Innovation & Entrepreneurship ( Market Research & Feasibility Study ) Paper

Innovation & Entrepreneurship ( Market & Feasibility Study ) - Research Paper Example The report will cover among other things the market demand for fast food in London and risks that may be encountered by investing in such a business in London. Objectives The objective of this feasibility study is to examine the suitability and riskiness of investing in a hospitality industry in London, U.K. This is because we have a great interest of establishing a fast food restaurant in London city. We strongly believe that fast food is doing so well in the city, which will enable us generate high profits in the long run. As a result, we intend to secure commercial premises along Cambridge Street, where, we believe, the business will do so well. We will conduct the feasibility study through market research involving interviews, questionnaires and direct observations. Products and services The restaurant will be serving a variety of U.K. cuisines such as burger, chips, pizza, french fries, tea, and coffee among other delicacies (Euromonitor International Par.4). Our foods will be s erved within the business premises, and customers will have a chance to have a take-way. Since the business will be located within one of the busiest streets in London, we believe that we will have many customers, both local and international tourists who visit the city and who will come to our restaurant. With the high sales expected throughout the season, we are optimistic that the business will generate high returns. In addition, we intend to offer the best-prepared cuisine in London as a whole. Market Research To understand the suitability of Cambridge Street as a good place for fast food restaurant, we conducted research through direct observations, interviews and the use of questionnaires with the residents of the London city. Findings showed that a majority of the London residents eat a lot of fast foods prepared in restaurants, as noted by Kuhn (Par.3). Findings also showed that a majority were young people between the ages of 10 to 60 years. At the same time, we found out t hat students also like eating fast foods, particularly those we intend to offer. In this regard, about 95 % of those interviewed stated that they prefer eating fast foods in restaurants because of lack of enough time to prepare food at home (Ruddick Par.6). Furthermore, they stated that fast foods are cost-effective and delicious. Others argued that eating in a restaurant also gives them opportunity to socialize with their friends and families, as noted by Boella (84). Pricing and promotion Based on the feasibility study, we discovered that our business would face stiff competition from other restaurants in this area. However, the good thing is that the closest restaurant will be within a mile from where we intend to locate the business. However, to beat the probable competition, we will carry out an intensive marketing and promotion campaign throughout London and the U.K. at large to create awareness about our company and the cuisine we offer. We also intend to ensure that we use t he latest technology to ensure high quality in the foods we serve. At the same time, we shall ensure that we maintain the highest standards of hygiene within and around our business premises. In addition, our resaurant will charge reasonable prices, which we believe, will keep our customers coming. This will

Medieval, Renaissance, and Enlightenment Thought Essay

Medieval, Renaissance, and Enlightenment Thought - Essay Example In the realms of romanticism, a number of examples have helped people to understand the kind of philosophical thought that passes through the minds of characters and people and what changes their minds with respect to the relationships that they share with people around them. In modern day society, such a thought process might have changed but is inherently very similar to the days of yore. When talking about cultural mutation, one can easily witness changes taking place in modern day society with respect to the formation of global economies and socio-cultural scenarios. As compared to the past, in order to depict the growth in thought, one should be able to determine the causes and inferences of the Lutheran Reformation, victory of the usage of empirical methods and statistical data in order to prove scientific methods rather than relying on normative thought processes. (Triki, Rachida) Furthermore, the journey of conversion from the identity of a hero to a saint also finds a very p romising exemplary while discussing the power and established Renaissance Empire during the time of Michelangelo.

