Thursday, December 26, 2019

DBQ Opium in China Essay examples - 1745 Words

DBQ: Opium in China While most of the Western Hemisphere was undergoing drastic advancements, such as former colonies gaining their independence and transforming into more modernized nations, a lot of mishaps were occurring in the Eastern Hemisphere—China, specifically—a nation that was notorious for its isolation from foreign influences. European nations began to greedily eye China’s abundance of desirable resources, such as tea, porcelain, and silk. However, China had very little need or desire for European goods. In an attempt to resolve the trade imbalance Britain began importing opium into China, which would prove to be disastrous for the Chinese population. The dispute over the importation of the drug eventually led to the†¦show more content†¦He acknowledges that the Queen was surely too kind-hearted to impose that sort of treatment on another country, especially seeing as how she made each ship that went to Canto carry a document that said, â€Å"you shall not be p ermitted to carry contraband goods†. Thus, the Queen did not openly allow the trade of opium to continue, but failed to enforce the law. He implores her to make sure that the laws of the central dynasty were not violated again (Document 2). The perspective being shown is from a Chinese man who does not use opium, for he sees it as only causing harm. Lin Zexu was the imperial commissioner who was originally assigned to stop the opium trade in Canton. He was fiercely opposed to the exchange of opium and his actions were considered to be a major catalyst for the start of the Opium War. The emperor wrote to Zexu, â€Å"You have caused this war by your excessive zeal† (Document 6). By 1839, war was imminent. The opium trade had caused the reversal of the silver deficit, now putting an economic strain on China, while Britain’s economy flourished from the profit they were making off the drug. Because it was being illegally imported, all of the money was going directly t o Britain instead of to the Chinese government in the form of taxes. This caused a severe economic decline in China as unemployment rose, agriculture declined, and funding for public improvements diminished. During a public meeting in Canton, an agreement

Wednesday, December 18, 2019

The Never-Ending Financial Crisis of 2008 - 614 Words

Since it began in 2008, the US has faced what is being called the â€Å"great recession.† It is 2013, and it is clear apparent that it is a â€Å"recession† longing to be cured. Through the works of Putnam, Sum et. al., Wisman, and Colander, we can better understand this crisis and look for the best way to get out of it. To begin, Robert Putnam describes what has occurred in the U.S. over the past several decades. He states that over the past several decades the U.S. has been subject to â€Å"[an] economic and cultural [entanglement] a mixture of government, private sector, community and personal failings† (Putnam 2013, III). Putnam believes that this financial crisis occurred as a result of layoffs, and many closings of businesses (Putnam 2013, 2). We can further this understanding by turning to Sum, et. al., who believed that the crisis occurred due to the blue-collar workers who have lost their jobs, and might never see those jobs again (Sum, et. al. 2010, 6). Our next economist to turn to is John D. Wisman. In his article he describes what he believes to be the cause of the crisis. He states that this recession occurred centered upon inadequate regulation stemming from laissez-faire ideology, and low interest rates (Wisman 2013, 921). He further points out that an underlying effect of wage stagnation and dramatically increasing inequality in the US over the past 35 years may also be a cause. Now to the guy who wrote our current textbook, Macroeconomics 9th Edition, whoShow MoreRelatedToo Big to Fail: The 2008 World Financial Crisis and Its Aftermath1779 Words   |  7 Pagesï » ¿ Too big to fail: The 2008 world financial crisis and its aftermath The 2008 world financial crisis begin the banking and housing sector, but spread like a contagion through the entire economy. 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Tuesday, December 10, 2019

Depression Essay Example For Students

Depression Essay The Depression Imagine for a moment, waking up one day to find yourself on a dirty floor, a pile of rags, or maybe even the street. You look down at yourself to find youre wearing the same clothes you wore yesterday, except they are completely filthy and have lots of holes in places like the knees and elbows. You have no access to a mirror to show you what you look like so you go to touch you hair with your hand and find it to be a pile of grease and dirt that obviously hasnt been washed in days, maybe even weeks. Then they get ready and go to school. They are depressed about school. They go to all their classes. The end of the day is nearing and they may be depressed about having to go home. Their family life might be bad. They go home and what do you do? Sit down, watch television, play a video game, lock themselves in their room, or just going around being mad at everyone and their life. This really is the pits. They need to change their life whether it be changing their after school activity or changing their attitude. Depression is defined as a psychoneurotic or psychotic disorder marked especially by sadness, inactivity, difficulty in thinking and concentration, a significant increase or decrease in appetite and time spent sleeping, feelings of dejection and hopelessness, and sometimes suicidal tendencies. No two people feel or experience depression the same way. The symptoms and causes of depression are very different for everyone. Lawrence Clayton, Ph. D. and Sharon Carter write, The National Institute of Mental Health (NIMH) reported that for 4 to 10 percent of the American public at any given time the downer mood doesnt lift. They also reported that one quarter of the population would experience a major depressive period during their lifetime (8). One out of four people will have a problem with depression in the United States. NIMH also reported that approximately 4 out of a 100 teenagers get seriously depressed each year. Clinical Depression is a serious illness that can affect anybody, INCLUDING TEENAGERS (Lets Talk 1). Gerald D. Oster, Ph. D., Sarah S. Montgomery, MSW, write, Clinical depression refers to a condition marked by the changes in ones mood and by associated behaviors that range from a mild degree of sadness to intensely experienced feelings of hopelessness and suicidal thoughts (43). Did you know suicide is the second leading cause for death in teenagers? Suicidal thoughts, remarks, or attempts are ALWAYS SERIOUS. ..if any of there happen to you or a friend, you must tell a responsible adult IMMEDIATELY .. .its better to be safe than sorry (Lets Talk 3). According to a website called Depression.com Each year 250,000 teens attempt suicide, and 2,000 complete it. Since 1960, teen suicides have doubled. Girls are more likely to attempt suicide, but boys kill themselves four times more often, usually with guns (Depression 1). Suicide is not the answer. According to Lawrence Clayton, Ph. D. and Sharon Carter there are a lot of symptoms to depression: The symptoms to look for in yourself, or anyone you suspect may be depressed, are as follows: social withdrawal, lack of interest in usual activities, frequent tearfulness, unkempt appearance, belief that no one cares, feelings of hopelessness, beginning or increasing use of alcohol or other drugs, inappropriate feelings of guilt, pessimistic outlook, excessive anxiety, low self-esteem, inability to concentrate, excessive irritability, difficulty in making decisions, prolonged sadness, recurrent thoughts of death, desire for revenge, thoughts of suicide, sudden drop in grades or work performance, very high or low energy level, sleeping too much or not enough, loss of appetite or overeating, and confusion. They do not need to be experiencing all of these symptoms to have a problem. Experiencing any four is enough to warrant concern (9-10). Ancient Rome Essay There are many therapists willing to help; it is up to you to find a qualified and personable professional. Most teens feel a sense of relief after entering therapy and find it useful to be able to share personal feelings and secrets. Individual therapists come from a number of different theoretical perspectives, including psychodynamic and cognitive-behavioral. Most therapies are helpful to reduce present family tension and to enhance communication (128). Depression in teenagers in the United States has grown through the years. One out of four people today will have a problem with major depression. This number is high. If teens can understand what depression is and get help today then they can learn how to deal with depression. We may be able to bring down this high statistic.BibliographyClayton, Lawrence, Ph.D. and Sharon Carter. Coping with Depression. New York: The Rosen Publishing Group, Inc., 1995. Depression in Teens. Depression in Special Groups. November 17, 1999. http://www.depression. com/health _library/special_groups/special_01_teens.html. Lets Talk about Depression. Nation Institute of Mental Health. November 17, 1999. http://www.nimh.gov/ depression/genpop/letstalk. html. Oster, Gerald, Ph.D. and Sarah S. Montgomery, MSW. Helping Your Depressed Teenager. New York: John Wiley Sons, Inc., 1995.

