Macro And Micro Answer 1: As a result of the prevalence of greater number of accidents on the road of Poland, due to many factors, people are less attracted to travel by road. This is greater number of road accidents creates greater fear for the people of getting injured or even dead…
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105). The amounts of external costs incorporate the direct physical, psychological, as well as emotional damage to others. Along with this, treatment costs are sometimes borne by the third parties (who are directly affected by the Alcohol consumption) by means of private or public insurance. It has been estimated by researchers that the total amounts of costs associated with the alcohol consumption resulting from welfare as well as health services, and also from insurance, enforcement, as well as penal costs and also from loss of costs of production accumulate to the total social cost by the amount of 1–3% of GDP in different European countries, including Poland. These amounts of loss of GDP by creation of negative effects of car accidents on the generation of greater amount of social costs are creating negative externalities to the people of the country (Bielinska-Kwapisz and Mielecka-Kubien, 2010, p. 1). As an outcome of the higher level of road accidents people are getting scared of traveling by road and thus they are expected to demand lesser amount of petrol. This reduces the demand for oil given the price of the petrol. Hence, the demand curve for petrol will shift down from AD1 to AD2 (Figure 1). Thus the equilibrium market price of petrol will fall and the producers will end up producing lesser amounts of output, selling at lower level of price and thus making lesser amount of profit. This also hampers the consumers by reduction in the amount of sales tax generated from the sales of petrol. This reduction in tax earning of the government reduces the amount of government spending on the development of road infrastructures and creates the negative externality to the consumers (Veal, 2002, p. 190). The externality is considered to be negative due to the fact that greater levels of accidents by some of the consumers to lack of proper road protections and infrastructures, which are to be implemented by the government, consumers are getting worse off. And also this fact is regarded as externality because of the fact that the generation of greater amount of negative effects upon the utility level of the consumers has not entirely been reasoned with the inefficient behavior of the people, in general. Rather these negative effects are largely generated by the lack of efficient government intervention into the process of development of higher degree of secured and well-protected road infrastructure Batta, 2008, p. 81). However this negative externality is also related to the misbehavior of the consumers of alcohol also. Greater accidents are made by the drunken car drivers for which the innocent people are paying the price in terms of their lives. This fact is also regarded as the negative externality to a large number of people (Bielinska-Kwapisz and Mielecka-Kubien, 2010, p. 5). Figure 1: Negative externality in the Petrol market Answer 2: Figure 2: Tax on petrol and reduction in negative externality The level of negative externality can easily be removed with the help of greater level of tax imposed on the petrol consumption. This higher level of tax on the purchase and use of petrol will increase the amount of tax revenues earned by the government of the country under consideration. This higher volume of tax revenues will thus give the government of the country to make higher amount of public expenditure on the developmen
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(Petrol Market Essay Example | Topics and Well Written Essays - 1500 Words)
“Petrol Market Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/macro-microeconomics/1398689-economic.
The price rose to US$50 in 2005 from under US$10 in late 1998 and early 1999. Oil prices hit a record high level of over US$145 a barrel in July 2008. With the onset of the worldwide financial crisis and deep recession, a reduced demand for crude oil drove down prices as it had done in the past, and the price of oil dropped to US$34 in February 2009, gradually increasing to US$80 in January 2010.
16). In the case presented by the newspaper article, the market for eggs is experiencing acute shortages of supply which eventually has led to a sharp increase in prices. This makes it very expensive for biscuit manufacturers to purchase eggs which are an essential input in the production process.
Report on the UK Petrol Market. The UK petrol market is important and dynamic. Since the publication of the Monopolies and Mergers Commission in 1990, there has been increased competition. The emergence of large supermarkets dealing in petrol has led to the decline of the major non-supermarket dealers such as Esso and Shell.
According to the paper United Kingdom equally suffered the effects of rising petrol prices and trusted statistics can draw a clear picture of the fuel consumption trends in UK, rise in fuel prices in the United Kingdom, and their effects to the economy and business in UK. A rise in petroleum prices may emanate from various factors including market forces like inflation, cost of crude oil, supply and demand levels, and taxes on fuel products.
In international trade, various forces hold power over the world oil supply, which include temporary, cyclical, and permanent factors.
The world oil market features volatility and uncertainty in prices because it is intrinsically slow to respond to changes in supply and demand.
With such fierce competition, there is no reason that any car industry can fall under the category of a perfect competition. The goal of the oligopolies is mainly to attain a strategic edge over their competitor. The competing firms in the European market try to innovate and introduce new features in their respective models rather than reducing the prices to attract buyers.
Moreover, CP has commissioned TML to undertake all of its non-trading activities, known as “middle office” and “back office” operations. By fully capitalizing on TMLs proven abilities in business support and financial management expertise, CP is