The Impact Of Capital Gains Tax On Residential Property Investment Essay

The Impact Of Capital Gains Tax On Residential Property Investment Performance And Viability In Australia - Essay Example Net losses in a tax year may be carried forward, but not offset against income. Personal use assets and collectables are treated as separate categories and losses on those are quarantined so they can only be applied against gains in the same category, not other gains. This works to stop taxpayers subsidizing hobbies from their investment earnings. (Wikipedia). This study will include the impact of CGT on Residencial Property Investment Performance and viability in Australia. Some organizations believe that because of this capital gains tax the increasing number of house affordability is alarming. Only a small percentage of family can now be able to afford houses. Instead they resort on renting it, still it is not that affordable to rent one. This high cost of housing is because of the capital gains tax in Australian. However to some investors it has a positive effect on their business. Capital Gain Tax as defined by Australian Taxation Office as the tax that you pay on any capital gain you include on your annual income tax return. It is not a separate tax, merely a component of your income tax. Your are taxed on your net capital gain at your marginal tax rate. All residential properties are subjected to capital gains tax. To those family that owns one or more properties the capital gain tax is complicated for them. Even if they uses the name of their spouse the said property is still subjected to capital gain tax. The Construction, Forestry, Mining and Energy Union - Construction and General Division, the CFMEU believes that Australia is in the grip of a housing crisis. This crisis is not only characterized by declining affordability in first home ownership, but by increasing levels of housing stress among low to middle income participants in the private rental market, the degradation and running down of public housing stock across Australia, and finally, by growi ng levels of homelessness in the community. The Union believes that this trend comes at a time when a select few have grown more and more wealthy off the back of a speculative boom in house and land prices, that serves to make the already well off even more affluent, while locking many ordinary Australians out of home ownership, and affordable rental housing. The Union bases its view on several important studies over the recent period, including work done by the Affordable Housing National Research Consortium, of which the Union was a part. However there are still residential properties which are exempted in the tax. This may have a positive effect to those who owns only one property but to some who has 2 or more property the capital gains tax is a burden for them. Impact of Capital Gains Tax to Residential Property in Australia As per described above one main impact of capital gain tax is the increasing number of non-affordability of renting and owning a house. Confusion on the application of the capital gain tax is also another reason of this. There are cases where in the property is not subjected to capital gain tax because of some exemptions which are further discuss in this paper. Factors Determining Application of

Outsorcing and Exchange Traded Funds Essay Example | Topics and Well Written Essays - 1250 words

Outsorcing and Exchange Traded Funds - Essay Example These reasons have been adduced as the causes of outsourcing by United States. It has therefore become a trend for developed economies to outsource their processes to emerging markets. Emerging economies are those economies with relatively cheap cost of labor. As a result of outsourcing their processes, multinational companies have to exchange their home currencies in the foreign exchange market in order to acquire the currencies in the countries of operations. Exchange rate is the price of one currency in terms of problems. In this paper, the US dollar has been compared with Brazilian currency, the realm, over the last five years (Lydon, 2005). Business process outsourcing has been made in the information technology sector, financial sector, telecommunication sector and other after sales services. Brazil has become a preferred country for outsourcing since this has become one of the government strategies to create more employment opportunities and increase the gross domestic product . As a matter of fact, Brazil has become a preferred calling center. The rate of exchange in the years has kept on varying depending on the forces of demand and supply in the various countries. The country is rated next to Mexico and Europe irrespective of the proximity of these states. The preference of Brazil has been favored by the time zone, strong government support, conformity of culture high rates of fluency and growing technology (Stouffer, 2011). With the increasing outsourcing in Brazil, 25000 direct jobs and 75000 indirect jobs have been created. One of the major sectors that have actually grown is the IT section where the country’s size is the 8th in the world. The pooled skilled labor has enabled outsourcing in this country a preference. Outsourcing in the banking industry and the information providing areas has made Brazil increase it’s outsource capacity. The question that many ask is whether the fluctuating Brazil currency could be a hindrance to outsou rcing in Brazil. When companies establish their operations in a foreign country, the challenge that must be met is the competition with the home companies (Casale, 2008). The history of the US dollar against the realm from 2006 is as follows. In 2006 the realm per US dollar was 2.27 and 1.9 in the year 2007. As from the information, the realm gained against the US dollar and therefore any US firm that outsourced in Brazil had to incur additional cost for labor purposes (Lydon, 2005). In the year 2008 the exchange rate per US dollar was 1.63 and 1.95 kin the year 2009. The steadiness of the realm against the dollar therefore reduces the risk that is associated with operations in foreign countries. In the year 2010, the dollar was traded at 1.82. In as much as the rate has varied in the 5 years, it is worth realizing that the variation in the cost of the dollar has promoted the outsourcing to Brazil. Indeed, Brazil may be ranked the second after the giant outsourcer which is India. Th e decreasing value of the realm compared to the dollar could be a reason as to why Brazil could be the second option for countries to outsource. A stable currency is necessary in instances that outsourcing decisions are to be determined. The real against the dollar has remained stable between 1.7 and 1.9 to the dollar and this has made the United States be a desired place to outsource. There are several strategies that any firm with off shore outsourcing must do to ensure that