Pros And Cons Of Globalization Politics Essay

Pros And Cons Of Globalization Politics Essay The 19th century witnessed the advent of globalization in something approaching its modern form. Industrialization permitted the cheap production of household items using economies of scale, while rapid population growth created sustained demand for commodities and manufactures. Globalization in this period was decisively shaped by nineteenth-century imperialism. After the Opium Wars and the completion of the British conquest of India, the vast populations of these regions became ready consumers of European exports. Meanwhile, the conquest of new parts of the globe, notably sub-Saharan Africa, by the European powers yielded valuable natural resources such as rubber, diamonds and coal and helped fuel trade and investment between the European imperial powers, their colonies, and the United States. It was in this period that areas of sub-Saharan Africa and the Pacific islands were incorporated into the world system. The first phase of modern globalization began to break down at the begi nning of the 20th century with the First World War. According to John Maynard Keynes The inhabitant of London could order by telephone, sipping his morning tea, the various products of the whole earth, and reasonably expect their early delivery upon his doorstep. Militarism and imperialism of racial and cultural rivalries were little more than the amusements of his daily newspaper. What an extraordinary episode in the economic progress of man was that age which came to an end in August 1914. The final death knell for this phase of globalization came during the gold standard crisis and Great Depression in the late 1920s and early 1930s. Globalization in the middle decades of the twentieth century was largely driven by the global expansion of multinational corporations based in the United States and the worldwide export of American culture through the new media of film, television and recorded music. Today, cross-border capital flows are more important than trade flows, and some trans national corporations now have budgets larger than the economies of many countries. But what is globalization by itself? Imagine how life was twenty years ago. There were no cell phones, no computers, definitely no laptops. Therefore, there was limited communication not only between people from other countries, but also between people who lived on the opposite site of the same country. Instead of sending emails that only take a few seconds to receive, letters were sent and received within a few days of weeks. In its simplest way we can describe globalization as elimination of borders such as each country becomes socially, politically and economically interdependent with one another. In ideal global community economic globalization will lead to emergence of global market place or single world market. Depending on the paradigm, globalization can have both positive and negative effects on participating nations. On the positive side, globalization has resulted in increased access to more goods and consumers in many countries, reduced prices due to competition with local monopolies and increased food supply due to industrial agricultural in some countries. There is a worldwide market for the companies and for the customers there is a better access to products from different countries. For example, people are quite happy when they are able to purchase label products like Nike shoes, GAP clothes, Sony Play Stations, Apple devices, Toshiba computers for bargain prices. These are just a few items people from first world enjoy purchasing for reasonable prices. The prices are kept low by the manufacturer because the items are produced in the third world countries where labor costs are minimal. Poor people in some countries have been able to buy cheaper imported goods rather than goods produced by local monopolies. Transnational companies provide third world regions technology and employment wages a nd as a result of financial investment the employed workers can afford food, cloth and a shelter for their families. In theory, the region should go on prosperity and eventually start importing goods and services created based on other countries in addition to exporting goods and services created on their own. A recent study by the London-based Center for Economic Policy Research reports that globalization increases economic growth and improved the incomes of both rich and poor people. The researchers claim that the number of people living in poverty today would be even greater without globalization. However, there is more inequality among and within countries today than in the past. Between 1870 and 1990, the gap in per capita income between rich and developing countries has grown fivefold. Closely related to equality and wages, labor conditions is another area influenced by globalization. On the positive side, some workers in lesser developed countries have received more education and training from multinational companies due to globalization. Furthermore, there is some evidence that increased competition has resulted in upgrading educational systems to produce a more highly qualified workforce. The threat of job displacement is one of the most tangible concerns that critics have regarding globalization. Workers have more employment opportunities in some countries, but they have less in others where certain industries and firms have been put out of business by global competitor. Some people have less choice about how they make their living as a result of globalization. In fact, globalization affects everyone; from the villager working in a third world transnational factory to the unemployed former factory worker in North America. These two types of individuals best rep resent people most affected by globalization. The third world factory workers may for the first time in their lives have a predictable and steady income to feed, clothe and shelter their families. In the past they may have been vulnerable to diseases and starvation. It also has significant impact on people in North America as many of manufacturing jobs were relocated offshore where labor cost and taxes were nominal. They not only have lost their jobs, but also their homes and their hopes. Increasing imports from low-wage countries are perceived by some as a threat to manufacturing jobs in industrialized countries, particularly in labor-intensive sectors. The key question regarding globalization and governments is whether or not globalization threatens national sovereignty. Historically, governments played a major role in promoting their countrys economic development and managing its