Tuesday, December 3, 2019

Merrill Finch Inc. Essay Example

Merrill Finch Inc. Essay MERRILL FINCH INC. RISK AND RETURN a. (1)Why is T-bill’s return independent of the state of the economy? Do T-bill’s promise a completely risk-free return? Explain (2)Why are High Tech’s returns expected to move with the economy, whereas, Collections’ are expected to move counter to the economy? 1. The 5. 5% T-bill return does not depend on the state of the economy because the Treasury must redeem the bills at par regardless of the state of the economy; therefore, T-bills are risk-free in the default risk sense because the 5. % return will be realized in all possible economic states. Consequently, this return is composed of the real risk-free rate, (i. e. 3%, plus an inflation premium, say 2. 5%). As the economy is full of uncertainty about inflation, it is unlikely that the realized real rate of return would equal the expected 3%. For example, if inflation averaged 3. 5% over the year, then the realized real return would only be 5. 5% – 3. 5% = 2%, not the expected 3%. To simplify matters, in terms of purchasing power, T-bills are not riskless. Investors are fully aware of the changes within a portfolio of T-bills, and as rates declined, the nominal income will fall; and T-bills are exposed to reinvestment rate risk. In summary, it is concluded that there are no truly risk-free securities within the United States. If the Treasury sold inflation-indexed, tax-exempt bonds, they would be truly riskless, but all actual securities are exposed to some type of risk. 2. High Tech’s returns move with, hence are positively correlated with, the economy, because the firm’s sales, and hence profits, will generally experience the same type of difficulties as the economy. We will write a custom essay sample on Merrill Finch Inc. specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Merrill Finch Inc. specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Merrill Finch Inc. specifically for you FOR ONLY $16.38 $13.9/page Hire Writer If the economy is booming, so will High Tech. On the other hand, Collections is considered by many investors to be a hedge against bad times and high inflation, so if the stock market crashes, investors in this stock should do relatively well. Stocks such as Collections are thus negatively correlated with the economy. b. Calculate the expected rate of return on each alternative and dill in the blanks on the row for in the previous table. The expected rate of return is expressed as follows: . Here Pi is the probability of occurrence of the state, ri is the estimated rate of return for that state, and N is the number of states. Here is the calculation for High Tech: High Tech= 0. 1(-27. 0%) + 0. 2(-7. 0%) + 0. 4(15. 0%) + 0. 2(30. 0%) + 0. 1(45. 0%) = 12. 4%. We use the same formula to calculate r’s for the other alternatives: T-bills= 5. 5%. Collections= 1. 0%. U. S. Rubber= 9. 8%. M= 10. 5%. c. You should recognize that basing a decision solely on expected returns is appropriate only for risk-neutral individuals. Because your client, like most people, is risk-averse, the riskiness of each alternative is an important aspect of the decision. One possible measure of risk is the standard deviation of returns. 1) Calculate this value for each alternative and fill in the blank on the row for in the table. (2) What type of risk is measured by the standard deviation? (3) Draw a graph that shows roughly the shape of the probability distributions for High Tech, U. S. Rubber, and T-bills. 1. The standard deviation is calculated as follows: = . High Tech= [(-27. 0 – 12. 4)2(0. 1) + (-7. 0 – 12. 4 )2(0. 2) + (15. 0 – 12. 4)2(0. 4) + (30. 0 – 12. 4)2(0. 2) + (45. 0 – 12. 4)2(0. 1)] ? = = 20. 0%. Here are the standard deviations for the other alternatives: T-bills= 0. 0%. Collections= 13. 2%. U. S. Rubber= 18. 8%. M= 15. 2%. 2. The standard deviation is a measure of a security’s stand-alone risk. The larger the standard deviation, the higher the probability that actual realized returns will fall far below the expected return, and that losses rather than profits will be incurred. 3. The data provided the most risky investment is High Tech and the least risky are T-bills. d. Suppose you suddenly remembered that the coefficient of variation (CV) is generally regarded as being a better measure of stand-alone risk than the standard deviation when the alternative being considered has widely differing expected returns. Calculate the missing CVs and fill in the blanks on the row for CV in the table. Does the CV produce the same risk rankings as the standard deviation? Explain The coefficient of variation (CV) is a standardized measure of dispersion about the expected value; it shows the amount of risk per unit of return. CV= /. CVT-bills= 0. 0%/5. 5% = 0. 0. CVHigh Tech= 20. 0%/12. 4% = 1. 6. CVCollections= 13. 2%/1. 0% = 13. 2. CVU. S. Rubber= 18. 8%/9. 8% = 1. 9. CVM= 15. 2%/10. 5% = 1. 4. When we measure risk per unit of return, Collections, with its low expected return, becomes the most risky stock. The CV is a better measure of an asset’s stand-alone risk than because CV considers both the expected value and the dispersion of a distribution—a security with a low expected return and a low standard deviation could have a higher chance of a loss than one with a high but a high . e. Suppose you created a two-stock portfolio by investing $50,000 in High Tech and $50,000 in Collections. (1) Calculate the expected return (rp), the standard deviation (p), and the coefficient of variation (CVp) for this portfolio and fill in the appropriate blanks in the table. 2) How does the riskiness of this two-stock portfolio compare with the riskiness of the individual stocks if they were held in isolation? 1. To find the expected rate of return on the two-stock portfolio, we first calculate the rate of return on the portfolio in each state of the economy. Since we have half of our money in each stock, the portfolio’s return will be a weighted average in each type of economy. For a recession, we have: rp = 0. 