Analysis of Price Setting, Poverty and Obamacare
Question : 1 Nike’s charge a price
Considering the Nike’s charging a price of a Air Jordan Basketball Shoes, economically we shall have to discuss about the price determining factors that why and how the Nike’s and under what circumstances is defining the price. The followings are the factors which can influence the Nike’s price determination:
- Cost of Product: This means calculation of all costs including procurement of raw material, manufacturing, distribution, labor, and other miscellaneous expenses. If the rate is not inclusive of break-even there would be trouble. So Nike while fixing the price must have notice the cost.
- Profit Margin: After measuring the cost, the business wants the profit taking as to what extant there should be the earning. So that it may influence the Nike’s strategy while determining price.
- Market Demand: It plays also a vital role as in case of less demand the price shall be lower while in case of high demand the price shall be high. Demand & Supply concept affects the price determination.
- Experience & Market Credibility: This is also a known factor to the price determination because the credibility in the market gives the seller sound position and the buyer trust the goods produced by well experienced and well reputed manufacturer so that they also influence the price determination factor.
- Market Competition: In case of excess of business rivals, there is a strong competition occurs in the market so that the prices are to be determined in a way to attract the buyer maximum.
The all above factors generally influence the price determination therefore we can say that Nike can charge the price as it may has considered the above factors. Its cost & profit margin as well product demand may influence and would demand the price that Nike is going to fix.
Que: 2 Explain in detail what is being done to combat poverty? But also add why poverty is so hard to define and ultimately solve.
The poverty is a state of person in which is becomes unable to meet his necessities from the resources available to him. The necessities include, food to maintain the hunger, education, healthcare facilities, shelter to reside, clothes and the means to live and improve. It is a hard task to define and measure the poverty since past because the growth rate of the population is increasing with a high margin than the growth in resources. All around the world especially the third world countries are facing this problem more. The United Nations has been planning and working to reduce the poverty in collaboration with IMF, World Bank and other financial institutions. A statistical figure printed by “One Day’s Wage” show that the 2.4 billion people around the world have been living on less than $ 2/day and approximately 1.2 billion are living on less than $ 1.24. (Extreme Global Poverty). About 3.4 million people die every day because of water related disease and approximately 768 million people have no access to clean water. The number of dead due to HIV/AIDS is 11,700 while 61 million children having the age of primary education are not attending the schools. In every minute at least one women is being die due to pregnancy or labor complications. 29.8 million People are enslaved. (The World Bank Survey and One’s Campaign). Strategy of One day’s Wage is to get the donation of one day from the individuals at global levels to combat the poverty and provide the aid to the people.
However the strategy is also being maintained in documented form by World Bank, IMF and through regional financial institutes like Asian Development Bank. This documented framework is formulated to draw the policies and design of different programs to elevate poverty in low-income countries. The institutions have required the Poverty Reduction Strategy Paper (PRSP) conditionally from the governments for debt relief to the enhanced Heavily Indebted Poor Countries.
Further guidelines set by the United Nations to combat poverty are including:
- The economic and social policies to form equity at the core of Poverty Reduction Strategy Paper.
- Encouragement of adoption of the plans which are contributing to increase the equal distribution of income, wealth, resources, and services.
- Promotion of the human rights especially the rights of the poor people.
- Elimination of gender sensitivity from the working environment. Such types of biases are exists in the third world countries which affect the macroeconomics and social policies.
- Globalizing and helping the international policies and regulations that are helpful for the poor people.
- Promotion of peace around the world by eradicating the confliction among people. A peaceful society promotes the healthy economics.
Que: 3. Playing the economist, analyzing in detail the Affordable Care Act.
The Patient Protection and Affordable Care Act which is commonly known as Affordable Care Act was came into force in March 23, 2010 after getting approval of President Obama. It has been working in cooperation with Health Care and Education Reconciliation Act. It is known as the “Patient’s bill of right” enabled the American people to have more knowledge about the stability and flexibility about their health. It was primarily constituted with a goal of reducing the health expenses of the individual and providing him/her the best Medicaid and Medicare. The mechanism of this act is to provide subsidies & insurance exchanges. It covers the followings:
- There is a prohibition to deny providing the benefits to the children under 19 due to pre-existing condition. The health plans of these kinds are held unlimited.
- The adult of under age 26 are held coverable in their parent’s health plan. They can be eligible to that.
- Eligibility to withdrawals the insurance coverage by the arbitrary is finished. The insurer is limited and no more cancels the coverage because of honest mistake.
- It provides the guarantee of the right to appeal and provides the right to ask that why the claim is denied.
- There is a ban on lifetime for all new health insurance plans.
- There should be know-how to the insurance companies about the public justification of the reasoning of the rates.
- The premium dollars must be spent on the health care.
It however covers and cares in the way of care at no cost principle as through this one is enabled for recommended preventive health services. In other words there would be no copayments. It enables the individual to plan and choose the primary care doctor. As well as through this act one can get the emergency care at the hospital which is even outside the health plan network.
Despite criticism, the Act is called as a positively terrific health care system in United States. There are comprehensive policies and reforms made in health care sector which have made the insurance companies more accountable. It has also minimized the cost which is the best as guarantee for more health choices and through this the American has got the best and quality health facilities. It is not a close end for being a universal health care system although is ensuring the American health insurance system but is criticized although especially in the Western World.
Que 4: Minimum Wage Politician’s Dream:
Minimum wage means the lowest wage rate or hourly-rate or remuneration that is paid to the labor against the services provided. There are certain laws that have been enforced to protect the labor from the low level of wages or un-natural wages and provide a minimum barrier to save them from going below the income level and poverty. There are in favor and against this theory the people. The supporter say that the more wage shall enable the labor to work more efficiently which would increase the production, profit, reducing the poverty & inequalities, flourishing the business and the economy. The opponents of the theory say it increases poverty and increases unemployment so that it is damaging to the business.
George Slighter writes that the minimum wage rate is not helpful in reducing the poverty because of fall in employment. The politician’s issue on minimum wage rate is that through paying the more the living standard of the labor shall increasing that may divert their attentions and priorities that can affect the labor market. Economically the wage rate if high, shall affect the small business more because the highly paid labor will increase the cost of the business so that to make the profit margin the business shall make the prices high which can create inflation.