Thinking Like An Economist Essay Example | Topics and Well Written Essays - 1000 words

Thinking Like An Economist - Essay Example Thus, trade barriers will reduce market efficiency. The reason is simple that the comparative advantage that is there in free trade system will be lost and the economies will have to produce each and everything for themselves which will not allow for specialization and the benefits gained from it. Each country has specific resources in form of labor, capital, technology and knowledge (skill) and these resources can be used to produce certain type of goods better than other type of goods. Thus, if each country is able to recognize what it can produce best, the whole world will benefit by producing only what it excels others at producing and exchanging that with nations that produce other things that they excel at thus allowing for larger number of each good produced for the same amount of resources. Other positives of free trade system include greater variety of goods and services, efficient use of the scarce resources and a greater competition for the domestic industry. Therefore, we can say that since having trade barriers causes the economy to produce inside its maximum potential with given amount of resources, that is, the production possibilities frontier, a reduction in trade barriers would mean production moving closer to the production possibilities frontier. ... Q.2) An economy that is producing inside the production possibilities frontier is not realizing its full potential and there is a room for betterment. Such a situation, where the economy does not operate at its full potential arises in two situations: 1) when the economy is unable to employ all its resources of production, for example, labor available but not employed; 2) misallocation of resources. The production possibilities frontier tells us the maximum quantity of two products that can be produced using the current amount of resources. However, if available resources are not fully utilized, the output will be less than the full potential. Using 4 out of 5 machines available due to fuel shortage can be another example of underutilization of available resources. Misallocation of resources happens when an economy starts producing goods that it does not specialize in. This will require the particular nation to use comparatively more resources to produce the same amount of that good than a nation who has comparative advantage in producing that good. Had the nation employed the same resources in producing the other goods that it specializes in, the economy would have been better off by being on or closer to the production possibilities curve. The inefficient use of resources implies that the economy could be producing more without adding a single unit of labor or capital by allocating resources efficiently on the basis of comparative advantage (Tregarthen & Rittenberg, Chapter 2: Confronting Scarcity: Choices in Production, 2009). Q.3) Economic growth refers to the state where the production possibilities curve of an economy expands or shifts outwards. This means that the economy is able to produce more with the given amount of resources than it

Marketing Advertising IMC Plan (Glaceau co.) Research Paper

Marketing Advertising IMC Plan (Glaceau co.) - Research Paper Example Customers are not segregated on the basis of age, sex, color or race. 2) Differentiated Marketing In this sort of marketing strategy the firm tries to target different segments of the market and a different marketing strategy is adopted for each segment of the market. 3) Concentrated Marketing In this strategy the firm chooses one segment of the market and focuses exclusively on that particular segment for its products. The product fulfils the needs of that particular group of customers only. For our product –Glaceau Smart and Vitamin Water; we have decided to apply the concentrated marketing strategy. We are going to target only one section of the customers for our products. The target market which has been selected for our product has the following features – Smart Water Men above 35 years of age Economically successful – main target is upper middle class male; more than $ 60,000 income. Marital status : Married Focused on staying young and healthy – vis its the gym regularly or exercises ,buys health drinks Occupied in sedentary jobs like management, software professionals etc. Vitamin Water Women above 35 years of age Economically successful-main target is the upper middle class Focused on health and staying young-visits the gym regularly or exercises or diets. Occupied in sedentary jobs Smart Water and Vitamin Water can be put under the functional foods category. Functional food may be defined as any type of food product where a new ingredient has-been added in order to make the product healthier. (Glenn R. Gibson)Thus Vitamin Water and Smart Water can easily be defined as functional foods as they add nutrients to water and make it healthier for the body. Functional food industry has been witnessing increased growth in USA these days. According to a survey conducted by Nutrition Business Journal a US citizen spends $50 per month in order to buy functional foods and this amount is increasing each day. It also says that only 8.7 % of the population has never purchased a functional food product – rest 91.3% has at one time or the other bought some or other category of functional foods. (Nutrition Business Journal).This report shows the vast potential for functional food products. So our decision to market Vitamin Water is both timely and fulfils a major consumer demand. However the question still remains as to why have we decided to target people above 35 years of age and why only those who are economically successful. A research by Mintel states that people prefer functional foods due to the following reasons- Reasons for functional food purchase % Make up for unhealthy eating 48 Weight loss 44 Supplement my diet 35 Address health issues 30 Avoid eating empty calories 26 In place of a meal 16 Others 7 Source: (Mintel International Group Ltd.) Vitamin Water and Smart Water can be targeted to all the people who are mentioned above except probably those who eat functional food in place of a meal or for ot her reasons. Vitamin Water and Smart water contains additional supplements which can provide supplement diet , addresses health issues due to lack of vitamins , helps you avoid calories and still intake vitamins and can also assist you in weight loss as you can replace water for your nutrient intake instead of food. Thus our products can be sold better to those who are concerned