may be useful in the economy is that they can reduce demand for demerit goods. A decrease in the consumption of demerit goods would therefore reduce the number of negative externalities that occur from their consumption, such as drink-driving accidents, anti-social behaviour and alcohol-related hospital admissions (this would create a snowball effect as healthcare resources become increasingly scarce). This can be depicted using a negative consumption externality diagram as shown in Figure 2. Given that the marginal social benefit (MSB) of consuming the good is less than the marginal private benefit (MPB = demand curve), the effect of a price floor on demand can be represented by the fall in quantity demanded from QFM (the free market level of consumption) to QSO (the socially optimal output where negative consumption externalities are diminished or eliminated). Figure 3 illustrates how imposing a price floor affects both the consumer and producer surplus. The first effect is the reduction in consumer surplus (represented by the change in CS1 to region CS2). This is due to the rise in price, leading to a smaller wedge between the highest price consumers are willing to pay and the price that is eventually paid (P1). On the other hand, Figure 3 also illustrates a potential increase in producer surplus from PS1 to PS2 due to the price floor. Hence in this example it is notable that a portion of the consumer welfare in this market has been absorbed by the producers the suppliers of the good have benefitted from the governments intervention while consumers have been negatively affected due to the rise in price. The imposing of a price floor has introduced a deadweight loss to society. This is defined as a cost to society resulting from allocative inefficiency (when market supply and demand are not at equilibrium). However, the magnitude of the effect that a price floor will have on consumption and production depend greatly on the price elasticities of both demand and supply. Figures 4-6 illustrate the extent of the change in quantity based on the PED and PES of the good. Figure 4 illustrates the effect on a good with a high PED qd falls by the greatest magnitude as demand is much more responsive to the rise in price. Therefore, imposing a price floor on a good may only be suitable when PED is elastic rather than inelastic. The price elasticity of supply also determines the extent to which a price floor will affect the quantity traded. Figure 5 depicts a good with price-inelastic supply, showing that an increase in price will only lead to a minimal increase in the quantity supplied. When supply is price-elastic, Figure 6 demonstrates the fact that producers will be greatly responsive to the change in price, leading to a leap from in the quantity supplied (qE to qs). The Scottish Government recently intervened in the alcoholic beverage market on February 2018 by placing a minimum price of 50p per unit on drinks (The Economist:2018). The aim of the regulation will be to lessen the external costs imposed on third parties. Using Figure 2, the external costs of alcohol consumption can be represented by a contraction along the MSC curve from P1 down to P2. As a product that is overconsumed in a free market and considered addictive by many consumers, it is widely recognised a demerit good; intoxication harms not only drinkers but also the wider society, posing several risks to consumer health such as an increased likelihood of contracting liver disease, heart disease and stroke as well as a greater number of fatal car accidents resulting from drink-driving. Statistics from an NHS report taken in 2015 indicate that ?approximately 57,000 deaths (1 in 15 of the Scottish population) were caused by alcohol (Alcohol Focus Scotland:2018). One reason why the minimum price may benefit Scottish consumers is that reduced consumption should reduce the number of alcohol-related accidents and health complications resulting from misuse, likely leading to a healthier population and a more productive workforce. This is highly likely given that alcohol is produced in a competitive market with many substitutes and at low prices the price strategy is described as a ?price hike on cheaper, stronger drinks (BBC News:2018). Suggesting that demand for the good is fairly price elastic, it would mean that a 20% rise in the price, for example, should result in a percentage fall in demand that is larger than 20%. With reference to Figure 5, it can thus be inferred that a price floor of P1 on alcohol should successfully reduce demand from QE down to Qd. However, the price floor may do some Scottish consumers more harm than good Figure 3 shows that a rise in price will cut consumer surplus short (CS2 has shrunken in size in comparison to CS1). This may be problematic for low-income households among the Scottish population who only consume alcohol occasionally since a per-unit price rise will comprise a greater proportion of their income than those with more income. This group of consumers will be much more price-elastic in demand