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Stakeholders in a Business

Stakeholders are groups of people who are involved or affected by a particular business. The main stakeholders of a business are: Shareholders – people who own shares in the company Employees – workers employed by the company Customers – People who buy and use the products the firm makes Suppliers – Firms who sell raw materials to the firm. Local Community – local area affected by business, e.g. local shops who sell sandwiches at lunch time. Local environment – increasingly people are considering the environmental impact of business, not just people. The success or failure of…

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UK Construction Industry

Readers Question: What is the Economic significance of the construction industry to the UK economy, how it impacts, with respect to trend in economy. According to BIS The UK construction industry   contributed 9.2% of the nations GVA (Gross Value Added) in 2007. The UK construction industry consists of over 250 000 firms employing 2.1 million people in a multitude of roles. (I assume that they are including people indirectly involved in industry e.g. supply chains) – It doesn’t mean there are 2.1 million builders…. The construction industry tends to be…

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Bank Bonus Windfall Tax

In 2009, Alistair Darling introduced a 50% tax rate on bank bonuses of more than £25,000. The bonuses would be paid by the banks rather than employees. I spent a lot of last year, saying how much tax revenues had fallen. The credit crunch and recession caused many traditional sources of revenue to dry up. Especially higher rate of income tax, stamp duty on housing purchases e.t.c. Alistair Darling will be feeling somewhat relieved that his windfall tax on bank bonuses has netted the government an extra £2bn in tax revenue…

The Supply of Salt

The Supply of Salt

I woke up this morning to the site of 8 inches of snow. My first thoughts were great! – no school today. (teachers enjoy a day off as much as students). Quite a few county councils have been alarmed at how quickly their stocks of salt for gritting the roads has dwindled. There appears to be a mixture of responses. Some ministers and councils say there is no shortage, others say there is a real problem. Often the issue seems to be local bottle necks with…

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New Server

I was having problems with my web hosting company – the site had periods when it was, offline so yesterday I moved the site to a much better server and is now working well. However, I did lose a few recent comments, so sorry if yours didn’t appear.

Missing Markets

Missing Markets

Readers Question: Have you seen question 16 on AQA’s objective test (multiple choice) paper from last January? – link below. I can’t see the logic in the correct answer being B, as per the mark scheme. Any idea? 16 Which one of the following is associated with a missing market? A.  A monopoly restricting output B. The production of a negative externality A missing market is a type of market failure. A missing market means that there is some obstruction to an efficient free market which would enable a Pareto efficient distribution of…

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Best Ticket Prices for Airlines

A while back I wrote about Ryanair’s ticket pricing policy. It stemmed from a personal experience where I bought a ticket costing ostensibly (£0) but ended up paying over £100. To some extent Ryanair’s ticket pricing reflects an attempt to be allocatively efficient – charging consumers a price equal to the marginal cost of extra services. For example, if you want a meal you have to pay extra. From an economic perspective it is probably more efficient to charge consumers separately for extras. It enables consumers to only pay…