Evaluate the Significance of Imperfect Competition Models for Essay

Evaluate the Significance of Imperfect Competition Models for Explaining the Pattern of International Trade - Essay Example This type of market does not operate under the rules of perfect competition. In this type of market structure, a firm has the ability to affect the prices. In spite of being close substitutes, the products can be differentiated and advertising and branding plays a major role in this type of market. A large number of sellers exist in the market. The market structure is characterized by freedom of entry and exit. Monopolistic competition and oligopoly constitute the structure of imperfect competition. Firms that are imperfectly competitive offer many products. The products are offered at administered prices. The price changes are costly and slower. The prime prediction of the theory of monopolistic competition is that firms will produce at the level where marginal cost equals marginal revenue in the short run. However in the long run, the firms will operate at zero profit levels and the demand curve will be tangential to the average total cost curve. Intra Industry Trade Situation wher e there is exchange of similar products between similar industries is referred to as intra industry trade. This is a very common term in international trade where imports and exports of similar product take place. The three types of intra industry trade include trade between goods that are homogeneous, trade between horizontally and vertically differentiated goods. Consider the Krugman’s model of monopolistic competition. This model helps to explain intra industry trade by using economies of scale as experienced by production, products that can be differentiated and heterogeneous preferences between and within countries. The sum of fixed cost and variable cost is the total cost of the firm. Therefore, C= F+cX, where F is the fixed cost, c is the constant marginal cost and cx is the variable cost. So, average cost, AC= F/X+c The demand curve faced by the monopolistically competitive firms is downward sloping. Profit is maximized at the level where marginal revenue equals margi nal cost. The equation of the demand curve faced by a monopolistically competitive firm is X= S[1/n-b(P-Pavg)] Where X= sales of the firm, S= total sales of the industry, n= number of firms participating in the industry, P=price charged by each firm, Pavg=average price charged by each firm, b=parameter of MR. A typical firm that charges the price greater than Pavg, is likely to enjoy smaller share of the market. Another assumption is that S is not affected by P. This refers to the situation where competition in price will simply redistribute the share of the market without increasing the total sales. To determine the market equilibrium, firms are assumed to be symmetric. The demand and cost functions are the same for all firms. An upward sloping relationship is said to exist between the number of firms and average cost of any firm. A downward sloping relationship is said to exist between the number of firms and price charged by each firm. In equilibrium, P=Pavg as all firms are assu med to be symmetric. The demand curve is X=S/n, and AC=nF/S+c. The demand curve can be rewritten as X=(S/n+SbPavg)-SbP where the bracketed term is the intercept and Sb is the slope. Then the marginal revenue is P-X/Sb. MR=MC, therefore, P-X/Sb=c or, P=c+X/Sb. But each firm charges the same price, then, P=v+1/bn. (Cashel, n.d., p. 1). The long run equilibrium takes place where P=AC. This model can be used now to derive the implications of international trade. International trade is

Innovating Essay Example | Topics and Well Written Essays - 2500 words

Innovating - Essay Example Some of these factors include the cost of research, the nature of research and the potential for resistance by the various agencies. Both the normative and the constructivist have their own way of meeting these different needs and it is necessary to know exactly what an organisation is looking for. For an organisation that is looking to manage the risk and the cost of research, it might be necessary to use the normative process. On the other hand, those organisations, such as the military which are not concerned with the risk of failure or the costs can use the constructivist approach. This paper tries to compare the two approaches with regard to various factors of innovation. Normative approach has its advantages in the light of the creation, distribution and sharing of knowledge. In the academic world, and especially at the tertiary level, the normative approach to knowledge and innovation can be very useful due to several reasons. First, it is indispensable to understand that one of the most imperative things about modern knowledge management is the shared learning which means that knowledge is shared equally across the world. While innovation is something that should be free from the rigid standards, it is definite that it is dependent on the normative knowledge. Most innovators are people who have acquired the shared knowledge in a specific field of knowledge. To keep up with the demand of innovation that is necessary in the modern world, there is a need to have a well thought-out way of innovation. The modern world cannot depend on erratic and unexpected innovations for its development. In this regard, normative approach to innovation is very necessary to help in a guided innovation. Despite this, there are those who believe that normative approach to innovation is not the best way to go, but that a constructivist model should be used. Most of innovations done in the past were done in a constructivist