economy. Today, however, some critics argue that government matters less and less in a global economy. On the positive side of the ledger, for some governments, globalization has resulted in expanded infrastructure, more jobs, and more economic development for their citizenry. Certain countries have benefited from the transfer of modern, more effective management techniques to their business sector. Furthermore, some observers believe that the increased interdependence of trading and investment partners will draw countries closer together and serve as deterrent against war. On the negative side, international competitiveness has influenced public policy in some countries by encouraging government officials to lower labor standards. Because governments may view themselves in competition with others in a race to the bottom to attract investors to their country, foreign firms can have the upper hand in negotiations unless governments have something unique such as rare natural resources, highly trained people and a large market to offer. Singapore, for instance, invested heavily in education, attracting high-tech and professional industry rather than limiting its population to employment in low-wage factories. Globalization may be a positive force for greater cross-cultural understanding via more cross-cultural exposure and closer cross-border ties. In the past thirty years we have been socially connected to the internet and have created global links between people and fields of education, medicine, science and technology, art, entertainment, trade, travel, business, politics. The list goes on and on. We surf the internet in search of movies, music and fashion. We can even go on online dating services that connect us up with the perfect guy or girl that we have been dreaming to meet. As Tomlinson stated, A world of complex connectivity thus links the myriad small everyday actions of millions with the fates of distant, unknown others and even with the possible fate of the planet. According to Tomlinson increased connectivity of the world is as a double-edged sword that provides new and wider understanding at the same time that it takes away the securities of ones local world. Critics claim that globalization is creating a monoculture that is rapidly spreading around the world. By this view, weakened cultural traditions combined with the importation of foreign media, stores, and goods encourage cultural homogenization. For instance, television has universally connected many cultures to one another. In fact, many non-western cultures have been influenced by the broad scale of exportation of western culture through music, television and the internet. Critics claim that globalization has irrevocably changed the social landscape of communities and constitutes a threat to national culture in various ways. As what concerning environmental sustainability, positive side of globalization is that it caused some countries to make a narrower range of products more efficiently. In other words, it has given them a comparative advantage. It has been responsible for creating and exporting technologies that use fewer natural resources and result in less waste and pollution. Globalization has facilitated improved energy efficiency, reduced use of materials, metal recovery technologies. The industrial ecology movement has sought to improve environmental responsiveness at the same time that it reduces the global cost of production for corporations. On the negative side, because of globalization, harmful technologies and activities have also been exported. Although better technology is available, companies do not always use it because it may be expensive. Therefore, globalization is blamed as a source of pollution. Since environment is a heritage of all human beings and everyone is affected it become s a global environmental problem. How does globalization affect our life? Because of globalization we have a great number of choices as to what types of movies, food, cloth, technology and books we can purchase and what prices we pay for them. Our choices might become limited if we are not able to secure our jobs because of the negative economic impact of global shift in economic investment outside our country. Since globalization in some degree erases borders, we start to live in cultural diversity. Because some of our friends are foreigners, we are growing in understanding of their cultural heritage and experience some kind of social connection with their home cultures. We look around our house and see goods that have been manufactured all over the world blankets from India, tea from Ceylon, cloth from China, Korea and France, furniture from Canada and so forth. How does economic globalization be fully achieved? The realization of economic globalization can only be achieved through the progressive change of law and policies governing how countries exchange goods and services with one another. The North American trade agreement between USA, Canada and Mexico is a good example of this type of globalization political policy creation. The paradigm of past eras of protection resulted in policies that served as national interest of individual countries to preserve local jobs and produce markets. Tariffs, trade quotas, legislations were passed to assure imports could not have competitive pricing edge and gain significant market foothold within the country. Nationalism and its reluctant trade policy often restrained the flow of goods and services across borders. As time pasts, countries more often start to realize that in order to be competitive they must start to open their borders more widely. In conclusion, the current debates raging on globalization and the explosion of publications on this topic reflect the importance this phenomenon has gained in recent years. We can picture globalization as a process that has resulted in both positive and negative consequences, both winners and losers. Given the complexity and scope of the topic, it is difficult to determine with precision whether some of the problems linked to globalization would exist independently and to what degree. Globalization in its current state often involves serious tradeoffs such as economic development and jobs at the cost of environmental degradation and weakened labor protection. Given the ever-evolving history of economic development, trade, and international relations, there is little reason to assume that globalization as we know it today is the final version. It is time to consider how we as future managers may contribute to globalization and whether we may take a strong leadership role in influenci ng the way people think about and practice global business in the future.