Antelope Canyon Essay Example | Topics and Well Written Essays - 500 words - 1

Antelope Canyon - Essay Example ly creates awareness among potential tourists, but also affects their rationality in terms of choice, as people tend to opt for something they have some knowledge of. An attempt to sample some of these hotels is provided hereunder. To begin with, the Clarion Inn is a long-stay, comfortable hotel with up to 74 rooms. In addition, the hotel has a business center complete with high-speed internet connectivity (Clarion Inn Motel, 2015). Located at the heart of the beautiful Lake Powell Country, this destination is ideal for individuals who want to enjoy nature’s tranquility. Next is Debbie’s Hide a Way, a hotel with one of the nicest flower patios in the area, can accommodate up to eight guests in their family and romantic hotels (Debbie’s Hide a Way, 2015). Another nice-looking, warmly hotel is the Red Rock Motel. With 14 rooms and a spacious packing lot, the motel offers extra-ordinary comfort at pocket-friendly rates (Red Rock Motel, 2015). Designed with 3 Romantic hotels and 4 Family hotels, Days Inn and Suites offers you amazing coziness at pocket friendly rates. Complete with 82 rooms and a business center with internet connectivity, the suite is idea for business vacations, family outin gs, as well as romantic dates (Antelope Canyon Hotel 2015). Knights Inn is a hotel suitable for family vacation as well as business retreats for the corporate world. Complete with 63 rooms, a spacious business center with internet connectivity (Knights Inn, 2015), this palatial hotel offers the type of comfort comparable to none. Located downtown Page, Best Western Plus is a 132-roomed hotel, with supplementing meeting rooms and business center (Best Western Plus), ideal for families on vacation as well as corporate retreats. In addition, the hotel is located in a convenient place that allows for breathtaking canyon adventures and sightseeing. Comfort Inn & Suites is a well-appointed hotel that offers tourists a luxurious feel. Located along Haul Road, the suite has 68

