Economic development Essay

Economic development and economic growth are both indicators of the economic position of the country. Economic growth is the growth in gross domestic product and economic development is related to growth in the standard of living and poverty. As you can see economic growth and economic development are not the same thing, economic development is far more than just growth in GDP as it involves indicators that are not purely economically related. However economic growth is an indicator of economic development but there are also several other factors that represent economic development. These indicators are; life expectancy at birth, infant mortality rate, daily calorie supply per capita, adult literacy rate, number of doctors per 1000 people, average years of schooling, availability of clean water, freedom of press, immunisation rates and levels of discrimination. As you can see these are generally not economic indicators but when they are combined they form the economic development figure. There are fifteen barriers to economic development, the first of these being a lack of physical capital. Lack physical capital is a significant barrier to the development of a country for several reasons. There is already a shortage of capital that further leads to less capital being produced; this creates significant problems for developing countries. In these countries the income levels are low leading to low savings and therefore little money for investment in capital. This lack of capital furthers the low productivity therefore the employment remains low. This also leads to a lack of demand for goods and services the low demand means that less needs to be produced therefore less capital needs to be produced. This then forces the country into a cycle of underdevelopment. This consequently creates a barrier for the country to develop. An example of this is in most less developed countries where they are in constant times of war and civil unrest. Their capital is destroyed through war making it difficult for the country to produce more capital. Also, Sierra Leone, the worlds least developed country, as shown by the human development index, has a GDP per capita of US$159 this creates significant problems for the economy and its development. A lack of human capital is the next barrier to development. This barrier is created through a lack of education and training of the population. It also relates to the general heath and wellbeing of the population. If the labour-force are getting sick then they are unable to work and therefore decreasing the labour capital. A current example of this situation is in South Africa. In South Africa the micro-economic impact of AIDS is very serious and is getting worse. Among skilled workers HIV prevalence is expected to peak between a fifth and a quarter percent by the year 2000, which is consequently depleting the number of skilled workers creating the lack of capital development barrier. These problems are also leading to a rise in insurance bills and the costs of health benefits rise. This therefore diverts government savings to pay for health care and as a result the availability of funds for investment will fall. AIDS is predicted to knock 0.3 to 0.4 percent off the annual growth rate. As you can see this is a severe barrier to development in these less developed countries. A strategy to this barrier is human resource development. The next barrier to development is a lack of savings. This also causes low levels of investment due to the low income leading to low savings. This low level of savings is also caused by several other reasons such as; poorly developed financial markets, holding of savings in traditional non-money forms, the purchase of unnecessary luxury items, cheap family labour reducing the incentive to save for investment and the general indebtedness of the population. The low incentive to reinvest profits by businesses also reduces the savings. Budget deficits by the government to make up for the low taxation revenue are also decreasing the amount being saved. When there is a lack of savings caused by any of these causes it forces the need to borrow form overseas that consequently leads to problems with the balance of payments. An example of lack of savings exists in Nigeria. In Nigeria there are severe problems with their currency. These begin with significant fraud problems also the majority of trading is done with cash in which until recently the currency did not exceed the equivalent of 50 cents. The next problem is that they don’t believe in banks, the only use of banks is to exchange foreign currencies for tourists, which leads to a lack of funds for investments. Also, Local traders keep all working capital stuffed in coca jars, as they believe business opportunities will disappear in the time it takes to make a withdrawal. Banks do not allow credit due to the fear of not being repaid. All of these factors contribute to a large barrier to development simply due to a lack of savings. This could be solved through improving the financial system. Another barrier to development is a lack of taxation revenue. A lack of taxation creates barriers as it means the government has little finances to use on economic development. The high unemployment, very low-income levels and difficulties in tax collection cause this lack of tax revenue. The government is then forced to collect tax mainly from customs duties, sales taxes and excises. These taxes can prove to be very inflationary and are also regressive. Another problem with these taxes is that they discourage investment and the creation of employment. Nigeria also has a problem with the collection of taxation. Most Nigerians that can afford to avoid paying taxes, as they believe that their money will be flinched by the corrupt government. This creates severe problems for the country, as there is no money for the government to use in investment to promote economic development. Improving the financial system will also help solve this barrier. The next barrier to entry is a lack of infrastructure. Less developed countries rarely have a sufficient supply of necessities such as roads, ports, sewerage, power schools or water- facilities etc. The main reason that this infrastructure is not being made is that the government simply cannot raise the funds to finance them due to their lack of taxation revenue. Another reason maybe that the government has chosen to finance defence spending or if they are in time of war, in which most LCD’s are. A lack of infrastructure restricts the free flow of goods and services and reduces the productivity of the labour force that further restricts the economic development of the country. In Africa infrastructure is very underdeveloped compared to the other less developed regions. They have 6 phone lines for every 1000 people compared to the average of 54 for other developing regions. Also their power supply is far less than the average of 300kw per 1000 peoples with 80kw this significant ly stops their development. In Nigeria there are serious problems with infrastructure causing business uncertainty. Telephones rarely work and the electric comes in periodic vengeful surges. Nigerian firms, particularly the state-owned ones due to the lack of taxation, devote little effort into maintaining their