Economics

President Hoover advocated for volunteerism where there was cooperation between the public and private sectors so as to help in economic recovery and achieve long-term growth. He tried to reduce government intervention as much as possible so as to promote self-reliance and individuality. Hoover did all this in the hope that the private sector would recover from the great depression on its own and hence the need for limited government intervention. As part of his belief in volunteerism, Hoover asked the major banks to form the National Credit Corporation that was meant to prevent the small banks from collapsing by providing loans to them. But this move did not help much as the major banks still remained reluctant to provide loans and would require collateral from the small banks.

Labor Policies
The labor policies that were adopted by Hoover to address the economic problems caused by the great depression included job sharing and wage control. The reason why he came up with these policies was that he believed that the great depression was a result of inequality in income and wealth distribution which had resulted to adverse consequences like the stock market crash. To achieve recovery from the great depression through the labor policies, he met the labor union leaders together with the industrialist and they negotiated a deal. The deal was that the labor unions would not go on strike and the industrialist agreed that they would not reduce the wages so that the country would recover from the great depression. As a result of this agreement, Davis-Bacon Act was signed into law by President Hoover. This Act required all the local governments to pay the wages set by labor unions for the public works projects. He also signed the Norris-LaGuard Act that required the courts not to issue injunctions against labor union strikes. However, this labor policies initiated by Hoover did not help in recovery from great depression and instead made the situation worse as the rate of unemployment was increasing reaching 16.   The rate of unemployment was growing because the labor policies kept the wages artificially high and hence limited employment opportunities.

Policies to Reduce Unemployment Rate
To address the growth in unemployment that was caused by great depression, the Mexican Repatriation program was authorized by President Hoover. The program involved a forced migration of both Mexicans and American Mexicans to Mexico so as to remove the people who were seen to be taking away American jobs and hence combat the rampant unemployment that was witnessed as a result of the great depression. This move led to migration of approximately 500,000 Mexicans and American Mexicans to Mexico.  

Policies to Raise Tariffs
In 1930 the Smoot-Hawley Tariff Act was approved by the Congress and in the same year Hoover signed the Act into law so as to help in raising tariffs on imported goods. Hoover raised the tariff on imported goods so as to increase their cost and hence encourage the purchase of American products. Raising tariffs was also aimed at protecting the local farmers and also raise the revenue for the federal government during the hard economic times of the great depression. However, this move made by Hoover to increase tariffs on imported goods did not help much toward economic recovery, because other nations in retaliation also increased tariffs on American goods and hence reduced international trade.

1. Describe some of the tradeoffs for
a. A family deciding to buy a new car
When a family is considering buying a new car, the tradeoffs can be purchase of a new house one can say that the opportunity cost is seriously high but that one is not likely to achieve the same results from buying a house. However, one will still purchase anew car as opposes to a house because of the lower end of the opportunity cost range. A house would provide shelter to the family at all times and at times it will appreciate in value. Meaning that it has a high opportunity cost it has a high benefit as opposed to the car which depreciates as the time goes on. If this was tradeoffs in this situation and the family decides to buy a new car then the opportunity cost will be a family having to do without a house.

b. A politician deciding whether to spend on national parks
One of the possible tradeoffs for a politician spending money on national parks could possibly be using the money on further funding in education being that the opportunity cost for this though could be that half of the national park would be cleared for property development but the trade off being that all students have textbooks to study from. If this was a trade off in this situation and the money went to the national parks then the opportunity cost would be that of the students having their texts to study from.

C. A professor deciding whether to prepare for a lecture.
The tradeoffs for a professor deciding to prepare a lecture are possibly the use last years materials. Such action of sacrificing the preparation of a lecture can be termed as the opportunity cost. Therefore the opportunity cost in this case is the student having recycled materials without current development in their field. This kind of children if they go to the job market they will find it difficult.

