http://www.financialexpress.com/fe_full_story.php?content_id=158335
Abstract:
The rate of inflation in India is 6.48%, this is due to a rise in prices in the food market. There is more aggregated demand in the CLASS IS OVER ILL DO IT AT HOME
2007年3月19日星期一
2007年3月13日星期二
My Econ Article and Analysis
http://www.allheadlinenews.com/articles/7006599170
Extract:
Prince Charles of England thinks that the gigantic fast food company, McDonalds, should be banned. Prince Charles visited Imperial College London Diabetes center and emphasized on the fact that a well-balanced meal is essential to preventing diabetes and strengthening health. As a result, McDonalds has not only caused obesity and bad health for their costumers, but the damage extends to a third party, the healthy population, because health problems increase insurance rates, taxes, and decreases labor quality. This is known as a negative externality, as it damages a third party that did not participate in the fast food market.
Analysis:
The health problems that McDonalds are causing reflect mainly on the lower income population, since McDonalds has a relatively low price. Therefore, these harmed people become unhealthy, causing them to demand more health fee which is paid by the insurance companies. Many of those low income people are receiving free insurance and their need for more health fee drives up the insurance rates in general, making the healthy population pay more insurance money. Therefore, this is one of the negative externality costs.
Secondly, since most of the low income population receives government funded health care, once their health worsens, the government needs more money to cover those costs. In addition, when more people become ill, the government needs to spend more money on building extra hospitals. All of these taxes come from those higher income people that were not involved in the fast food market. Thus, this extra tax is another negative externality cost.
Finally, once the health conditions of the fast food consumers drops, the quality of the labor forces decreases as well. Since the quality of one of the resources decreases, the Possible Productivity Curve shifts in for many companies. In other words, the cost of production for companies other than McDonalds has increased, and since they are not in the same market, that extra cost of production is also a negative externality cost.
Prince Charles suggests solving this problem by banning all of the McDonalds restaurants in the world. However, that is almost impossible, it requires too much cost and it might lead to a black market for McDonald’s fast food. Therefore, a better solution would be taxing McDonalds for their product, making the cost of production higher for McDonalds, and thus shifting the Marginal Productivity Curve in to Marginal Socially Beneficial Curve, since cost of production is a determinant of supply.
This tax revenue can then be spent on educating the population with the problems of fast foods and the importance of a well balanced diet. The physical education department in schools and communities can be subsidized using the government tax revenue. Healthy restaurants can also be subsidized to reduce obesity and diabetes. Finally, the tax revenue can also be spent on advertising healthy food on TV and radio, educating the masses through advertisement.
Extract:
Prince Charles of England thinks that the gigantic fast food company, McDonalds, should be banned. Prince Charles visited Imperial College London Diabetes center and emphasized on the fact that a well-balanced meal is essential to preventing diabetes and strengthening health. As a result, McDonalds has not only caused obesity and bad health for their costumers, but the damage extends to a third party, the healthy population, because health problems increase insurance rates, taxes, and decreases labor quality. This is known as a negative externality, as it damages a third party that did not participate in the fast food market.
Analysis:
The health problems that McDonalds are causing reflect mainly on the lower income population, since McDonalds has a relatively low price. Therefore, these harmed people become unhealthy, causing them to demand more health fee which is paid by the insurance companies. Many of those low income people are receiving free insurance and their need for more health fee drives up the insurance rates in general, making the healthy population pay more insurance money. Therefore, this is one of the negative externality costs.
Secondly, since most of the low income population receives government funded health care, once their health worsens, the government needs more money to cover those costs. In addition, when more people become ill, the government needs to spend more money on building extra hospitals. All of these taxes come from those higher income people that were not involved in the fast food market. Thus, this extra tax is another negative externality cost.
Finally, once the health conditions of the fast food consumers drops, the quality of the labor forces decreases as well. Since the quality of one of the resources decreases, the Possible Productivity Curve shifts in for many companies. In other words, the cost of production for companies other than McDonalds has increased, and since they are not in the same market, that extra cost of production is also a negative externality cost.
Prince Charles suggests solving this problem by banning all of the McDonalds restaurants in the world. However, that is almost impossible, it requires too much cost and it might lead to a black market for McDonald’s fast food. Therefore, a better solution would be taxing McDonalds for their product, making the cost of production higher for McDonalds, and thus shifting the Marginal Productivity Curve in to Marginal Socially Beneficial Curve, since cost of production is a determinant of supply.