infrastructure and it therefore ends up breaking down. Reliable firms are so hard to come by that firms barter contacts: we’ll let you share the electricity from our generator if you can help us find spare parts for it. Firms wanting to set up in Nigeria face the problem known locally as BYOI (bring your own infrastructure) this shows how much of a problem infrastructure is in Nigeria. A lack of infrastructure could be solved in many ways such as encouraging enterprise, human resource development or improving the financial system. A lack of entrepreneurs is another barrier to economic development. Enterprise is essential in order for development to occur, as it is one of the key factors to production. In the less developed countries there tens to be a lack of entrepreneurs for several reasons. The first of these is the fact that there is a limited opportunity to make a profit, due to the lack of demand. The next reason is that the businesses not easily financed due to the low level of savings. The lack of infrastructure available also distracts these entrepreneurs. Another reason to the lack of entrepreneurs is that cultural beliefs often place little importance on monetary gain and entrepreneurs are thus given little status. The number of entrepreneurs is also reduced by the lack of education in these countries. The final reason is that it is risky for an entrepreneur due to the political and economic instability. An example of a lack of entrepreneurs is also in Nigeria as it closely relates to the lack of the infrastructure. The lack of infrastructure adds at least 25 percent onto a firms operating costs if it choses to set up in Nigeria, this is a significant deterrent for firms to set up and should be solved if the county wants to achieve economic development. A strategy that could be adopted to help this situation is encouraging enterprise. The next barrier to economic development is a lack of technology. There are several reasons why these less developed countries are not more technologically advanced. The first reason being that most new technology will involve some investment in capital that is lacking in these less developed countries. Also another problem is that the new technology will need skilled labour to operate it but skilled labour is also of shortage in a LCD. The next reason is that companies don’t really want to adopt labour saving technology when they already have cheap labour and there are high unemployment rates. The final reason that there is a lack of technology is that new technology is used to facilitate the achievement of economies of scale and the small markets in LCD’s reduce the incentive to mass-produce. The governments however, have managed to encourage technology into these LCD’s and most currently use modern technology that compliments the labour so workers maintain their jobs. A lot of the modern technology used in these counties is generally used in the foreign owned industries where they mass-produce in order to export to advanced markets. Over population and rapid population growth is another factor that causes a barrier to development. In these less developed countries the birth rates are often five times higher than in the more developed countries. The advances of medicine have also caused a fall in the deaths, which leads to a higher population growth. The growth of these countries is generally around 2 percent and their growth is usually below this figure, which therefore worsens the situation, and the real GNP per capita often falls. In the more advanced countries they generally have population growth of around 0.5 percent and their economic growth will usually be higher than that. This is where the widening gap occurs pushing less developed countries further away from more advanced countries. This high growth of the population also has the effect of increasing the labour force, but as there is little demand for labour the unemployment rate will tend to rise. Also, most of this population is below 15 or above 65 meaning they are unable to contribute o production but still need things such as food, water, clothing and shelter. This creates a problem known as dependency burden making development even harder. Governments in these LDC’s fight a tough battle with a rapid growing population and are always trying to slow this rate but they face several problems such as poor education, communication, lack of contraception and cultural attitudes. Africa is currently the fastest growing of all the developing regions with a growth rate of 3 percent over the past decade but with this high growth rate comes several associated problems. Africa has one doctor for every 20,000 people compared to an average 5000 people in developing countries and its infant mortality rate is the highest at 96 per thousand births almost double the developing countries average. Africans also have a life expectancy of 52 years where the average for developing countries is 64. As you can see that the effects of a high population are not beneficial to a developing country. This barrier to development can be solved with the population control strategy. The next barrier to development is inflation. Inflation in these countries is caused by the scare amounts of goods and services relative to the high population consequently causing demand pull inflation. The domestic supply is unable to match the domestic demand. The inflation rates in many of these countries gets above 200 percent compared to that of around 5 percent in most advanced countries. This high inflation has many unwanted effects such as decreased living standards and a reduction in real income, it also tends to redistribute the income from the poor to the wealthy therefore increasing the income inequality that already exists. A high inflation rate also causes the investment of non-productive assets such as antiques or gold, this money is therefore taken out of the economy reducing the funds available for investment. These high inflation rates also cause a reduction in the competitiveness of exporters and import competing firms that therefore leads to an increase in the countries current account deficit. Another effect that inflation will lead to is a falling exchange rate, which if the country has a large foreign debt will make it even harder to pay. Inflation is very high in most of the African countries and causes severe problems to their economy and development progress. Balance of payments problems is also another barrier to development of these less developed countries. The majority of LCD’s have problems with their external balance as the little income they do earn is used on imports and used to pay off interest on their foreign debts. As these countries are in deficit they are continually forced to borrow from overseas to finance their payments worsening their current account deficit even more. Many of these countries are also suffering from worsening terms of trade that also decreases their export revenue and thus further worsening their balance of payments. The WTO worldwide reduction of tariffs will help to assist this but government policies need to be implemented to seriously boost export revenue and turn the consumers away from imports. The strategy to help the balance of payments is import replacement. The next barrier to development that LCD’s face is a