2. Classify each of the following statements as either positive or normative,
a) Society faces a short-term trade-off between inflation  unemployment. (Positive)
This statement is true because when there is increase in inflation unemployment rate increases. This is because there will be an increase in the level of the price in the market thus creating unemployment when there is wages increase unemployment increases. At low levels of unemployment wages could start to increase creating tradeoffs between the rate on unemployment and the rate of inflation, it means that there is a conflict between giving full employment and controlling inflation.  The tradeoffs relationship between unemployment and inflation influences decision making in the society (Mankiw, 2008, P, 236).

b. A reduction in the rate of growth of money will reduce the rate of inflation. (Positive)
The statement saying that a reduction in the rate in money growth will reduce the rate of inflation is a positive statement. In that it is a true statement, that with the increase of money printed the rate of inflation will rise and prices will go up as the value of the dollar will fall and vice-versa, if there is less money printed then the value of the dollar will increase and lower inflation bringing prices down.

c. The reserve bank should reduce the rate of growth of money. (Normative)
This statement is true because it is an opinion and it is not necessarily necessary for the reserve bank to reduce the rate of growth of money. The reduction in the money supply in the market it is a preservative of a reserve bank therefore, it is up to the reserve bank to make decision whether to reduce the money supply to influence monetary factors in the market (Mankiw, 2008, p 236).

d. Society ought to require more people on social security benefits to look for jobs.  (Normative)
This statement is true the society requires more people to join source of security benefit in order to look for jobs. However, this is merely opinion which will not influence the ability of one looking for a job. But there is no economic factor that will influence one who is a member of social security benefit to get a job as compared to the one who is not a member.

e. Lower tax rates encourage more work and more saving.  (Positive)
This statement is true because it says a lower tax rate encourages people to work and save. If the tax is lower people will have desire to work and a desire to save because it will look worthwhile to work overtime if the tax is low well again if the tax is heavy and the pay is low one may be discouraged from working thus affecting savings.

Turkey, which is also known as the Republic Of Turkey is a developing country. Developing countries according to Kiggundu, (2002), are countries or nations which are in the midst of low intensity of material health being. The World Bank, according to their data and statistics, 2008 country classification, regards as a countries as developing if their revenue or income per capita is very low or middle. During its most up to date categorization, financial systems are separated using Gross National Income per capita of 2008. In this, nations that held a GNI per capita of lower than US11,905 were well thought-out to be developing. From this, Turkey was classified as a developing country. The trade and industry history of the Republic of Turkey encompass divergent segment which can be recorded from World War I en route for the closing stages of World War II. Clough and Cole (1952), argues that one of the distinctive feature is the administration and management policies which consequenced in the financial system enlargement into a multifaceted complex economic structure generating a wide variety of farming, manufacturing and engineering, and service yield for both household and sale to other countries markets, and the economy developed at a regular yearly speed of six percent. The Republic of Turkey profited monetary from the conflict between Iran-Iraq. Both of these nations turned out to be most important business associates of Turkey, with Turkey furnishing them with weapons. Iran relied a great deal on Turkey for overseas sale itinerary for its rudimentary oil.

In 1991, Clough and Cole (1952) further states, the Republic of Turkeys economy was severely battered by the Persian Gulf War. The UN restriction and stoppage on Iraq obligated the termination of oil sales to other countries by means of the eyhan pipelines, ensuing into the loss of the channel fees. In accumulation, the financial system may possibly have misplaced or mislaid as much as US3 billion in operation in the company of Iraq. Some countries like the Saudi Arabia, Kuwait, and the United Arab Emirates (UAE) moved to pay compensation to Turkey for these fatalities, and by 1992, the financial system again commenced to develop rapidly.

The Turkish economy again was plunged into crisis in 1994. The central administration shift during 1992 and 1993 towards awarding large remuneration boost to public servants as well as to augment reassignment to state venture inflamed the state-owned lending obligation to a documented 17 percent of GDP in 1993. This elevated administration expenditure piercingly boost domestic demands rate of growth to 6.4 percent in 1992 and 7.6 percent in 1993. In turn, price increases tariff shot up in the midst of the yearly rate and hit the highest point at 73 percent by mid-1993. The consequential increase in the factual swap over rate transformed into greater than before imports and unhurried the spreading out of sales to other states and nations. The business discrepancy ascended in 1993 to US14 billion, at the same time as the contemporary financial credit shortage reached US6.3 billion, or 5.3 percent of GDP.