Behaviorism, Constructivism, and Cognitivism: Multiple Approaches To Le

A. Behaviorism, constructivism and cognitivism are relatively common theories used in the classroom as ways to approach student learning. Behaviorism focuses on observable behavior, such as students answering questions correctly, or being able to follow directions to complete a task as instructed. Characteristics of a classroom that uses behaviorism might be memorization of facts, writing vocabulary words, or a token reward system to inspire the desired behavior and decrease undesired behaviors. Constructivism, as indicated by the root word â€Å"construct,† focuses on the construction of new ideas, or expanding on what is already known. Students in a classroom using constructivism as a means for learning might seem more actively engaged in the learning process; they often learn something new through applying what they already know about the content area, and exploring new matter to further their understanding. This type of classroom often uses hands on manipulatives to allow students to actually build, create, or experiment with what they are learning. A cognitivism approach to learning might be explained by the minds capacity to process information – such as how a learner might remember something, retrieve information, or store new concepts. Learning through this method often depends on how the student processes what the teacher is presenting. Classrooms using this approach might incorporate learning strategies that help students categorize and sequence information to assist with processing. Like constructivism, it can be an active style of learning. A1. Support Personal examples of a behaviorist style of instruction are based on the widely renowned theory by B.F. Skinner, which in the classroom can be summarized by reinf... ...speaker and the listener. The student can store often used responses, and prepare anticipated answers prior to situations where he will be meeting with those less familiar with his speech capabilities. By implementing this type of device, the student has become more confident and can communicate appropriately for a student his age. In this instance, the integration of technology into the learning environment may make a difference as to whether the student is employable or overlooked due to the inability to communicate well on the job. Works Cited Brewer, E.W., Campbell, A.C., Petty, G.C. (2000). Foundations of Workforce Education. Dubuque, Iowa: Kendall/Hunt Publishing Company. Standridge, M.. (2002). Behaviorism. In M. Orey (Ed.), Emerging perspectives on learning, teaching, and technology. Retrieved May 9, 2012 from http://projects.coe.uga.edu/epltt/

Historic Textiles Essay

Man does not live by bread alone is a very popular saying uttered by one of the greatest men who ever walk this planet. And there is much truth to that. Thus man, after working hard in the fields and whatever profession he is engage into, will feel not much satisfaction and there is that continued longing for something else missing in his life. It is at this point that man desire for other things besides the familiar refrain of food, shelter, and clothing. There are those who say that the pursuit for the finer things in life takes the edge off living and so from the time man learns to navigate his way across paths that connect one tribe to another, trade began. And one of those being traded in ancient times is something related to man’s basic need – clothing or textile. In the Middle Ages, Iran’s textile industry reached its golden age under the guidance of the Safavid dynasty. This paper will take a closer look at the textile industry in Persia between the early 16th century and after the demise of the Safavid Dyansty in the early part of the 18th century. In this important period of its history the proponent of this study will examine different aspects of trade, the techniques used in making textile, and the significant designs that made Persia as a very important trading hub during these years. This paper will also examine the role that the textile industry played in the economic wealth of Iran. Background There is that certain quality and charm to affluence. It is therefore easy to understand why everybody wanted to be rich and no one would like to trade places with a poor man. Human nature seeks for comfort as the body craves for water in the searing heat of the desert sun. This is human nature and it best explains why merchants from the East and West in the Middle Ages continue to brave foul weather condition and other hazards associated to trade so long as the exchange of goods and money take place. But when a person reaches a level of domestic comfort, there is that tendency to become more sophisticated. The desire for luxury items kicks in and the well-heeled patrons of fine luxury products will drive their adventurous merchants even to the ends of the earth to acquire what is needed or more appropriately, to get things that are not basic needs but will surely fill a craving for the exotic and for the expensive. In the Middle Ages the Westerners look to the East for items related to a basic need, the need for clothing and these came in the form expensive textiles and for those who can afford it silk will do just fine. There is also the desire for fine Persian rugs or what is also known as carpets. Culture In the Middle Ages, there are two major perspectives in the quest to understand historic textiles. The first one can be seen through the eyes