tag:blogger.com,1999:blog-85785480247755750192024-03-12T20:37:21.106-07:00A2 Work/Revision BlogA blog of posts ranging from articles to revision material on three subjects: Economics, English Literature and GermanSandrohttp://www.blogger.com/profile/14610891179167672433noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8578548024775575019.post-32450429401135471992010-04-07T15:20:00.000-07:002010-04-07T15:23:14.992-07:00Chinese tax breaks<h1>Bankers' heaven</h1> <h2>A lesson in regressive taxation</h2> <p class="info">Mar 31st 2010 | SHANGHAI | From <em>The Economist</em> print edition</p> <p><span style="font-size:100%;">AS AMERICA and Europe plan new ways to claw back money from high earners in finance, China is going the other way. When the Communist Party decided to transform Shanghai into a financial centre, it gave a great deal of thought to personal-tax incentives. A ruling put out at the end of 2008 by the city’s Pudong district is the most regressive form of taxation imaginable.</span></p> <p><span style="font-size:100%;">Ordinarily, China imposes one of the highest top marginal income-tax rates in the world, 45%. There are few complaints about this from locals: nothing good is likely to come from provoking the authorities’ attention. But it is a turn-off for employees of companies that Shanghai wants to attract to the skyscrapers popping up on the western bank of the Huangpu River.</span></p> <p><span style="font-size:100%;">Chinese law specifically bans local governments from offering personal tax breaks, but there is a way around this constraint. Typically taxes are divided into two pools, with 60% going to the national government in Beijing and the remaining 40% retained locally. The most competitive local governments collect their share and then send it straight back to the lucky taxpayer—technically a reimbursement, but in reality a big tax break.</span></p> <p><span style="font-size:100%;">The ruling by Pudong’s district government—Circular 301, as it is officially called—allows these subsidies to be paid to “qualified financial talents working at qualified financial institutions”. Upon approval by regulators, senior managers can receive a reimbursement of 40% of their taxes, plus a housing subsidy. That pushes their tax rate down to 27%, still higher than Hong Kong’s 15% and Singapore’s 20% but well below what a banker would pay in New York (44%) or London (soon to be 50%) or for that matter Tokyo (50%) or Seoul (35%). </span></p> <p><span style="font-size:100%;">Bankers who are not quite so important get a not-so-grand tax break, roughly half as large. More junior staff get nothing. The same system of targeted personal-tax breaks for senior executives was apparently successfully used in Beijing to entice financial firms to move from one side of the Forbidden City to the other, to an area called Financial Street. Once the leading global firms had moved their offices, the tax rebates were allowed to lapse. The same will probably happen in Shanghai. But for now, if you’re a capitalist-roader, the people’s party is pretty hard to beat. </span></p>Sandrohttp://www.blogger.com/profile/14610891179167672433noreply@blogger.com0tag:blogger.com,1999:blog-8578548024775575019.post-40609703729155699782010-01-07T15:38:00.000-08:002010-01-07T15:46:29.965-08:00AS Micro Economics Application<span style="font-weight: bold;">Barriers to Exit-</span> high sunk costs in branded sportswear industry, e.g. Nike, Adidas<br /><br /><span style="font-weight: bold;">Benefits of Monopolies</span>- spending on Research and Development, economies of scale.<br /><br /><span style="font-weight: bold;">Buffer Stocks</span>- market for rubber in India is stabilised through the use of buffer stocks.<br /><br /><span style="font-weight: bold;">Bulk-purchasing economies of scale</span>- supermarkets such as Tesco are able to buy in bulk; their considerable market power allows them to drive down the prices of inputs, such as milk and other farm produce, thus leading to lower unit costs.<br /><br /><span style="font-weight: bold;">Cartel-</span> OPEC.<br /><br /><span style="font-weight: bold;">Congestion Charges- </span>operate in London, Singapore and Oslo; according to Commission for Integrated Transport (CfIT), road congestion in the UK is set to grow by 65% by 2010 unless action is taken.<br /><br /><span style="font-weight: bold;">Demerit Goods-</span>cigarettes, alcohol, drugs.<br /><br /><span style="font-weight: bold;">Diseconomies of Scale- </span>communication problems; Virgin combated such problems by delayering – removing a layer of management.<br /><br /><span style="font-weight: bold;">Education</span>-UK's spending on education amounts to 13% of the overall budget.<br /><br /><span style="font-weight: bold;">External Economies of Scale-</span>growth of specialist suppliers and expertise in the computer industry in Silicon Valley, California.<br /><br /><span style="font-weight: bold;">Financial Economies of Scale-</span>big firms have higher credit ratings than smaller firms – this means they can negotiate better loan rates with banks.