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It is exploitative in nature and it takes unfair advantage of the fact that there are a few firms operating in the market and consumers must turn to them to buy their service (Schiller, Hill, & Wall, 2013). In order to protect the consumers from such exploitative practices and not let the companies take advantage of the consumers’ lack of options, government regulators should intervene and oversee that no collusion takes place.
Collusion remains to be a problem in today’s economy as well. Recently, a collusive agreement between top Silicon Valley executives took place whereby they agreed to not hire away valuable employees from each other’s companies (Fung, 2014). Although this collusion was not in the form of controlling prices or output levels, it still shows the exploitative nature of collusion and the harm is does to the people.
I agree with statement 1 since it adequately describes the need for free and open markets where the supply and demand equilibrium is not disturbed. Collusion upsets this equilibrium and harms the consumers with artificially high product prices and the companies themselves with its inefficient resource allocation.
Statement 2 is also similar in nature and describes how collusion can upset the way market forces are working. In an Oligopoly, collusion is easier and consumers are at a disadvantage. To ensure that the market remains corruption free and exploitation does not take place, it is necessary to let the market forces work to achieve equilibrium rather than setting up an artificial price for the selfish interests of the companies.
Fung, B. (2014, April 23). What the Apple wage collusion case says about Silicon Valley’s labor economy. Retrieved from Washington Post:
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Per Capita income is the measure of living standards .It is calculated by taking the Gross Domestic Product (GDP) which is the total income and dividing it by the population. The standard deviation of GDP per capita is referred to as natural log. The United States of America has continued to maintain high per Capita income despite its huge population.1960 acts the base year in calculation of the per capita income.
The cost of one forklift is 2/6= .33 automobiles. The concave shape of the production possibilities curve shows the increasing opportunity costs. The shape of the curve depicts that the economy must give up larger units of rockets to gain added units of automobiles.
MACRO AND MICRO ECONOMICS. Copper is a substance that gives a measure of the world’s economy. The global price virtually trebled between the beginning of 2005 and the 2008 summer prior to their fall to $ 3000 in the 2008’s autumn (Geoff, 2012: 3). There has been an apparent price recovery and thus prices of copper are currently more than that of 2007-2008.
Absolute advantage: Absolute advantage refers to the advantage of producing more good per unit of production as compared to the production of others. Application The article talks about international business while maintaining proper markets. The comparative advantage of the United States as compared to China, Germany and France remains debatable.
Scarcity Scarcity is limitation in supply. Scarcity is when a commodity is hardly there. For instance, land is a scarce factor of production (Mankiw, pp.55) Relevance In this article it is found out that the government and other traditional sectors are running short of labor.
Similarly, within the second video, the importance of public affairs, the meaning of words, and the means through which individuals within society are ultimately exhausted of many of the old advertising techniques and if so often been leveraged, the viewer is made aware of the fact that change is necessary in order to affect the new integration approach with a given product or service.
Spillover effect is referred to the decrease in the wages of the non-union company. Generally after any organization increase wages then simultaneous they used to reduce the number of employees to maintain the balance in the profitability.
For example when the shirts produced are 90 the amount of computer forgone are less in China than in America, hence low opportunity cost. This means if there is trade China will benefit more, this is because it will import computers and export shirts since the opportunity cost for computers is low.
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