Whether to Launch a New Satellite - Assignment Example

Whether to Launch a New Satellite Answer 1-a Yes there can be external factors that are associated with the decision by the government of a country or a private organisation about whether to launch a new satellite. One of the factors is unfriendly relations between / among neighbouring countries and a war-like situation that force the governments of either nation to launch a military satellite for spying purposes. Secondly, governments have an inclination towards technological advancements or Research and Development to build their information databases, communication networks, broadcasting and track environmental changes to reap economic or financial benefits. No, the number of active satellites (nearly 900 out of more 18,000 satellites) compared to space debris (comprising more than 17000 fragmented objects) are not socially optimal as this mammoth amount of space waste could result in a disaster or upheaval if objects collide. In addition, this could lead to a situation where an entire orbit would be rendered useless for generations. Answer 1-b The author is in favor of stopping so many satellites from flying blind. The article describes the fact that there are institutions that collect and analyse data on potential collisions, yet this is not truly worth because there are significant loop holes, differences and discrepancies in their analytical reports and conjectures. In order to deal with this situation, “The European Space Agency” would encourage collaboration, communication and coordination among space agencies from Europe and America to reach a consensus and overcome any differences in calculations and analysis. The updated and accurate information in turn would enable governments and businesses to develop alternative solutions to resolve this issue of increasing space waste. Secondly, the article suggests that there is a dire need of developing an international civil satellite-awareness system that would provide necessary information to governments and businesses about how to safely operate a space satellite and what safety measures, precautions and practices to be adopted for greater risk management. Also, the article suggests that debris-creating anti-satellite tests must be banned by international community to ensure space safety. In addition, it also pinpoints the fact that satellite-launchers should be forced to buy insurance so that it could cover the risk of extra costs before entering into space. In this scenario, the above mentioned policies could result in reducing space waste by developing and implementing feasible alternatives after mutual agreement among nations. Developed Western and Asian countries can play a vital role in this instance. Answer 1-c The article has described a free-rider problem that (mainly) developed countries (having modern, highly sophisticated and advance technology at their disposal) are among the top producers and launchers of space satellites to maintain their military position and economic growth. Hence, it can be concluded that these nations do not actually contribute significantly in sharing the costs of reducing space debris rather interested in gaining more benefits at the expense of others. The problem could be resolved only when these super powers would have a mutual agreement or a genuine interest in cleaning orbit by giving up their gains for the sake of humanity. International Court of Justice and United Nations must take action in this regard. The problem defined in this article about public and human welfare (rather than a tangible public good), which is directly related to greater national interest. Answer 3 Private schools are also commercial businesses that provide quality education as a service for which they charge huge sums of money. Like other businesses, these schools also incur different costs such as salaries and wages, rent, utilities, maintenance, upgrading of computer and science labs and other expenditures. They then deduct their total costs from their fees revenue from students and reap profits. When their expenses increases, more specifically the teacher salaries, this increases their Average total costs thus resulting in a decrease in profit margins and forcing them to increase average fees rate for students. It is worthwhile to mention that any other external factor may also affect schools’ revenue stream. As in recession, the economy contracts, unemployment increases and purchasing power erodes, hence there is a higher probability that students will switch off their education or may take yearly break. In short, aggregate demand for private schools reduces, thereby forcing them to increase tuition fees modestly to retain their existing students or customers. Answer 4 The market power of firms in an industry increases when there are few competitors and many barriers to entry that thwart other parties to make investments and commence business operations. Also, there are some external factors like economic downturn and credit crunch like situation that shatters investor’s confidence to make bold investment decisions as well as forces consumers to tighten their belts. In Australia, banking industry also felt the pinch of recession and thus competition declined after subsequent closures of small financial institutions. Moreover, the large banks have enormous financial resources so they have the ability to assimilate temporary economic shocks like industry closures, property sector and mortgage decline, diminishing demand of money due to economic contraction etc. Only large institutions can cover their overheads and survive whereas small banks shut down, merge or are acquired by big giants. Also, banks are manipulating the consumers as ‘they’ve been able to make it so expensive and time-consuming to shift loans and (particularly) bank accounts between them.’ Part-b Taxes are imposed by federal, state and local governments to raise funds and generate revenue to finance their expenditures. These funds are then used in providing health, education, infrastructure, utilities and communication networks to citizens across the country. Taxes are imposed on both luxuries (having elastic demand) and necessities (having inelastic demand), and vary across nations. However, some kitchen and food products are usually excluded from tax list of products. This section will discuss the economic impact of recent tax hike on Tobacco companies in Australia that has raised hue and cry among cigarette suppliers and producers. Australian Prime Minister Kevin Rudd has announced an increase of 25% in current tax rate on cigarette companies. This hike is an attempt to reduce tobacco demand by both hardcore and occasional smokers thereby reducing the social costs and spending the savings to finance government's public health and hospital reforms. It is expected that this tax hike will help reducing the ‘tobacco consumption by six per cent and the number of smokers by two or three per cent - about 87,000 Australians’. Also, it will increase government revenues by $4–5 billions in next 5 years. The tax hike will increase monetary tax by $2.16 and thus considerably increase the market prices to end consumers. (Web: Ninemsn.com.au) and (Web: Theage.com.au) Analyzing the economic impact of this tax hike in the light of elasticy concepts and demand / supply theory in the short run, it is worthwhile to mention that there are two major types of users namely hardcore and casual (from both elite, middle and lower social classes). Hardcore users are strongly addicted to nicotine so there demand is highly price inelastic. If tax is increased significantly, then it can b concluded that elite, upper-middle and middle-middle class smokers may continue their habit because of their higher / better purchasing power and negligible affordability issues. In contrast, lower-middle and lower class hardcore smokers may reduce some of their tobacco consumption as they will be unable to assimilate price surge completely. As far as the case of occasional smokers with relativly high price elasticy is concerned, this surge will result in significant decrease in their consumption besides the probabality that some will even quit this habit. Again, higher income smokers are excluded from this category as they may end up smoking occassionaly. In addition, the soaring tobacco prices would compel non-smokers to avoid jumping in this nefarious world of smokers who suffer from acute illnesses (Tuberculosis, cancer, hypatitis, sugar etc) and other health issues. This tax increase will certainly yeild more benefits in the long run. It must be highlighted that the economic contribution of the tobacco industry is under $5 billions from direct and indirect employment and taxes to government whereas estimated social costs are nearly $31 billion. So, reducing tobacco consumption is in greater economic interest and welfare of citizens. The social costs saved from this hike coupled with extra taxes will result in improving infrastructure, health and education facilities to individuals, households and businesses. This will not only result in jobs creation but also remove the chances of cash outflow by tobacco companies from Australia to their home nations. In short, this has both micro and macro economic benefits. (The Advertiser) References: No author. “Cigarettes slapped with 25% tax hike”. Ninemsn.com.au April 30, 2010 The advertiser “$31 billion smoking cost to economy, report says” Adelaidenow.com October 21, 2009 No author. “Cigarettes slapped with 25% tax hike” Theage.com.au April 30, 2010 Read More