depletion of their natural resources. Many of these countries are highly dependent on one major export to create export revenue, create growth, employment and income and the reduction in the current account deficit. This creates problems as they may deplete natural resources without considering future production. This reduces the potential for further future development and growth. In Mauritius, they have cleared 25 percent of their forests in the last 19 years purely for export. This causes massive environmental effects and also is a serious concern, as when the resources run out the country’s economy will fail to stay afloat. This is the same in many less developed countries including many African counties and their dependency on oil. It can be helped with export development to have a wider range of exports and less dependency on one major export. Another significant barrier to economic development in these less developed countries is corruption and poor administration by the government. Corruption is a very common problem in LDC’s. The problem associated with this is that aid and government revenue is not all used in promoting growth, corrupt leaders and government officials take most of it. When a government is corrupt it causes most of their aid to be withdrawn forcing them to reform their political structures. This withdrawal of overseas assistance causes depletions in general living standards of the country. Another problem with these governments is that they know little or nothing about economics. These leads to several problems including poor administration and efficiency these lead to a poor ability to promote development. An example of this is in Nigeria where it has been estimated that in the last twenty years over two billion dollars of oil revenue from the country has been embezzled. This is mainly due to their last dictator who ordered the Nigerian Central Bank to deposit 15 million dollars a day into his own Swiss bank account. This works out to twenty percent of GDP and when you take into consideration that their NFD is over 40 percent of GDP, the country is not left with much money. A strategy that has been put into place for this specific barrier is the refusal to lend money to Nigeria from IMF. Natural disasters are another barrier to development in less developed countries. The effects of natural disasters such as floods or droughts have a much greater impact on less developed countries compared to that of advanced countries. Most LCD’s are prone to these natural disasters, which is a significant factor to their underdevelopment. In India they have times of severe droughts and flooding where 80 million people were affected. This has severely decreased their agriculture production and is consequently creating a barrier to their development. There is not much that can be done about natural disasters but do adjust to them and to adopt new ways to cope with them. Another significant factor preventing the development of less developed countries is war and civil unrest. Many LCD’s are in constant war and civil unrest, this causes several problems with development. The first of these problems is that entrepreneurs are discouraged by the countries instability also important infrastructure is destroyed and governments spend their little taxation revenue on maintaining order or producing weapons. Economies in war torn countries are unlikely to be operating at full capacity making it hard for development to occur. In Rwanda civil wars in the nineties have claimed the lives of almost 1,000,000 Rwandans. Most of the aid to the country was invested in weaponry and therefore not used in promoting economic development, as it should have been. This is how civil wars can create barriers to development. The only solution to this is to end the wars and focus the spending into promoting economic development. The final barrier to development is a lack of press freedom. Press freedom involves the exchange of ideas, criticism of government and increased awareness of world events and developments. This is something that most LCD’s do not have and therefore their economic development is limited. In Mexico the government allowed Televisa to have a monopoly in the television market if they didn’t play any anti-government shows and supported the government. In the eighties journalists were killed by the police in Mexico City if they published any anti-government articles. This is serious problem in these less developed countries and is usually the result of government corruption. The first strategy to promote economic development in these less developed countries is export development. This strategy involves assisting those producers who export to overseas markets. An increase in export development will earn foreign exchange and create unemployment and income and also help to solve problems with the balance of payments. The next strategy to promoting development is import replacement. Import replacement involves the shifting of demand away from imports and towards the domestically produced products. This can be done in several ways including the induction of tariffs on imports making them more expensive relative to the domestic product. This also encourages foreign investment as the foreign firms wish to have the same protection. Assisting domestic producers financially is another way of promoting this economic development, by subsidising and offering tax incentives to local producers it will increase their competitiveness with imports by the lower costs of production. However, replacing imports is only a short-term solution and therefore policies promoting long-term development must be applied. Human resource development is the next strategy to development. This development involves improving the size of the labour force and also the skills of the labour force. The labour force can be increased through improved health care and skills can be attained through things such as training and education. In Nigeria the World Bank is currently funding an $80 million project into their education as well as building a better and more consistent water supply. Also In Malaysia education investment has been amongst their highest priorities for decades, they have spent $731 million on improving their education levels to the level they are currently at Another way to promote economic development in these less developed countries is through encouraging enterprise. In most LDC’s there is a lack of entrepreneurs, in order to increase the quantity there are several solutions such as improving management and leadership training and tax incentives, subsidies and free loans. Cuba has introduced a group of people called the cuentapropistas, 170,000 entrepreneurs marking the arrival of a new business sector in the islands socialist economy. They account for 8% of the labour force and manage to put food on the table for one in ten Cuban’s. These new small businesses have been a result of reduced subsidies to state enterprises, increased foreign investment, and introduction of incentives in the agricultural sector and the legalisation of dealings in foreign currency. This has already had positive signs on the Cuban economy with growth in 1998 at 8 percent some 31percent higher than two years previous. Population control is another strategy to economic development. Rapid