...Surplus Deficits ECO/372 September 10, 2010 Surplus Deficits A surplus in this economy can be beneficial to many businesses and as a whole society as well. A surplus benefits out society when producers and consumers sell their goods or services to the public. It is known that economic surplus is made up of two parts which are producers and consumer surplus. The producer surplus is the benefit that it receives from doing their service to the public at whatever the market price is at that time, rather than selling their services at a much cheaper rate. A consumer surplus is very different and opposite of that of a producer surplus. A consumer surplus is the benefit that it receives from purchasing their services from the public where they would be willing to pay more for the service they purchased. A government budget surplus can be very beneficial to the economy. A government budget surplus can be beneficial in that it gains revenue through taxes and other fees associated with the surplus. A budget surplus does have its effect on the economy in how the government officials use their funds. Two periods in time that comes to mind where the United States had to run their budget surpluses is the War in Iraq from 2003 to 2011, and the September 11th, 2001 attacks in New York at the World Trade Center. According to “A History of Surpluses...
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...the Student Aid and Fiscal Responsibility Act eliminated bank-based lending entirely, for a savings of about $67 billion in subsidies over 10 years. While about two-thirds of that revenue went to increasing the Pell Grant to its current $5,550 maximum level, about $20 billion was redirected to reduce the deficit. Nelson (2011)”. Current statistics demonstrate that the U.S. showed a strong skill surplus of lots of money in the education region to the sum of 12.6 billion. This happens when University students such as group B” attends the University of Phoenix. Regardless of the effects of the current international economic hold up, a diffident increase in this imperative region is foreseen. United States revenue from University of Phoenix students and other college student attending college in the United States reached and estimated sum of $17.8 billion in 2008, the maximum sum recorded so far (Nelson, 2011). The United States’ financial reputation on an international level The United States take its reputation very serious on an international level. When the U.S. runs a surplus other countries are more than willing to business...
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...Why the U.S.’s deficit, surplus and debt have an effect on a domestic automotive manufacturing (exporter) and The United State’s financial reputation on an international level The United States financial reputation on an international level The new economic cycle; 2000 to 2001 the United States economy has gradually dropped. This dropped occurred before September 11, 2001 terror attack and continued during the international financial crisis. The United States is struggling with the fundamental or comprehensive which has hinder the strength of the United States. One major problem is the fiscal and trade deficits. "In 2010, the fiscal deficit in the United States was $1.3 trillion or approximately 9 percent of U.S. GDP" (The Brookings Institution.) The budget deficit and debt limit the resources to spend on production and investment. Similarly, the impact of imported products on employment in the United States is not as much as great as some sensational arguments might make it appear. This is because most products imported by the United States are not produced by the United States, or are produced by the United States in a quite small amount. A domestic automotive manufacturing (exporter) The U.S. current account goods and services trade deficit which is balanced by our foreign investment surplus. Trade just means exchanging in which when we export fewer foreigners then they export to us. In all actually The U.S. could be getting compensate for that. By exporting less than...
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...Consumer Surplus and Producer Surplus Consumer Surplus – Difference between what the consumer is willing to pay for an additional unit of a product or service and its market price. Producer Surplus - Difference between what producers receive for an added unit of a product, and the marginal cost of producing it. For example Mr. ‘A’ wishes to buy CDs. The consumer surplus for Mr. A (an individual) in the CD market is: Price Mr. A’s Demand for CDs Shaded area is Mr. A’s consumer surplus P* Market Price DV=MBV QV* Q The surplus of all consumers is simply the sum of all consumers’ surpluses. For instance total consumer surplus in the market for apartments Price Market Demand for Apartments Shaded area is consumer surplus for all consumers P* Market Price DM=MBM Q* Q Similarly, we can see producer surplus in the apartment market below: Price Market Supply for Apartments SM =MCM P* Market Price Shaded area is producer surplus for market Q* Q In this example, one person may be willing to rent their 1st apartment for $200. Since the...
