Oh my God

Oh my GOD,,I found my blog!!!!!!!

mind map

quantitative easing

Quantitative easing means putting more money into our economy to boost spending.
the targets of ‘quantitative easing’ ：

- keep the inflation stable and promote a healthy economy.

The bank of England use the interest rate to control inflation , and they aim is keep the interest at 2% but the target made by government . why the government and bank hope to keep the inflation stable ,this is because if the inflation below 2% or nearly zero, it reduce the the bank rate to boost spending and inflation. Also there is a still significant risk of very low interest rate, the bank can increase the quantity of money,so in other words, inject the money directly to the economy, the process of this also called quantitative easing. Because of injection of money the spending may increase because with the increase in lending the money to the seller or buyer they can spend more which is more than before, therefore the spending will increase and the inflation rate may grow up. Whereas why keep stable inflation is good? Because if the inflation is unstable, in terms of householder and companies which is very costly. and they make it hardly to see how price of individual good are changing compared with others.

-supply more money

why should more supplied?

Because the money supply needs to keep growing at the steady rate of the economy,and to ensure inflation remain close to the government 2% targets.

A country has a large current account deficit, what policy should be followed?

1. I think the government should do nothing, because it may be that under a free exchange rate system therefore the currency may face to depreciate. Also if a country has a strong economy it will attract FDI(foreign direct investment0) r loans into the capital account so the current account is balanced.
2. expenditure switching policies. Because these sort of policies reduce domestic spending on imports also the government can set the tariff or non tariff barriers to protect the domestic business. Also the government can subsidies to domestic producers, If the government recognise how important of exchange rate is helpful, they will set lower exchange rate or lower interest rate to encourage the domestic demand and the number of exports.
3. Expenditure reducing policies, this is means reduce spending on imports by reducing total spending such as deflationary fiscal policies, also they can set higher tax and spend lower money also deflationary if monetary. on anther hand the government can increase the interest rate which is reduce the demands, because less demand leading less expenditure.

review 4

Describe deregulation in the transport market
deregulation occurs when the government deliberately removes official regulations that act as a barrier to competition in a market. It is a supply side policy that facilities con testability.
the reason off deregulation is make the transport more efficiency and maintain the transport. For example, deregulation on local bus services in the transport act and then it becomes more efficiency.

Describe privatisation in the transport market.

Privatisation is the process by which a former publicly owned organisation or activity is sold off to the private. there are more information about privatisationhttp://shuimengqiu.blogspot.com/2009/11/privatisation.html

Explain the negative externalities due to increase the transport demand.

The negative externality is when the social cost exceed private cost. With the increase the transport demand, the pollution will be increase lead to reduce the transport sustainability.
there will be more congestion, so the risk of accidents will be growth. For freight transport, it will delay the delivery time and consuming products.

review3

Describe contestability in transport market and describe barrier to entry and there application to the transport market.



Generally if transport market is contestability, there is low barrier to entry.

for example the market of road haulage, couch services and rural bus services are get high con testability,therefore there are low barrier to entry. In the opposite, the air transport market has low contestability therefore it is high barrier to entry.

In monopoly market, there is high barrier to entry, because if a new business want to entry the set up cost is high, also there is some legal barriers for example the new transport market should have the licence from government.etc Thus in monopoly market there is low contestability.



In oligopoly market, the is lower barrier to entry than monopoly because a oligopoly market is a market dominated by a few larger firms. Therefore there is low contestablility as well.

However in a contestable market and a perfect competition market there is high contestability.

Because a contestable market is a market where is no barrier to entry and exit and the costs facing incumbent and few firms are equal.Also the meaning of perfect competition is a market structure with many buyers and sellers, free entry and exit an identical product. So according to the definition of both market it reflect both of them are no barrier to entry , therefore there are high contestability.



Outline the natrual monopoly case for transport

A natrual monopoly is a market situation where a monopo;osthas overwhelming cost advantage.

The natrual monopoly case for transport such as water, gas and electricity. For example there are two bus companies in a transport market, but both of them find put there is low profitability, but the bus company which exit in this market already will win the competition perhaps, because if there is already a bus company occur, the scale of this company is big, so the new entry bus company has low ability to get this conpetition so it will be difficuilt to entry real market. However if this new bus company has another transport market already and run it very well, it might be survive in this kind of competition.

review2

Explain how transport forecasts are made and why?
Transportation forecasting is the process of estimating the number of vehicles or travelers that will use a specific transportation facilityin the future.

the forecasts can basis on the figure,data and trend on transport. For example, the number of railway line prepare to use, the number of passengers satisfy by airport, or the number of ships calling on a seaport. To do transport forecasting, The first step is collection of data on current traffic. together with data on population, employment, cost etc. Feeding data on future population, employment, etc.