population growth is unwanted as it creates problems such as inflation and scarcity and therefore more poverty. There are plenty of methods that can be put into place to slow population growth. Some of these methods include maximum children policy such as China’s one child policy and free supplies of contraception. The Grameen bank is another contributor to helping population control in Bangladesh. The bank issue loans to woman and as part of the conditions to borrowing the money they must agree to have small families. This has proved to be a successful program all across the world and has helped to promote the small-scale development of many less developed countries. The next strategy to promote economic development is increasing the agricultural productivity. Agriculture is usually a major sector in the less developed countries and thus improving its productivity will significantly promote development. Improving the agriculture productivity can be done in many ways. Some of these include merging small farms to create larger more efficient ones and encouraging owner operators to increase the incentive to improve productivity there also several other ways in which these countries can improve their agricultural productivity. With 75 percent of the population living in rural areas, improving the efficiency of India’s agriculture is the key to attaining high growth and reducing poverty. Accelerating rural development and poverty reduction requires cutting spending on input subsidies; investing in rural infrastructure; providing more effective rural services, especially to the poor and socially excluded; improving management of water, forests, and other natural resources; liberalizing the rural economy, including the rural financial system. In the heart of India’s poorest region, the Bihar Plateau Development Project is increasing access to much-needed irrigation and safe drinking water by tribal communities and raising their incomes through the diversification of rural livelihoods. The project aims to reach 4.5 million people through a variety of institutional mechanisms, including water and sanitation committees, water user associations, and income generation schemes, all aiming to transfer skills and enhance people’s capabilities so that the benefits may be sustained once the project ends. This is one way in which India is proving to increase its agr icultural productivity. Another strategy to promoting economic development is by adopting intermediate technology. If a less developed country invested in new technology it may be forgiving employment possibilities, as most new technology is very labour intensive, this will consequently lead to a fall in employment. As these countries have an abundance of labour it is much easier, cost effective and better for the economy if they use intermediate technology that still requires high levels of labour. An example of this is Fred Hollows, Hollows uses local resources to create employment income and economic growth through the training of people to perform the medical tasks and also employment in the factories where the lens are created. The final strategy to promote economic development is to improve the financial system. In these economies there is a lack of savings and an insufficient financial system, this creates major barriers to development. Thus policies need to be adopted to improve this situation that promote growth and employment without generating high levels of inflation. The World Bank’s Executive Board approved a $506 million loan to support financial sector adjustment and reform in Colombia. The loan is part of a revised World Bank strategy for Colombia that includes intensified lending to help the country promote peace, ease the impact of the recession on the poor, and rebuild after their earthquake. It is also part of a $1.4 billion package to help bolster Colombia’s economy. â€Å"This financial sector adjustment loan reflects the World Bank’s confidence in Colombia’s wide-ranging reform strategy, which is critical to its effort to overcome the recession,† said An dres Solimano, director of the Bank’s program in Colombia. The financing of many of these strategies is usually funded through institutions such as the World Bank and the International Monetary Fund institutions. The World Bank is a major force behind the development of less developed countries as it gives issues discounted loans to most of these countries. Another way that these countries can fund their development is through overseas aid. The are large amounts of money flowing out of the developed countries from governments and other aid organizations as aid into the less developed countries hoping to achieve economic development. For all of these less developed countries to achieve economic development, an effort from all developed countries with aid and advice must be contributed, but until then the world will not have any chance of abolishing poverty. References: – IFC – Building the private sector in Africa – The Economist January 15th 2000 – survey Nigeria – World bank – Rwanda development project – The Economist May 27th – Aids impact in South Africa – World Bank – Cuba’s Cuentapropistas – World Bank – India’s development – The Grameen Bank – Economic Development in Bangladesh – The Economist May 27th – Growth is good – The Economist Feb 22nd – Televista – World Bank press release, 11th June 1998

Evolution of Human Resource to Human Capital: A Strategic Shift

As per the Darwin’s theory of evolution, everything has to evolve in order to sustain its identity. Corporate and its environment are changing every day as per the needs and behaviour of the customer. New strategies and concepts are evolving and the old concepts are either getting modified or are getting redundant if not practised. Knowledge of attracting, selecting, deploying and developing talent and strategies has given a competitive advantage to the companies.In line of this Human Resource, that was considered as a supporting coordinate in strategy formulation, now has taken a front lead in capital generation and hence regarded as the Human Capital. Peter Drucker famously defined a knowledge economy as one in which the human brain provides the primary means of production. He then noted the obvious corollary: that an organization’s most valuable resource is lodged in the heads of its employees and goes home with them at night. [Reference4].This is how firms have star ted involving employee participation at all levels for decision making and management forecasts (be it in any field, i. . Operations, finance, Marketing, Human Resource department etc. ) and not only a pre-selected group of individuals. Concepts like brainstorming of ideas have also evolved with the concept of human capital. In this article, let us first define human resource and human capital briefly. Human Resource was regarded as the set of individuals that forms the employee strength of any organization and its planning was typically considered as the process of anticipating and providing for the movement of people into, within and out of the organization.Previously firms were giving much importance to system implementation than human resource development as technology was much simpler. But with the advancement of technology and shortage of skilled manpower, firm has started