The Republic of Turkeys remarkable monetary act in the 1980s attracted towering grades from Wall Streets credit-rating bureau. Between 1992 along with 1993, the administration made use of these rankings to exert a pull on finances to wrap its financial statement discrepancy and insufficiencies. International acquaintance subjects above this interlude amounted to US7.5 billion. The resources and money surge facilitated the preservation of the overestimated trade rate. In a bazaar financial system, an elevated intensity of regime had a loan which was supposed to interpret into superior familial interest tax and yet perhaps mob out private-sector lenders, by this means in the long run sluggishing the economic development. After making a good conclusion on straightforward revenue opening for the duration of this stage, money-making depository rented at humanity interest rates moreover gave Turkey the loan at elevated home rates devoid of trepidation of a decrease in value currency. As a consequence, Turkeys overseas short-term debits ascended sharply. Peripheral and domestic self-assurance in the administrations aptitude or capability to administer the approaching steadiness of expenditure disaster declined, compounding financial and monetary complicatedness.

The administration had to intercede by disposing off its foreign-currency treasury to hold back the Turkish lira from taking a rain check. As a consequence, assets cut down from US6.3 billion by the conclusion of 1993 down to US3 billion through the finish of March 1994.There was success in the management in engendering a little excess in the financial plan throughout the subsequent part of 1994, chiefly as a product of elevated levies, after succeeding a shortage of 17 percent of GDP during the opening quarter. The hold back in administration expenditure, a prickly failure in commerce assurance, along with the consequential turn down in profitable activity condensed duty revenues, conversely. The economic predicament resulted in a turn down in actual GDP of 5 out of a hundred in 1994 following the financial system had developed rapidly within 1992 and 1993. Bona fide earnings moreover went down in 1994. Standard ostensible pay increases of 65 out of a hundred were almost 20 percent lower than the rate of purchaser cost price increases. Today, the Republic of Turkey boasts of a very well developed or upward slope in terms of economy recovery. Like many other developing countries, the Republic of Turkey faced a lot of challenges in her way to the realization of economic recovery. Among the challenges she faced, as Peter Goff (2003), puts across in factors affecting economic growth are insufficient savings and investments, lack of government financed investment, inadequate macroeconomic stability, unstable trade liberalization, poor capital mobility and exchange rate policy.
Corruption was another major set back in the realization of economic recovery and growth. Corruption characterizes an existent risk to the steadiness and healthy being of people and holds back financial and community progress of a nation. Dishonest practices jeopardize safety of civilization, weaken the standards of social equality and universal moral principles and make vulnerable sustainable and opinionated expansion, in meticulous as an insufficient state and global response show the way to impunity. Pointless to stress that administration has the most important, prime and chiefly conscientiousness and accountability role in fighting and thwarting or averting dishonesty, bribery as well as corrupt practices. On the other hand, the steady and stable meeting of labors at the nationwide, local, and worldwide stages is vital and indispensable. One of the connected prepared features is the cover up of profits of crime to screen and protect from fairness. The pursuit for resources recruitment of an assortment of monetary systems was opportunely conjugated to the cover up requirements of the scandalous ensuing in enormous resources hemorrhage and loss from this Republic (Hafiez, 2004). Resultantly, this paved way for the malfunction to pick up and pull through stolen resources and properties and expand and enlarge effectual, useful and successful avoidance and prevention against constant and unremitting conveyance and relocation of illegitimate and dishonesty finances and resources to other jurisdictions.

Other factors includes elevated and bloated administration and management budget discrepancy, arrears and discrepancies, high take-home pay costs, soaring level of farming subsidies, inadequate technological competence and political financial system, wealth and market structures cause the financial and monetary stagnation in developing states. The controlling governmental organizations thwart the deployment and proper usage of the flawlessly high-quality and available capital and wealth. The service of resources and labor income is not enough and first and foremost serves to shelter political pressure and individual private gains. Worldwide structural modification and regulation agenda, curriculum and proposals and suggestions usually intend and endeavor their hard work at false objective and, for that reason, only make unsuccessful, pointless and useless efforts to hold back, confine and limit the trade and industry, financial and monetary dysfunction.

