Group items tagged

Decrease in the supply of cars in Japan

As largest car maker in the world, this will impact the market for cars. Increase of price due to less quantity

Statistics of a decrease in supply

The attempts of government intervention to change the demand of fat in the past and what the government is attempting to repeat now, in order to change the demand of sugar and chocolate. This will also change the supply of the goods, since the tax will hit the producer as well.

This section shows the desired price, through the addition of the tax. It also gives a very exact target date for when the tax should be started up. This allows for graphs to be drawn before and after the event.

This shows how over time further taxes will be put on products, showing further change in demand and supply and the SRAS and LRAS.

What can the government do to prevent the inflation? - what policies are there? monetary and fiscal but in this case monetary policy is the one to change the interest rates. --> however, this can lead to an increase in unemployment rate. WHY? 

-Increase borrowing and decreasing savings -however, real interest rates are positive due to deflation 

Increase in budget deficit as spending increases and tax revenue decreases - along with debt of 215% of GDP

GDP=C+!+G+X-M  demand for domestic products decrease because foreign products are relatively cheaper - increase in M and decrease in X, so AD decreases and GDP decrease causing deflation

Panasonic (oligopolistic firm) is considering to cut workers due to recession, so microeconomics on oligopoly with the x-axis with quantity and y-axis with price can be made.

In the end, is it possible to find a way to NOT cut workers?

In your IA maybe you could add a simple note saying how long the recession has been going on.

I assume this section is saying that they are trying to reduce costs of production and increase efficiency. However, in most cases if a firm tries to lower the price they would lose customers due to price war between other firms that produce homogenous goods so it would be risky to change prices when its oligopoly. Although, their main aim is to recover its business so they are trying to cut many workers, reduce costs and increase efficiency.

Brings marginal cost shift inwards and by that also the average cost shift inwards as well 

Slush in labours at Panasonic Corps in Osaka 

These are inferior goods

Given the option, consumers are willing to opt for the cheaper, unbranded version amid high economic costs.

Shows economies of scale: Coles can sell cheaper because as a chain they can source from farmers directly. This lowers their costs of production and thus lowers consumer prices.

Boom and the bust represents the business cycle. The boom being the positive output gap and the bust representing a negative output gap (recession) In this case Spain was experiencing a boom, but after a while they faced a recession because they did not have spare capacity in the factors of production as they use to have (used too much doing the boom)

Because of the very high unemployment rate, it is very difficult for Spain to get out of recession. This is one of the reasons why Spain may be forced to ask for a bailout.

Possible evaluation: Higher tax may increase the government's income, but based on Laffer Curve, if the new tax rate is beyond the most effective tax rate, then in reality, income can be lower.

Supply & Demand

Initial Supply Value

Not an Increase in Supply Decrease? No Change?

GDP can vary due to seasons - similar to seasonal unemployment

will lead to a decrease in AD

GDP increase = could express this on an AD/AS graph where the AD shifts to the right as well as AS shifts to to the right (both increase) - also leads to inflation

Topic is on inflation

inflation increases due to decrease in the economy

Oil - one of the most inelastic good