of those who inhabit the Eastern half of the globe. The second can be seen through the eyes of those living in the Western half of the planet. The difference in climate and topography allows for the exchange of goods and precious items, each group needs the other to acquire what they all wanted. For the Easterners living between the periods of the 16th century up to the 18th century, historic textiles of great historic significance are those that are coming from the regions around Asia. The Chinese, Indians, Turks and Persian make this all happen. The historic textiles are used for everyday purpose in this part of the world as clothes, accessories for man and animals and of course as a major household item to take away the dullness of day to day living. These products are also seen as major exports for those who live on the other side. For the Westerners living in the Middle Ages, the said historic textiles that include silk brocades and fine Persian carpets are a source of pride and joy. For them these textile products are exquisite works of art. If people from Persia used the rougher textile from wool in order to produce carpets – for the purpose of using the same as rugs – the Westerners will never agree to allow such expensive items to be trampled by dirty shoes. And so for the Europeans, carpets and fine textile are hung on wall and some used to cover expensive furniture. Safavid Dynasty It is understood that things does not come out from nothing. There is an explanation for the Golden Age of the Persian textile industry and it can be explained in one idea – the Safavid dynasty. An overview of this Persian dynasty will not only explain the origin of the much sought after luxury items but it will also help frame the context as to how the industry was developed from its primitive form into something that impacted the world in the Middle Ages. But it is not also right to give all the credit to the Safavids in terms of the creation of fine Persian carpets and the fine silk fabrics. It must be mentioned that a few centuries earlier it was the Sassanians who laid the foundation for the textile industry. This led Roger Savory to remark that, â€Å"Although the making of carpets is of ancient provenance in Iran, it was the Safavids who elevated a cottage-industry to an activity on a national scale and one which formed an important part of the economy† (1980). But the Sassanians limited success strengthens the argument that it takes more than talent and skill to survive in the dog-eat-dog world of ancient trade, it requires a great leader to set-up a system that will empower the people and encouraged those who have the entrepreneurial spirit to venture into the unknown or simply improve on what they have and in this case it is the ability to make beautiful fabrics. The flowering of Iran’s Golden Age through the able leadership of Shah Abbas I was made possible by the exploits of Abbas ancestor Ismail Safavi in 1501 who made the strategically located Tabriz as the capital of his newly formed state. Ismail brought peace and order while Abbas provided the leadership savvy that would usher in a period of political and military reform as well as of cultural florescence (Yalman, 2002). In the latter part of the 16th century Shah Abbas transferred the capital to Isfahan. During this time carpets and textiles became important export items. These products were not only used by the aristocracy and ordinary people, the same were used to fuel the economy. According to savory the first carpet factory was established in Isfahan and Yalman concurs by saying that these were produced in workshops set up under state patronage in Isfahan and other cities (2002). Historic Textiles As mentioned earlier the origin of the magnificent Persian carpets can be traced to a cottage industry that started a few centuries before the Safavids. Roger Savory provided more details when he wrote: The origins of the Persian carpet industry as we know it today is the tribal rug, women by the women and children of the semi-nomadic tribes, using the wool from their own flocks and natural dyes. The tribal rugs were usually in bright, gay colors, with bold fairly simple designs. They were and are highly individualistic, frequently irregular in shape, and characterized by color changes in the wool caused by the use of different dye batches (1980). Aside from the exquisitely designed but tougher looking carpets the Persians are in possession of fine fabrics and are mostly made of silk. Rudolph Matthee even asserted that not only was Iran a center for manufacturing silk fabrics but the region is also a producer of raw silk (1999). The following lists the three kinds of silken Safavid pieces of cloth: 1. Simple fine silk; 2. Brocade or gold silk; and 3. Silken velvet. Technology According to Carol Bier it is almost impossible to get a detailed and technical description of the intricacies of the Persian textile industry. First of all this is due to the problem of the materials itself, the fabrics are understandably fragile and did not survive the ravages of time. The few that remains are even far removed from the Safavid Dynasty. Historians are even forced to use the surviving paintings made by artists of the Middle Ages to get an a more in-depth understanding of Iran’s Golden Age in textile manufacturing and export industry. But it does not require a rocket scientist to understand that these artists can make alterations and can insert their own interpretations making their artwork