<br /><br /><span style="font-weight: bold;">Global Externalities-</span> ozone depletion, CO2 emissions, acid rain.<br /><br /><span style="font-weight: bold;">Government Failure-</span> occasionally regulators can be too close to the industry they are monitoring – this is known as regulatory capture. This has arguably happened in the water industry, partly because the regulator in many cases relies on the industry to provide it with the date it needs for an overview of how the industry is operating.<br /><br /><span style="font-weight: bold;">Green Taxes-</span> a landfill tax introduced in the UK in 1996 aimed at reducing the negative externalities resulting from excessive waste.<br />Healthcare- the UK's planned spending on healthcare for 2004 was £81 billion, 17% of the overall budget.<br /><br /><span style="font-weight: bold;">Income Distribution-</span> income inequality has widened since Labour first came to power in 1997, despite some redistributive economic policies such as Working Families Tax Credit.<br /><br /><span style="font-weight: bold;">Indirect Taxes-</span> taxes on cigarettes, VAT etc.<br /><br /><span style="font-weight: bold;">Kyoto Agreement-</span> agreement aimed at cutting CO2 emissions by 5% less than 1990 levels, which set up international tradeable permits scheme; UK signed up; USA pulled out in 2001.<br /><br /><span style="font-weight: bold;">Marketing Economies of Scale- </span>costs of advertising very high in soap powder industry; also high in branded sportswear.<br /><br /><span style="font-weight: bold;">Merit Goods-</span>healthcare, education, public transport.<br /><br /><span style="font-weight: bold;">Monopolies-</span> Tesco's bid for Safeway in 2003 was turned down because Tesco would have more than 25% of the market share, which would have made it a monopoly according to the Competition Commission.<br /><br /><span style="font-weight: bold;">Monopolies and Mergers-</span> a merger that will lead to a company with over 25% market share is investigated by the Competition Commission to see whether it is in the public interest, e.g. the Manchester United plc and BskyB merger was prevented because it was not in the public interest.<br /><br /><span style="font-weight: bold;">Natural Monopolies-</span> rail track, water supply.<br /><br /><span style="font-weight: bold;">Negative Externalities-</span> noise pollution, litter, water pollution.<br /><br /><span style="font-weight: bold;">Positive Externalities-</span> merit goods such as healthcare, education and public transport are seen as resulting in positive externalities.<br /><br /><span style="font-weight: bold;">Public Goods-</span> street lighting, defence (UK planned defence spending in 2004 was £27 billion of 5.5% of overall budget).<br /><br /><span style="font-weight: bold;">Regulators- </span>water industry (OFWAT), communications industries (television, telecommunications etc.) (OFCOM)<br /><br /><span style="font-weight: bold;">Restrictive Practices-</span> two ice-cream suppliers, Wall's and Mars, were made to end the practice of forcing retailers to stock only their goods and not those of rivals.<br /><br /><span style="font-weight: bold;">Subsidies-</span> the government subsidises the rail industry, even following privatisation.<br /><br /><span style="font-weight: bold;">Technical Economies of Scale-</span> occur in many industries with indivisibilities (items that are not provided in small units), such as oil tankers and other capacity transport; the more they are used, the greater the level of efficiency.<br /><br /><span style="font-weight: bold;">Tradeable Permit Schemes-</span> operate to manage fish stocks in New Zealand; also an element in the Kyoto agreement aimed at reducing CO2 emissions; Singapore has a system for reducing ozone-depleting substances.Sandrohttp://www.blogger.com/profile/14610891179167672433noreply@blogger.com0tag:blogger.com,1999:blog-8578548024775575019.post-61603515195037477622010-01-07T14:53:00.000-08:002010-01-07T14:58:41.233-08:00Micro Economic AS Definitions - AQA textbook and 'Market imperfections' revision cue cards<style type="text/css"> <!-- @page { size: 21cm 29.7cm; margin: 2cm } P { margin-bottom: 0.21cm } --> </style> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Abnormal Profit- </b><span style="">the profit over and above normal profit</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Asymmetric information- </b><span style="">when either a buyer or seller has more information than the other party.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Barriers to Entry- </b><span style="">factors which make it difficult or impossible for firms to enter an industry and compete with existing producers. </span></span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Basic Economic Problem-</b> Resources are scarce but wants are infinite. Resources have to be allocated between competing uses because wants are infinite whilst resources are scarce.</span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Branded Good-</b><span style=""> a named good which in the perception of its buyers is different from other similar goods on the market.