Group items tagged

Shows how different places have varied incomes.

This is my article for this week's topic - income elasticity/cross elasticity/elasticity of supply. The article above relates to the raise in minimum wages of the people in Washington D.C. My write-up can be viewed here: https://pamojaeducation-com.campuspack.eu/Groups/13.Y2.ST.ODP.MAY.ECON.SL.A/Nattanopthorns_Economics_Blog/2013/11/9-2_-_Income_ElasticityCross - Bee

The following article talks about Obama's Budget for the US this year. It proposes low-income tax breaks, to further decrease the income inequality in the US and give more benefits to the low income earners in the US.

The Australia government is proposing a change in their confusing government subsidies for childcare to have one single payment which subsidizes up to 90% for low income families. This is a tool to reduce income inequality and to encourage young children from lower income groups to be able to have a strong foundation in their education. The problem of this subsidy is the question of the unhappiness of the taxes payers who may resist this proposal because of the higher government expenditure incurred on families which may have many social problems and are unable to have a stable employment.

The following article talks about how Obama is trying to help the poor of the United States by "expanding low income tax breaks" and offering them other benefits as well. This would hopefully not only benefit the poor, but also increase AD in the economy as now more people have more money to spend.

This article should realte to week nine. It talks about Income elasticity of oil prices and personally I find it quite interesting.

The demand for gadgets among the young people from 12 to 17 years old reflected the inelastic demand for iPhone. The most desire Christmas present is the Samsung Galaxy phone follows by the Apple. This shows that young people, most of them, who do not have their own income, are very interested in the technology in order to keep up the latest news updates and gossips with their peers or their families and friends. The advertising od these oligopolies are very successful by promoting the products as an essential tool for daily living. The incomes of the families that are able to afford these gadgets reflect that they are from middle income or the rich. The pricing of these products are reasonable affordable as the US dollars is stronger than the Korean Won. The close substitute, cross elasticity is the Apple, which is an American product, which may be compatible in price and functions, but Samsung seems to have greater inelasticity. Christmas is a period of seasonal demand where the inelasticity of new gadgets increases because adults want to please the teenagers with new technology. The businessmen are able to intelligently respond by increasing the supply because they are inelastic in their supply to increase their marginal revenue and to enjoy of scale.

The Minister of Education, Mr. David Laws, wants to reduce the national expenditure on school uniform. He believes that the inflated price of school uniform up to 52 million pounds per year is excessive. The schools in the UK have to reduce the opportunity cost of demanding overly priced uniform. This practice must be stopped. In implementing this policy, British families would be able to save 52 million pounds in one year, which is a sizeable proportion of many poor families budgets. In many lower income families in this period of recession, families who are depending on food banks will benefit from this opportunity cost of spending on uniform as they have a scarce budget. This will help them to shift their household expenditures to more essential items such as food. The opportunity cost of them budgeting a significant percentage of their limited income to an inelastic demand for uniforms may create problems of great scarcity to families with many school-going children. The guideline by the minister stated that the uniform must be purchase from the cheaper suppliers, which will reduce the opportunity costs. This will mean savings for the parents. The question is how do these new policies going to be effectively worked out because some rich parents with no scarcity problems will insist or prefer their children to wear higher quality and more expensive uniforms, some even tailoring them.

this article relates to our week 9, study because it tells us the the consumers demand for energy is inelastic and how the government decisions affects the price of company products.

The Thai government wants to increase the alcohol average tax by a significant percentage. The tax ceiling for the beer and wine will increase to 2000 baht per liter, which is very significant. This is aimed at increasing the government revenue, as the demand for alcohol is inelastic and increasing in consumption. Thailand has a significant percentage of foreign tourist and foreigners living in the country who enjoy alcoholic beverages. Locals are increasing in their income inelastic and consuming more alcohol. This will hopefully reduce the demand, as alcohol is extremely addictive and have negative externalities such as dream driving causing many innocent deaths.

This article discusses about the income effect of rich millionaires in China. The demand for butlers for the superrich has created a special school of training for them. The butler is trained to be able to work as managers to have the proper attitudes and training to help their bosses to live more comfortably. The training includes how to handle foreign guests and important officials. This means that the butler must be well paid and the ability to handle various responsibilities increase their demand. There is a ready supply of young China graduates who desire to work because of the re-numeration and the opportunity to have occupational mobility.

This article discusses the global crude oil supply prices which have been increasing because of the various countries having political unrest causing disruptions. The strong demand for the oil has increases the prices as the supply decreases. The various countries that have a significant decease in supply include Libya, Nigeria, and Iraq. The estimated barrels daily of crude oil disruptions reflect that Syria has been having a decrease in supply since 2011. The other factors that affect the prices include the seasonal demand pattern, which shows a decrease in demand in September and decrease further in October. The increases by non-OPEC countries mean that there is an increase of production such as in the US, which will offset the decrease in supply in Syria. Saudi Arabia always has a sustained output because it will provide higher income.

This article talks about how economic growth on its own is not sufficient enough to battle extreme poverty. The world bank stresses that we need to reduce poverty, at a rate of 50 million a year until 2030. As we know fiscal policies can be used to stimulate growth but this is not the only use. We can also use them to redistribute income, which is necessary in this case. Further more monetary policy is not good enough in tackling these issues directly. Dedicated government spending and tax cuts on the poor are far better fiscal policies to deal with the issue.

This article talks about tax increases for high-income Americans, and how this plus spending cuts and economic growth might help reduce their debt.