Explain the main ways in which transport sector can be described through the data.

For example, we have data which shows the how does consumer think about the comfortable of take bus, if there are more than 50% consumer think it is not good enough, the manager of bus company may make a forecast to solve this problem. In the opposite if the data shows there is more than 50% consumer think it is good, the manager of bus company will make a forecast which is how to keep it.

Outline economic of scale and application to transport.
Economies of scale: where average cost falls as production increases. They are happening because larger firms are able to lower their unit costs.
application to transport relevant the regulation and the transport market, for example barrier to entry, and one reason

of it is to entry a transport market should have licence from government.

review

Outline the characteristics of the main modes of transport?

Road-For road transport,generally it is very convenient and efficient, because it is provide the door to door service. For example delivering goods by truck. It is extensively used in retailing and where 'just in time' are required it is not always the most sustainable mode and has poor public image

Rail- For rail transport, it is convenient can efficiency as well, but it more suit to middle and long distances. on another hand, it more suit to container traffic over long distance. there are interchange limitations for certain types of potential traffic. The capacity of rail is big.

Air- For air transport the speed s very high and it is over long distance and it is very efficiency, therefore, for business and travel, air transport is a good choice. Clearly relevant for transporting time sensitive cargo such as mail and certain types of food products, but is cost a lot. However, it is the least sustainable mode because there are few realistic substitutes.

Sea-For sea transport it is very suit to bulky good. for example oil and containers, can be moved over longer distances where speed is not an important consideration. For example when you send letter, you will choose send it by ship or by air which means normal or quicker.

Explain why transport is derived demand.

Because transport as a service or function is not demand purely for what it it, but for what it can do. people will choose the transport because it can satisfy what are they want to do. for example a person buy clothes on line if she want to get this clothes she must choose a way to post it. therefore she can choose post by quicker way(airway) or normal way(ship).

Explain how to measure transport demand.

Price,price charge is very important , but it depends on the elasticity and different transport modes.

price on substitutes,the demand will change with the price change in substitutes. however we need concern about demand elasticity as well.

income , higher income in passenger will stimulate them purchase more on transport. however it depend on the elasticity and current situation.For example if the interest rate is high they may saving more instead of purchase it on transport.

quality, high quality will help to increase the demand, but if the price is so high, the demand may decrease so it depends.

privatisation

privatisation is the process by which a former publicly owned organisation or activity is sold off to the private sector,generally, it including an outright sale to another company, a management and employee buyout, or the public sale of shares in a new company.

what is the benefits of privatisation?

• privatisation will stimulate the current owner concentrate more on maximise the profit. Therefore they will set some SMART strategies such as increase the consumer services and quality of it which will help to improve the allocative efficiency.

• Privatisation provides a series of supply side-benefits for consumers due to an activity being exposed to the free market.

• privatisation will reduce the government intervention. Normally a nationalised company will effect by the current economy situation as well as some political factors. For example if they meet recession the government will ask them to reduce the price. I think this because government is concentrate more on the social side. Therefore if the company have privatisation, these obstacles will be avoid.
  

The disadvantages of privatisation

• more risks. For example less government subsidies.
• if the company is controlled by the government, the taxpayers will pay if the will have a loss so there s no insensitive to minimise costs
• privatisation nay not necessary encourage the competitiveness, because the national monopoly may become local monopoly.
• cross subsidisation may not apply here.

recommendation on whether to accept Romily's proposal.

In my opinion, I suggest the Barker limited to accept Romily's proposal. Because as the advantages I mentioned which is more than the disadvantages of move into crisps production.


firstly, Romily has been working in marketing department of walkers crisps and has made rapid progress there. From this evidence that I know Romily is experienced and she can do this job. whilst she putting 20000 which is half of her life saving into the new business ,this shows she supports this new business. Therefore with her experience, to build the crisps market will use less time and save money and more efficiency. Also Romily made a decision tree, and it shows the probability is bigger than loss, because the probability of successful is 70% and loss is 30%. However this is just a estimate, there will have some unpredictable change and risks in the future. To produce the crisps, Barker Ltd will use their own potatoes and they will keeping the brand name . this is good for the crisp market because Barker Ltd got main customers and due to loyalty demand therefore these customers may want to try their new product and the demand of crisp is established. The potato price forecast to drop in real and it leading to less attractive to keep sell potatoes therefore move to a new market may recover the business and more successful.

on other hands I have some advices to help Barker Ltd to gain more successful if move into the crisp business. Firstly, increase the level of hierarchy, because the span of control will decrease and the have more communication between staffs and it is easier to control therefore the staffs will be motivated and it will leading to more productivity's. Also to look for some investors from her family member which can help her to start the business easier or put into all of her life saving.

oligopoly-Kinked demand curve

oligopoly is a market structure dominated by a few firms.