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...Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139 Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139 The Heinz School of Public Policy and Management, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213 erikb@mit.edu • yuhu@mit.edu • mds@cmu.edu Erik Brynjolfsson • Yu (Jeffrey) Hu • Michael D. Smith W e present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets. While efficiency gains from increased competition significantly enhance consumer surplus, for instance, by leading to lower average selling prices, our present research shows that increased product variety made available through electronic markets can be a significantly larger source of consumer surplus gains. One reason for increased product variety on the Internet is the ability of online retailers to catalog, recommend, and provide a large number of products for sale. For example, the number of book titles available at Amazon.com is more than 23 times larger than the number of books on the shelves of a typical Barnes & Noble superstore, and 57 times greater than the number of books stocked in a typical large independent bookstore. Our analysis indicates that the increased product variety of online bookstores enhanced...
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...Consumer Surplus [pic] When analyzing changes to a consumer optimum given changes in the market price of a particular commodity, we often speak of the consumer being better or worse off. What is missing in this analysis is the ability to quantify changes in individual satisfaction due to these price changes. One method used to measure these welfare changes is through the use of a concept known as Consumer Surplus. This method compares the value of each unit of a commodity consumed against the price of that commodity. Stated differently, consumer surplus measures the difference between what is person is willing to pay for a commodity and the amount he/she actually is required to pay. Consumer demand is a measure of willingness to pay. As shown in the diagram below, consumers often value each additional unit consumed less that previous units (i.e., the concept of diminishing marginal utility). For example, suppose that the good in question is monthly consumption of gasoline. Based on the data in the diagram below (left), the consumer would be willing to pay $9 for the first gallon rather than to without. This first gallon would be used for essential driving activities. Each successive gallon has a value to the consumer of $1 less than previous units (2nd gal = $8.00, 3rd gal. = $7.00, and so on) as needs are met and the consumer engages in driving more for pleasure and sight-seeing. The value that the consumer places on each gallon (unit) consumed is summarized by the individual...
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...Employee Surplus Agenda Introduction Problem Alternatives Implementation Timeline Problem Decrease in sales revenue Abundance of qualified employee Possible Solutions Reduce Hours Hiring Freeze Voluntary Separation Reduction in Force (RIF) Reduce Work Hours- Pros Reduces labor cost Able to retain all qualified employees Easy to introduce Reduce Work Hours- Con May reduce employee motivation Skilled employees may leave company Lowers productivity Hiring Freeze - Pros Encourages personal skill building Protects current employees from layoffs No additional company expense Hiring Freeze - Cons Reduces possible future productivity Reluctant employees lack of enthusiasm Does not reduce compensation cost Voluntary Separation- Pros Attractive separation package Reduces long term payroll cost Less disgruntled employees Minimize legal risk Voluntary Separation- Cons Increased short term cost Qualified employees may leave Must fill vacant positions RIF - Pros Reduces long term employee cost Able to focus on most profitable line of business Reduces short term payroll cost RIF - Cons Bad publication Does not increase revenue Possible legal risk Best Solution - Combination Step One – Implement hiring freeze Step Two – Offer voluntary separation Step Three – Downsize (if necessary) Month One - Preparation Determine the desired number of employees...
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...Economics of Daily Life Economics of Daily Life Economics is a study of how society manages its scarce resources. The literal translation for economy is “one who manages a household.” “In an increasingly complex world connected by social and economic interaction and interdependence, news of stock market fluctuations, consumer confidence scores, and various economic indicators fill the media” (Broome & Preston-Grimes, 2011). This means that economics is everywhere, even in a home. Every household makes decisions that follow the economic principles. There are tradeoffs, and incentives. Supply and demand regularly show up in a household setting, as do decisions regarding limits on price and time. I am a single mom and the science of economics is a daily occurrence, at the grocery store, while doing homework, and in my choice of home and bills. Economics is an inevitable part of most people’s daily lives. It occurs in every facet of home, work, and school. There are ten principles to economics. They are the decisions that need to be made in regards to the jobs that need to be done, and the management of the resources that will allow the necessities to be provided. One of the principles that occur most in my daily life is tradeoffs. Tradeoffs occur when a person has to choose between one thing and another, forgoing one desirable option, for the more beneficial, sometimes undesired option. In a study done in 2011, a Montessori middle school set up a school store. Some...