China is in a better position than India to succeed in the new global Outline

China is in a better position than India to succeed in the new global economy - Outline Example Consequently, there is a panic in Middle East on this basis and it is possible that global consequences may follow (Cetron et al, 2006). "Looking across the Pacific and to Asia, the emerging powers of the previous decade are now key players and global economic powers. Asia, led by a dynamic China and India, has emerged to lead the global economic recovery; it will be essential for America to engage with Asia in all areas ­Ã¢â‚¬â€œeconomic, security, and energy† (India, China new global powers, 2010). This idea expressed by a representative of American government means that America is on the way of establishment a strong partnership though diplomatic and political complexities may occur. China China impacts global economy by its incredible growth. China is a well-known producer of 13% of world economic output and is the largest consumer of nickel, copper and oil in the world. This country exports cement and is the leader in this niche. Investments of China are wide-spread in t he world. Import and export has been growing for the last 25 years to the greatest extent. China entered WTO in 2001 and thus China’s trade has increased. Every year China’s export grows per 29%. China has shifted accents of its export from textile to electronics (A New World Economy, 2005). Moreover, China intends to produce and export cars and airplanes in the nearest future. China invests in its own economy as well as foreign investments are attracted to this country. International society is greatly concerned about investments in China. If to compare China’s development on this stage with Korea’s development, it would be clearly seen that China is more open for foreign investments and is able to create many labor places in different industries, and not only low-paid jobs in agriculture (Chen et al, 2001). China proves that it is a favorable country for skilled professionals, their training and education. Thus this country has a great potential and doe sn’t intend to take place of a competitive employer, exporter and importer. Nevertheless it is necessary to mention that development of China is a well-weight policy. For example, China has very quickly managed firstly to transform Beijing boulevards and then modernize Shanghai by numerous skyscrapers. China’s manufacturing resides in the Pearl River Delta Region and its virtuous financial services reside in Hong Kong. Investments inside of the country are also evident in infrastructure of the country (Chen et al, 2001). Transportation infrastructure is well-developed and impresses by its large-scale innovations developed. China is able to deal with millions of new cars joining country’s traffic every month. Thus transportation infrastructure is of high interest for China’s investments. Thus economic growth of China, its overall investments make it a powerful participant of modern globalization process. India India is another challenger for a global power . There is an interesting expression about role of China and India in the international arena: â€Å"China is the ?workshop of the world, then India has become the laboratory of the world† (India, China new global powers, 2010). India’s services make this country an outstanding competitor (e.g. Tata Consultancy Services, Infosystems and Wipro Technologies). Moreover, India’s intention to develop its manufacturing sector makes this country as competitive in this area as

Explain the role of government in economic matters for each Research Paper

Explain the role of government in economic matters for each subculture. Should the government be regulator or supporter Why - Research Paper Example The first of these which will be discussed is that of the individualistic approach. This can be defined as an approach to governance that places a high level of emphasis upon the predicate that the government should be restricted to allowing a high degree of private initiative. Although not strictly speaking a libertarian interpretation of the government’s responsibility to the system and vice versa, it is perhaps one of the more libertarian viewpoints of government’s role within society. Ultimately, within this context, government is seen to have a strictly utilitarian purpose ot maximize efficiency without allowing any firm of waste or bureaucracy to drain the productive energies that would otherwise result. Conversely, a traditionalistic political culture best describes a type of political culture that prizes family ties more than the other two which will be enumerated upon. Whereas the individualistic approach tries to minimize the role that government may play within society and or the community, the traditionalistic approach seeks to place a positive role that government can and should integrate with in regards to the community. Whereas other approaches place a great degree of emphasis on a particular determinant, the traditionalistic approach is no different in this respect as it places the highest degree of emphasis on seeking to engage the government in the task of maintaining the social order that is already in existence. In this way, this type of view is inherently conservative as it attempts to maintain the status quo via the utilization of governmental power. Similarly, the last form of political culture that will herein be enumerated upon is that of the moralistic political culture. As the name implies, this particular approach places a very high degree of importance on seeking to utilize the government as a â€Å"positive force† within

Tax systems Essay Example | Topics and Well Written Essays - 1750 words

Tax systems - Essay Example Indirect taxation leads to income effect. Income effect occurs when people find that they have surplus money and therefore their demand for goods and services increase. In case of no tax levied people after earning certain amount of income will start preferring leisure over work. Since indirect taxation increases the prices of goods and services people will have to work harder to keep up their standard of living and will have to earn more income to buy the same â€Å"basket† of goods that they were buying before and this will lead to more working hours in the economy. In this case, increase in taxation would result in increase in incentives for people to work hard and to expend more effort.ii) Regressive Taxation system is one where rich people pay lesser proportion of their income as tax than the poorer people. For example, a flat tax of $5 would make a higher proportion for someone earning $100/month than someone earning $200/month. For someone earning $100/month it would be 5%, whereas for the other guy it would be 2.5%. This kind of tax system is normally regressive and usually indirect taxation is regressive. On the other hand progressive system is one where rich people pay higher tax than the poor people. Income tax is usually progressive as it takes into account the income of people. Regressive taxation can be an incentive for people to work hard and earn more money, whereas as progressive systems can be a disincentiveSince regressive system leads to same amount of tax in absolute terms for both rich and poor., any additional work or money earned by poor people would reduce their proportion of income as tax. This makes people work harder to nullify the effects of regressive tax. For example, if someone is earning $100 and he knows that he will have to pay $5 in taxes every time irrespective of his income. He would try to increase his income to $105 to nullify the effects of the tax. This increase in income for $100 to $105 will increase his dispos able income after tax from $95 to $100. The person by earning more would be $5 richer. Hence, regressive tax system encourages increase in effort. People work harder to increase their disposable income to improve their standard of living. Progressive system can be a disincentive to work harder. Since, progressive tax increases with the additional income earned, many people would be put off from working harder as they will think that any increase in