Have North Americans Stopped Caring Essay Example for Free

Have North Americans Stopped Caring Essay In Chapter 7 of Interest-Group Participation in American Democracy, an online source, an interest group is defined as an â€Å"organization or association of people with common interests that engages in politics on behalf of its members† (190). Since people cannot directly participate in governance, they associate themselves with groups that aim to change the political landscape. According to the same source, the rights of individuals to form such groups are protected by the Constitution (213). In spite of this, there seems to be a decline in participation of these groups. This paper aims to explain why. One of the factors that caused the said decline may be attributed to the dominance of the elite in political campaigns. In the past, citizens who share a common goal volunteered their time and energy to these endeavors. Today, campaigns require mammoth financial backing up to fund campaign activities opening doors for big corporations and the wealthy to make hefty contributions. The bottom line in the political industry is this: financial capital the wherewithal for mass marketing has steadily replaced social capital that is, grassroots citizen networks as the coin of the realm. † (Putnam, 39 40) An increase in cynicism is another cause for the decline in participation. According to Morris P. Firiona, people feel that only the â€Å"extreme voices† are heard leaving the â€Å"moderate middle† a couple of steps behind (395-425). Firiona also asserts that the transparency in the workings of the government showed people how messy policy making can get (Firiona, 395-425). However, it is important to note that the disillusionment is not completely depleting participation. Interest-Group Participation in American Democracy argues that the advancements in technology allow individuals to get involved without needing to go out to the streets to proclaim what they believe is right (204). With just a few clicks on the internet, current events unfold before the readers eyes. Discussion and blog sites are avenues which people take to express their thoughts and sentiments. These non-traditional means of participation are more convenient and less energy-consuming. These are popular especially among the youth who, according to Warren E. Miller and J. Merrill Shanks, have grown apathetic compared to previous generations (69). The dominance of certain groups such as the elite and the extremists, the increase in distrust in the government, and the waning of youth involvement are only some of the reasons why there is a decline in participation. This does not mean that citizens have stopped caring. As mentioned in the previous paragraph, non-traditional means of contribution is gaining momentum in this modern age.

Osi Model Essay -- Networks Telecommunications

UNDERSTANDING THE OSI MODEL AND THE RELATIONSHIP WITH TCP/IP The Open Systems Interconnection (OSI) model is a reference tool for understanding data communications between any two networked systems. It divides the communications processes into seven layers. Each layer both performs specific functions to support the layers above it and offers services to the layers below it. The three lowest layers focus on passing traffic through the network to an end system. The top four layers come into play in the end system to complete the process. This presentation will provide you with an understanding of each of the seven layers, including their functions and their relationships to each other. This will provide you with an overview of the network process, which can then act as a framework for understanding the details of computer networking. Also this paper will explain how the 802 specifications expanded the OSI reference model by dividing the data link layer into two layers. Finally, this paper will draw comparisons between the theoretical OSI model and the functional TCP/IP model. Although TCP/IP has been used for network communications before the adoption of the OSI model, it supports the same functions and features in a differently layered arrangement. The history of the development of the OSI model is, for some reason, a little-known story. Much of the work on the design of OSI was actually done by a group at Honeywell Information Systems, headed by Mike Canepa, with Charlie Bachman as the principal technical member. This group was chartered, within Honeywell, with advanced product planning and with the design and development of prototype systems. In the early and middle '70s, the interest of Canepa's group was pr... ...mputer systems communicate with one another in the world wide web or in a corporate setting. Personally, I have found that the OSI model relates to just about everything that I have done as an IT consultant. During computer migrations and configuring desktops to be networked on the corporate land, enables the workstations to communicate via the OSI model and the TCP/IP model. Having to map network drives enables users to have extra disk space other than just their hard drive to store data. When a user retrieves data from a network drive, the total process is through the seven layers of the OSI model. Configuring email accounts enables users to communicate via email transactions, a process that uses the OSI model and the TCP/IP model. References 1. Network Plus Guide to Networks (2002) 2. Ethernet Tutorial (2001) 3. Microsoft's guide to the OSI model (2004)