due to the differing levels of household income and their consumer preferences. Therefore, minimum pricing can be also criticised as it would disproportionately reduce Scottish consumers spending powers based on their income. A possible benefit of using minimum prices to Scottish producers is that it increases the price that they producers receive from the sale of the good. This may be beneficial for smaller firms as they may gain greater profit and subsequently use this profit to invest into their products, potentially resulting in produce of a higher quality. However, the price floor may unintentionally cushion inefficient producers of the good by allowing them to avoid cutting their costs. This could be potentially harmful to the industry if resources are not being fully optimised and waste becomes commonplace in the market. The price floor can beneficial to the Scottish Government a healthier workforce may afford to work more often and/or for longer hours. However, a concern arising from the imposition of a minimum price revolves around the treatment of the market surplus (qs-qd, see Figure 4). The government may incur additional costs in having to buy up the excess supply or destroy it. This may be an unfavourable outcome for the government the surplus may be considerably large if alcohol is to have price-elastic demand or supply (or even both, making the procedure even more costly. To conclude, minimum pricing will have both positive and negative connotations for all three economic agents. The extent of these are determined by the size of the price floor. There may be better methods to reduce market failure from the consumption of such a demerit good, such as a progressive tax (e.g. a duty on alcohol) or a subsidy on alternative merit goods (healthcare) to increase external benefits. Bibliography Sloman et al. (2018) Economics. 9th edn. London: Pearson The Economist. (2018). Scotlands minimum price for alcohol may have unexpected effects. [online] Available at: https://www.economist.com/britain/2018/03/01/scotlands-minimum-price-for-alcohol-may-have-unexpected-effects [Accessed 15 Nov. 2018]. Alcohol Focus Scotland. (2018). Alcohol facts and figures. [online] Available at: https://www.alcohol-focus-scotland.org.uk/alcohol-information/alcohol-facts-and-figures/

Codes of Ethics Essay - 717 Words

Introduction Throughout the world, business organizations and various professions conduct daily activities that require standards of ethical behavior. To convey a company’s ideals, principles, and goals most companies develop a document called a code of ethics that defines the behavior that others can expect from them. A business code of ethics is a valuable tool used within a profession or business to evaluate its performance in the business world. Business Codes of Ethics Each day in the workplace, people encounter ethical situations to which they must react. A code of ethics formed by a profession or a business is very clear and helpful in providing guidance in the ethical decision making process. The purpose behind a code of†¦show more content†¦In another example, Kenneth Lay and Jeffery Skilling, along with several other senior management individuals, regularly lied to Enron stockholders and employees about the company’s financial situation. It was as if a code of ethics did not exist at Enron. While the company was sinking financially, they all raped and pillaged Enron’s coffers while displaying no remorse for their actions. Ultimately, the company crumbled and the perpetrators received punishment. Unfortunately, 20,000 people lost their jobs because of the unethical behavior of the Enron executives. Within my future field of the IT industry, the standard code of ethics revolves around three main areas. These three areas are as follows: â€Å"I will strive to know myself and be honest about my capability, I will conduct my business in a manner that assures the IT profession is considered one of integrity and professionalism, I will respect privacy and confidentiality†. (SANS: IT Code of Ethics, 2004, p. 1) Below each of these headings, a plethora of other sub points of ethical expectations reside. For example, I will not steal property, time, or resources. 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Genius free essay sample

Albert Einstein supposedly once said Everyone is a genius. What he was trying to point out to us is that no matter what subject or issue, everyone has a talent where they excel, and (Coordination) in which they are classified as a genius. But what exactly is a genius? The dictionary states it as an exceptional natural capacity of intellect where intellect is the power or faculty of the mind by which one knows or understands. However, there can be various types of geniuses: of the arts, inventors, Miters or any common day hobbies, or maybe even life.As Einstein, who allegedly said this, discovered: the theory of relativity, proved atoms existed, and E=Mac, most people classified him as a genius(Periodic Sentence). Einstein was a genius of academics; he