Economic growth can also be hindered by anomalies in terms of production, (Bizled 2010). Factors of production exist in four ways land, labour, capital and enterprise. Financial, monetary and money making expansion and development depend on the excellence and accessibility of these factors. If some of the features of production experience a lack of worth or accessibility, then economic development and expansion will not be great as its likely prospective. Other hindrances present can get in the way of nations aptitude to nurture and develop their financial system. They possibly will be not capable to gain way in to overseas markets, due to the buy and sell policies of other nations. For them to shield and defend their own household producers, many nations obstruct the imports of commodities or services from additional parts of the globe.

Is the retail grocery market in Australia a perfectly competitive one Outline the major reasons why it might not be perfectly competitive. What are the likely implications of this for consumers
Since the early 1990s the Australian grocery industry is growing steadily. As we all know, grocery items are indispensable in our daily life. The fluctuations in the grocery industry have the potential to influence the overall economy, because the cost of living is directly linked to the price of grocery items. Thus competitiveness of the grocery industry should be considered seriously.

Grocery wholesaling and grocery retailing comes under grocery industry. Grocery wholesaling covers not only the acquisition and supply of products to grocery retailers but also the facilitating services to retailers. This includes assuring promotional support of manufacturers, and provision of, or access to, financial and accounting services. Likewise, grocery retailers supply a variety of goods ranging from fresh farm produce to dry goods to non-grocery items. Besides this, the retailer supplies a range of associated services including location, parking and in-store amenities such as lighting, checkout facilities and customer assistance. The recent development of new supermarket forms in Australia (Woolworths Metro and Coles Express) provides important insights into the changing geographical forms of grocery retailing and consumption in Australia.

Developments in Australian grocery retailing are directly linked with the developments in the United States and Europe. Computerization brought in a plethora of technological changes both in Grocery wholesaling and in Grocery retailing. At the retail level, the advancement in technology facilitated centralized warehousing by the vertically integrated chains. This facilitates reduced stock levels, fewer visits per store, less in-store storage requirements, fewer incidents of stores running out of particular products, and less product spoilage.

At the retail level, computerization introduced bar-coding and checkout scanning. This helped to improve the efficiency of store operation. Its real significance has been the detailed marketing information gathered. This limited the role of the retailer as a gatekeeper. Another significant change happened is in the format of the store. In the latter half of the 1990s, major supermarket chains introduced variations in their standard and large store formats, to compete more directly with the convenience stores and to respond to the changing consumer requirements in city and suburban locations.

At the retail level, small stores tried to justify their higher average price structure by claiming that they offered a higher level of customer service, and extended trading hours meant that they have a captive customer base. Some independent retailers established large store formats and compete directly with the major chains. Whereas, others introduced special offerings such as gourmets, etc. In general, the independents failed to adapt.

The Australian grocery retail market is not perfectly competitive. There emerged a number of fabulous opportunities in the food retail and allied sector. Now-a-days, most of the retailers focus their attention in the food retail sector.

At present the number of stores owned by the various supermarket industry participants is Woolworths around 800 (includes Safeways)
Coles around 750
Food works more than 700 (includes convenience outlets)
IGA around 1200 (includes convenience outlets)
Aldi more than 200
Spar around 100
Franklins more than 80
Supabarn 5
Costco 1. (Competition barriers to major supermarkets being torn down, 2009, para.15).

Although Coles and Woolworths have a major share of the packaged grocery market, other competitors are entering the market and expanding the number of stores they own. This means that there is only limited barrier to enter in the market.

From the consumers perspective, competition is good, because Competition is by far the most effective means of exerting downward pressure on grocery prices. Yet effective barriers have impeded entry by competitors into local and national grocery markets. These barriers to entry have stifled competition to the detriment of consumers. (Competition barriers to major supermarkets being torn down, 2009, para.22).

Limited shelf space is much less of a constraint for the grocery retailer than it is for individual manufacturers. Within the limits of this constraint, the more products offered for sale through a grocery outlet, the lower the costs associated with supplying any one product group. Thus, grocery retailers, particularly the supermarket chains, increasingly have expanded their product range to include products traditionally sold by specialty retailers (fresh fruit, bread, meat, fish, etc.) and other items such as paper products, newspapers and magazines, and plants. Some supermarkets have added even services, such as in-store banking facilities.

