...institutions possess or demands jurisdiction over pre-existing national state (Haas 1968:16). Under these perspective integrations involves the process through state surrender sovereignty freely to the new political entity purposely to cooperate in achieving political, social and economic goals. As Linderberg 1971:46 proclaimed that regional integrations does not emphasize only in the political dimension but also take place in the field of economics, security and environment. There are five stages which are necessary for any regional integration to pass through these are; Free trade areas, custom unions, Common Market , Common Currency and Political Union. The few examples of regional integration in Africa and Europe are as follows Southern Africa Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA), Economic Community of Western Africa States (ECOWAS) , European Union (EU), North Atlantic Free Trade Area(NAFTA). Globalization, refers to the process in which the production and financial of the countries are becoming interlinked by an increasing number of cross-border transaction to create an international division of labor in which national wealth creations comes, increasingly to depends on economics agents in other countries, and the ultimate stage of economic integration where such dependence...
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...of Firm and Household Decisions CHAPTER 11 General Equilibrium and the Efficiency of Perfect Competition Prepared by: Fernando Quijano and Yvonn Quijano General Equilibrium and the Efficiency © 2004 Prentice Hall Business Publishing Principles of Economics, 7/e Karl Case, Ray Fair © 2004 Prentice Hall Business Publishing C H A P T E R 11: Perfect Competition • Input and output markets cannot be considered separately or as if they operated independently. Principles of Economics, 7/e Karl Case, Ray Fair 2 of 33 General Equilibrium and the Efficiency • Partial equilibrium analysisis the process of examining the equilibrium conditions in individual markets and for households and firms separately. • General equilibrium is the condition that exists when all markets in an economy are in simultaneous equilibrium. General Equilibrium and the Efficiency General Equilibrium and the Efficiency of Perfect Competition General Equilibrium and the Efficiency of Perfect Competition • In judging the performance of an economic system, two criteria used are efficiency and equity (fairness). • Efficiency is the condition in which the economy is producing what people want at the least possible cost. of C H A P T E R 11: Perfect Competition © 2004 Prentice Hall Business Publishing Principles of Economics, 7/e Karl Case, Ray Fair 3 of 33 © 2004 Prentice Hall Business Publishing C H A P T E R 11: Perfect Competition of ...
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...At the roots of globalization there are a lot of mechanisms conected with economies of scale. The higher border of demand and bigger problems with knowledge and capital using in high developed countries went far towards some solutions for easier entries to different markets. That is why countries deleted administrative and economic borders limiting competition. Free flow of information, ideas through the world, caused that some values, lifestyles, consumption models are common for some nations. That is why customers needs are higher and higher and similar (unified) – califionisation of needs. It means that consumers have a lot of information about level and style of life in the richest countries, they want the same in their mother country. That is why we have some global products for every customer (coca cola, pampers, cars). General results of globalization 1. New division of the world; - information revolution and very fast technical development, create new opportunities for developing countries, economies, companies, and people. But not every country is able to use these opportunities on the same level. It depends on the level of social-economic country’s development. It is called Triad Power: bigger technological, economic, social and cultural integration is present among three most developed regions of the world: North America, west of Europe, east and south-east Asia.- it is a center of the world. (highly educated people, good organization of their work, capital) ...
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...ways in the competition of national governments and also the EU seeks to make markets work better & achieve higher level of the economic efficiency and economic welfare. The competition policy focus on the discourage of competitive behavior. This wills covers in which the competition of the national governments & EU seek to the better work of the markets to achieve higher level of economic efficiency. The main expectation of competition policy is to make the market contribute to increase efficiency and competitiveness of the UK economy within the single market of EU. There are main objective – * Technological innovation * Protect and secure the standards of anti-competitive behavior. * Effective price competition between suppliers. The coco green company should follow these objectives to gain the UK market. Main Aims of Competition Policy Main aim of competition policy is to promote competition & make markets work better & contribute towards to increased efficiency & competitiveness of the UK economy. within the EU single market. Competition policy is aims to ensure: * Wider consumer choice in the markets for goods & services. * Technological innovation in which promotes gains in the dynamic efficiency. * Effective price competition between the suppliers. * Investigating allegations of the anti-competitive behaviour within the markets which might have negative effect on the consumer welfare There are 4 pillars...