5(-27%) + 0. 5(27%) = 0%. We would do similar calculations for the other states of the economy, and get these results: State| | Portfolio| Recession| | 0. 0%| Below average| | 3. 0| Average| | 7. 5| Above average| | 9. 5| Boom| | 12. 0| Now we can multiply the probability times the outcome in each state to get the expected return on this two-stock portfolio, 6. 7%. Alternatively, we could apply this formula, r = wi ri = 0. 5(12. 4%) + 0. 5(1. 0%) = 6. 7%, which finds r as the weighted average of the expected returns of the individual securities in the portfolio. It is tempting to find the standard deviation of the portfolio as the weighted average of the standard deviations of the individual securities, as follows: p wi(i) + wj(j) = 0. 5(20%) + 0. 5(13. 2%) = 16. %. However, this is not correct—it is necessary to use a different formula, the one for that we used earlier, applied to the two-stock portfolio’s returns. The portfolio’s depends jointly on each security’s and the correlation between the securities’ returns. The best way to approach the problem is to estimate the portfolio’s risk and retu rn in each state of the economy, and then to estimate p with the formula. Given the distribution of returns for the portfolio, we can calculate the portfolios and CV as shown below: p = [(0. 0 – 6. 7)2(0. 1) + (3. 0 – 6. 7)2(0. 2) + (7. 5 – 6. 7)2(0. 4) + (9. 6. 7)2(0. 2) + (12. 0 – 6. 7)2(0. 1)]? = 3. 4%. CVp = 3. 4%/6. 7% = 0. 51. 2. Using either or CV as our stand-alone risk measure, the stand-alone risk of the portfolio is significantly less than the stand-alone risk of the individual stocks. This is because the two stocks are negatively correlated—when High Tech is doing poorly, Collections is doing well, and vice versa. Combining the two stocks diversifies away some of the risk inherent in each stock if it were held in isolation, i. e. , in a 1-stock portfolio. f. Suppose an investor starts with a portfolio consisting of one randomly selected stock. What would happen: (1) To the riskiness and to the expected return of the portfolio as more randomly selected stocks were added to the portfolio? (2) What is the implication for investors? Draw a graph of the two portfolios to illustrate your answer. 1. The standard deviation gets smaller as more stocks are combined in the portfolio, while rp remains constant. Thus, by adding stocks to your portfolio, which initially started as a 1-stock portfolio, risk has been reduced. In the real world, stocks are positively correlated with one another—if the economy does well, so do stocks in general, and vice versa. Correlation coefficients between stocks generally range in the vicinity of +0. 35. A single stock selected at random would on average have a standard deviation of about 35%. As additional stocks are added to the portfolio, the portfolio’s standard deviation decreases because the added stocks are not perfectly positively correlated. However, as more and more stocks are added, each new stock has less of a risk-reducing impact, and eventually adding additional stocks has virtually no effect on the portfolio’s risk as measured by . In fact, stabilizes at about 20% when 40 or more randomly selected stocks are added. Thus, by combining stocks into well-diversified portfolios, investors can eliminate almost one-half the riskiness of holding individual stocks. The implication is clear: Investors should hold well-diversified portfolios of stocks rather than individual stocks. By doing so, they can eliminate about half of the riskiness inherent in individual stocks. 2. g. Should the effects of a portfolio impact the way investors think about the riskiness of individual stocks? If you decided to hold a 1-stock portfolio (and consequently were exposed to more risk than diversified investors were), could you expect to be compensated for all your risk; that is, could you earn a risk premium on the part of your risk that you could have eliminated by diversifying? 1. Portfolio diversification does affect investors’ views of risk. A stock’s stand-alone risk as measured by its or CV, may be important to an undiversified investor, but it is not relevant to a well-diversified investor. A rational, risk-averse investor is more interested in the impact that the stock has on the riskiness of his or her portfolio than on the stock’s stand-alone risk. Stand-alone risk is composed of diversifiable risk, which can be eliminated by holding the stock in a well-diversified portfolio, and the risk that remains is called market risk because it is present even when the entire market portfolio is held. 2. If you hold a one-stock portfolio, you will be exposed to a high degree of risk, but you will not be compensated for it. If the return were high enough to compensate you for your high risk, it would be a bargain for more rational, diversified investors. They would start buying it, and these buy orders would drive the price up and the return down. Thus, you simply could not find stocks in the market with returns high enough to compensate you for the stock’s diversifiable risk. h. The expected rates of return and the beta coefficients of the alternatives supplied by Merrill Finch’s computer program are as follows: SecurityReturn ()Risk (Beta) High Tech12. 4%1. 32 Market10. 51. 00 U. S. Rubber 9. 80. 88 T-bills 5. 50. 00 Collections 1. 0(0. 87) 1) What is a beta coefficient, and how are betas used in risk analysis? (2) Do the expected returns appear to be related to each alternative’s market risk? (3) Is it possible to choose among the alternatives on the basis of the information developed thus far? Use the data given at the start of the program to construct a graph that shows how the T-bill’s, High Techs, and the market’s beta collections are calculated. Then discuss what betas measure and how they are used in risk analysis. 