2. Explain the concept of workable competition. Why might it be relevant in this market What indicators could be used to assess whether workable competition exists in the retail grocery market Justify your answer

Workable competition is a market situation, where a high degree of monopolistic power exists, but there is sufficient competition between near monopolies which protects the customers from monopolistic abuse.

The idea of workable competition was first introduced by economist J. M. Clark in 1940. In his opinion the goal of the policy should be to make competition workable. He proposed criteria for judging whether competition was workable, and this provoked a series of revisions and counter- proposals. The criteria put forward are wide ranging e.g. the number of firms should be at least large as economies of scale permit, promotional expenses should not be excessive and advertising should be informative. No consensus has arisen over what might constitute workable competition, but all bodies which administer competition policy, in effect, employ certain version of it.

Workable competition can be defined as
Workable competition is a notion which arises from the observation that since perfect competition does not exist theories based on it do not provide reliable guides for competition policy. (Workable competition, 2002, para.1). Workable competition is indispensable in the Australian grocery market because, there are a number of companies operating in this sector. In order to protect the interests of customers and to maintain price stability in the market, workable competition is essential. Workable competition helps to maintain the overall control of the market. It helps to prevent the unexpected price hikes and falls.

The indicators used to assess whether workable competition exists in the grocery industry is listed below
No discrimination in price
Stability in Price
Whether Customers are aware that they have a choice.
Whether Customers know how to exercise choice.
Whether choice are made available to them.
 Workable competition is relevant in the market, because
Workable competition is a market structure that results in efficient production without achieving the strict standards of perfect competition. The concept of workable competition is often applied by governmental authorities in guiding regulatory policy for oligopolies in energy and communications. (Workable competition definition  business, 2009, para.1).

3. The major retail grocery chains are vertically integrated. Explain the meaning of this term and the implications for any competitors in the industry. Suggest a strategy for successful entry of a new competitor. Draw up a payoff matrix to illustrate your strategy.

Vertical integration is a process in which several steps in the production andor distribution of a product or service are controlled by a single company or entity, in order to improve the companys or entitys power in the marketplace. It is the integration along a Supply Chain. If a retailer starts manufacturing the product it sells, it is increasing its level of vertical integration. Vertical integration can be defined as the number of activities along the value chain that are performed within a single company. All the major retail grocery chains are vertically integrated. Here the various stagessteps in the process of distributing the products to the customers are controlled by a single company or organization. The degree to which a firm owns its upstream suppliers and downstream buyers is referred to as vertical integration. (Strategic management Vertical integration, 2007, para.1).

The main objective of vertical integration in retail grocery chain is to provide better services to the customer. It helps to improve the overall efficiency and effectiveness from the production of goodsservices to the delivery of goodsservices.

Vertical integration provides a bundle of benefits to the company, such as
Reduction in transportation cost.
Improves supply chain coordination.
Better opportunity to differentiate the product.
Captures upstream and downstream profit margins.

The advantages of vertical integration include the ability to secure supplies and future orders. The companies in the grocery retail must design a vertically integrated retail chain which provides greater attention on the timely delivery of goods to the customers. It must be designed in such a way that it would help to differentiate the companys products among the competitors. In addition to this, the firm must offer the after sale service facilities to the customer. Here the entire activities from the production to the delivery of goodsservice are controlled by a single company. So, a system should be designed in which there is no loophole for failure.

Vertical integration strategies aim to increase the firms coverage of the value added chain of an industry by extending backward into the production of components or raw materials or forward into wholesaling and distribution toward the end-user or customer.