a less reliable source of historical facts. As a result of these difficulties, Bier concluded that: The process of drawloom weaving and its technology is not thoroughly understood or documented for these periods. Treatises have yet to be located for fuller documentation of the use of dyes and for the processes of commercial weaving, as well as for the manufacture or embellishment of textiles by other means (e. g. embroidery, applique, crocheting, knitting, felt-making, accessorization) †¦. of innovation, improvements, or other modifications in the technology or its application that may have had an effect upon textile design and patterning (2008). In the same vein Milton Sonday concurs by saying that, â€Å"All too often what survives of a historic fabric is a fragment that is too small to give an impression of what the original looked like. Fragments must, therefore, if possible, be placed within the context of either continuous pattern from one or more fragments, provided one understands the principle upon which such patterns were laid out. Weaving Patterns Even with the scarcity of resources from which historians can draw conclusions, the following addresses the few significant facts that can be gleaned from artifacts and other documents that shed light on the said subject matter. As far as patterns and designs go, it is Milton Sonday that provided the most help. In the words of Sonday, â€Å"The highest achievements of Safavid silk designers and weavers are preserved in a limited number of figured velvet and â€Å"lampas† weaves. Aside from their sumptuous surfaces and monumental patterns, they are ideal for the insights they provide for understanding technology and aesthetics† (2008). This conclusion is part of the a general idea that it is notoriously difficult to differentiate what is uniquely Safavid historic textile as opposed to those coming from other historic textile centers from the Middle East. In fact there is disagreement as to which brocaded plain weave, brocaded satin weaves, float-patterned satin weaves, double cloths and the various metal background truly belongs to the Safavid and not to the Mughals of India. And so it is best to focus on the figured velvet and the â€Å"lampas† weaves to know more about Safavid historic textiles. Sonday pointed out that for the Persian fabrics of this era there can be two traditional patterns. The first one is a continuous pattern with elements of their composition arranged to be repeated endlessly and in all directions. The second major pattern is called the pictorial pattern with elements of its composition is arranged in such a way that it is contained within and related to a top, bottom, and sides (Sonday, 2008). The repeating patterns is achieved using a squared unit in weaving, where its sides are parallel with warps and its top and bottom parallel with wefts. Finally, Sonday made another important discovery, â€Å"A significant feature of Safavid continuous patterns in â€Å"lampas† and velvet weaves is the use of the human figure and narrative subject matter. Motifs are distinguished by clarity of drawing and can be identified as Safavid by the style of motifs such as birds, leaves, trees, flowers. No single motif is overly highlighted in their continuous patterns and there are practically no open spaces† (2008). There in a nutshell one gets the idea of a classic Safavid design. Conclusion It is a wonder to learn of ancient trading systems. It is also an adventure reliving the past when merchants had to be more than businessmen but has to have that adventurous spirit as well to get the best for their demanding clientele. For the gold and silver enriched Europeans there is a desire, in fact a craving for the exotic Middle East products and foremost in their list are fine Persian carpets and exquisite silk fabrics. Iran, the present day name for ancient Persia succeeded in becoming a center for historic textile trade in the Middle Ages because of the work of the Safavid dynasty particularly their greatest leader Shah Abbas. But there is more to Persian carpet and Persial silk brocades aside from the wise management of Abbas. It can be understood by tracing the development of their techniques and design from ancient times and of course the skill and determination of their women and skilled workers who continued to find ways of improving their craft. References Bier, C. (2008). â€Å"Textiles and Society. † In TextileAsARt. com. Retrieved April 11, 2008 from http://www. textileasart. com/woven. htm Carpet. org. (2008). â€Å"Carpet. † Retrieved April 11, 2008 from http://www. carpet. org /glossary. htm#carpet. Matthee, R. (1999). The Politics of Trade in Safavid iran: Silk for Silver, 1600-1730. New York: Cambridge University Press. Pope, A. U. (2008). â€Å"Masterpieces of Persian Art. † In TextileAsArt. com. Retrieved April 12, 2008 from http://www. textileasart. com/index2. html. Savory, R. (1980). Iran Under the Safavids. New York: Cambridge University. Sonday, M. (2008). â€Å"Patterns and Weaves: Safavid Lampas and Velvet. In TextileAsArt. com. Retrieved April 11, 2008 from http://www. textileasart. com/index2. html. TextileAsArt. com. (2008). â€Å"Antique Textiles, Woven Treasures. Retrieved April 11, 2008 from http://www. textileasart. com/index2. html. Yalman, S. (October 2002). â€Å"The Art of the Safavids before 1600 â€Å". In Timeline of Art History. New York: The Metropolitan Museum of Art. Retrieved April 11, 2008 from http://www. metmuseum. org/toah/hd/safa/hd_safa. htm.