was more acquainted with the way his brain worked, especially compared to that of many of us (Parallelism). So he took what he needed to know from I. We will write a custom essay sample on Genius or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page E. Teachers, mentors, or parents), in order to make his life more like he wanted it to be. Another individual that most classify as a genius is Wolfgang Amadeus Mozart, a music composer that started when he was Just the age of 5 years old appositive).Mozart was known as a child prodigy in music, he is well known for many symphonies and operas such as, Don Giovanni, The Magic Flute, and the Jupiter symphony. From the beginning, he was aware exactly what he had a passion to do, to play music, and that is exactly what he did. Most of mankind classifies this group of prodigies as geniuses because of what they did In order to make the world a different and changed place, but I believe they are geniuses because of what they did for homeless, in order to make their lives happier for their own desire. If you really think about it, what most people want from life Is happiness; to be able to push through all the struggles and come out as a better person; to fight for what you want or In what you believe; somebody who controls their life, In order to make It a happy one. One of my main role models In life, Brandon Bandmaster, who used to be Just a little small town boy from Litton, Oklahoma (appositive), now stands as our State FAA President. Brandon lived In a small town, and when he transferred there as a Irishman, he didnt even know what the FAA was.But after seeing a copious amount of opportunities for happiness In It, he took the chance and ran with It, and look here It landed him, as our State President, and he couldnt love It anymore! Brandon .NET through struggles and hardships, but he didnt let them stand In his way, I heard him once say A setback Is a setup for a comeback! , now that Is the attitude In Mulch you have to go at life! He kept on going and now all of that has p aid off because he Is happy, Just Like he always has been.What I believe all of those Individuals have In common Is that they saw an opportunity of happiness, they lasted onto It and It took them where they wanted to be. I believe that anyone who aspires to be happy, and doesnt let anyone tear them down but Instead stands back up stronger than before, Is someone who stands as a genius of life (Subordination). I truly believe that everyone Is a genius; at one time or another, something will happen that makes them realize that they dont live forever, and that you can either live out sour life happy, or sad.And when that moment comes, that person then becomes a genius of life. Intellect where intellect is the power or faculty of the mind by which one knows or people classified him as a genius(Periodic Sentence). Einstein was a genius of prodigies as geniuses because of what they did in order to make the world a different think about it, what most people want from life is happiness; to be able to push through all the struggles and come out as a better person; to fight for what you want or in what you believe; somebody who controls their life, in order to make it a happy one.One of my main role models in life, Brandon Bandmaster, who used to be Just a President. Brandon lived in a small town, and when he transferred there as a of opportunities for happiness in it, he took the chance and ran w ith it, and look Inhere it landed him, as our State President, and he couldnt love it anymore! Brandon Net through struggles and hardships, but he didnt let them stand in his way, I heard him once say A setback is a setup for a comeback! , now that is the attitude in Inch you have to go at life! He kept on going and now all of that has paid off cause he is happy, Just like he always has been.

Tobacco Advertising And Its Dangerous Effects On Young People. Tobacco Essay Example For Students

Tobacco Advertising And Its Dangerous Effects On Young People. Tobacco Essay Tobacco Advertising and its dangerous effects on young people. Tobacco Advertising Makes Young People Their Chief TargetEveryday 3,000 children start smoking, most them between the ages of 10 and 18. These kids account for 90 percent of all new smokers. In fact, 90 percent of all adult smokers said that they first lit up as teenagers (Roberts). These statistics clearly show that young people are the prime target in the tobacco wars. The cigarette manufacturers may deny it, but advertising and promotion play a vital part in making these facts a reality (Roberts). The kings of these media ploys are Marlboro and Camel. Marlboro uses a fictional western character called The Marlboro Man, while Camel uses Joe Camel, a high-rolling, swinging cartoon character. Joe Camel, the smooth character from R.J. Reynolds, who is shown as a dromedary with complete style has been attacked by many Tobacco-Free Kids organizations as a major influence on the children of America. We will write a custom essay on Tobacco Advertising And Its