Psychosocial Effects of Adult ADHD Essay Example | Topics and Well Written Essays - 3000 words

Psychosocial Effects of Adult ADHD - Essay Example Oosterlaan, Logan and Sergeant referred to this condition as 'Response Inhibition' in their article, in Cambridge Journals. Earlier it was presumed that it was only a boy's disorder and never affected girls. Recent information has proved otherwise and now the actual ratio of boys: girls is 3:1. Till recently, hyperactive and impulsive behavior had always been considered as part of childhood and not exactly a problem. Also boys are given more attention, because their behavior is more aggressive and caught attention and hence, were treated accordingly. These are connected with poorer performance, less systematic behavior, loss of working memory, lack of focused attention, irritability, restlessness, inability to carry out specific instructions, and lack of concentration in any activity without being distracted. It is considered to be difficult to diagnose the inattentive kind, as behavior does not show it. According to unconfirmed data 4% to 5% of United States citizens have AD/HD related problems. It persists throughout a person's lifetime. Approximately one-half to two-thirds of children do not get completely treated and will continue have the same behavioral problems even as adults that will create tension for them on the job, within the family and in social relationships. It is supposed to be caused mainly by biological factors, said to be the 'influence in neurotransmitter activity' in the brain. Research leads us to believe that this has a definite genetic basis. Research conducted by NIMH using a positron emission tomography scanner to map out the working procedure in the brain has resulted in showing a certain unbroken connection between the ability to hold sustained attention and the activity level in the brain. In this research, the level of glucose used by various areas of brain which could be in control of impulses and quick decisions was carefully measured. Those areas in an affected person showed decreased activity, as a result of consumed lesser level of glucose. "In people with AD/HD, the brain areas that control attention used less glucose, indicating that they were less active. It appears from this research that a lower level of activity in some parts of the brain may cause inattention and other AD/HD symptoms." http://www.add.org/articles/factsheet.html Earlier diagnosis would solve the problem being carried forward into adulthood, but sometimes, this would not happen. This problem could be excessive, long term and exasperating to the person and people around him. Adult AD/HD is considered to be difficult only if it has created problems either at work place or in the social life of individual. If a certain handicap is felt in these areas, perhaps it should be treated clinically. Because the nature and severity of the problem could vary from person to person, it is not very easy to come to a conclusive diagnosis without any stray doubt. Sometimes, it is not rare to come across a family history of the problem. "Adult anxiety disorders have been shown to be familial. The familial patterns are likely due to a combination of genetic and environmental factors, Garfinkel et al

World Views on theism Essay Example | Topics and Well Written Essays - 1500 words

World Views on theism - Essay Example Just as Hackett recounts, the absence of the divine Being immediately creates the limitations of cultural relativism. This is because, the notion that a divine Being exists and created the universe and the fullness thereof immediately gives room for moral absolutes or the universal law. Since a personal example suffices, living in America made me note that as globalization continues to render the US and the entire world a cultural melting pot because of multiculturalism, the danger of cultural relativism has certainly become inescapable. This danger has mainly manifested itself in a clash between legislative pieces and cultural values. For instance, because of the constant but radical shifting away from theism, the US government with all its constitutional maturity still remains ambivalent and unsure about the publication of literature such as Phillip R. Greaves II’s The Pedophile’s Guide to Love and Pleasure, despite the risks it poses to children. Only theism can here by strike this delicate balance between freedom of speech and conscience and that of children’s safety.... The crux of the mater herein is that when stimuli are introduced, there must be a response, as a corresponding action. Personally, I readily identify with behaviorism because I have come to note that results or consequences shape individual or collective action. Action in turn develops into behavior. Particularly, I have come to note that most of my colleagues did not take their assignments seriously until lecturers set deadlines. Reflecting on my past life also reinforce my belief in behaviorism, since we worked hard in high school, mainly upon knowing that entry into college or university learning would be based only on merit. Learning Styles Personally, kinesthetic approaches to learning have proven the best and most fruitful. This is because, this approach proves to be the most practical since it involves learning by performing, and therefore incorporates hands-on approaches such as movements, observing and other physical activities. Alongside note-taking and ensuring physical co mfort, joining study groups, using appropriate technology such as visual aids and reviewing information have catalyzed learning. The foregoing has especially been the case during encounters with cognitive sciences such as linguistics. Particularly, it has been virtually impossible to master phonetics, the International Phonetic Alphabet (IPA chart), the phonological processes and supra-segmental features thereof, without looking at the mirror to watch the movement of articulators, or feeling the movements of my articulators, or both. In courses pertaining to political science, history and sociology, I have found it most benefiting to my memory when I place the world map before me, as a reference material. Likewise, as one given over to kinesthetic approach, I have found