The vertical integration strategy of a company is applicable only if it is able to strengthen the companys competitive position. One of the criticisms against vertical integration is that it reduces the companys manufacturing flexibilities, lengthening design time and ability to introduce new products. So the company must design a strategy which provides manufacturing flexibility and shorten the design time and ability to introduce new products. Besides these, while designing the strategy, the firm must consider that it require minimal transportation cost and creates increase in marketing power. Vertical integration is feasible only if it generates a bundle of benefits with minimal cost. It is always referred as a strategy with low cost. Vertical integration itself was viewed theoretically as being costless. That is, no internal organization costs were recognized, but only any costs realized through distortions in market prices, quantities, or the factor proportions used to produce output from a neoclassical production function. (Joskow, 2008, p.319). There are two types of vertical integration forward integration and backward integration. Forward integration is the HYPERLINK httpwww.investorwords.com1838expansion.htmlexpansion of a business HYPERLINK httpwww.investorwords.com3874product.htmlproducts andor HYPERLINK httpwww.investorwords.com6664service.htmlservices to related areas in HYPERLINK httpwww.investorwords.com3495order.htmlorder to more directly fulfill the HYPERLINK httpwww.investorwords.com5877customer.htmlcustomers HYPERLINK httpwww.businessdictionary.comdefinitionneed.htmlneeds. Backward integration is a form of vertical integration that involves the acquisition of suppliers in order to reduce dependency.

Payoff Matrix
A payoff matrix is a decision analysis tool that summarizes pros and cons of a decision in a tabular form. It lists payoffs (negative or positive returns) associated with all possible combinations of alternative actions (under the decision makers control) and external conditions (not under decision makers control). Also called payoff table. (What is the payoff matrix 2010, para.1).

The matrix drawn below is a normal-form representation of a game in which players move simultaneously and receive the payoffs as specified for the combinations of actions played. For example, if player 1 plays top and player 2 plays left, player 1 receives 4 and player 2 receives 3. In each cell, the first number represents the payoff to the row player (in this case player 1), and the second number represents the payoff to the column player (in this case player 2).

Mercantilism is an economic nationalism for the purpose of building a powerful wealth and nation while Adam Smith created a different notion for this concept and calls it as a mercantile system of political economy. This type according to Smith distinguish the system to enrich the country by limiting imports and encouraging exports which was dominated by Western European countries from the sixteenth up to the late eighteenth century. Although, mercantilism type of system was to create a favorable balance of deal that could bring silver and gold into the nation and maintain domestic employment. This provides the basic interest of producers and merchants whose actions were protected by the state. Thus, the most important intention for mercantilism according to Smith was to consolidate the regional power of feudal era especially in the sixteenth century to increase the growth of industry relative to agriculture, increase the volume of trade and increase the use of metallic system (silver and gold) to barter transactions.

Adam Smith Views on Mercantilism
Adam Smith is one of the first economists who showed that mercantilism is a bad idea. He explained that the real wealth of nation is the ability to provide more goods and services. He further reiterates that the government should only do things that the private sectors cannot do such as judicial and defense system. He further stress out that people would only do their best to meet other people needs because of self interest regulated by competition. Thus, he is the first one who advocated free trade economy that could maximize nations wealth. Moreover, he created the concept of comparative and absolute advantage and how productivity is increased by the division of labor. Free market economy of individuals is still the key decisions to improve wealth of a nation. For example, in a free market economy, the rising and falling of the demand would causes prices and profits to rise in the case of the former concept and decline on the case of the latter one. Thus, the result would be the shifting of resources to the former from the latter.

Principles of Mercantilism
The principles of mercantilism lie upon on its supply of capital and global volume of international trade and its economic assets which are represented in terms of bullion (silver, gold and trade value) detained by the nation. Also, it further assumes that the monetary assets or capital together with wealth are similar. However, during the period of mercantilism, the conflict between nation-states is more frequent and more extensive. The armies and the navies were no longer momentary forces but rather full time professional forces. Also, the government primary objective was to command sufficient quantity of bullion to support military attacks for their aid of territorial expansion. Thus, most of the mercantilist policies were the result of the relationship between the government and their mercantile classes. Instead of paying levies and taxes to support the armies of one nation, the government passes policies that would further protect their business interest against foreign competition.