giving respect to their employees and have initiated different measures to enhance their skills. This has generated the concept of Human Capital. Human capital narrowed the concept of human resource in terms of expertise and knowledge beneficial for the company. Human Capital describes the economic value of employees’ knowledge, skills and capabilities.This concept has highlighted the fact that success increasingly depends on an organization aptitude to manage talent and stressed upon the idea of â€Å"Compete through people†. In line of strategic planning that involves a set of procedures for making decision about the firm’s long term goals and strategies, human capital has taken the front seat. In the older model with the advancement of system technology, corporates started considering system before human resource. Their main goal was to make human resource as predictable as physical assets.But in last 40 years this concept has gradually changed and now the concepts like Toyota Production system pioneered the model that human resource come much before systems and that any individual on the production line had the capability often regarded as the ownership to point out problems and stop the line when proper standard operating procedures (SOP) is not being followed or some error has occurred. This has also extrapolated the idea that it is the human resource that drives and maintains the system and is not the other way round.It has also advanced the human resource processes to be continuous and not episodic as considered previously. Human capital is clearly different from the tangible monetary capital due to the distinguishing characteristic of human capital to grow cumulatively over a long span of time. Due to the shocks experienced in the business cycles it is difficult to maintain the linearity in growth of tangible monetary capital. During the period of prosperity, monetary capital grows at relatively higher magnitude while during the period of recession and depression; there is a dip in generation of monetary capital. Reference3].Contrary to this, human capital has uniformly rising rate of growth over a long period of time because the foundation of this human capital is laid down by the skills both technical as well as educational and health inputs. [Reference3]. The current generation is qualitatively developed by the effective inputs of education and health that will also benefit the future generation by its advance research and development. Thus the future generation gets refined day by day in terms of skills, production capacity etc. generating more human capital with superior quality.Firms have started banking upon their skill inventories for their business differentiation. Skill inventories list each employee’s education, past work experience, vocational interest, specific abilities and skills, compensation history and job tenure. IT hubs in Hyderabad, Bangalore etc. have banked upon their skill inventories and this has signified the rapid growth of Indian economy. Companies such as Mackenzie etc. has o ver a period of time emphasised and given inputs to develop a pool of human capital to gain the competitive advantage.Now the trategy formulation has moved from simple analysis to devising a coherent course of inputs and actions. Thus cumulative growth of Human Capital in India is evident. Countries like china have always banked upon their human capital for their economic growth. Many reasons explicitly explain the strategic change of human resource to human capital major of which is globalization. Globalization has led to multitasking of the employees where the work force is developed in a holistic manner to accomplish many tasks at one time. The resources are utilised in a much better way.Individual knowledge bases are continually changing and adapting to the real world in front of them. So the dimension of knowledge is not limited to demographic borders and has developed leaps and bounds. Training programs complement building the human capital by developing superior knowledge, sk ills and experience within the workforce. Managers of today are thriving to develop business agility in their team. Many development assignments are getting structured for employees, empowering them and ensuring that their job duties and requirements are flexible enough to allow growth and learning.Human capital is intangible and elusive and cannot be tapped the way organizations manage jobs, products and technologies. One of the reasons for this is that the employees, not the organization or system own their human capital. If valued employees leave a company, they take their human capital with them, and any investment the firm has made in training and developing those employees is lost. Technology advancement has also pioneered the shifting of human resource to human capital.Companies like Apple, Samsung are coming up with more than one product in a year where the human talent is used profusely to gain the technical niche. Advancement of technology tends to reduce the job openings that required little skill and increased the position that required considerable skills. This transformation has shifted the human resource from â€Å"touch labours† to â€Å"knowledge workers†, in which the employee responsibilities expand to map a richer array of activities such as planning, decision making and problem solving.Even the firm are preparing blue prints of programs to improve the skills of not only the upper management but also the middle and the lower management also. Firms are creating programs and awards like mentorship program, performance pay, incentives, bonuses and other awards for all level of employees to retain their human capital. Because employee skills, knowledge and abilities are amongst the most distinctive and renewable resources on which a company can draw, their strategic management is more important than ever. Reference2].Thus HR professional can concentrate more effectively on the firm premeditated direction instead of daily routine t asks. This blueprint can include forecasting personnel needs especially for firms planning to expand, contract or merge, planning for career and employee promotions, and evaluating the impact of the firm’s policies- both those related to HR functions and other functions- to improve the firm’s earning and strategic directions. But the main challenge comes in utilization of human resource as human capital.Without proper ownership and proper activities that capitalizes the workmanship of an employee, the part of the capital gets unutilized and goes as idle waste. Managers are architecting work for the employees in such a manner where they feel themselves connected and their skills are enhanced. This also catapults their full capacity utilization. The evolvement of this concept has inevitably changed the focus of firm from traditional Human Resource Management to strategic Human Capital Management.To be in the competition firms are using their human capital to implement bo th proactive and reactive change initiatives and are crossing the line to retain their human capital. Such is the magnitude of human capital in today’s scenario, where in a manager success is determined by the amount of human capital he has generated or retained in a year. The future depends on pursuing businesses that leverage human capital.