1. (Draw the framework of the graph, put up the data, then plot the points for the market (45 line) and connect them, and then get the slope as Y/X = 1. . ) State that an average stock, by definition, moves with the market. Then do the same with High Tech and Tbills. Beta coefficients measure the relative volatility of a given stock vis-a-vis an average stock. The average stock’s beta is 1. 0. Most stocks have betas in the range of 0. 5 to 1. 5. Theoretically, betas can be negative, but in the real world, they are generally positive. Betas are calculated as the slope of the â€Å"characteristic† line, which is the regression line showing the relationship between a given stock and the general stock market. As explained in Web Appendix 8A, we could estimate the slopes, and then use the slopes as the betas. In practice, 5 years of monthly data, with 60 observations, would generally be used, and a computer would be used to obtain a least squares regression line. 2. The expected returns are related to each alternative’s market risk—that is, the higher the alternatives rate of return the higher its beta. Also, note that T-bills have zero risk. 3. We do not yet have enough information to choose among the various alternatives. We need to know the required rates of return on these alternatives and compare them with their expected returns. . The yield curve is currently flat; that is, long-term Treasury bonds also have a 5. 5% yield. Consequently, Merrill Finch assumes that the risk-free rate is 5. 5%. (1) Write out Security Market Line (SML) equation, use it to calculate the required rate of return on each alternative, and graph the relationship between the expected and required rates of return. (2) How do the expected rates of return compare with the required rates of return? (3) Does the fact that Collections has an expected return that is less than the T-bill rate make any sense? Explain (4) What would be the market and the required return of a 50-50 portfolio of High Tech and Collections? Of High Tech and U. S. Rubber? 1. Here is the SML equation: ri = rRF + (rM – rRF)bi. Merrill Finch has estimated the risk-free rate to be rRF = 5. 5%. Further, our estimate of rM = M is 10. 5%. Thus, the required rates of return for the alternatives are as follows: High Tech:5. 5% + (10. 5% – 5. 5%)1. 32 = 12. 10%. Market:5. 5% + (10. 5% – 5. 5%)1. 00 = 10. 50%. U. S. Rubber:5. 5% + (10. 5% – 5. 5%)0. 88 = 9. 90%. T-bills:5. 5% + (10. 5% – 5. 5%)0 = 5. 50%. Collections:5. 5% + (10. 5% – 5. %)-0. 87 = 1. 15%. 2. We have the following relationships: ExpectedRequired ReturnReturn Security ()(r)Condition High Tech12. 4%12. 1%Undervalued: gt; r Market10. 510. 5Fairly valued (market equilibrium) U. S. Rubber9. 89. 9Overvalued: r gt; T-bills5. 55. 5Fairly valued Collections1. 01. 2Overvalued: r gt; The T-bills and market portfolio plot on the SML, High Tech plots above it, and Collections and U. S. Rubber plot below it. Thus, the T-bills and the market portfolio promise a fair return, High Tech is a good deal because its expected return is above its required return, and Collections and U. S. Rubber have expected returns below their required returns. 3. Collections are an interesting stock. Its negative beta indicates negative market risk—including it in a portfolio of â€Å"normal† stocks will lower the portfolio’s risk. Therefore, its required rate of return is below the risk-free rate. This means that Collections is a valuable security to rational, well-diversified investors. To see why, consider this question: Would any rational investor ever make an investment that has a negative expected return? The answer is â€Å"yes†Ã¢â‚¬â€just thinks of the purchase of a life or fire insurance policy. The fire insurance policy has a negative expected return because of commissions and insurance company profits, but businesses buy fire insurance because they pay off at a time when normal operations are in bad shape. Life insurance is similar—it has a high return when work income ceases. A negative-beta stock is conceptually similar to an insurance policy. 4. Note that the beta of a portfolio is simply the weighted average of the betas of the stocks in the portfolio. Thus, the beta of a portfolio with 50% High Tech and 50% Collections is: . bp= 0. 5(bHigh Tech) + 0. (bCollections) = 0. 5(1. 32) + 0. 5(–0. 87) = 0. 225, rp = rRF + (rM – rRF)bp= 5. 5% + (10. 5% – 5. 5%)(0. 225) = 5. 5% + 5%(0. 225) = 6. 63% 6. 6%. For a portfolio consisting of 50% High Tech plus 50% U. S. Rubber, the required return would be: bp = 0. 5(1. 32) + 0. 5(0. 88) = 1. 10. rp = 5. 5% + 5%(1. 10) = 11. 00%. j. Suppose investors raised their inflation expectations by 3 percentage poin ts over current estimates as reflected in the 5. 5% risk-free rate. What effect would higher inflation have on the SML and on the returns required on high-and low-risk securities Suppose instead that investors’ risk aversion increased enough to cause the market risk premium to increase by 3 percentage points. (Inflation remains constant. ) What effect would this have on the SML and on returns of high-and low-risk securities? Here we have plotted the SML for betas ranging from 0 to 2. 0. The base-case SML is based on rRF = 5. 5% and rM = 10. 5%. If inflation expectations increase by 3 percentage points, with no change in risk aversion, then the entire SML is shifted upward (parallel to the base case SML) by 3 percentage points. Now, rRF = 8. 5%, rM = 13. 5%, and all securities’ required returns rise by 3 percentage points. Note that the market risk premium, rM – rRF, remains at 5 percentage points. When investors’ risk aversion increases, the SML is rotated upward about the Y-intercept (rRF). rRF remains at 5. 5%, but now rM increases to 13. 5%, so the market risk premium increases to 8%. The required rate of return will rise sharply on high-risk (high-beta) stocks, but not much on low-beta securities.