Conclusion
Today the mercantilist principles have passed and modern economist accept the concept that Adam Smith. The insight of the free trade act that lead to international specialization of labor to obtain greater economic well-being for most nations. Although some mercantilist policies continue to exist in the modern times like in mid-1970 when global economic recession occur because of oil crisis leading to some economist to label the attitude of neomercantilism (surge of protectionist sentiment). However, the establishments of World Trade Organization (1994) enforced the member of this group to agree on International Trade Act. On the other hand, the principles of Adam Smith remain to be the most famous books of economics of all time. Powerful movements that led to the birth of Modern Capitalism were basically came from the idea of Smith and deserves to be regarded as one of the most influential person of the modern times.

Article Critique
The article Do Immigrants Cause Crime was written by Milo Bianchi, Paolo Bounanno and Paolo Pinotti in the year 2008. These authors examines whether empirical relationship that may exists between crime and immigration in Italian provinces for a period of 13 years between the year 1990 and 2003. This article has drawn data from administrative data in assessing and correlating the population size of immigrants and the property crime incidents with the crime rate in these provinces. Instrumental variables are used based on migration of individuals to European countries with an aim of identifying casual impact of immigrant populations exogenous change casual impact in Italy. After critical analysis of the information and data estimates obtained and a review of various theories of crime, the article comes to a conclusion that immigration only leads to an increase in incident of robberies only while all other types of crimes are unaffected. The authors suggests that because robberies account for a minor percentage of criminal offenses in these areas, the overall effect of immigration on crime is close to zero refuting the claim that immigration leads to an increase in crime.

Summary
The authors introduces the article by first acknowledging that the prevalence of immigration practices around the world has increased but laments that no extensive studies have been conducted on impact of immigration on crime rates. According to the article, much of the earlier studies concentrate on the impact of immigration on natives but not on crime. The article draws information from various sources including books and earlier studies in its introduction (Butcher  Piehl, 1998). The authors cites to the international social security survey programs national identity survey of the years 1995 and 2003, which had found out that OECD countries believed that immigration was leading to increased crime rate. This forms the research objective and hypothesis of the article. The article suggests that most of the immigration policies that have been formulated are based on this perception. The article also cites the standard economic theories of crime that arguably states that there could be a correlation between crime and immigration (Borjas  National Bureau of Economic Research, 1998, Ehrlich, 1973). This theory argues that given the hard and difficult living standards of the immigrants, they have higher propensities of committing crime as compared to the natives.

The article is based in Italian provinces and the authors use information obtained from the police administrative records to criminal offenses pattern. According to the information analysis, the pressure of immigration in Italy is found to have increased emanating from political instability in neighboring countries (Zimmermann  Bauer, 2002). An econometric analysis using OLS estimation is used by the article whereby criminal activity determinants are controlled. According to the results of this analysis, 1 increase in immigration leads to 0.1 increase in criminal offenses with property crime thefts and robberies taking prevalence. The authors Milo, Paolo and Paolo also analyze information from judicial law to get accurate information on crime prevalence amongst immigrants. Findings of this article suggest that although immigration has increased tremendously over the period of the study, crime as a result of immigration is only 0.99 which is less than 1 of total crimes committed during this period (Card, 2001). However, under reporting as well as heterogeneous law enforcement is cited by authors as a major possible cause of crime data errors. The article also finds no correlation between immigration and drug related crimes.

Critique
Milo Bianchi, Paolo Bounanno and Paolo Pinottis article is an exemplary examination of the correlation between immigration and crime. The article challenges to the assumptions that immigration leads to an increase in crime in an area. By first proving that the standard economic theory of crime is not accurate, the article goes further to providing empirical data obtained via research and calculations of OSL estimates. The authors use various variables to ensure that its findings are not subjective or judgmental. To come up with solid evidence of immigration effects on crime rate, the authors begin by analyzing the various factors and variables that could lead to an increase in crime in some provinces and not others. For example, wealth in the Northern provinces could be a contributor to property crime amongst immigrants than in the Southern provinces that could be poorer (Friedberg  Hunt, 1995). This article creates a foundation for other researchers to build on and opens up doors for empirical research on the topic.