Kinkes demand curve is a demand curve made up of two parts; it's suggest oligopolists follow each reductions, but not price rises.

kinkes demand curve can be used to explain why prices in oligopolistic markets are often rigid, or stable for relatively long periods of time. Price Rigidity is a condition where one follows a decrease in price but not an increase in price. This is due to the ability of other firms to match prices with it and it often leads to a kinked demand curve.

Attempt to stay at the same price which is point P shows the fixed price, and the output shows by the point Q. It is assume that a firm increase the price which is above point P , the other firms will not follow to increase the price because the oligopolistic market is non price competition. Therefore, when a firm increase the price the other firms will be able to sell more themselves, attracting customers from the firm that increased the price. Thus cause of this we know the demand is elastic to an increase in price. and it shows the firm's demand curve is AB and its marginal revenue is AC. Inversely, if the firm decrease the price, the other firm will follow, because if they do not cut the price, they will lose their market share for example, lose their customers. This is starts a price war, the result of which is likely to be that all firms lose out. The demand curve below B is inelastic, because it make a sense if the MC curve move up or down and the output will not change. While the marginal revenue curve is EF.

Monopoly

Monopoly is one of the market structure. A monopoly exists when single firm controls the entire output of an industry. The sole supplier of a good for which there is no close substitute.
The feature of monopoly

• single firm


• high barriers to entry


• no close substitute


• price maker
  

The firm produce the output at where MR=MC, charge price at P to achieve supernormal profit.
In competitive market, MC=AR price would be lower at Pc and output wold be higher than Qc. Net welfare for consumer is higher.

In a perfect market, the market equilibrim will be at point X where MC=AR, That's supply meets demand.n price at Pc and output Qc.


The disadvantages of monopoly:

• The monopolist is not producing at the lowest point of AC curve, though produce efficiency is not achieved, allocative efficiency is not achieved either since the price charged to consumers is greater than the marginal profit.
• consumer surplus is being reduced
• monopolist could be monopoly power to create barrier to entry and operate price discrimination.

the advantages of monopoly:

• Dynamic efficiency is being achieved in the long run. firms are able to invest, innovate and develop to protect market position.
• If monopoly benefits from economic of scale, long tun average cost is reduced.

comment of 5business ideas

1. I do not think this is a good idea because the cost of it is very high, and the market is not really good. To keep the fresh of these food in vendin machine is not very easy, they company who do this business need send staff to change the food on time. If the food not sold out, the food are waste. the consumer can not touch the food before they want to buy, they do not know whether the food is good or not, therefore consumer may change their mind to go to supermarket. However, it is very convenient to people who lives very far from market.

2.No firll gym, open 24/7

This is unique business idea, it will be attract a lot of people. Open a gym 24 hours per day and 7 days per week is satisfy lots of demand, because different people has their own different spare time. Sometimes, the gym close at 9 o'clock, for people who have free time before 9 o'clock is good, they can go to gym before it close, but for people who do not have free time before 9 o'clock is not good, because they cannot go when is too late. In another hand, if the capacity of this gym is so small, people will choose the time when they think is suitable, or after them work, they may all go the gym. So too many people will lead to overcrowded. So I think open a gym 24 hours per day and 7 days per a week is good, because it can satisfy more demand and it will encourage more people to join. Also the possibility of overcrowded will decrease. However, I do not think there will be a lot of people go to gym in the evening, because it is not really health to do exercises in night. So, some people may not want to go. the cost will be high as well, for example the electricity. Whereas it depends on different people.

3.Adjusting jeans for pregnant waistlines & back again

This is very attractive products for pregnant, because girls like wear jeans even though she is pregnant or not. Adjusting jeans satisfy the demand of prednant, it is very convenient and not really the out look of jeans. However, it is not very health that a pregnant to wear adjusting jeans, therefore for some of prednant they may prefer to wear other comfatable clothes in stead of atjust jeans.