This tax revenue can then be spent on educating the population with the problems of fast foods and the importance of a well balanced diet. The physical education department in schools and communities can be subsidized using the government tax revenue. Healthy restaurants can also be subsidized to reduce obesity and diabetes. Finally, the tax revenue can also be spent on advertising healthy food on TV and radio, educating the masses through advertisement.
2007年3月12日星期一
New Article
http://www.allheadlinenews.com/articles/7006599170
I hope this is a more reliable source.
Extract:
"Prince Charles of England says MacDonalds Food Should be Banned". Even though the prince in england technically does not have any politial power, his opinions are still extremely influencial on government policies. The fast food industry has very high supply and demand, but the high demand has caused a negative externality, which is obesity. This is because socially beneficial demand curve is lower than the private beneficial demand curve. As a result, the government should proceed a couple of policies to control the demand curve, making it socially optimal.
MR. WELKER: I have a question, does obesity even count as a negative externality? because it influences one of the dealers in the market which is technically not a third person.... I am really confused, I will find you tomorrow to discuss this.
I hope this is a more reliable source.
Extract:
"Prince Charles of England says MacDonalds Food Should be Banned". Even though the prince in england technically does not have any politial power, his opinions are still extremely influencial on government policies. The fast food industry has very high supply and demand, but the high demand has caused a negative externality, which is obesity. This is because socially beneficial demand curve is lower than the private beneficial demand curve. As a result, the government should proceed a couple of policies to control the demand curve, making it socially optimal.
MR. WELKER: I have a question, does obesity even count as a negative externality? because it influences one of the dealers in the market which is technically not a third person.... I am really confused, I will find you tomorrow to discuss this.
2007年3月11日星期日
Which Article Should I choose?
This article is from a very reliable source but its a cliche topic...
http://www.thestar.com/Business/article/180613
This article is not so reliable, but it is an interesting topic
http://www.thelibertypapers.org/2007/02/25/funding-government-through-externality-payments/
Finally, this article is extremely interesting, but the site might be a little unreliable, I want to do it on this one but I am not sure if this is acceptable:
http://www.heartland.org/Article.cfm?artId=20616
http://www.thestar.com/Business/article/180613
This article is not so reliable, but it is an interesting topic
http://www.thelibertypapers.org/2007/02/25/funding-government-through-externality-payments/
Finally, this article is extremely interesting, but the site might be a little unreliable, I want to do it on this one but I am not sure if this is acceptable:
http://www.heartland.org/Article.cfm?artId=20616
2007年3月6日星期二
Lack of Government Control on Alberta's Oil Sands Causing Pollution
http://www.gateway.ualberta.ca/view.php?aid=7626
This article suggests that there is a lack in government control over the growth of Alberta's economy. The Oil Sands, which is Alberta's main economy, causes a great amount of pollution, which is a negative externality.
The critic in this article suggests that Alberta's government has a "greedy and short-sighted" view, that pollution leads to global warming which is a negative externality "to end all externalities". I agree with the author of this article because it is not wise for the government to ignore this market. This is because, the negative externality that the pollution causes actually increases the cost of production, which shifts the supply curve inward from the privately beneficial supply curve to the socially beneficial supply curve. This inward shift of the supply curve causes the equilibrium quantity produced to decrease and the price of the product to increase. As a result, for the Oil Sand Market to be socially beneficial, less of the good should be produced, and prices of the Oil should be adjusted higher.
In addition, the government should tax this particular good, because taxing it would decrease the supply curve and shift the supply curve inward from the privately beneficial supply curve to the socially beneficial supply curve.
This article suggests that there is a lack in government control over the growth of Alberta's economy. The Oil Sands, which is Alberta's main economy, causes a great amount of pollution, which is a negative externality.
The critic in this article suggests that Alberta's government has a "greedy and short-sighted" view, that pollution leads to global warming which is a negative externality "to end all externalities". I agree with the author of this article because it is not wise for the government to ignore this market. This is because, the negative externality that the pollution causes actually increases the cost of production, which shifts the supply curve inward from the privately beneficial supply curve to the socially beneficial supply curve. This inward shift of the supply curve causes the equilibrium quantity produced to decrease and the price of the product to increase. As a result, for the Oil Sand Market to be socially beneficial, less of the good should be produced, and prices of the Oil should be adjusted higher.
In addition, the government should tax this particular good, because taxing it would decrease the supply curve and shift the supply curve inward from the privately beneficial supply curve to the socially beneficial supply curve.
2007年3月5日星期一
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