Definition of automation Automation refers to the process of automatically producing goods through the use of robots, control systems and other appliances with a minimal direct human operation. Within manufacturing industries, automation has led to increased labour productivity as fewer workers are needed to produce the same number of manufactured goods. A perceived downside of …
Moral Hazard is the concept that individuals have incentives to alter their behaviour when their risk or bad-decision making is borne by others. Examples of moral hazard include: Comprehensive insurance policies decrease the incentive to take care of your possessions Governments promising to bail out loss-making banks can encourage banks to take greater risks. Conditions …
A look at some of the advantages and disadvantages of hosting a major sporting event. Hosting a major sporting event can give many economic, social and cultural benefits. However, the costs of hosting the event can also be quite high. What determines whether the benefits outweigh the costs? Advantages of hosting a major event 1. …
Profit is the net difference between revenue and costs. The main way that firms use profit is to: Pay dividends to shareholders. Invest in increasing capacity or expanding into new markets. Invest in research and development. Pay for new advertising and marketing strategies. Save profit as part of cash reserves, to use as savings. Tax. …
Definition Trade liberalisation involves removing barriers to trade between different countries and encouraging free trade. Trade liberalisation involves: Reducing tariffs Reducing/eliminating quotas Reducing non-tariff barriers. Non-tariff barriers are factors that make trade difficult and expensive. For example, having specific regulations on making goods can give an unfair advantage to domestic producers. Harmonising environmental and safety …
With any new technology – especially electronic goods (TVs, computers, cameras), we tend to see a sharp fall in price over time. Initially, the new technology is very expensive, and a high percentage of disposable income, but over time, prices tend to fall considerably. There are a number of reasons to explain this fall in …
A look at the economics reasons for high youth unemployment (16-25) in many western economies. In the UK, youth unemployment has averaged higher than the main unemployment rate. This is is a similar situation to the US and European economies. The reasons for youth unemployment include Lack of qualifications. Young people without any skills are …
Resource scarcity is defined as a situation where demand for a natural resource is exceeding the supply – leading to a decline in available resources. When we talk about scarce resources, we usually imply that current use is unsustainable in the long-term. Scarcity can involve non-renewable resources, such as oil, precious metals and helium. It …