Assembly language vs. Mechanical language Essay

Assembly language can execute the same commands as machine language; however, the commands have names instead of numbers. Assembly language, unlike machine language, is a symbolic representation of operation codes, symbolic memory addresses and pseudo codes, which makes the virtual environment user friendly. Machine language, on the other hand, is represented as binary bits consisting of a string of 0s and 1s, which makes the virtual world challenging since the lingo is only comprehended primarily by computers. Therefore, assembly language is considered more user friendly than machine language. Assembly language enables programmers to relate op codes using symbolic names in place of numbers to perform an instruction or input a piece of data. Programmers can inscribe op codes using purposeful words like JUMP, CLEAR, and ADD as an alternative to cryptic binary codes consisting of series of 0s and 1s. An example of assembly language, machine language and its meaning are listed in the book called, â€Å"Invitation to Computer Science† (Schneider & Gersting, 2013, pp. 285, fig. 6.5). In figure 6.5, assembly language is clearly easier to comprehend than machine language, which makes assembly language user friendly. In addition, assembly language allows programmers to utilize symbolic addresses to replace numeric memory addresses in binary bits to execute a command or input data. Computer specialist can link symbolic labels to an instruction or piece of data in the program. In other words, the symbolic label turns into a permanent tag for the instruction or piece of data disregarding where it populates in the program or where it relocates in the memory. However, machine language is more complicated. To perform an instruction or input data in the memory in a specific location, the computer specialist must specify the direct address. For example, â€Å"In machine language, to jump to the instruction stored in memory location 18, you must specify directly to address 18 (write JUMP 18 in binary code). The programming is complicated if a new instruction or data is introduced anywhere within the 18 lines of the program, the jump location 18 shifted to 19. According to Schneider and Gersting, â€Å"This makes modifying programs very difficult, and even small changes become big efforts† (2013, pp. 285). Assembly language use symbolic address is proven to be more user friendly than a numeric address for programmers. Moreover, pseudo code allows the programmer to use a special type of assembly language to be converted into op code referred to as pseudo op. Unlike other operation codes, a pseudo –op does not develop a machine language for instructions or data. In order to execute such task, pseudo-op implores the service of the assembler. One of the many services provided by the assembler is the ability to generate instructions or data into the suitable binary likeness for the system. A brief summary of the conversion is documented in the publication â€Å"Invitation to Computer Science† (Schneider & Gersting, 2013, pp. 287). The summary breaks down how the pseudo-op commands the assembler to generate a binary representation for the integer, and so on. If a programmer had to manually construct the conversion, this would prove to be a very cumbersome task. Therefore the application of assembly language pseudo-op makes the task more favorable for the user. Consequently, assembly language symbolic representation of op codes, addresses, and pseudo codes all makes the virtual environmental experience for users more appealing than that of machine language. Assembly language is developed with the human factor in mind and with that, the experience for the programmer is uncomplicated. Advancement in the virtual world deemed assembly language more appropriate named low-level programming language. Where machine language in the virtual world was once considered primitive, assembly language to, now resides in the same era. In the land of programming, the assembly language created for a specific task or data input must be converted into machine language. The conversion is executed by an assembler. Therefore, low-level programming language, in the same manner, has to convert into machine language the same. More specifically, â€Å"Each symbolic assembly language instruction is translated into exactly one binary machine language instruction† (Schneider & Gersting, 2013, pp. 282). The translation into binary machine language means that instructions or data is represented by a series of 0s and 1s in order for the computer to execute the instruction or store the data information given. Schneider and Gersting said it best when they stated, â€Å"†¦it is the language of the hardware itself† (2013, pp. 282). Since programmers are not hardware the process could prove to very cumbersome for users. The silver lining in this storm is the creation of high-level programming language. Unlike low-level programming language, high-level programming language is more maneuverable by the programmer. High-level programming language is created to use both natural language and mathematical notation. In other words, Schneider and Gersting states, â€Å"A single high-level language instruction is typically translated into many machine language instructions, and the virtual environment created by a high-level language is much more powerful than the one produced by an assembly language† (2013, pp. 282). In short, high-level programming language differs from low-level programming language in that the translation into many machine languages versus translation into one machine language is more powerful. Moreover, high-level programming language is user friendly rather than low-level programming language which is computer friendly. Since the general idea is making the virtual world friendlier for its users, if Internet did not exist, I would not be so friendly. I access the internet on a daily basis for a variety of tasks like; paying bills, scheduling and canceling appointments, recipes, purchases, banking, and the list could go on and on. However, the most important area of internet use is paying bills. Prior to the internet, paying bill required physically visiting the establishment where the bill is to be paid, purchasing a money order in some cases, writing a check or even more archaic, paying with cash. Somehow, a bill or two slipped through the cracks. Now that the primitive days are over and technology has advanced the human nation, auto pay makes life much easier. The merchants that are due payment for services rendered receive payment automatically and