(a) Explain how allocative efficiency is related to the concepts of consumer surplus and producer surplus. Consumer surplus is defined as the highest price consumers are willing to pay for a good minus the price actually paid. As shown in the diagram‚ P1 is the highest price consumers are willing to pay for a good. Pe is the equilibrium price determined by the market. Any consumers are willing to pay price higher than Pe will end up paying Pe. This means they pay less than they expect‚ therefore
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Sessions 6‚ 7 & 8 Economic Efficiency y Consumer Surplus A buyer’s willingness to pay (WTP) for a good p y( ) g is the maximum amount the buyer will pay for that good good. WTP measures how much the buyer values the good. Example: 4 buyers’ WTP for an iPod name Anthony WTP $250 Chad 175 Flea 300 John 125 Consumer Surplus Q: If price of iPod is $200‚ who will buy an iPod‚ and what is quantity demanded? q y A: Anthony & Flea will buy
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Effectiveness and Efficiency Businesses often discuss about ways to improve their managements. Employee effectiveness and efficiency is a beneficial process for enhancing a business‚ although they may sound similar they are entirely different. Effectiveness means when a business is successful in producing the desired strategies planned by the employees‚ mainly the managers. Whilst efficiency measures the relationship between minimum inputs with a maximum output. There are common issues that
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Regime-boosting regionalism Regime-boosting regionalism looks to reinforce the status‚ authenticity and the common interests of the political regime (as opposed to the country state fundamentally)‚ both on the international scale and local. Numerous managing regimes and political leaders in Africa participate in typical and verbose meetings‚ whereby they laud the purposes of regionalism and local organizations‚ undersign to collaboration treaties and arrangements‚ and participate in ’summitry
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company‚ one has to make sure they are making the right decisions in growth. In the decision to grow from excel to access there are quite a few benefits. In addition to this‚ it is a great idea to promote quick communication and sharing between coworkers to increase efficiency and communication avenues to both remote and local workers. Access is a great program that offers many benefits. While it may not be as easy to use as excel‚ it allows for relating data easily and allows it to grow easily without
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Recent measures taken by the firm to achieve efficiency. (Distinguish carefully as between different economic notions of efficiency in your answer). Glanbia plc is an international dairy and nutritional ingredients group headquartered in Ireland. The company has 4‚500 employees in seven countries and sales offices in a further five. International operations include food ingredients and nutritionals while Irish operations incorporate consumer foods and agribusiness and property. The group has three
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Calculating Efficiency. Efficiency (%) = Useful Energy Out x 100 Total Energy In Questions 1) A light bulb takes in 30J of energy per second. It transfers 3J as useful light energy and 27J as heat energy. Calculate the efficiency. 2) A kettle takes in 2000J of energy per second. It transfers 1500J as useful heat energy and 500J is wasted as sound energy. Calculate the efficiency of the kettle. Remember: In the exam they may not
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Pareto efficiency‚ or Pareto optimality‚ is a central theory in economics with broad applications in game theory‚ engineering and the social sciences. Given a set of alternative allocations and a set of individuals‚ a movement from one alternative allocation to another that can make at least one individual better off‚ without making any other individual worse off is called a Pareto improvement or Pareto optimization. An allocation of resources is Pareto efficient or Pareto optimal when no further
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the Efficiency is about a society making optimal use of scarce resources to satisfy wants and needs market can fail Allocative efficiency is concerned with producing the goods and services that match the changing needs and preferences and which are placed the greatest value. Allocative efficiency is reached when no one can be made better off without making someone else worse off. This is known as pareto efficiency. Allocative Efficiency occurs
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can be predicted by past stock market returns in-sample and out-of-sample‚ and the predictive relation is much stronger between stocks and high-yield bonds. By contrast‚ there is little evidence that stock returns can be predicted by past bond returns. These findings are robust to various model specifications and test methods‚ and provide important implications for modeling the term structure of defaultable bonds. Ó 2012 Elsevier B.V. All rights reserved. Article history: Received 8 July 2011 Accepted
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