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Buffer Stocks Scheme-</b><span style=""> a buffer stock system is used to stabilise prices in agricultural and other commodity markets. An organisation buys and sells in the open market so as to maintain an minimum price in the market for a product.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Capital Costs- </b><span style="">some industries are expensive in terms of set up, e.g. car manufacture. </span><u><span style="">Barrier to entry</span></u><span style=""> in a market.</span></span></p><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><span style=""></span><br /><b>Ceterus Paribus-</b> the assumption that all other variables within the model remain constant whilst one change is being considered.</span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Chain of Command-</b><span style=""> the number of people a decision must go through before it is acted on – longer in a large firm. Part of managerial problems arising in diseconomies of scale.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Complementary Good- </b><span style="">a good which is purchased with other goods to satisfy a want.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Composite Demand- </b><span style="">when a good is demanded for two or more distinct uses. Eg, increased demand for oil in the chemical industry will result in a fall in the supply of oil to the petrol industry because oil is in composite demand.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Conglomerate Merger-</b><span style=""> a merger between two firms producing unrelated products.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Consumer Surplus- </b><span style="">the difference between how much buyers are prepared to pay for a good and what they actually pay.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Demerit Good- </b><span style="">a good that is over provided by the market mechanism. It is over consumed and poses negative externalities in the economy.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Derived Demand-</b><span style=""> when the demand for one good is the result of or derived from the demand of another good. Eg, An increase in the demand for cars will lead to an increase in the demand for steel. Steel is said to be in derived demand from cars. </span></span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Division of Labour- </b><span style="">specialisation by workers.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Diseconomies of Scale- </b><span style="">a rise in the average costs of production as output rises.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Dynamic Efficiency- </b><span style="">occurs when the resources are allocated efficiently over time</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Economies of Scale-</b><span style=""> a fall in the average costs of production as output rises. Can also act as a </span><u><span style="">Barrier to Entry</span></u><span style="">.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Elastic Demand-</b><span style=""> Where the price elasticity of demand I greater than 1. The responsiveness of demand I proportionally greater than the change in price. Demand is infinitely elastic if price elasticity of the demand is infinity.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Free Rider</b><span style="">- a person or organisation which receives the benefits that others have paid for without making any contribution themselves. Mainly associated with public goods.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Indirect Taxes and Elasticity-</b><span style=""> The government uses indirect taxes such as duties to discourage the consumption of demerit goods (e.g. cigarettes), which are considered to be over-provided by the free market system. The effectiveness of indirect taxes in reducing the consumption of demerit goods depends to a large extent on the elasticity of demand for the product.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Inelastic Demand-</b><span style=""> where the price elasticity of demand is less than 1. The responsiveness of demand is proportionally less than the change in price. Demand is infinitely inelastic if price elasticity of demand is zero.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Inferior Good- </b></span><span style="font-family:Arial, sans-serif;"><span style="">A good the demand for which falls as income rises. The income elasticity of demand is therefore negative. </span></span> </p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Internal Economies of Scale- </span></b><span style="font-family:Arial, sans-serif;"><span style="">are reductions in a firm's long-run average costs that it can take advantage of as it increases its level of output</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Giffen Good- </b></span><span style="font-family:Arial, sans-serif;"><span style="">In economics and consumer theory, a Giffen good is one which people consume more of as price rises, violating the law of demand. E.g. Bread</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Government Failure- </span></b><span style="font-family:Arial, sans-serif;"><span style="">occurs when government intervention results in a sub-optimal allocation of resources. When trying to rectify market failure, or achieve some other policy objective, the government actually makes matters worse.