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...an age of remarkable technological change is now forcing us to think very hard about the linkages between technology and economic development. The harder we think about it, the more we realize that technological development is almost certainly the key driver of long-term economic growth, Bai C, Yuen C (2002). Recent advances in our ability to communicate and process information in digital form - a series of developments sometimes described as an “IT revolution” are reshaping the economies and societies of many countries around the world. Technology is now a driving factor in the process of globalization in the free market economy. Technological innovation is the one of the most fundamental impulses that set and keep the free market economy in motion Wang (2007). It incessantly transforms production and consumption as well as organisation of firms and industries, destroying old ones and creating new ones – a process that Schumpeter named creative destruction which leads to innovation and value both for consumers and for shareholders of companies. Free market refers to a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. Free market contrasts with a controlled market or regulated market, in which government intervenes in supply and demand through non-market methods such as laws...
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...competitive environment, the company has increased its investments in quality and marketing as well as the efficient use of its fleet in order to attract more consumers. Also, the cost control has become a major factor in the management of airlines. However, the rapid growth of the airline industry has triggered some problems like congestion at some airports, travel delays and low runway capacity especially during peak hours of travel. These problems are caused due to increased demand and the lack of investment in some airports. The opening of foreign markets by the government was another benefit resulted of the deregulation. This change encouraged the airlines companies to expand their markets internationally. The growth of the airline industry also has created new jobs. Nowadays, the airlines can operate air services from any point in the US to any point of the world. The competition motivated companies applying technological innovations in...
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...Trade leveraging policy to push exports on anvil Our Economy Bureau 3 September 2004 New Delhi: A day after doling out sops to exporters, commerce and industry minister Kamal Nath today said that the government would bring out a trade leveraging policy apart from a special package for textiles, tea and coffee sectors to further push up exports. "India is one of the few countries in the world which will have incremental growth in its human skill resources in the coming years. We have never leveraged trade. I am going to work on trade leveraging policy. We have to see trade not only as a foreign exchange earner but also as a net employment generator," Nath said at a FICCI seminar on the foreign trade policy. Since the multi-fibre agreement is coming to an end in 2005, the minister said that the government would look at the entire textile chain and come out with a textile policy. Nath said that his ministry would also organise a seminar on textiles in the next one month to discuss issues emerging in the post quota regime. Stating that the days of government subsidising inefficiency were over, Nath said that the industry would have to match the strength of its competitors in order to achieve a quantum jump in its exports. He said issues like the inverted duty structure needed to provide a level playing field to the domestic industry particularly under regional and bilateral agreement would be addressed soon. The minister also admitted that infrastructure was the weakest...
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...focuses on economic aspect with reference to the integrated financial markets. With the presence of free trade in the era of globalization, tangible substances as well as abstract ideas are widespread and interconnected; which has succeed in marking a change in human history. If asked to list two most predictive attributes of its success, I might suggest the hastening pace of technological change and the existence of free trade. Advancement in Internet and transport technology contributes to the escalation of globalization in the past decade. It expands the availability of telecommunication and information; facilitates remote delivery and provides new access and distribution channels; this helps to increase efficiency and cost-effectiveness in conducting economic activity. For example, the use of Internet—Skype, Facetime, Whatsapp etc. makes the world shrink its size as people can simply reach out to people who are miles away. This facilitates growth of economic activities as interaction and connection between people all over the world becomes a lot easier. What’s more, the market liberalization is indeed an important predictor of the success of globalization. Travelling back in time at the 21st century, the scale of capital flows and the interaction of global economic had already remained extraordinarily extensive, including both developed and developing countries. (“Globalisation Effect On Unemployment And Economy Economics Essay”, n.d.), such fierce growth rate of economic activity...