all that is required, is manually setting the date, amount and merchant to be paid. Auto pay is convenient, one less tree is destroyed and gas is saved for another day. Simple as my reasons may be, it works for me. Advance in virtual technology make life easier for internet user, however, piracy can present itself as a problem if certain protocols are not put in place. When communicating with others over the internet, there are many ways to safeguard your computer, here are five protocols used as protection while communicating over the internet, authentication, authorization, encryption, system administrator, and firewalls. A combination of all these protocol could safeguard users while communicating over the internet. Authentication is a way of verify the individual right to access a computer. The individual accessing the computer usually has a unique username and password that allows the computer to recognize the individual to allow access to the system. For example, most employers allow their employees access to computers on the job for various duties. However, some user have restrictions where as others do not. In, â€Å"Invitation to Computer science†, a passage on authentication reads, â€Å"When a user attempts to log on to the machine, the operating system reads the user ID and checks that the password matches the password for that user in the password file† (Schneider & Gersting, 2013, pp. 391). Piracy can still occur if this is the only protocol used. However, if authentication is partnered with encryption, communication may not be compromised over the internet. Encryption allows users to create a message in plain text but before it is send to its destination the message is encrypted also known as ciphertext. When the message is obtained by the receiver the content is decoded so it is able to be read. However, if the message is hijacked by the incorrect receiver, the plain text remains encrypted. Encryption according to Schneider & Gersting, â€Å"is the process of using an algorithm to convert information into a representation that cannot be understood or utilized by anyone without the proper decryption algorithm;†¦Ã¢â‚¬  (2013, pp. 401). Moving along in safe communication over the internet is authorization. Authorization dictates what an authenticated user has permission to do. Contingent on whom the authorized individual may be, they possess the ability to read, write, execute or delete files. The text, â€Å"Invitation to Computer Science† states, â€Å"The system administrator or superuser has access to everything, and is the person who sets up the authorization privileges for all other users† (Schneider & Gersting, 2013, pp. 395). A more tangible explanation is, I am the system administrator for my personal laptop and I delegate authorization to other users. Next in safety is firewall software. Firewall software blocks access points to a users’ computer. It inhibits communication to or from sites you the user do not allow. In addition to safety while communicating over the internet, safeguarding your computer against viruses is vital. One measure a user can utilize to safeguard their computer against viruses is antivirus software. There is much antivirus software available on the market but the main two that comes to mind is Norton and McAfee antivirus software. Both seem to be popular amongst consumers of today. Antivirus software recognizes viruses, worms and Trojan horses by unique signature these programs transmit. The software wipes out the tainted program being transmitted which safeguards your computer from any threats. In the last 12 months, the following three computer viruses have had a significant impact on business are Shamoon which attacked Saudi Aramco oil company computer, St. Barnabas Healthcare System e-mails were infiltrated by Melissa and a Chinese hacker infiltrated the Times computer system through malware which granted them access to any computer on the Times network. The morning of August 15, 2012 a virus was unleashed to execute the destruction of a company called Aramco’s, corporate PCs documents, spreadsheets, e-mails, files putting in place of all the items demolished, an image of a burning American flag. The person responsible for such destruction is unknown but the article states, â€Å"†¦a person with privileged access to the Saudi state-owned oil company’s computers†¦Ã¢â‚¬  is the villain (Perlroth 2012). The name of the virus that collapsed Aramco’s computers is called Shamoon. The virus compelled the company to terminate the company’s internal network in efforts to hinder the virus from spreading like wildfire. In another article, St. Barnabas Health Care System e-mails were sabotaged by the horrendous e-mail virus Melissa. The virus surfer the information highway and infected E-mail systems worldwide, hindering networks and hard drives and to add insult to injury destroyed data. In efforts to save the St. Barnabas Health Care System immediate shut down of the system and networks was in order to rid the organization of the problem. In the same manner, Chinese hackers installed malware to infiltrate Times computer system to obtain passwords for personnel employed by Times. The Chinese hacker had a four month running spree of consistently attacking Times systems. The article states, â€Å"The timing of the attacks coincided with the reporting for a Times investigation, published online on Oct. 25, that found that the relatives of Wen Jiabao, China’s prime minister, had accumulated a fortune worth several billion dollars through business dealings† (Perlroth 2013). In efforts to intercept the Chinese hackers attacks, Times employed security guru to detect and block the attacks. Perlroth reports, â€Å"Computer security experts found no evidence that sensitive e-mails or files from the reporting of our articles about the Wen family were accessed, downloaded or copied,† said Jill Abramson, executive editor of The Times† (2013) References Larson, A. (1999, July 12). Global Security Servey: Virus Attack. Information Week, http://www.informationweek.com/743/security.htm Perlroth, N. (2012, October 23). In Cyberattack on Saudi Firm, U.S. Sees Iran Firing Back. New York Times, http://www.nytimes.com/2012/10/24/business/global/cyberattack-on-saudi-oil-firm-disquiets-us.html?pagewanted=all&_r=0 Perlroth, N. (2013, January 30). Hackers in China Attacked The Times for Last 4 Months. New York Times, http://www.nytimes.com/2013/01/31/technology/chinese-hackers-infiltrate-new-york-times-computers.html?pagewanted=all Schneider, G.M. & Gersting, J.L., (2013). Invitation to Computer Science. (6th ed.). Boston, Ma: press

