Short answers Coursework Example | Topics and Well Written Essays - 250 words

Short answers - Coursework Example So under such situation the seller will pass the entire tax burden on the consumer and will remain unaffected himself. If the price elasticity of demand (PED) of a product is 0.75, then it means that the product has an inelastic demand. This means a percentage change in price is not followed by a significant change in quantity demanded. If the firm decides to increase the price by 20 % then quantity demand will be negligibly affected and the total revenue will increase. Total revenue increases if either price increases or QD increases. Here price is increasing by a greater proportion then the decrease in QD, therefore the overall total revenue for the firm will also increase. The above shows that after the price change, the marginal utility per dollar spent on pretzels is higher than the marginal utility per dollar spent on beer. Under such circumstances the consumer should spend more on pretzels and less on beer. He should continue to do so until the marginal utility per dollar spent on both the goods become equal. If by hiring additional labor the total output increases with the decreasing rate, then the labor can said to have diminishing returns e.g if a firm hires 4th unit of labor, then the total output increases by 10 units. However when the firm hires 5th unit of labor, then the total output increases by 8 units only. So under such situation the total output is increasing but with a decreasing rate, this is known as diminishing returns. Similarly if a firm currently has 4 labors and they were producing 300 units per day. Now if the firm hires 5th unit of labor, but they manage to produce only 270 units per day, then this is known as negative returns, as the total output decreases with additional labor. The good produced under perfect competition are homogenous i.e goods of an individual firm is exactly identical to the goods of the other firm, they are perfect substitutes. So if an individual firm tries to charge a higher price on the

The decine and recovery of the US Steel industry Essay

The decine and recovery of the US Steel industry - Essay Example with foreign steel. However, this had significant, lingering after-effects that did not produce nearly the results expected or hoped for. Additionally, the power of labor unions added significantly to the decline of this industry during the same period, something that is currently being redeveloped by the U.S. political system. The steel industry has been plagued with lowered demand for steel products in construction and in automotive due to a variety of global economic factors being felt across the globe. This report highlights all of the factors behind the decline and the current slow recovery of the steel industry, including the aforementioned tariff and labor union influence, the existence of increasing pension payouts for Baby Boomer retirees, changing consumer and industrial customer buying behaviors, changing construction patterns globally, as well as the influence of Wall Street on this industry. Decline Factors – Tariffs and Labor Impacts In the early 2000s, the U.S. steel industry was plagued with considerable problems that were causing significant disruptions to profitability. First, there were many bubbles occurring in the stock market during this period that were eroding consumer confidence and reducing construction for materials requiring steel in their construction, such as automotive products and various consumer appliances. In an effort to help companies that were on the verge of bankruptcy during this period, President Bush imposed import tariffs as an effort to slow illegal dumping of foreign-made steel and also to boost profitability for these struggling industries. These tariffs consisted of a 15 to 30 percent commission by early 2002, however the end results of this effort were the production of internal disputes with domestic steel industry ownership who felt that this limited competitive edge and also made foreign buyers seek new market opportunities for the export of their own domestically-made steel (Blecker, 2002). Therefore, e ven though it represented more opportunities for domestic production to increase, it limited the scope of steel-related partnerships with disgruntled foreign steel producers and limited their expansion potential across the globe. Further, the backlash of various trade disputes did, indeed, force steel manufacturers outside of the United States to begin the process of looking for new export opportunities, thus eroding even more opportunities for this industry in the process. Additionally, during this time period, less regulatory presence in the steel industry gave considerable authority to various labor unions, such as the United Steelworkers of America (USWA), which began demanding higher wage increases for workers and therefore eroding profitability in an already struggling industry (Ikenson, 2002). What was occurring was that steel industries were already experiencing lowered demand for products both domestically and abroad and were on the verge of bankruptcy at the time. The powe r of these unions was exerted in an effort to prevent, at any cost, plant closings in an effort to save American jobs with the USWA. These efforts were ultimately successful, in conjunction with the new tariffs imposed, and forced steel industry owners to continue production and operate, essentially, in the red for a period of years until new regulatory powers began to erode the power of these labor unions. Today, there