Law of Diminishing Marginal Return Essay

The Law of Diminishing Marginal Return suggests the inverse relationship of marginal utility that a person derives from the quantity of his/her consumption of that given good or commodity. In other words, the higher the number of quantities one consume for a particular good/commodity, his/her marginal utility from consuming that given good decreases, and vice versa. For instance, a person derives 10, 14, 16 units of utility from consuming 1 unit, 2 units, and 3 units respectively of Pepsi Cola. Given this, though the utility of the person is in increasing trend [10 to 16 utils], but the marginal utility exhibits a decreasing trend [4 to 2 additional utils] as the number of Pepsi Cola is consumed by the given individual. The Water-Diamond Paradox is considered a contradiction since, relatively, water is more essential to life compared to diamonds, yet, diamonds have higher price compared to water or the price of water is way cheaper compared to diamonds. In most cases, those things that have higher values are the ones with higher prices. But for the Water-Diamond Paradox, water, which has higher value, has lower price compared to diamonds, thereby not conforming to the above stated idea. The difference between ATC and AVC, given that the number of outputs increases, is equal to zero since increase in the level of output do not directly affects TFC, which is the difference of ATC and AVC. Oftentimes, it is the AVC that is immediately affected for a given increase on the number of output or level of production of a given firm. Economies of scale provide an illustration of the relationship of increase in the production efficiency and the production volume of a given firm. For instance, Pepsi Corporation purchased more equipment for its production line. The said purchase of new machineries improves the overall efficiency of Pepsi’s production line, which results to higher number of Pepsi Cola produced at a given period of time. On the other hand, Diseconomies of Scale provide an illustration of the relationship between the increase on the number of output produced and cost of production. Meaning, as the number of output produced increases; the cost of production also increases. For instance, Toyota is already efficient with 100 workers. Aiming to further extend their profits, Toyota management hired new 20 workers, making their workforce equal to 120. Those additional workers will only increase the production cost of Toyota, while the volume of cars produced will still be almost the same or equal to the time when workforce of Toyota was still 100. Fixed costs would be the computers, land, building that I will use for my internet business; while variable costs would be the electricity and labor cost. In order for my business to take advantage of economies of scale, I must increase the number of computers in the internet business in order for me to accommodate more customers. The event of increasing the number of computers will stop by the time the marginal profit starts to decline since my marginal cost become larger than my marginal revenue. Generally, businesses shut their operations down if the difference between total revenue of producing equilibrium quantity of good/service is less than the total variable cost of producing equilibrium quantity of good/service. Or, the business must shut down if price of producing equilibrium number of products is less than the average variable cost. On the other hand, the business will continue to operate if the price level is greater to the average variable cost. Answer #7a Sustainable development would be the economic principle which I think would determine how long firms producing ethanol from alcohol will survive can. Given the limited resources that we have today and the ever increasing consumption of every consumers, it is a must for ethanol producers the how status of sustainability of corn in the economy in order for them to have an idea the amount of corn that will be available in the next coming years [long run]. Cellulosic ethanol is a biofuel which can be produced through utilizing corn, starch, woodchips to name a few. Given the rise of cellulosic ethanol in the market, the demand for corn in the market also increased, and so with its price (Cox 1). Therefore, in the long run, the rise of cellulosic ethanol will more likely to increase the cost of production of corn-based industry due to the price increase in corn caused by its high demand in the market. Works Cited Cox, Jeff. â€Å"Big Ethanol Shakeout Coming? † 21 August 2007. CNNmoney. com. 19 July 2008 .

