Smokers save Govt cash, says report
This article details how smokers can be beneficial to the government deficit. With high tobacco taxes, cigarette smokers contribute a significant amount of money to the government in taxes. In addition, the shorter life expectancy of a smokers reduce the cost of aged care provided by the government. This relates to our class as this has a direct effect on government spending.
The article also talks about the supply and demand of cigarettes. As the government raises the price of cigarettes by 10 cents (through taxation), consumption falls by 5 percent. This shows the effect that price has on quantity demanded of cigarettes, or, the price elasticity. The article relates to the class in that it talks about the relationship between supply and demand.
Monday, May 28, 2012
Wednesday, May 23, 2012
Beware of Greeks Bearing Bonds
a) To me, the most interesting part of the reading was the part about Greeks paying, or rather not paying, taxes.
"The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense."
Most surprising to me was that even doctors who make millions of dollars per year report incomes under 12,000 - low enough not to pay any taxes. This is drastically different from the culture of the U.S. where tax fraud is not only very strictly monitored but also not socially acceptable.
b) Greece's economy threatens the rest of Europe because their economies are so intertwined. When Greece joined the European Union the convinced the other countries that they would be a safe, stable economy. This led foreign countries and investors to invest in Greece's economy. Not only will those investments be lost, but as Greece uses the Euro, the value of the Euro will depreciate.
c) Raising taxes and decreasing government spending will significantly decrease GDP. After increased taxes, consumption in Greece will presumably decline. In the GDP equation (GDP = C + G +I +Ne) both consumption and government spending will decrease.
"The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense."
Most surprising to me was that even doctors who make millions of dollars per year report incomes under 12,000 - low enough not to pay any taxes. This is drastically different from the culture of the U.S. where tax fraud is not only very strictly monitored but also not socially acceptable.
b) Greece's economy threatens the rest of Europe because their economies are so intertwined. When Greece joined the European Union the convinced the other countries that they would be a safe, stable economy. This led foreign countries and investors to invest in Greece's economy. Not only will those investments be lost, but as Greece uses the Euro, the value of the Euro will depreciate.
c) Raising taxes and decreasing government spending will significantly decrease GDP. After increased taxes, consumption in Greece will presumably decline. In the GDP equation (GDP = C + G +I +Ne) both consumption and government spending will decrease.
Monday, May 21, 2012
Weekly Blog post - Week 8
NZ rated highly for investment safety
This article reports that New Zealand has been ranked, according to Dun and Bradstreet's global risk (GRI) indicator, fourth in its region and in the top 20 in the world for investment safety. This is the result of New Zealand having relatively low economic uncertainty. While this does show promise for New Zealand, some are still concerned that the uncertainty in Western Europe could lead to some deterioration in New Zealand.
Economic uncertainty is one factor that firms consider when deciding whether or not to expand their business into a country. New Zealand's high world rankings in this category add to the attractiveness of the country as a place to start a new business or expand a business into. This directly relates to our consulting firm project where we had to evaluate our study abroad country based on its economic conditions.
This article reports that New Zealand has been ranked, according to Dun and Bradstreet's global risk (GRI) indicator, fourth in its region and in the top 20 in the world for investment safety. This is the result of New Zealand having relatively low economic uncertainty. While this does show promise for New Zealand, some are still concerned that the uncertainty in Western Europe could lead to some deterioration in New Zealand.
Economic uncertainty is one factor that firms consider when deciding whether or not to expand their business into a country. New Zealand's high world rankings in this category add to the attractiveness of the country as a place to start a new business or expand a business into. This directly relates to our consulting firm project where we had to evaluate our study abroad country based on its economic conditions.
Friday, May 18, 2012
How Walmart Is Changing China
a) I found the passage on the pressure on Walmart to become for environmentally friendly particularly interesting. To me, this is a great example of the "Environmental Kuznets Curve." As Walmart grew into a multi-national corporation, they became more and more concerned with the amount of waste they produce. While this may have been the result of public pressures (the company had earned the label of "environmental despoiler"), it still shows that as income increases past a certain point, pollution decreases.
b) From the article, we see that multi-national (such as Walmart) can have a significant impact on the economics and culture of a country (such as China). As Walmart started to move in to China, new environmental standards began to develop. Not only did Walmart have to comply with these standards, but so did its competitors and suppliers.
c) Multinational firms play a huge role in integrating various cultures. Not only do multinational firms bring in goods from other cultures, but often times bring in workers from other countries as well. As a developed country, New Zealand hosts many multinational firms. These firms make up a significant portion of New Zealand's GDP.
b) From the article, we see that multi-national (such as Walmart) can have a significant impact on the economics and culture of a country (such as China). As Walmart started to move in to China, new environmental standards began to develop. Not only did Walmart have to comply with these standards, but so did its competitors and suppliers.
c) Multinational firms play a huge role in integrating various cultures. Not only do multinational firms bring in goods from other cultures, but often times bring in workers from other countries as well. As a developed country, New Zealand hosts many multinational firms. These firms make up a significant portion of New Zealand's GDP.
Monday, May 14, 2012
Week 7 blog
Kiwi dollar dips after weak retail stats
This article is about the decrease in the exchange rate of the Kiwi dollar. The article attributes this most recent dip to a drop in core retail sales in New Zealand. This article also mentions how both the New Zealand and Australian dollar are greatly affected by the economic status of Europe.
This relates to class, for one, because it has to do with exchange rates from country to country. We just completed a worksheet where we had to convert U.S. dollars to the currency in our country, and after this dip in the Kiwi dollar, the value would have changed. It also relates to the broader concept of our class that is a global economy. What happens in Europe not only affects European countries, but all countries around the world.