Dangerous Effects On Young People. Tobacco specifically for you for only $16.38 $13.9/page Order now Dr. Lonnie Bristow, AMA (American Medical Association) spokesman, remarks that to kids, cute cartoon characters mean that the product is harmless, but cigarettes are not harmless. They have to know that their ads are influencing the youth under 18 to begin smoking(Breo). Researchers at the Medical College of Georgia report that almost as many 6-year olds recognize Joe Camel as know Mickey Mouse (Breo). That is very shocking information for any parent to hear.The industry denies that these symbols target people under 21 and claim that their advertising goal is simply to promote brand switching and loyalty. Many people disagree with this statement such as Illinois Rep. Richard Durbin who states If we can reduce the number of young smokers, the tobacco companies will be in trouble and they know it (Roberts). So what do the tobacco companies do to keep their industry alive and well? Seemingly, they go toward a market that is not fully aware of the harm that cigarettes are capable of. U.S. News recently featured a discussion of the smoking issue with 20 teenagers from suburban Baltimore. The group consisted of ten boys and ten girls between the ages of 15 and 17. When asked why they started smoking, they gave two contradictory reasons: They wanted to be a part of a peer group. They also wanted to reach out and rebel at the same time. When you party, 75 to 90 percent of the kids are smoking. It makes you feel like you belong, says Devon Harris, a senior at Woodlawn High. Teens also think of smoking as a sign of independence. The more authority figures tell them not to smoke, the more likely they are to pick up the habit (Roberts). The surprising thing is that these kids know that they are being influenced by cigarette advertising. If these kids know that this advertising is manipulating them, why do they still keep smoking? The ads are everywhere, especially in teen-oriented magazines, such as Rolling Stone and Spin. The ads also fuel some of the reasons the children gave for starting. They represent rebellion, independence, acceptance and happiness. These are all the things a young person, between childhood and adolescence, needs and desires. This type of advertising, on top of peer pressure, is the mystery behind the rise in adolescent smoking.How do we stop the future of America from smoking? Here are three things that the experts recommend. Try to convince your children that smoking is not cool. Talk to your kids at a young age about the dangers of smoking. Identify family members who smoke and ask them to stop (Thomas).Children are the most valuable commodity we are given in life. Lets try to educate them while theyre young to be independent thinkers and to not be swayed by the tobacco companies who are trying to take advantage of their mind and body.Works Cited Bill Clinton vs. .u0cd2d90768a9f5a074af7da6c74bbf7a , .u0cd2d90768a9f5a074af7da6c74bbf7a .postImageUrl , .u0cd2d90768a9f5a074af7da6c74bbf7a .centered-text-area { min-height: 80px; position: relative; } .u0cd2d90768a9f5a074af7da6c74bbf7a , .u0cd2d90768a9f5a074af7da6c74bbf7a:hover , .u0cd2d90768a9f5a074af7da6c74bbf7a:visited , .u0cd2d90768a9f5a074af7da6c74bbf7a:active { border:0!important; } .u0cd2d90768a9f5a074af7da6c74bbf7a .clearfix:after { content: ""; display: table; clear: both; } .u0cd2d90768a9f5a074af7da6c74bbf7a { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u0cd2d90768a9f5a074af7da6c74bbf7a:active , .u0cd2d90768a9f5a074af7da6c74bbf7a:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u0cd2d90768a9f5a074af7da6c74bbf7a .centered-text-area { width: 100%; position: relative ; } .u0cd2d90768a9f5a074af7da6c74bbf7a .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u0cd2d90768a9f5a074af7da6c74bbf7a .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u0cd2d90768a9f5a074af7da6c74bbf7a .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u0cd2d90768a9f5a074af7da6c74bbf7a:hover .ctaButton { background-color: #34495E!important; } .u0cd2d90768a9f5a074af7da6c74bbf7a .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u0cd2d90768a9f5a074af7da6c74bbf7a .u0cd2d90768a9f5a074af7da6c74bbf7a-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u0cd2d90768a9f5a074af7da6c74bbf7a:after { content: ""; display: block; clear: both; } READ: Essay about Net Neutrality: The Future of the Internet? Essay Joe Camel. U.S. News World Report. 2 Sep. 1996: 12. Infotrac. Online. 27 Oct. 1996. Selling Tobacco to Kids. America. 17 Feb. 1996: 3. Infotrac. Online. 27 Oct. 1996. Roberts, Steven. Teens on tobacco; kids smoke for reasons all their own. U.S. News World Report. 18 Apr. 1996: 38. Infotrac. Online. 27 Oct. 1996.Thomas, Roger E. 10 steps to keep the children in your practice nonsmokers. American FamilyPhysician. Aug. 1996: 450. Infotrac. Online. 27 Oct. 1996. Breo, Dennis L. Kicking Butts-AMA, Joe Camel and the Black Flag war on tobacco. JAMA, TheJournal of the American Medical Association. 29 Oct. 1993: 1978. Infotrac. Online. 27 Oct. 1996.