Sulfuric acid

The resulting copper (II) sulfate solution when cooled can easily crystallize which is in the solid form and the amount of product can be accurately measured by using electronic balance to get the mass of the The experiment is carried out to calculate the percentage crystal formed. Yield of the salt formed. The percentage yield is the percentage of purity of the product that we want and the actual yield is always less than the theoretical value as there are many factors to affect the purity Of the product such as environmental factor, systematic error, random error and others.Therefore, it is very hard to get a 100% yield throughout the experiment. Objective: To make a salt and to calculate the percentage yield of the salt. Reagents & Apparatus: 20 ml Sulfuric acid MM, g Copper (II) carbonate, Bunsen burner, Tripod stand, Gauze, White tile, Filter funnel and filter paper, Glass rod, 100 ml Glass beaker, Conical flask 250 ml Petri dish, Balance Spatula, Procedure: Stage 1 1 Add 20 ml MM sulfuric acid in a 100 ml beaker. Heat carefully on the tripod with a blue flame until nearly boiling. 2 When the acid is hot enough, turn off the Bunsen burner and stand the beaker on a white tile. Use a spatula to add small portions of copper (II) carbonate into the beaker. The reaction is exothermic, so be careful when adding the solid. Stir the mixture gently for about half a minute after each addition. 4 When all the copper (II) carbonate has been added, allow the beaker to cool slightly; meanwhile set up Stage 2. Stage 2 5 Fold a filter paper to fit into a filter funnel, and put it in the funnel. Place the funnel in the neck of a conical flask. 6 When the beaker is cool enough to hold at the top, pour the contents into the filter paper in the funnel. Gently swirl the contents to mix; allow to filter through. Rinse the beaker and pour the Lear blue solution back into it. Boil the solution until the volume is half the original volume. Cool the solution. 8 Obtain the mass off dry Petri dish; label it with your group number. Carefully pour the warm solution into the dish and leave aside for a week. 9 After one week, obtain the mass of the dry crystals. Result : 1 What was the color of copper (II) carbonate? What was the color of the solution produced after the reaction? Before reaction (Copper (II) Carbonate) After reaction (Copper (II) Sulfate) Color Green Blue 2 Describe your crystals.The crystal formed is in blue rhombic shape. 3 Mass of the dry crystals = 3. Egg Precaution steps : 1 . The position of eyes must be perpendicular to the scale of measuring cylinder to avoid parallax error. 2. Stir the mixture gently to ensure the copper(al) carbonate, is fully reacted with sulfuric acid, 3. Handle the acidic solution using gloves to avoid the acid from splitting to the hands. Discussion: 1 Calculate the theoretical yield of crystals that could have been made. + (as) (as) +(l) + (g) = ml=20 =o. Moll -0. 02 x (249. 5) = 0. Mol -?4. Egg Mass of the crystal ( ) 2 Calculate the percentage yield. Percentage yield = x 100% = x 100% = 63. 93% 3 a) Is it possible to prepare copper (II) sulfate if we start with copper (II) oxide and sulfuric acid? If so, describe the procedure. Yes, it is possible to prepare copper (II) sulfate if we start with copper(al) oxide and sulfuric acid. To prepare copper (II) sulfate , prepare of the O. MM sulfuric acid and pour portions of copper(al) oxide is added to the beaker until excess. Stir the mixture and pour into the filter funnel.The filtrate is then heated until the illume becomes half and cools the solution to crystallize. The crystal which is copper (II) sulfate will be formed. The crystal is then rinsed with water and dried with filter paper. B) Is it possible to prepare copper (II) sulfate if we start with copper metal and sulfuric acid? If so, describe the procedure. No, because the position of copper ion is lower than hydrogen ion in electrochemical series . Hence, it doesn't react with acid. Concl usion: As the conclusion, it shows that salt can be made by reacting acid with metal carbonate together.

Analysis of retail marketing

Analysis of retail marketing Retailing involves the selling of goods, services or merchandise from a fixed location (like departmental store, boutique), by mail or through the internet, in smaller lots for direct consumption by the customers. Subordinate services like delivery may be included. (Wikipedia) After studying the nature and role of retail and the global environment in which it operates, following is my research in this area: 1) Retail Internationalisation is much more than the opening of stores abroad: Retailing had always been a domestic market activity. However, an increasing number of retailers are no more confining their trading activities to the home-market (Moore and Fernie, International Retail Marketing). Fashion retailers like The Gap, H&M, Zara, Gucci, etc recognised the benefits of crossing boundaries and thus, have sought to exploit international opportunities. Retail internationalisation is an essential ingredient for the global economy. Consumers are increasingly becoming international in their outlook due to business/pleasure travelling, access to internet, television, magazines, etc and are always seeking new experiences and a global appeal while shopping. International retailing satisfies the increasingly complex and demanding needs of global consumers. As retailers are cost-driven, consideration of key activities and procedures is necessary to achieve the tag of an international retailing business that is profitable. Internationalising retailers also gain sustainable competitive advantage. Wal-Mart and Tesco enjoy cost leadership & the benefits of operational efficiency. Brand strength is well known with Starbucks. Zara and H&M achieved fashion leadership whereas category dominance is prominent with IKEA. The motivations for international expansion: According to Williams, 1991, it is important to note those factors that motivate retailers to consider international markets as a strategy for growth. Amongst the various theoretical frameworks, the â€Å"push and pull† factors proposed by Alexander (1997) have emerged as key in interpreting retailer’s motives behind expansion into foreign markets. It focuses on why retailers are ‘pulled’ towards a foreign market and/or why they are ‘pushed’ to move out of their home market. According to Alexander (1997), retail internationalisation was a reaction to the bad internal market conditions, or the desire to further exploit trade competencies and opportunities abroad due to home-market saturation. The 21st century has given rise to an elite group of trans-national grocery retailers (like