Intro to Microeconomics Study Guide Essay

Economics is the study of allocation of scarce resources 1) Chapter One: The Principles of Microeconomics a. Four resources: Land, Labor, Capital (machinery), Entrepreneurship (human capital) b. Principle #1: People face trade-offs, government also faces them, the main one the gov. faces is efficiency vs. equity i. Efficiency is when everyone who makes the most, keeps the most money ii. Equity would be if everyone was taxed the same c. Principle #2: The cost of something is what you give up iii. Opportunity cost = the measurement of trade-off you give up something you can have later, to get something now d. Principle #3: Rational people think at the margin iv. They do what’s best for them and maximize benefits v. Think at the margin = thinking about the NEXT one vi. Margin=small incremental changes e. Principle #4: People respond to incentives vii. Prices are major incentives viii. Taxes/tax credit f. Principle #5: Trade can make everyone better off ix. Everybody can specialize x. More variety of goods xi. Doesn’t always make everyone better off ex: Jamaica, NAFTA xii. One partner can be strong and over power others g. Principle #6: Markets are a good way to organize economic activity xiii. People are guided by self-interest xiv. Markets are where consumers and suppliers come together and trade-off occurs h. Principle #7: The government can improve market outcomes xv. Main act of government – enforce property rights xvi. Government can step in if there’s market failureexternalities occur (taxes can be enforced for cigarettes), people who aren’t in the market are ffected xvii. Government can step in when there’s market power xviii. Monopoly/oligopoly-government might step in 2) Chapter 2: What does it mean to think like an economist? i. Objectively j. Scientific method xix. Observe, hypothesis, identify variables, collect data, test hypothesis, draw a conclusion k. Difficult to conduct a controlled experiment in economics l. Circular Flow Diagram = money and goods and services flow from input marketoutput market xx. Flow of Money: Market for factors of production (input market) households get income spending on markets of goods and services (output market) which generates revenue for firmswhich pay wages and rent for factors of production xxi. Flow of goods and services: Market for factors of production (input market) buys factors (land, labor, capital and entrepreneurship)firms which sell goods and servicesto market of gas and serviceswhich buy goods and services from households, which sell factors to market for factors of production xxii. This marketing is missing government, trade, savings, black market activities and charity work/non-profits m. Production Possibilities Frontier: how much a country can produce xxiii. Assumptions: one country, two goods, resource = labor xxiv. Bowed out PPF due to different resources (L) xxv. Opportunity cost increases with bowed out PPF because it takes more and more to make one more of the good xxvi. Any points along the PPF are efficient, outside the curve are not feasible and inside the curve is inefficient xxvii. Efficiency means we maximize our resources xxviii. To get more of the good, you have to give up some of the other good xxix. More resources for both goods increase: entire curve shifts out xxx. More resources for just one good increase: curve shifts on one side only xxxi. If the PPF is straight, it’s because there are multiple resources for both goods xxxii. Just stating a fact = positive statement