Wednesday, November 27, 2019

ACT Writing Prompts The Complete Guide

ACT Writing Prompts The Complete Guide SAT / ACT Prep Online Guides and Tips It's pretty scary to walk into a room on ACT test day and with no idea what the essay question you're about to answer is about. Luckily, you don't need to know- the ACT essay prompts only ask about a teensy, tiny category of ideas. And the best part is, you already know all about the topics! Keep reading to see sample ACT Writing prompts you can practice with. More importantly, we also teach you how to gather evidence before the test so you can walk in 100% prepared to answer any prompt they give you. 7 Sample ACT Essay Prompts The idea behind the ACT essay is that it's a fair test of everyone's writing ability because nobody knows the topic or question before the test. In order for this to be true, the ACT actually has to choose from a pretty small sliver of questions (since the topics must be broad enough that all test takers can write about them). See for yourself: here are the three free and publicly available official ACT Writing prompts. Do you notice any common threads? 1. Intelligent Machines (source: ACT.org ) Many of the goods and services we depend on daily are now supplied by intelligent, automated machines rather than human beings. Robots build cars and other goods on assembly lines, where once there were human workers. Many of our phone conversations are now conducted not with people but with sophisticated technologies. We can now buy goods at a variety of stores without the help of a human cashier. Automation is generally seen as a sign of progress, but what is lost when we replace humans with machines? Given the accelerating variety and prevalence of intelligent machines, it is worth examining the implications and meaning of their presence in our lives.Perspective One: What we lose with the replacement of people by machines is some part of our own humanity. Even our mundane daily encounters no longer require from us basic courtesy, respect, and tolerance for other people. Perspective Two: Machines are good at low-skill, repetitive jobs, and at high-speed, extremely precise jobs. In both cases they work better than humans. This efficiency leads to a more prosperous and progressive world for everyone. Perspective Three: Intelligent machines challenge our long-standing ideas about what humans are or can be. This is good because it pushes both humans and machines toward new, unimagined possibilities. Write a unified, coherent essay about the increasing presence of intelligent machines. 2. Public Health and Individual Freedom (source: ACT.org ) Most people want to be healthy, and most people want as much freedom as possible to do the things they want. Unfortunately, these two desires sometimes conflict. For example, smoking is prohibited from most public places, which restricts the freedom of some individuals for the sake of the health of others. Likewise, car emissions are regulated in many areas in order to reduce pollution and its health risks to others, which in turn restricts some people’s freedom to drive the vehicles they want. In a society that values both health and freedom, how do we best balance the two? How should we think about conflicts between public health and individual freedom?Perspective One: Our society should strive to achieve the greatest good for the greatest number of people. When the freedom of the individual interferes with that principle, freedom must be restricted.Perspective Two: Nothing in society is more valuable than freedom. Perhaps physical health is sometimes improved by restricting freedom, but the cost to the health of our free society is far too great to justify it.Perspective Three: The right to avoid health risks is a freedom, too. When we allow individual behavior to endanger others, we’ve damaged both freedom and health.Write a unified, coherent essay about the conflict between public health and individual freedom. 3. Kid Stuff (source: ACT.org ) Toys are for children, right? Not anymore. In recent years, things that used to be considered "kid stuff" have grown in popularity among grownups. Nowadays, adults regularly play video games, watch animated movies and television show, purchase dolls and other collectible figures, and read comic books for their own enjoyment. Is adult enjoyment of children's entertainment merely a sign of immaturity? In what ways can playing with kid stuff change the way adults understand today's youth? Given that toys, games, and publications that used to be exclusively for children are growing in popularity among adults, it is worth considering the effects and implications of this trend.Perspective One: It's good for adults to be familiar with kid stuff. They'll understand the lives of children better and be more responsive to their needs, interests, and problems.Perspective Two: Adults need to be models of maturity and responsibility. When they act and think like children, kids have no one to look to for guidance.Perspective Three: Children need their own cultural space- their own books, their own toys, their own movies- in which to explore their ideas. When adults start to take over the space, kids lose out.Write a unified, coherent essay about the trend of adults playing with kid stuff. Here are four other prompts that I have constructed, based on the core question and core perspectives I extracted from the official prompts (if you're curious about how I constructed these prompts, check out our article on how to attack ACT Writing prompts): 4. Globalization Many of the goods and services we depend on daily have global sources. Where once you might speak with a customer service representative from across the country about your computer problems, your call now would most likely be routed across the world. In one grocery store, it can be possible to find a mixture of foods from multiple continents. Various pieces of culture can be instantaneously broadcast around the world via the Internet, enabling shared experiences among people of disparate geographic origins. Globalization is generally seen as a sign of progress, but what happens when we replace local interactions with global ones? Given the accelerating rate of globalization, it is worth examining the implications and meaning of its presence in our lives.Perspective One: Globalization requires a shift in the way we think about other people, other societies, and the world. This is good, because it will push humanity towards previously unimaginable possibilities and achievements.Perspec tive Two: Removing geographic boundaries from commerce means that the right people can be chosen for the right jobs at the right price. This efficiency leads to a more prosperous and progressive world for everyone. Perspective Three: The flourishing of a new, global society comes at the cost of local cultures. Less diversity leads to deficits in empathy and creativity, two of the most defining characteristics of humanity.Write a unified, coherent essay about the increasing presence of globalization. 5. Information Accessibility At this moment in time, there is more information more readily available to more people than ever before. Smartphones can instantly provide directions to your destination, when even 10 years ago you had to look up directions before you left and/or bring along a map. Researchers from all over the world are able to pool their knowledge to advance their fields more quickly. Many libraries have broadened their collections to include subscriptions to online/electronic databases as well as printed works. Greater access to information is generally seen as a positive advance, but what are the consequences of making so much knowledge available to so many people? Based upon the ever-increasing amount of information in the world and the ever-broader access to it, it is worth examining the implications and meaning of easy access to information in our lives.Perspective One: With increased ease of access to information, we lose the incentive to gain knowledge ourselves. By outsourcing our memories of facts and other information, we are becoming less intelligent.Perspective Two: Greater access to information allows us to avoid memorizing facts and, instead, use our brains for higher-level thinking. This efficiency leads to a more prosperous and progressive world for everyone. Perspective Three: The more people who have access to more information, the greater the chances of collaboration and thus further advances in human knowledge. This is good because it pushes us toward new, unimagined possibilities.Write a unified, coherent essay about the increasing accessibility of information. 6. Novelty In the world today, newness is highly valued. Social media apps constantly update to make sure you’re shown the newest information or posts from those you follow. Many of the products we purchase today are purposefully created with short lifespans to encourage consumers to continue to get the newest, up-to-date versions. Subscription services for music and video make it possible to continuously listen to and watch new media. Novelty is generally seen as a positive characteristic, but what are we losing by constantly focusing on the new? Given its increasing prevalence, it is worth examining the implications and meaning of the growing emphasis on novelty in our lives.Perspective One: Change is the only constant in life, and to ignore this is to grow rigid and stagnate. More exposure to new ideas and ways of thinking can only lead to progress for society and for humanity as a whole.Perspective Two: By exclusively focusing on the new, we lose sight of what we already know. Instea d of ignoring the old, we should be focusing more past accomplishments and errors. The only way to move forward is to heed the lessons of the past.Perspective Three: Information, products, and ways of thinking should only be valued if they are useful and reliable, not just because they are new and exciting. New does not automatically equal improved.Write a unified, coherent essay about the increasing value assigned to novelty. 