Wal-Mart, Tesco, Carrefour) for whom internationalisation is a defining element of their corporate philosophy. E.g. Tesco, with 15% turnover from outside the UK & 65,000 overseas staff, declares internationalisation as one of the four defining elements of its corporate strategy. Likewise, rigorous international strategy is being pursued by the Spanish footwear brand Camper, b y recognising their brand appeal, product range and limited sector-competition. (Moore and Fernie, International Retail Marketing) To conclude, retail internationalisation is not just about opening of stores abroad. It also involves: Synchronising cultural diversity Transferring knowledge and experience Sustainability and ethical aspects of retailing Young consumers and global trends Cross-boundary service quality The need to develop & manage stores in new markets The transfer of ‘invisible’ dimensions of retail such as know-how and expertise from one market to another Cost-saving reasons Achieving market differentiation 2) Provide a critique of the various methods of market entry that are available to the international retailer:

Global business investment Coursework Example | Topics and Well Written Essays - 2500 words

Global business investment - Coursework Example Because of this reason, exchange rates analyzed, watched and manipulated economic measures by the government. Exchange rates are also useful when examined on a smaller scale: they influence the real return of the portfolio of an investor. There are several factors that affect exchange rates. Before we examine these factors, it is important to look at how exchange rate affects the trading relationships between countries. A lower currency is considered to make exports of a country cheaper and imports expensive in the foreign markets. A higher currency is considered to make exports of a country expensive and imports cheaper in the foreign markets. Hence, a lower rate of exchange will increase the balance of trade of a country while a higher rate of exchange is expected to lower it. There are several factors that have influence on exchange rates, and they are associated with the trading relationship between countries on a global level known as internationalization or globalization (Hill 2012). It is significant to understand that exchange rates are expressed as a comparison of two currencies from two countries. It is also significant to understand that these factors cannot be discussed in a specific order; similar to numerous aspects of economics, the significance of these factors is usually subjected to discussion. The following are discussed determinants that influence exchange rate between countries. Exchange rates, interest rates, and inflation are all highly correlated. Central banks in manipulating interest rates can exert influence on both exchange rates and inflation, and altering interest rates influence currency and inflation values. Interest rates that are high offer lenders high return in an economy relative to other countries. For this reason, interest rates that are high attract a huge amount of foreign capital and result in a rise in the exchange rate. For instance, if the United Kingdom rates rise in relation to elsewhere, it becomes

Business Environment Essay Example | Topics and Well Written Essays - 1750 words

Business Environment - Essay Example There are two distinct types of Business Environment (Kew and Stredwick 2005). a) Internal environment b) External environment The internal environment includes money, machinery, man, material and management, which are usually based under business control and the changes upon the performance of the enterprise or organizations. The external environment consists of factors that are beyond the manipulation of the enterprise and entails the governmental and legal factors, political factors, socio-cultural factors among other factors. External environment could be micro or operating environment or macro or general environment. Scenario 1 Working for Stepping Stones education publishing LTD involves the need to expound on the economic chapter of the Business Environment. Task 1; Book Chapter: Any ultimate decision that is made by a manager must always involve price and output. The price –output decisions are surrounded by three factors. These factors include cost, demand and market structure (Henry 2008). Market structure refers to competitive environment whereby any enterprise manages and dictates on how cost and demand should be featured in decision making. Although various firms operate within different market structures, there are five basic market structures namely: monopoly, duopoly, oligopoly, monopolistic and perfect competition. A market operates under perfect competition if it persuades numerous firms, freedom of entry and exit, homogenous output and perfect information. A market economy has competition between huge numbers of buyers and sellers who search for a chance to buy and sell goods and services (Kapstein 1996). Competition among sellers dictates that prices will always be on the lower side and that of the buyers dictates that prices will never be very low hence making a major impact on the market equilibrium. The element price is very essential in the market. Its prime purpose is to ensure that there is a clarification in the economic market . In addition, price contributes to market analysis with regard to the demand curve (Krugman 1996). A demand curve is the relationship between the price of the good and the amount or quantity the consumer is able or willing to part with in regard to its purchase in a specified period of time with consideration to income, tastes and prices of similar goods. The graph above explains the Supply /Demand curve in relation to production of Oil in Libya. In essence, the demand for crude oil increases when the price is low causing the supply for the product to decrease. According to Kew and Stredwick 2005 argues that pure monopoly ensures that there is the only one supplier in the market, there is no close replacement to the output good plus no threat of competition. Monopoly means that there is only one firm that is ruling the market. This kind of domination is not competitive because it is the only supplier in the market hence it as a downward sloping demand curve as it has the freedom to choose its prices and quality in the market. Duopoly is a market dominated by two firms, which are large enough to influence prices in the market. In addition, oligopoly is dominated by a small number of firms, which are large enough to manipulate prices in the market. A market structure that is monopolistic constitutes of several producers with various real or perceived difference in products. A perfect competiti