However, despite the data presented and the extensive estimation and calculations carried out by the authors, the credibility of this paper is refuted by the various claims of the authors pertaining to inadequate data and the complexity of the issue. For example, crime prevalence percentage is calculated after ensuring that all the variables are at equilibrium. Also, the inaccuracy of data caused by unreported crimes and use of heterogeneous laws makes the findings of this article to be inadequate. According to the paper, two years analysis of immigration and crime differs with a ten years analysis. For two years analysis, crime is found to be directly correlated to immigration while for the ten years period, crime percentage rate as a result of immigration is significantly equal to zero. Such conflicting findings call for further and intensive research and analysis in the future.

In essence, the major problem of the article is that it does not carry first hand information, but rather depends on secondary information. The article has used most of the OSLs estimates in coming up with the arguments and conclusions. Data has also been collected from the police. This basically shows that the authors were depending on secondary materials for their information. It is important thus for such a piece of work that data on the same subject has to be collected from the field  and then compared with the secondary data, to give a better conclusion.

Conclusion
It is no doubt that immigration have increased in the past years and this trend is expected to continue. However, the question of whether immigration leads to an increase in crime still remains an enigma to many countries. While most people and countries seem to believe that immigration leads to an increase in crime, no empirical evidence can prove this since few researches have been carried out on the same. The article seems to refute that immigration can lead to an increase in crime in an area. However, given the various obstacles weaknesses of the findings, further research is required for a better understanding of this topic.

Many business decision calls for business managers to employ mathematical analysis so to come up with a prudent decision. In this sense various analyses can be undertaken in the whole process of decision making so as to forecast the outcomes and design good business plan. Break even analysis has proved to be an important tool in helping business managers to make prudent decisions.

Break even analysis involves determining the point at which a business costs will be equal to revenue i.e. neither loss is incurred nor profit gained. Linda (2008 p.98l) describe the break even point as the point where companies cost match the sale volume where neither profit is made nor loss is incurred.

Answer to question 1
Given the information about the Healthy Spring Water Company
Sales revenue 60000
Incremental variable cost 15000
Non incremental Fixed cost 20000
Then the following explanation need to be clear a
At break even point total revenue (TR)  total Cost (TC)
On the other hand TRPQ, where P is the price of a unit sold and Q is unit sold
Also, TCFCVQ, where FC is fixed cost and VC is the variable cost
Finding VC per unit sold (V)
V total variable costunits sold 1500030005
The break even point (BEP) condition is that TRTC. This is equivalent of PQFCVQ
Given PQFCVQ
PQ-VQFC
Factoring out Q then Q (P-V) FC from this equation
 QFCP-V Where P-V represent contribution of unit sold, Q represent the quantity sold at BEP.

Maximum sale loss to be tolerated
 New price is 12510020 25
Current units sold is 3000 and the sales is 60000
Beak even quantity after increase in price is
FCP-V2000025-51000 units the break even sales will be 10002525000
Fall in sales to tolerate is current sale - break even sales after price increase 60000- 2500035000
Fall in units sold will be 3000-10002000 units
Percentage sales loss is  change in sales up to break even sales current sale100
350006000010058.33

Answer to question 2
Current sales60000
Sales after 20 decrease is (100-20)100 6000048000
Sales TRPQ
Then 4800025Q
Q48000251920
Contribution before price increase is P-V
20-515
Total contribution is (P-V) Q 152000030000
Total contribution with price increase
(P-V)Q (25-5)192038400
Contribution increase is therefore 38400-300008400

Answer to question 3
  The additional variable cost is 2
Then, the new variable cost is 527
The break even quantity after increase in price and variable cost will be
QFCP-V2000025-71111.111 approximately 1111 units
Sales will then be PQ 25111127775
  Current sales is 60000
Then the sales loss Healthy Spring company can tolerate is 60000-2777532225
Percentage sale change to be tolerated is sales changecurrent sale100322256000010053.71
 Answer to question 4
Sales before increase in fixed cost is 60000
Break even sales after change in price and fixed cost can be calculated as follows
QFCP-V. The new FC is 20000135021350
Then break even quantity is
Q2135025-71186.111 approximately 1186 units
Break even sales after increase in price and fixed cost is 29650
  The sales fall that will be tolerated is 60000-2965030350
The percentage change is
Sales changecurrent sales100303506000010050.58