and normative statement = subjective 3) Chapter 3: Absolute and Comparative Advantage n. Absolute advantage is when you make something more efficiently than someone else, so that less is required, which means less opportunity cost xxxiii. Assumptions: 2 people who can make goods, 2 goods that both people want to consumer, time is the only input, both people want to consume both goods and they’ll only trade if they can produce one good xxxiv. Each person works 8 hrs. per day o. Farmer can produce 8 donuts and 32 cups of coffee; Baker can produce 24 donuts and 48 cups of coffee xxxv. The baker has absolute advantage because he can make more donuts and more coffee than the farmer in 8 hrs. xxxvi. Graphing: use points (8, 0) and (0, 32) for farmer’s PPF and CPF (consumption possibilities frontier). Use points (24, 0) and (0, 48) for baker’s PPF and CPF p. Trade deal: Farmer will make only coffee (which is all 32 cups of coffee in 8 hrs. ), baker offers farmer 5 donuts for 15 cups of coffee xxxvii. Trade increases variety xxxviii. Farmer ends up with +5 donuts and – 15 cups coffee = 5 donuts and 17 cups coffee q. Comparative advantage is when you have a lower opportunity cost xxxix. The opportunity cost of one donut for the farmer is 4 cups of coffee and for the baker is 2 cups of coffeebaker is comparative advantage in donuts because of lower opportunity cost xl. The opportunity cost for one cup of coffee for the farmer is ? donut and for the baker is ? donutfarmer has opportunity cost in coffee because of lower opportunity cost r. The price range after the trade deal will lie between opportunity cost of both people, so both are better off xli. 2 cups of coffee ? P ? 4 cups of coffee 4) Chapter 4: Supply and Demand s. Assumptions: one good, one market, market is perfectly competitive (many buyers and sellers, all goals are the same across firms and price takers) t. Demand xlii. Demand curve shows relationship between price and willingness to buy (P and Qd) xliii. Quantity demanded (Qd) is the amount consumers are willing and able to buy xliv. LAW OF DEMAND: P, Qd = negative correlation xlv. Market demand is the sum of individuals’ demands xlvi. Variables that increase or decrease demand: IP-TEN 1. Income a. I, Qd = Normal good b. I, Qd = Inferior good 2. Price of related goods c. Pa, QDb = Substitutes d. Pa, QDb = Complements 3. Taste and preferences 4. ExpectationsEx: when you except the price of a good to increase later on, you will buy more now when it’s cheaper 5. Number of buyersMore buyers = higher demand u. Supply xlvii. Supply curve shows relationship between Price and Quantity supplied (P and Qs) xlviii. Quantity supplied is the amount sellers are willing and able to sell xlix. LAW OF SUPPLY: P, Qd = Positive correlation l. Variables that shift supply curve: I-TEN 6. Input price (Ex: wages increase) e. IP, Qs f. IP, Qs 7. Technologyadvancement means Cost, Supply 8. Expectationsexcepting a technological advancement 9. Number of sellers g. # Sellers, Qs h. # Sellers, Qs v. Consider: market for hybrid cars li. Event: price of gasoline goes updemand is impactedP of gas so people will look for substitutesdemand for hybrids (curve shifts right) lii. Event: technology advance reduces cost of productionsupply impactedsupply because it’s easier and cheaper to produce (curve shifts right)P , Qs liii. Event (i) & (ii): P of gas & technology –>D and S both impactedD, SQ and P is ambiguous (depends on degrees of shifts and how you graph curve shifts) w. Consider: market for bus rides liv.