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... | | | | |Mode of examination : | | | |Essay | |For Students |School International School Major IET | | |Name 謝玉麟 Student No. 2010054425 Mainland Student [ ] Non-mainland Student [√] | | |Essay topic Understanding China’s trade surplus | |Evaluations | | | |Comments： | | |...
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...The Gold Mine Version 2.1 Your Step by Step System for Finding, Securing and Obtaining Surplus Funds From Mortgage Foreclosures, Tax Sales, Unclaimed Estate Monies, and Bankruptcy Courts. **Please NOTE – the Videos that will help you understand the written information that follows are now all on one page with titles describing what they address. Please be sure to check those videos out at http://www.surplusfundsriches.com/coursevids.htm YOUR BROWSER MUST BE OPEN IN THE BACKGROUND FOR THIS TO WORK! If you’re internet browser is open in the background while you are reading this, you can click the above link and go straight to the page. If not, cut and paste it into your browser. WATCH AT LEAST THE INTRODUCTORY – FIRST – VIDEO PLEASE! Also – if you are going to function as a researcher, using our funding, you are responsible for using this book to get the list of monies held, doing the research as outlined in the pages that follow, and sending that information in. The last part of this portion of the book has the Independent Contractor’s Agreement, the Referral Form and additional information. You do not do the negotiations or contact the individuals if you wish to function in this capacity. Please, before you ask for help on acquiring a list, follow directions to do so with the emails to the bookkeepers. GETTING THE LIST IS PRIORITY – USE THE VIDEO LINK ABOVE TO WATCH VIDEOS, IN ADDITION TO READING THIS BOOK! Finally, I get a lot of calls regarding new statutes/laws passed in each...
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...equilibrium ("What Is Market Equilibrating Process"). This process is also referred to as a circumstance where the supply of a product is precisely equivalent to its demand. As a result, the price remains steady in this situation as there is no surplus or shortage is reflected in the market. The market has reached equilibrium as the supply and demand curves interconnect. At this point, quantity supplied and the quantity that is demanded is equivalent. Surplus and shortages are detected if the market price is higher than the equilibrium price and the quantity supplied is greater than quantity demanded therefore creating a surplus then the market price will fall. For example, retailers often have surplus of inventory that cannot sell therefore the prices are reduced and placed on sale. Since the price has decreased, the product’s quantity demanded will increase until equilibrium is obtained and as a result, surplus drives price down. Also, if the market price is lower than the equilibrium price, the quantity delivered is fewer than the quantity demanded thus producing a shortage. If a surplus is in existence then prices should decrease in an effort to attract extra quantity demanded and minimize the quantity supplied until the surplus is removed. If a shortage is present then prices should increase in an effort to attract extra supply and...
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...Localization of Solar Energy through Local Assembly, Sale and Usage Localization of Solar Energy through Local Assembly, Sale and Usage Jayendran Venkateswaran| Assistant Professor, IEOR, IIT Bombay Jayendran Venkateswaran| Assistant Professor, IEOR, IIT Bombay “PRICE OF one SOLAR LAMP FOR STUDY PURPOSE = COST OF KEROSENE FOR THREE MONTHS” “PRICE OF one SOLAR LAMP FOR STUDY PURPOSE = COST OF KEROSENE FOR THREE MONTHS” Jayendran Venkateswaran Assistant Professor, Industrial Engineering & Operations Research (IEOR), Indian Institute of Technology, Bombay Academic Background: Ph.D., Systems and Industrial Engineering [with minor in Biomedical Engineering], The University of Arizona, Tucson M.S., Industrial Engineering, the University of Arizona, Tucson M.Sc. (Tech.), Engineering Technology, Birla Institute of Technology and Science, Pilani, India One Million Solar Urja Lamps (SoUL): Co-investigator, Million SoUL project Jayendran Venkateswaran Assistant Professor, Industrial Engineering & Operations Research (IEOR), Indian Institute of Technology, Bombay Academic Background: Ph.D., Systems and Industrial Engineering [with minor in Biomedical Engineering], The University of Arizona, Tucson M.S., Industrial Engineering, the University of Arizona, Tucson M.Sc. (Tech.), Engineering Technology, Birla Institute of Technology and Science, Pilani, India One Million Solar Urja Lamps (SoUL): Co-investigator, Million SoUL...