Trade, Money and Capital

B. TRADE, MONEY AND CAPITAL Features of a modern economy 1. – Specialization and division of labor 2. – Measure economic values 3. – Stock of capital * Trade, specialization and division of labor. * Specialization: occurs when people and countries concentrate their efforts on a particular set of tasks, it permits each person and country to use to best advantage the specific skills and resources that are available. * Division of labor: dividing production into a number of small-specialized steps or task. * Specialization and trade are the key to high living standards. * Globalization Globalization: is used to denote an increase in economic integration among nations. Increasing integration is seen today in the dramatic growth in the glows of goods, services, and finance across national borders. * Money: the lubricant of exchange * Money: is the means of payment in the form of currency and checks used to buy things. Lubricant that facilitates exchange. * Governments control the money supply through their center banks * Money is the medium of exchange.Proper management of the financial system is one of the major issues for government macroeconomic policy in the countries. Capital * Capital: a produced and durable input, which is itself an output of the economy. It consists of a vast and specialized array of machines, buildings, computers, software, and so on. * Capital has to be produced before you use it. * Growth from the sacrifice of current consumption * Economic activity involves forgoing current consumption to increase our capital. Every time we invest we are enhancing the future productivity of our economy and increasing future consumption. * Capital and private property In a market economy, capital typically is privately owned, and the income form capital goes to individuals. * Capital goods also have market values, and people can buy and sell the capital good for whatever price the goods will fetch. * The ability of individuals to own and profit from capital is what gives capitalism name. * While our society is one built on private property, property rights are limited (taxes and government) *Property rights for capital and pollution * Property rights define how individuals or firms can own, buy, sell, and use capital goods and other property. An efficient and acceptable legal framework for a market economy includes the definition of clear property rights, the laws of contracts, and system for adjudicating disputes. C. THE VISIBLE HAND OF GOVERNMENT. * All goods and services are voluntary exchange for money at competitive market prices that reflect consumer valuation and social costs. * No economy actually conforms totally to the idealized world of the smoothly functioning invisible hand. * Economic imperfections lead to such ills as pollution, unemployment, financial panics, and extremes of wealth and poverty. Governments operate by requiring people to pay taxes, obey regulations, and consume certain collective goods and services. * Government have 3 main economic functions in a market economy: * Increase efficiency (public goods) * Promote equity (taxes) *Foster macroeconomic stability and growth (economic growth) * Efficiency * Perfect competition: Refers to a market in which no firm or consumer is large enough to affect the market price. * Imperfect competition: When buyer or seller can affect a good’s prices. Leads to prices that rise above cost and to consumer purchases that are reduced below efficient levels. Monopolist: a singles supplier who alone determines the price of particular good or service. * Externalities * Externalities (or spillover effects) occur when firms or people impose costs or benefits on others outside the marketplace. * Government regulations are designed to control externalities like air and water pollution damage from strip mining, hazardous wastes, unsafe drugs and foods, and radioactive materials. * Public Goods * Public goods: are commodities, which can be enjoyed by everyone, and form, which no one can be excluded (national defense). * Taxes The government must find the revenues to pay for its public goods and for its income redistribution programs. *All levels of government collect taxes to pay for their spending. * Taxes are the price that we pay for public goods * They are involuntary. * Equity * Markets do not necessarily produce a fair distribution income. A market economy may produce inequalities in income and consumption that are no t acceptable to the electorate. * The reason is that incomes are determined by a wide variety of factors, including effort, education, inheritance, factor price, and luck. To reduce income inequality: * Engage in progressive taxation: taxing large incomes at a higher rate than small incomes. * Transfer payments: which are money payments to people. * Macroeconomic growth and stability * Thanks John Maynard Keynes we know how to control the worst excess of business cycle. By careful use of fis cal an monetary polices, governments can affect output, employment, and inflation *The fiscal polices of government involve the power to tax and the power to pend. * Monetary policy involves determining the supply of money and interest rates. Macroeconomics polices for stabilization and economic growth include fiscal polices along with monetary polices. * Mixed economy: in which the market determines output and prices in most individual sectors while government steers the overall economy with programs of taxation, spending, and monetary regulation. * The rise of the welfare state * Laissez-faire (leave us alone): holds that government should interfere as a little as possible in economic affairs and leave economic decisions to the private decision making of buyers and sellers. Welfare state: is one un which markets direct the detailed activities of day-to-day economic life while government regulates social conditions and provides pension, health care, and other necessities for poor f amilies. * The mixed economies. * The success of market economies may lead people to overlook the important contribution of collective actions. * The tools of economics are indispensable to help societies find the golden mean between an efficient market mechanism and publicly decide regulation and redistribution * The good mixed economy is perforce the limited mixed economy