</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Homogeneous Goods-</span></b><span style="font-family:Arial, sans-serif;"><span style=""> goods which are identical.</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Horizontal Merger-</span></b><span style="font-family:Arial, sans-serif;"><span style=""> a merger between two firms in the same industry at the same stages of production.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Joint Supply-</b><span style=""> when two or more goods are produced together, so that a change in supply of one good will necessarily change the supply of the other goods with which it is in joint supply. Eg. Increase demand/supply in Beef will lead to increased supply of Leather.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Legal Barriers-</b><span style=""> organisations may be granted a monopoly by the government, e.g. the post office has a monopoly on postage under £1 in the UK. Patents also prevent competition and provide a </span><u><span style="">barrier to entry.</span></u></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><span style="text-decoration: none;"><b>Lorenz Curve-</b></span><span style="text-decoration: none;"><span style=""> indicates the degree of inequality in a society.</span></span></span></p><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><span style="text-decoration: none;"><span style=""></span></span><br /><b>Market-</b> any convenient set of arrangements by which buyers and sellers communicate to exchange goods and services.<br /></span></p><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Market Failure-</b> Occurs when resources are inefficiently allocated because the market mechanism is working imperfectly. Sub-optimal allocation of resources. Examples of market failure are:</span></p> <ul><li><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;">The abuse of monopoly power</span></p> </li><li><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;">the presence of externalities</span></p> </li><li><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;">the under-provision of merit goods </span> </p> </li><li><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;">the non-provision of public goods </span> </p> </li><li><p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;">Inequality in the economy.</span></p> </li></ul> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Merit Good- </b><span style="">a good which is under provided by the market mechanism. Creates positive externalities in the economy. Eg, Education, Healthcare</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Monopoly- </b><span style="">any firm large enough to dominate a market, i.e. set prices or restrict output. A sole supplier to a marker with over 25% of the market. High barriers of entry to the industry means no competition.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Negative Externalities- </b><span style="">also known as external costs, occur when a producer or consumer places costs on a third party.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Normal Profit- </b><span style="">the profit that the firm could make by using its resources in their next best use. Normal profit is an economic cost.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Normative Economics-</b> Value judgement about the way in which scarce resources are being allocated.</span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Occupational Immobility- </b><span style="">the inability of workers to move between professions. Causes include Imperfect Knowledge, Family Ties, Housing and Workers having job-specific, non-transferable skills.</span><br /><b>Opportunity Cost-</b> the benefits foregone of the next best alternative</span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Perfect Competition-</b><span style=""> a market structure where there are many buyers and sellers, where there is freedom of entry and exits to the market, where there is perfect knowledge and where all firms produce a homogeneous good. </span></span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Perfectly Elastic Good- </b><span style="">Buyers are prepared to purchase all they can obtain at some given price but none at all at a higher price.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Perfectly Inelastic Good- </b><span style="">Quantity demanded does not change at all as price increases. Numerical measure: 0.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Polluter Pays Principle- </b><span style="">refers to the idea that those who cause environmental damage have an obligation to pay for its clean-up costs. Means that taxes and charges should be used to deal with pollution.