4.wearable device tracks,fitness data 24/7

I think this products is not really suitable for now, because not every people want to take a small digital thing and record the sleeping time, or some other fitness data. It approciate people who like to know what these information. However. it is very convenient and really useful for some people, but I think it is very expensive as well. I guess it will be more demand of this product in the future becomes nowadays more and more people start to consider their health.

5.interactive piggy band teaches kids about money.

I really like this idea. Because it is good for children to learn the basic financial skills, make them recognise the importance of money. The main consumer of piggy bank is kids, it is very attractive, because children always like to copy the action of their parent, they will interested in how to save money in bank and willing to do it. Also this encourage them to save money, and their parent would like their children have this good habit. However, how to use computer is a problem for children, this is a new and difficult sill to them to learn how to use computer. Also some of children interested in this because of their curiosity, normally, kids can not keep their curiosity for a long time, when they stop to consider on this interesting project, they will stop use the piggy bank. Therefore, how to keep the kids use this bank it is difficult to the company.

Foldio

http://www.foldio.co.uk/index.php

Firstly I need to say Christin is a genius, he is 19 years old and just finished his A level course, but he ca running a business very well. Then I am thinking about me,,,,god....!!!!
Ok, Let's talk about foldio. This is a good products, because after I watched the Verdi, I visited the web side of this products. In this website they describe the advantages as :
1.Curves documents without a crease, creating a smaller, more functional portfolio
2.Paper doesn't curl, unlike cardboard tubes
3.Easy access to particular documents, unlike standard portfolios
4.Foldio holds paper, card, notepads, pens, books
5.Constructed from foam PP, Anti-worp system
6.Durable and comfortable handle
7.Affordable, high quality and stylish product
According to the advantages above, I think this is a good product, and they have a high market share.

marketing:
all the student can be the consumer of foldio. I mean all the student which include primary, secondary, high school and university school students. Because the supplier of foldio have different size of it, such as A1,A2,A3 and A4. This is good, because not only students but also other people,like business man. In another hand, foldio is not very expensive, for example the price of A4 is 19.99 and now is 16.99,this discount may because of the seasonal reason, now student start to go to school, they will think about to buy a new foldio, lower price is more attractive. If Consumer decide to use bulk buying, there will discount more. For instance if a university will buy 1000 foldios, there will be 5% discount of the total price. Also if you visit the website, you will see, the sale of foldio is good, because this reflect buy their sale record, for example, the foldio of A1 case is sold out. So according to the information above we can see the market of foldio is good. ( I think this is why when Christin face to 4 dragons he was very confidence)

Christin ask 80,000 pounds and 15% share to investment in the initial time. He said he will manufacture foldio with the 80,000 pounds. One of the dragon was interested in this product, and he would like to invest it , but the share for him is not very high, so he asked more than 15%share form Christin. Christin accept and increase the share from 15% to 35% which jump a lot.
I think accept this dragon's offer is right, because Christin can gain the invest and manufacture foldio. As we know the market for foldio is good, therefore the profit will be high, and Christin mentioned that he has experience of exports and impors with China, So he knows about the information of China, like the materials in China is very cheap. Therefore he can build the manufacture project in China which is cheaper and thus can save money and he can find a market in China as well. So in this comparesion, 35% share is not really influence a lot.

However, there are some risks of 35% share, because 35% is not a low share for a business. If a the competitors of foldio become more, the demand of foldio will be reduce, becuase consumer can compare the products and change their taste. for example lapdesk is one of the competitor of foldio, because both of them can keep the paper, but foldio do not have a mini desk which can help people writing everywhere. So if the market share decrease, and the marketing is more competitive the profit maybe reduce. Therefore if give the dividends to the investors with low profit, their will be loss of the profit . So depends on different situation.

Depreciation

balance sheet

I am sorry that I did not come today, because I feel really bad. However, I was read balance sheet at home and tried to understand it more clearly.

What is balance sheet actually is?
a summary of a person's or organization's balances. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year.

Balance sheet basis on balances
Assets= liability + shareholders equity
Owned=owed + investment

Assets
Current assets:
Assets that have life span of less than one year. Current assets include cash which you may have in hard cash(currency and coins), current, savings, and investment accounts, and other assets which are not cash is liquidity. Liquidity means how easily you can turns into cash. The second one is accounts receivable, it is how quickly will you customer pay you? How much is it really worth. The third part is stock(inventory), when we talk about stock, we need consider how quickly can you sell it? And again how much is it really worth. The forth assets is pre-paid expenses. For instance paid in advance for future benefits. E.g rent.