This article is about the decrease in the exchange rate of the Kiwi dollar. The article attributes this most recent dip to a drop in core retail sales in New Zealand. This article also mentions how both the New Zealand and Australian dollar are greatly affected by the economic status of Europe.
This relates to class, for one, because it has to do with exchange rates from country to country. We just completed a worksheet where we had to convert U.S. dollars to the currency in our country, and after this dip in the Kiwi dollar, the value would have changed. It also relates to the broader concept of our class that is a global economy. What happens in Europe not only affects European countries, but all countries around the world.
EGT Consulting Summary
In new Zealand, GDP per capita is just under $30,000 and has been increasing since 1997. In addition, he "light passenger" fleet makes up over 90% of the vehicle market in New Zealand. Since 2000, this market segment has increased in number by 22%. This shows that the market for sedans is the optimal market for the firm to expand into.
New Zealand is also a great country to expand a business. It has an extensive transportation system set up, with includes 14 major ports, railways spanning the length of the country, and a road network that makes almost every part of the country easily accessible. In addition, the business climate in New Zealand is, in relation to other countries, an easy place to start a new business and a great place to run a business.
New Zealand is also a great country to expand a business. It has an extensive transportation system set up, with includes 14 major ports, railways spanning the length of the country, and a road network that makes almost every part of the country easily accessible. In addition, the business climate in New Zealand is, in relation to other countries, an easy place to start a new business and a great place to run a business.
Tuesday, May 8, 2012
Reinventing the Bazaar
A) I found the part about relationships amongst consumers and producers very interesting. In particular, I found it was very interesting when the author said, "buyer and seller remain adversaries." It surprised me that, even after a relationship is established between a particular buyer and seller, and numerous transactions have taken place between the two, they continue to bargain over the price.
B) By transactions costs, the author means any costs that arise in the process of transactions that are directly involved in the transaction. One example is the time it takes for a consumer to "shop around" to find the best price.
C) High prices often occur as a result of imperfect information. This hurts the consumer because transaction costs discourage them for shopping around for prices and they must settle to some degree to one producers price. The allows producers to act as little monopolists. However, producers can also be hurt to a degree. Imperfect information prevents producers from lowering their prices to attract more customers, as there would be little effect on the number of customers they bring in.
B) By transactions costs, the author means any costs that arise in the process of transactions that are directly involved in the transaction. One example is the time it takes for a consumer to "shop around" to find the best price.
C) High prices often occur as a result of imperfect information. This hurts the consumer because transaction costs discourage them for shopping around for prices and they must settle to some degree to one producers price. The allows producers to act as little monopolists. However, producers can also be hurt to a degree. Imperfect information prevents producers from lowering their prices to attract more customers, as there would be little effect on the number of customers they bring in.
Monday, May 7, 2012
Weekly Post (week 6)
Get The Answers: Entrepreneurs are important source of new jobs
This article examines why small business thrive in New Zealand and what types of small business should look to expand. However the article also mentions New Zealand's lack of international businesses:
"A recent report by Statistics NZ, from their 2011 Business Operations Survey, indicates that only 18 per cent of businesses surveyed generated some form of overseas income last year and that 77 per cent of businesses had never generated overseas income."
The lack of international business limits the size of corporations in New Zealand. This directly relates to the consulting project in class because without large firms, there is no demand for limousines. If New Zealand is able to increase international business and in doing so increase firm size, a viable limousine market may develop.
This article examines why small business thrive in New Zealand and what types of small business should look to expand. However the article also mentions New Zealand's lack of international businesses:
"A recent report by Statistics NZ, from their 2011 Business Operations Survey, indicates that only 18 per cent of businesses surveyed generated some form of overseas income last year and that 77 per cent of businesses had never generated overseas income."
The lack of international business limits the size of corporations in New Zealand. This directly relates to the consulting project in class because without large firms, there is no demand for limousines. If New Zealand is able to increase international business and in doing so increase firm size, a viable limousine market may develop.
Friday, May 4, 2012
A Fez of the Heart
1) pg. 11 "Life used to be fun," Halil told me. "Now it's just business."
This short passage was particularly interesting to me because it shows how the economics of a country can overpower the culture. While Halil once enjoyed the rich Turkish traditions, many of them have been abandoned because Turkey can bring in more money from tourism by adopting a new lifestyle.
2) One example of the relationship between economics and culture is how signs in Turkish villages changed from "Bikini in village No" to "No problem in Turkey." This shows how Turkey changed its culture to increase tourism.
Another example of this relationship is how the Turkish population would, at first, provide hospitality to tourists for very little or no charge. However, as tourism grew, Turkish residents started to charge tourists and this quickly grew into a business.
3) Much of New Zealand's tourism revolves around its landscape. Sightseeing, bungee jumping, and hiking are some of the major tourist attractions of New Zealand. For all of you Lord of the Rings fans out there, the film trilogy (being shot mostly in New Zealand) is often credited for a 40% increase in toursim in New Zealand between 2000 and 2006.
This short passage was particularly interesting to me because it shows how the economics of a country can overpower the culture. While Halil once enjoyed the rich Turkish traditions, many of them have been abandoned because Turkey can bring in more money from tourism by adopting a new lifestyle.
2) One example of the relationship between economics and culture is how signs in Turkish villages changed from "Bikini in village No" to "No problem in Turkey." This shows how Turkey changed its culture to increase tourism.
Another example of this relationship is how the Turkish population would, at first, provide hospitality to tourists for very little or no charge. However, as tourism grew, Turkish residents started to charge tourists and this quickly grew into a business.
3) Much of New Zealand's tourism revolves around its landscape. Sightseeing, bungee jumping, and hiking are some of the major tourist attractions of New Zealand. For all of you Lord of the Rings fans out there, the film trilogy (being shot mostly in New Zealand) is often credited for a 40% increase in toursim in New Zealand between 2000 and 2006.
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