7. Job Changes Fewer and fewer people are staying with the same job their entire lives. In the United States, the average person will switch jobs more than 10 times in over the course of his/her life. Some workers will make lateral, or even downward, moves in order to increase personal fulfillment. Others switch jobs in an effort to obtain the highest possible salary. Increasing personal autonomy is generally seen as a sign of progress, but what happens when length of experience is replaced with variety of experience? As the number of jobs people will hold over the course of their lives continues to climb, it is important to examine the implications and meaning of this trend for our lives.Perspective One: Because jobs are no longer a lifetime commitment, people will feel freer to accept a greater variety of positions. This increase in breadth of experience will in turn make job applicants more attractive to future employers. Perspective Two: As the frequency with which people change jobs increases, the loyalty of people to their employers will decrease. This in turn will lead to more fractured company cultures, as employees will only care about what’s best for them.Perspective Three: The disappearance of the stigma associated with frequent job switching will allow employees more leeway with employment decisions. Increased autonomy will lead to increased happiness and job satisfaction.Write a unified, coherent essay about the increasing frequency with which people switch jobs. For additional Writing Prompts to practice with, you also might want to consider purchasing the most recent Official ACT Prep Guide, which includes five additional official essay prompts. While you'll see many different topics asked about on the ACT essay section, there is in fact only one ACT Writing Prompt (and three types of perspectives) you have to know. We call these the Core Question and Core Perspectives. This question (and these perspectives) will run through each and every ACT Essay prompt you'll get. The Reasoning Behind The Core Question As you can see, all the ACT writing prompts are about how the world (and the people in it) is (are) changing. All of them boil down to the following question: "What are your views on how humans are changing the world?" or, even more broadly, "What do you think about the way the world is changing?" The ACT frames its prompts this way because ACT, Inc. wants to choose essay topics that all students can have an opinion on, rather than asking about something extremely specific for which some students are more prepared than others. First Global Image from VIIRS by NASA Goddard Space Flight Center, used under CC BY 2.0/Resized from original. Read through the two official prompts again (above). Rather than asking about high school life (as the old ACT Writing prompts did), the current ACT essay prompts ask students to consider how changes in the world today affect all humanity, forcing the students to place the issue in a broader context. While the topics may appear to be highly specific at first glance (e.g. "intelligent machines"), the explanatory paragraphs for each prompt make it clear that the topics can be parlayed in a number of different directions (and be accessible to most people). There won't be prompts about issues that mainly affect urban dwellers (e.g. subways), or only affect certain geographic areas (e.g. snow preparedness). Similarly, something like "smartphones," for instance, would never be a topic on its own; rather, it would be an example that could be used for the topic (as with the "intelligent machines" prompt). When writing the ACT essay, it really helps to have strong opinions about the core question ("What do you think about the way humans are changing the world?"), but if you don't, no problem: it's easy to develop opinions! And we're here to give you a head start. In the next section, we're going to give you three basic opinions related to the core ACT essay question. We'll show you how to apply these perspectives to specific prompts and tell you where you can find examples to support them. The Reasoning Behind The Core Perspectives The new ACT prompt has three different perspectives that you need to discuss during the course of your essay. To figure out the three core perspectives, I read and re-read the perspectives for all three of the official prompts, considering them in light of the informational paragraphs that preceded them. I ended up with these three basic opinions: Core Perspective A: The changes caused by [Prompt topic] are not good and have negative results. This perspective maps onto Perspective 1 of the first official ACT sample prompt above, Perspective 2 of the second official sample prompt, and Perspective 3 of the third official sample prompt. My nickname for this position is "conservatism," since this perspective wishes to be conservative and not change things. Core Perspective B: The changes caused by [Prompt topic] will lead to greater (in)efficiency. This perspective maps onto Perspective 2of the first official ACT sample prompt above, Perspective 1 of the second official sample prompt, and Perspective 2 of the third official sample prompt. My nickname for this position is "utilitarianism," since this perspective is all about what will be more practical and lead to the greatest good for the greatest number of people (this is even explicitly spelled out in Perspective 1 of the second official sample prompt). Core Perspective C: The changes caused by [Prompt topic] will yield positive future results because it will lead to improvements for all humanity. This perspective maps onto Perspective 3 of the first official ACT sample prompt above, Perspective 3 of the second official sample prompt, and Perspective 1 of the third official sample prompt. My nickname for this position is "progressivism," since this perspective argues that change = progress = good. Building a Support Bank Now you know that the ACT essay will only ever ask you to discuss one question: "How is the world changing?" If you prepare for this question with diverse evidence before the test, you'll be ready to answer the prompt no matter what it is. To give yourself the most time to write and organize your argument, your thesis should match up with one of the three perspectives given- that way, you won't have to take the time come up with a fourth, completely new perspective and compare it to at least one the three perspectives the ACT provides. But it gets better! The internet (and society in general) is chock-full of theories and arguments about how the world is changing, and whether or not that's a good thing. All you have to do is read up on some of them and develop your own opinions. Opinions on the World Your ACT essay thesis should basically be one of the three perspectives, but you have to support that opinion with evidence- the answer to the question "why?" (or "why not"?). Look over these sets of three opinions and try to think of reasons or examples to support each. The world is changing to be worse than it was before. (because...) The world is changing to be better than it was before. (because...) The world is changing to be more (in)efficient than ever before. (because...) Research and Brainstorming Ideas Unlike with the SAT essay, you can use abstract reasoning to develop your point on the ACT. This means that you don't necessarily have to come to the test pre-loaded with specific examples: if you can't think of a concrete example that will support your point, you can make one up as you go along while constructing your argument. Now we'll look over a few sample internet resources that could serve as support (or brainstorming assistance) for the opinions above. You can use the general ideas from these resources, but you may also find some useful specific examples for when you face your real ACT Writing prompt. News sources such as the New York Times, Washington Post, LA Times, Al Jazeera, Time, The Atlantic, Slate, The Economist, Wired, New York Magazine, Popular Science, Psychology Today, Vox, Mic, and even Buzzfeed News will have information about current events that you can use. If you prefer listening/watching the news, you can always try that as a source of current events information as well watching or listening to television, radio, or podcasts. How Do I Use This Article? Just knowing what the ACT Writing prompts are likely to be about may lead you to think about the way you interact with the world somewhat differently. Keep your eyes peeled and your ears open for anything that could be fodder to answer a question about the way the world is changing- anything you learn about in history/social studies, read/hear about in the news, or even encounter in a futuristic novel can be added to your support bank. But, of course, the more effective way to use the information in this article is to practice both planning and writing ACT essays. We have another article with ACT essay tips, which can give you more information on how to practice the actual writing process, but knowing about the prompt types can get you thinking about your own opinions on how the world is changing. After all, you're being asked about this because you have a lot of experience with it, living in the world as you do (unless you are a ghost and don't live in this world, in which case, why are you taking the ACT?). So, using the prompts at the beginning of this article, or another group of questions about issues having to do with change (some items on this list of debate topics, for example), start planning hypothetical writing ACT essay responses. Try reading our step-by-step ACT essay example if you're stumped about where to begin. For each issue, planning involves picking a side, supporting it with one to two reasons or examples, and deciding how to discuss at least one of the other given perspectives in relation to the one you've picked (including arguments both for and against the other perspectives). If you really want to max out your ACT essay score, you should practice planning essays about how the world is changing until you can do it in 8-10 minutes reliably. If you're curious about where that 8-10 minute estimate comes from, check out our ACT essay tips article. What's Next? Check out our comprehensive collection of ACT Writing guides, including a detailed analysis ofthe ACT Writing Rubric that includes explanations and strategies and our explanation of the differences between the old and new ACT Writing Test. Find out how to get a perfect score on ACT Writing. Follow along as I construct a top-scoring essay step-by-step, or check out our list of tips to raise your ACT Writing score. Want to improve your ACT score by 4 points? Check out our best-in-class online ACT prep classes. We guarantee your money back if you don't improve your ACT score by 4 points or more. Our classes are entirely online, and they're taught by ACT experts. If you liked this article, you'll love our classes. Along with expert-led classes, you'll get personalized homework with thousands of practice problems organized by individual skills so you learn most effectively. We'll also give you a step-by-step, custom program to follow so you'll never be confused about what to study next. 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Saturday, November 23, 2019