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...What is the subject matter of economics? What role does the “division of labor” play in defining this subject matter? The subject matter of economics deals with social science concerned with administration of scarce resources. These resources can be objects and services that are capable of satisfying human needs and wants in both direct and indirect ways. This can be by helping to produce other objects and services whose use satisfies human wants. The administration of resources does not always create economic problems. There are lots of these resources that are more than enough to satisfy all of human wants and needs completely depend of them. One such resource example is “Air”. Such type of resources are known as free resources where it’s not necessary to organize its use because there is no side effects or waste for any inefficient use of such resources. On the other hand, scarce resources are resources that are not sufficient to fulfill human wants and needs completely. Therefore, these types of wants can only be partially satisfied. This reflects the problems of administration which are the subject matter of economics. Firstly, one of the problems of administration is to make sure complete utilization of scarce resources, because incomplete utilization may cause dissatisfaction to human beings. Secondly, in cases where these scarce resources are fully utilized, there is still an ongoing administrative problem of allocating the resources as required by the different uses...
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...the effects of the division of labour (pg. 3). The division of labour plays a extremely important role in book I. Adam suggest that this will spread wealth all the way down to even the poorest in society, an idea that closely resembles the theory of trickle-down economics. He implies that because the division of labour would be met with great success, it would create a surplus of products in the market and therefor create a greater access of goods to those who would generally be unable to afford these types of products. He argues that goods are produced at a much accelerated rate when the labour is divided. The division creates specialised knowledge and workers with dexterity (pg. 1) . His model of labour seems to closely resemble that of the industrial revolution and sweat shop labour, and I am guessing that his theory still plays a large role in manufacturing today, especially in developing nations where factory work is common, such as in China, Costa Rica, Indonesia, India, etc. In chapter II, Smith goes on to say that the idea of trade, is embedded in human nature (pg. 10). When a surplus is created, man can trade his good for one of his neighbours, which increases the wellbeing of everyone in a society. Adam’s writes, « It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature, which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another » (pg. 10) . When...
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...+ R&D Labs + Consultants + Small Bus | 42,000 | $650,000 | $225 | $200 | 200,000 | 7,550,000 | Industrial Version | Large Corps + R&D Labs + Consultants | 27,000 | $450,000 | $600 | $565 | 500,000 | 14,305,000 | Multiple Version CSC should offer student version at $50 and industrial version at $1950. Maximum net contribution can be achieved when the 'heavy users' and 'light users' are served separately. Heavy users, though they are smaller in size have higher WTP. The price for the industrial version has to be set at $1950 because otherwise the R&D and labs users will buy only student version as their consumer surplus is maximum there. So, to incentivize these customers, we lower the price by exactly the consumer surplus these users will get - $50. Large MNCs will buy the industry version at $1950 as their surplus is maximum at $550. In the same way, consultants, small business and students will all buy at $50 as their consumer surpluses are $150, $125 and $0 and also because they don't have another option. The total net contribution in this case is $20.58 million. Modeler Version | Market Segment | Size | Segment Dev Cost | Price | Unit Contribution | Product Completion Cost | Net Contribution | Student Version | Consultants + Small Bus + Students | 535,000 | $700,000 | $50 | $15 for students, $35 others | 100,000 | 7,925,000 | Industrial Version | Large Corps + R&D...
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