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...savings; and easing the exchange of goods and service. Usually the financial development level is primarily determined by the local institutional quality, the extent of government police, geographic elements, native income level and cultural tradition. These factors formed the economic environment in which the banks and other financial firms to make decision for investment project and exogenous financing, furthermore, the customers decide whether consumption or saving, moreover, the financial intermediaries finance the fund in which approach from savers to borrowers. The well financial system can perfect the effect of information, enforcement and transaction cost on the saving rate, investment decision and technological innovation, and steady state growth rate. Financial market channel the fund to investment opportunities to get the profit, so if the financial system cannot work well, the economic growth also more or less affected. The essay mainly gives a brief introduction on the points of financial development and economic growth based on the area of Chinese. The essay mainly talks about the theories relate to the relationship of financial development and economic growth, the determining elements to accelerate the financial development, reform in financial sector in China, and the positive relationship between financial development...
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...Chapter Two The Production Possibility Model, Trade, and Globalization Learning Objectives After you teach the material in this chapter, your students should be able to do the following: 1. Demonstrate opportunity cost with a production possibility curve. 2. State the principle of increasing marginal opportunity cost. 3. Relate the concept of comparative advantage to the production possibility cure. 4. State how, through comparative advantage and trade, countries can consume beyond their production possibilities. 5. Explain how globalization and outsourcing are part of a global process guided by the law of one price. Chapter Outline This is meant to be an outline and summary of what your students read in this chapter in the text, both in terms of concepts and examples. Headings and subheadings are tagged with the number of the learning objective (LO) to which the material in that section most closely relates and the associated PowerPoint slide numbers, so you may also use this to help you outline your lecture. Material followed by a ( is new to the 8th edition. • The Production Possibility Model, Trade, and Globalization • The three main coordination problems are reviewed, and students are reminded about the concept of opportunity cost, which will be central in this chapter to understand production possibilities. • The Production Possibilities Model (LO1) [PPT Slides 3 & 4] • Production...
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...defined as a trend in which countries across the globe are joining economically. Hill (2009) describes the major facets of globalization to include the globalization of markets and the globalization of production. The globalization of markets is a result of merging local and national markets to create one somewhat homogenous “global” market whereby the individual preferences of regions, or nations, have converged. On the other hand, the globalization of production has allowed firms to split their operations internationally. As a result, each stage of production for these firms takes place in countries around the world in areas where work can be accomplished at the lowest cost. The decrease in international trade and investment barriers and advancements in technology have served as the major drivers of globalization. Furthermore, Hill (2009) identifies that globalization has had an effect on the demographics of the global economy. This paper provides an analysis of the major drivers and effects of globalization and recognizes some of international trade theories that support the need for a global economy. Drivers of Globalization The first major driver influencing the spread of globalization is the decline in barriers to free trade. Since the end of World War II, the advanced nations of the West have advocated the free flow of goods, services, and capitol between nations. Hence, the General Agreement on Tariffs and Trade (GATT) and, later, the World Trade Organization (WTO) have worked...
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...the reason, of why this is one of the most compelled and debated issue, is “slavery is not only one of the most ancient but also one of the most long-lived forms of economic and social organizations” . All antebellum Americans, in north and south, were affected directly or indirectly by slavery. When we look at the economic aspect of slavery, I can say that slavery helped the economic growth and development of the United States. It was a harsh but profitable system. Contrary to the arguments that see slavery as inefficient and detriment to America’s economy, I believe that it was a benefactor. As Stampp and Fogel argue, slavery was morally untenable; it was a harsh working system but an efficient and profitable one. This paper will touch upon different arguments about efficiency of slavery and how slavery affected the South economy. This paper will try to clarify the issue that whether slavery was a benefactor or detriment for economy of the United States. The debate has gone on for a long time and it is about whether the slavery was efficient or not and whether it was an economic burden on regions. Historians emphasized mostly on the issue of whether or not slavery was a benefactor or detriment to the United States. There are two opposite poles of this debate. From those historians, Ulrich B. Phillips represented one pole of the debate. Many other historians influenced by Ulrich B. Phillips and took his side in the debate. The other pole of this debate is Robert William Fogel...