</span><br /><b>Positive Economics-</b> the scientific or objective study of the allocation of resources. </span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Positive Externalities- </b><span style="">also known as external benefits, occur when the benefit to an individual of his or her consumption or production is less than the overall benefit to society. Goods that have positive externalities such as merit goods are often under-provided by the free market system; therefore the existence of positive externalities is an example of market failure.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Private Good- </b><span style="">a good where consumption by one person results in the good not being available for consumption by another.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Producer Surplus- </b><span style="">the difference between the market price which firms receive and the price at which they are prepared to supply.</span><br /><b>Productivity-</b> output per unit of input employed </span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Productive Efficiency-</b><span style=""> is achieved when production is achieved at the lowest cost.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Property Rights-</b><span style=""> market failures, in particular negative externalities, often occur because the property rights to resources are inadequately defined or enforced.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Public Interest- </b><span style="">Competition Commission believes that consumers benefit from lower prices, a wider range of choice, more innovation and higher quality products and services.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Public Good or Pure Public Good-</b><span style=""> a good where consumption by one person does not reduce the amount available for consumption by another person and where once provided, all individuals benefit or suffer whether they wish to or not. Non-rivalry, non-diminishing and non-excludability are the characteristics of a public good. Eg, Street Lighting, Defence.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Restrictive Practices- </b><span style="">firms may try to prevent competition deliberately, e.g. by forcing a retailer to stock only their produce. One of the </span><u><span style="">barriers to entry.</span></u></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Span of control- </b><span style="">the number of people an individual manager is responsible for – is wider in a large firm. Part of managerial problems that lead to diseconomies of scale.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Specialisation-</b><span style=""> a system of organisation where economic units such as households or nations are not self-sufficient but concentrate on producing certain goods and services and trading the surplus with others. </span></span> </p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Static Efficiency- </b><span style="">occurs when resources are allocated efficiently at a point in time.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Substitute Good- </b><span style="">a good which can be replaced by another to satisfy a want.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Sunk Costs- </b><span style="">if you were to leave an industry, then although you might be able to recoup some costs (e.g. by selling machinery), some costs would be lost forever (e.g. money spent on advertising). </span><u><span style="">One of the barriers to entry/exit</span></u><span style="">.</span></span></p> <p style="margin-bottom: 0cm;"><span style="font-family:Arial, sans-serif;"><b>Superior Good- </b></span><span style="font-family:Arial, sans-serif;"><span style="">Superior goods make up a larger proportion of consumption as income rises, and therefore are a type of normal goods in consumer theory. A good the demand for which is income elastic. </span></span> </p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Sustainable Development- </span></b><span style="font-family:Arial, sans-serif;"><span style="">economic development which provides for the economic well-being of the present generation without compromising the ability of future generations to provide for themselves.</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Technical Efficiency- </span></b><span style="font-family:Arial, sans-serif;"><span style="">is achieved when a given quantity of output is produced with the minimum number of inputs.</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Tradeable Permits-</span></b><span style="font-family:Arial, sans-serif;"><span style=""> are used in an attempt to reduce negative externalities, particularly those caused by environmental degradation. </span></span> </p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Unitary Elasticity- </span></b><span style="font-family:Arial, sans-serif;"><span style="">Quantity demanded changes by exactly the same percentage as the price does. Numerical measure: 1.</span></span></p> <p style="margin-bottom: 0cm;"><b><span style="font-family:Arial, sans-serif;">Vertical Merger- </span></b><span style="font-family:Arial, sans-serif;"><span style="">a merger between two firms at different production stages in the same industry.</span></span></p>Sandrohttp://www.blogger.com/profile/14610891179167672433noreply@blogger.com0