Gray Wolves In Yellowstone Essays - Yellowstone, Canid Hybrids

Gray Wolves In Yellowstone Essays - Yellowstone, Canid Hybrids Gray Wolves In Yellowstone The reintroduction of Gray Wolves into Yellowstone has had many positive affects such as controlling the populations of large game and taking out the small week stupid ones. Some farmers complain about them killing cattle but who cares what they think. The gray wolf, also called the timber wolf, is the largest of about 41 wild species within the dog family, Canidae, of the order Carnivora. All living wolves are considered a single species, Canis lupus. There are 32 recognized subspecies of the gray wolf. Wolf size varies. Adults range from about five to six and a half feet from nose to tip of tail, from 26 to 36 inches high at the shoulders, and weigh from 40 to 175 pounds. Gray wolves arent necessarily gray but grizzled gray is the most common color they can also be white, black or red. Wolves are distinguished from dogs by characteristics of the skull. At one time the wolf lived throughout most of the Northern Hemisphere. Most wolf populations are in Canada and Alaska, where they are relatively stable. Of the lower 48 only Minnesota has a wolf population large enough to maintain itself. Wolves live in packs. The Forestry Service reintroduced gray wolves to the northern Rocky Mountains as well as Yellowstone National Park in an attempt to re-establish the species after an absence of more than 60 years. Gray wolves were exterminated from the area by the late 1920s. They are designated as endangered under the Endangered Species Act in most of the lower 48 states. The reintroduction program is a cooperative effort with the National Park Service and USDA Forest Service. Late last century, we realized that something was wrong with the ecosystem in Yellowstone National Park. Without the wolves Yellowstone fails to maintain its natural state. It was made clear that the ecosystem in Yellowstone would never function properly until they were back. They decided that the wolf should be reintroduced into the ecosystem at Yellowstone. Many people, thought that this was foolish. The debate over wolves and Yellowstone has pissed off a lot of people, who will continue to rage for years. Why were wolves reintroduced to Yellowstone? Wolves helped restore Yellowstone's ecosystem to a condition that resembles the way used to be. The wolf, is a large predator, and therefor an important part of the parks ecosystem. Once the population recovered, interactions between predators and prey were restored. The wolves select the weakest and most vulnerable members of the populations of deer, elk, bison, and kill them. Such actions enhance the health of the parks game species as well as weeding out the wussies. Even with wolves roaming the parks, visitors will rarely see them. They will be able to understand the importance of the wolf and see how the balance of life is essential. The biological factors resulting from reintroducing the wolf are important. However, the wolf itself is a mystery and symbol to mankind. Today, not everyone feels that same way about the wolf and its surroundings. Many don't know and understand the importance of the wolf and its duty. What you do not know you will fear. What one fears, one destroys.

Thursday, November 21, 2019

Analysis of the trends in the consumption patterns of oil Essay

Analysis of the trends in the consumption patterns of oil - Essay Example The definition of Economics can be classified into three broad categories, namely: (a) Wealth Economics Definition, (b) Material Welfare Economics Definition, and, (c) Scarcity Economics Definition. Of these three, the Scarcity Economics Definition is the pertinent for the present. According to this, economics is a â€Å"science which studies human behavior as a relationship between ends and means which have alternative uses† (Robbins, 1935). The study of Economics is divided by the modern economists into two parts, namely; microeconomics and macroeconomics. In macroeconomics, the economy as a whole is analyzed, while microeconomics analyses the economy in terms of its innumerable decision-making units. Microeconomics: The study of supply and demand inside a market is known as microeconomics. Microeconomics is â€Å"the study of particular firms, particular households, individual prices, wage incomes, individual industries, and particular commodities† (Boulding, 1969). Microeconomics offers solution for the problems: what should be produced, how those goods and services should be produced, and, who is allowed to consume those goods and services. It explains the composition of total production- why more of some things is produced than of others. In other words, it analyzes demand and supply for a product or service. The law of demand states that â€Å"a rise in the price of a commodity or service is followed by a reduction in demand, and a fall in price is followed by an increase in demand, if conditions of demand remain constant† (Samuelson, 1962). ... The major factors that influence the demand for a product or service are: price and availability of a substitute good, price and availability of a complimentary good, income, tastes and preferences, price expectations, stock of goods in consumer hands, and, population. Law of supply: Supply is the amount offered for sale at a given price. The law of supply states that "other things remaining the same, as the price of a commodity rises its supply is extended, and as the price falls its supply is contracted" (Boulding, 1969). The supply changes due to: i) costs of production, ii) unavailability of resources (like raw materials for the production), iii) improvement in the means of transportation, communication and technology, iv) political disturbances or war, and, v) the climate, irrigation methods and soil (in the case of agriculture products). Trends in the consumption patterns of oil The availability of oil and its price are linked by the laws of supply and demand. Each day approximately 84 million barrels of oil are extracted from the earth, and approximately the same amount is consumed. The world's rate of oil extraction will begin soon or has already begun to decline, while the demand for oil continues to grow which in turn will produce sharply rising prices for oil. In this study, the Oil Market Report by IEA dated 10th July, 2008 (IEA, 2008) is analyzed. The highlights of the analysis are given below: Microeconomics of oil - Supply and Demand: The oil market is one where small changes to the supply or demand cause large changes to the clearing price. In economics jargon, both oil supply and demand are "inelastic" - they show only a minimal short-term response to changes in