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...oligopoly is the best market structure for technological change. After reading this chapter, you should be able to: LO16-1. Define the monitoring problem and state its implications for economics. LO16-2. Discuss why competition should be seen as a process, not a state. LO16-3. Summarize how firms protect monopoly. LO16-4. Explain why oligopoly is the best market structure for technological change. “It is ridiculous to call this an industry. This is rat eat rat; dog eat dog. I’ll kill ’em, and I’m going to kill ’em before they kill me. You’re talking about the American way of survival of the fittest.” Ray Kroc (founder of McDonald’s) When Microsoft was designing Zune, the Microsoft workers were sent a link to a video of Steven Jobs (the CEO of Apple) showing Jobs stating, “The only problem with Microsoft is that they have no taste—Absolutely no taste.” The goal of Microsoft showing the video to Microsoft workers was to infuriate the Microsoft workers sufficiently so that they would show that not only do they have taste, but that they can bury Apple and its iPod. It was to make the competition with Apple personal. It didn’t work, and Apple went public with its “no taste” view of Microsoft in a series of TV ads that portrayed the Apple computer as the tasteful computer compared to a rather stodgy PC. In earlier chapters we’ve seen some nice, neat models, but as we discussed in a previous chapter, often these models don’t fit reality directly. Real-world markets aren’t perfectly...
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...get profits. In the graph, this computation is simply the area of the shaded rectangle. An oligopoly is a market dominated by a few producers. The market can be international, national, or local. The main characteristic of an oligopoly is that they have pricing power. However, unlike a monopoly that consists of a single firm dominating the market, an oligopolistic firm must take into consideration how the other producers will react to any changes in price. It is this mutual interdependence of the few firms producing the product that make an oligopoly different from a monopoly. Sometimes, an oligopoly will try to increase its market power by forming a cartel, which is a group of firms acting in unison. An oligopolistic firm is generally a large firm that had to invest a lot of capital to produce the product, such as aircraft, cars, and household appliances. This large initial investment of capital is often a major barrier to entry to oligopolistic markets. Other barriers to entry include patents, control of strategic resources, and the ability to engage in retaliatory pricing to prevent firms from entering the market. An oligopoly produces products that exhibit large economies of scale, where the cost of producing each unit declines with large quantities. Such economies of scale prevent other firms from entering the market, since there would be little market share that could be gained, and what could be gained would not be enough to be profitable. An oligopoly can...
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...1. Critically discuss the arguments for free trade, paying attention to winners and losers. Free trade as an argumentative policy which has being discussed up till these days since it was established. Debaters formed by two groups of people where one kept being supportive and one held back against this policy. Although the opposing side lists out three points which are unbalanced development, economic dependence and environmental problems to prove that free trade is harmful to less developed countries. On the other hand, supporters try to use increase production and efficiency, economic growth and employment opportunity and consumer satisfaction to prove that all parties benefit from free trade where less developed countries only be less benefits. In this essay, as one of the members supporting free trade agreement I will look deeper into all six points and prove how the advantages within far more excel the disadvantages. Firstly, increase production and efficiency is the most significant advantage of free trade among the above three points. As different countries specialized in different fields, by making use of this comparative advantage, they can allocate resources in the most efficient way where therefore export increases a country’s production demand and import increases competitions between companies where they have to decrease price as a result, the resources are bought cheaper due to competition. With the example shows in Diagram 1, it can convince the theory mentioned...
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