Law of Increasing Cost Essay
Law of Increasing Cost
The three types of unemployment are Structural, Frictional and Cyclical Unemployment. Structural unemployment occurs due to the disparity between the skills of a person whose looking for a job and the skills needed for the jobs available thus, the job seeker’s profession or skills is not likely related to that line of work. Frictional Unemployment is another type of unemployment which is strongly related to structural unemployment as the two both depends on the dynamics changes in the economy.
Thus, the people who do not even have work may not accept the first job offered to them because of the skills needed for the job and the salary. On the other hand, Cyclical Unemployment is due to lack of demand for work and is attributed to economic contraction. Cyclical Unemployment- the Government should implement and fund a program where in poorer and jobless people with capability can be able to have their own job and receive necessary payment. In doing such thing they can be able to increase productivity and economic efficiency as well as the workers welfare.
Answer to question no. The Law of Increasing Cost states that as the Marginal Cost, say X, increases the Cost of the Product, say Y, decreases and vice versa. Thus, the cost of product is dependent and inversely proportional on the marginal cost of that product. Cost of Product (Y) Marginal Cost (X) Answer to question no. 5 A progressive tax is the rate of the taxes that increases as the tax payers’ income increases. The system defends on the percentage of income of an individual. Those high-income people should pay higher percentage of tax than those low-income people.
An example of progressive tax is a Graduated Tax. The general sales is said to be regressive because everyone including the rich and the poor utilize it and therefore has to buy goods in order to survive for example clothes, the poor pay more of the percentage of the sales (clothes) tax compare to the rich people, that is why it is regressive. Answer to question no. 6 Inflation hurt the rich and much more the poor people. In order for the rich to uphold their ways of living they are tend to pay much greater price for the goods and services.
In a worse case, the poor may not be able to afford those goods and services, thus it posses a threat to their family and to the economy in general. On the other, economist may benefit from inflation since they can somehow predict inflation rate and thus, make appropriate preparations. Answer to question no. 8 Public Good are goods and services that are available for everyone to consume. Also, consumption of these goods does not decrease the availability of the supply. Such good includes information goods and human rights.
On the other hand, a private market offers goods that are the exact different of public goods, goods that are good for only one consumption and is for everyone to consume. Thus, the main reason why the public market cannot offer public goods is because public goods are free and the private market, more or less, does not offer free items. Answer to question no. 9 Full employment is define as the state and condition of the national economy, where all of the job seekers are willingly accept the job offers to them regardless of the amount of wages they are about to earn as well as the working conditions.
It clearly indicates 0% of people who do not have job or unemployed. Answer to question no. 10 No. It is the objective of the public market to increase revenue and thus, it important to give greater attention to the benefits that the firm will have rather than that of the society. Because positive externalities mean that the society will gain greater benefit than that of the firm, it is likely that the public market will not be able to produce the socially optimal amount of good that is characterize by positive externalities.