Macroeconomics (Economics in general) Essay Example | Topics and Well Written Essays - 7500 words

Macroeconomics (Economics in general) - Essay Example Various terms and assumptions are taken in economics in order to understand the behavior of individuals, society as a whole and the patterns of production and spending. Scarcity is one such concept used in economics to define and explain behavior and relationship among the key variables, that is, spending and production. Scarcity refers to scarcity of resources meaning that the resources available for ay economy are scarce and thus should be used efficiently in order to produce maximum outputs. Economic goods are goods where the consumer has to pay some price to acquire them and/or to consume them. On the other hand, the non-economic goods or simply the free goods have no opportunity cost. The consumer does not have to let go anything in order to use these goods. Goods involving a financial cost or any other type of cost are classified as economic goods. Economic goods can be anything that is purchased for consumption at some price. The price is determined by the interaction of supply and demand for that particular good or service. All goods that are sold for some price are economic goods in economic terms. Non-economic goods are those that are available for free. They can be in the form of air, government provided goods and services. As they are not costing anything, they have no opportunity cost either. The acquirer does not have to pay anything for its use. ... They can be in the form of air, government provided goods and services. As they are not costing anything, they have no opportunity cost either. The acquirer does not have to pay anything for its use. Similarly, they are not scarce in nature. Economics and scarcity are related as economics study the individual's behavior of making choices between available goods. The decision is primarily based on the opportunity cost, marginal utility and the scarcity of good and/or service. Economics, thus, has close relation with the concept of scarcity. Economics is the study of the decisions that households and firms make in any economy and their impact. Market Mechanism 2. Describe the market mechanism of supply and demand and describe how they operate in competitive markets to produce equilibrium. Market is a place where the buyers and the suppliers interact. The buyers are the consumers and/or customers of any sort of good or service. The suppliers are the providers of the required good or service. The market operates because of the interaction of buyers and suppliers. The buyers express their willingness to buy a particular good or service. The suppliers at the same time provide the required good or service. The degree of demand ad the level of available supply of that good or service determines the market price for that product. The interaction of supply and demand curve in economics determines the price at which the good or service will sell. The demand curve is a downward sloping curve showing a negative relationship between the quantity and price. As the price increases, the quantity demanded will decrease as the buyers have to pay more for that particular good or service and vice versa. The supply curve is positively related to price. As

GE-Two -Decade Transformation Case Study Example | Topics and Well Written Essays - 1000 words

GE-Two -Decade Transformation - Case Study Example However, the company has in the past encountered severe challenges before attaining its current global position. In the late 20th century, the company encountered challenges which threatened its operations and stability. This paper will examine GE, discussing strategies employed by the company’s management in the wake of severe challenges. Welch’s Challenge in 1981 In the year 1981, when Welch took over management of GE from Jones, the company experienced numerous of hardships that threatened its existence. In 1981, the US economy suffered serious recession, which meant that banks lent money at unbelievably high interest rates. The high interest rates were especially disadvantageous to companies such as GE that required borrowed capital to sustain its business. In addition, the US dollar was quite strong at the time making GE’s international business operations quite unprofitable and unmanageable. The tough economic times experienced in the US also meant that GE had to lay off some of its employees and reduce hourly positions (O’Boyle, 1999). This put Welch and the company in a tough position, having to balance the company’s operations among the few remaining employees. Moreover, GE faced serious competition, particularly from Japanese companies. Global competitors had significant competitive advantages over GE as their nations of domicile were free of economic crisis like the US. However, despite the immense challenges, Welch was able to take charge of the company rather effectively through the adoption of numerous strategies. Welch first adopted the number one or two, fix, sell or close strategy that required all GE’s business units to be leaders in their respective industries or face closure. This strategy was effective in eliminating unproductive units of GE and strengthening the remaining units, which became leaders in their industries. The closure and sale of unproductive units provided necessary capital for produ ctive units to strengthen their operations. Welch’s strategy was effectual as it freed capital for strategic investments, which enhanced the company’s bottom line performance (Slater, 1998). Welch’s Objectives and Initiatives When Welch became the CEO of GE in 1981, he established the new company objectives to leverage GE’s performance within the company’s diverse business portfolio. In order to do this, Welch required all company employees to become â€Å"better than the best† in their positions and responsibilities (O’Boyle, 1999). In order to ensure the company achieved Welch’s objectives, the CEO initiated a series of strategies between the late 1980s and early 1990s. These initiatives centered on the spectrum of achieving organizational change through restructuring its staffing, layering and size. Through the adoption of the initiatives and strategic change, GE was able to achieve substantial competitive advantage within i ts markets. Welch’s initiatives were able to revitalize the company’s operations, bolster its image, and achieve massive profit margins. Welch streamlined the company’s staffing, especially in the company’s planning unit to ensure GE was lean and agile. The logic behind Welch’s de-staffing initiative centered on the notion that company or unit productivity does not rely on the number of staff in the unit, but rather the value each staff adds to the unit or company. Welch sought to instill the culture of strength in value addition