Non-current assets
Assets that have life span of more than one year and can be turned into cash in less than one year.
Non-current assets include fixed assets, such as machinery, computers buildings, land and tangible assets. (fixed assets value=original value-accumulated depreciation)

Other assets
There are good examples about other assets patent, copyright and goodwill and actually goodwill might the brand value, all of them are intangible assets.

Then let’s talk about liabilities
What are liabilities? Liability is an obligation of an entity arising from past transactions or events.

Current liabilities
Debts or obligation that are due within one year.
1. Bank overdraft/short term loan \
2. Accounts payable (creditors)
3. Accrued expenses. E.G payroll, interest( interest pay the loan), tax.
4. Taxes

Long term liabilities
Debts or obligations that due in more than one year e.g. Bank loans, leases.
1. Bank Loan

Equity (capital)& Retained Earnings

Equity- Investment from shareholders(paid in capital goes to current assets)
Retained earnings- Profit

easy way to understand what is diminishing marginal return

mind map

Business Homework

What extent is profit a good indicator of the success of a business such as BP?

what is profit?
The positive gain from an investment or business operation after subtracting for all expenses. opposite of loss.

profit is a good indicator of the success of a business such as BP, because, If a company get high profit, which means they have large potential of market share, and customer's loyalty. So it will be attract some investors. Therefore they have high market share and financial guarantee, people will think this business may is good. However,if people just concentrate on how is the profit going on, I do not think it is a good way to measure a business is success or not, I know get high profit is the most important aim of every business. But there are other way to measure a business. For example the communication between employer and employees, the manage skills and the cash flow, all of them are good indicator of the success of a business, because if there are bad relationship between employees and employers how a company can operate normally, it will be demotivate their labour, as well as productivity. So if labour has low confidence and a industry has low productivity how a business can achieve successful? Also get high profit not only in long term , but also in short term, for example in summer the demand of ice cream is very high, so people will spend a lot of money on it, thus the ice cream company will get high profit. Whereas in winter, just a few people will purchase on ice cream, so the company will loss a lot, Therefore we can not measure this business is successful or not.

However profit is a good indicator of the success of a business, but it need related other aspect as well, because profit is not a full picture to a business.

Group Exercise 9

In fact, a company employing child labour is illegal, and we always say that is against business ethic in general, Because the child labour is under 16 years old which means they did not achieve the minimum standard education, and because of they spend a lot of time to work instead of to go to school, it bad for their future,which bring the negative externality to the society as well. Whereas,what is business ethic stand for? Business ethic means a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. In my opinion it is difficult to measure if the business is ethics or not.

For example,Nowadays more and more child would like to take a job rather than to be educated , especially the children's family who living in poverty,in terms of this situation, if the child who can find a job it could helps them in the future development of life standard. So some company, like sportswear business, they want to cut the cost so they recruit and use child labour, even though it is illegal, however, if children want and willing to do it may help them to get money, and for those business use child labour can reduce their cost which is achieve their corporate objective. therefore in this situation it good for both of them. But in another hand, Child do not have enough experience or power to be responsible a job which is suitable to a adult, in constract an adult had completed his education and maybe richness knowledge. Also the child labour in some countries is really poor, they work very hard, but their boss still give them low wages, or some managers in a company do not care if they are child or not and give them some massive missions, and because of that some children get ill or keep bad health. So this behavior is absolutely against the business ethics.

I would like set the sport wear business moves production of its trainers to a country that employs child labour in order to cut the production cost at first of the rank. Because to my way of thinking they may employ the child labour to the first floor to produce the materials,and because they want to reduce the cost they would like to pay low wages to those children, and the mission of children there will not be relax. For example some of those child labour in order to earn more money, they may over working, then they eat a little, go back home very late and so on. those elements above will leading the child labour keep a bad healthy and some safety problems also if they make some mistakes they boss can easy to cut their wages , meanwhile they will be easy to fire by their boss. So i think it is not fair for these child labour. In another hand because of child labour is illegally, they may get a bad work condition from this company because this company need hire them and the child labour do not really care about the work condition, but there are some potential problem. For example if they work there for a long term it will be demotivating, also there will be some accident happened cause of the bad work condition.

In summarise , I think the 9th action is first if the rank, the reason of this is which I mentioned above. How do you think of it?