Wednesday, November 20, 2019

Cash Flow Management in the Lawrence Simulation Essay

Cash Flow Management in the Lawrence Simulation - Essay Example It is in this situation that crisis has struck. Mayo has defaulted on payments for the weeks of 17 through 30 March. Further news is that Mayo will not be paying anything until the week of 14 April. Lawrence must negotiate with Mayo, Gartner, and Murray in order to speed up payments from Mayo and possibly further defer payments to Gartner and Murray. Borrowing from the bank is to be managed to minimize the outstanding balance and subsequent interest expense. Analysis: Lawrence faces two problems, a short-term cash-flow problem, and a larger and more significant strategic problem involving an unhealthy dependence on a single customer and lack of diversity amongst suppliers. We are tasked with the short-term cash flow problem at hand. If Mayo is allowed to proceed with delays of payment until the week of 14 April, the company will suffer a cash-flow deficit of up to $ 411,000 in excess of the $1.2 million line of credit for the period of 31 March through 13 April. Based on the existing payment schedule, there are no savings in interest expense to be gained by forcing Murray to accept delays in payments. If Lawrence chooses not to attempt a negotiation with Gardner for additional time to meet outstanding payments, the interest expense on borrowing will be $3,821 more than if Lawrence attempts to push Gartner to accept further delays in payment, regardless of the terms offered. Is the relationship with Gartner worth $3,821? How much would Lawrence spend to develop a new supplier?

Sunday, November 17, 2019

Inderstanding Consumer Behaviour Towards Luxury Products Essay Example for Free

Inderstanding Consumer Behaviour Towards Luxury Products Essay Studying consumer behaviour enables marketing researchers to predict how consumers will react to promotional messages and to understand why they make the purchase decision they do. Marketers realized that if they know more about the consumer decision making criteria, they can design marketing strategies and promotional messages that will influence consumers more effectively. The importance of consumer behaviour made marketers to think of a separate branch in marketing research Consumer research, to deal exclusively for consumer related issues. The current focus of this report is on study of underlying needs and motives in taking purchase decisions, consumer learning process and attitude formation process. The study has been initiated for Club Mahindra Holidays. The purpose of this study is to analyze consumer perceptions of luxury products and the factors that influence his purchase decisions. The objective is to understand consumer behaviour towards luxury products and the steps followed while purchasing it. To achieve the above objectives, we first look at how luxury goods are different from regular goods and then go on to explore some facets and trends of the luxury goods as well as their market and consumers. We will understand the definition of luxury products through secondary research. Post secondary research we will develop few hypotheses which will give us the direction for our next step ie Qualitative Research. We will use interview method in qualitative research which will give an insight into the mindset of the consumers and their purchase steps involved and then follow it up with quantitative research (survey method). Through this we will quantify our findings for the Indian luxury consumer and their buying behaviour. We will analyze the factors that influence the consumers in buying the luxury products. Jitesh Sanghvi MMS -137, Marketing Page 4 Understanding Consumer Behaviour towards Luxury Products Research Abstract Scope: This project is a part of a job assigned to the planning department. This project is an initiative taken to understand the behaviour of consumers towards luxury products. Purchase of a luxury product involves lot of planning and research before taking any decision. There are number of factors that affect an individual?s decision making process as well as his choice about the product. These factors are different for different types of luxury product. A research into these aspects will give us an insight into the mindset of the consumer and will help to study the consumer better. Method: Primary research was done in two steps. ? Qualitative Research – Depth Interview Method ? Quantitative Research – Survey Method 1) Qualitative Research: For qualitative research, few high income people were asked open ended questions which were formulated based on the secondary research and in line with the hypothesis. Depth interview of 10 people were taken which gave an insight into their purchase behavior and their decision making process for a luxury good. Based on this interviews and a further review of the secondary research reports, a final survey questionnaire was prepared. 2) Quantitative Research: For quantitative research, after making the initial questionnaire it was pretested with 5 participants and was improvised. The final sample was 30 with target group being A and A+ socio-economic class people. In June 2009, the survey was conducted to observe the behavior pattern of consumers in buying luxury products. This allowed us to find out about the behaviour of the consumer towards luxury products across various income groups. Also we asked them about what all factors Jitesh Sanghvi MMS -137, Marketing Page 5 Understanding Consumer Behaviour towards Luxury Products influence them to buy such products and which brand of products do they feel are luxurious. We also understood the price range that they feel makes the product luxurious. Thus in future while designing any interactive campaign the output of this survey would be of great use for positioning the product as a luxury product. Also some secondary data was mined regarding what exactly influences an individual? s decision. Conclusion: Luxury products are high involvement products which require high thinking and are defined by their exclusivity and brand. They are mostly bought as a symbol of status. People have high emotional attachment with luxury products and are mostly influenced by their family members in decision making as most of the products are bought for family use. These products are also used as a means to gift their closed ones. Endorsing a film star or sport personality does not affect the image of a luxury product to a great extent. Luxury products give a feeling of pride and most of the purchase decision making is influenced by family members especially spouse. This entire initiative was one of its kinds and will help the INTERFACE COMMUNICATION to design its campaigns for Club Mahindra Holidays in a way to advertise them as a luxury club. Jitesh Sanghvi MMS -137, Marketing Page 6. Understanding Consumer Behaviour towards Luxury Products Acknowledgement I would like to give my sincere thanks to my Industry Project Guide Mr. Nilesh Talreja, Senior Executive, Strategic Planning, Interface Communications and Ms. Nahid Elavia, Account Planner, Strategic Planning for their kind support and guidance during my project and also for providing me with a great opportunity to work with such a valuable organization. I would also like to thank Mrs. Shamla Sathe, Account Planning Head for giving me this great opportunity to work with Account Planning Department. It is her visionary thinking, which has been the guiding force for whole of the division and my report. I would also like to thank Mr. Amit Dhokai, my colleague, who has provided me with the necessary information and his valuable suggestion and comments on bringing out this project in the best possible way. I would also like to thank all the faculties at SIMSR who have helped me directly or indirectly in the completion of this project. I thank Interface Communications (A part of Draft FCB+Ulka) for such a valuable learning experience. Thank you Jitesh A Sanghvi MMS – 137 (2008-2010) K. J. Somaiya Institute of Management Studies Research Jitesh Sanghvi MMS -137, Marketing Page 7 Understanding Consumer Behaviour towards Luxury Products Sr. No. 1 2 2. 1 TABLE OF CONTENTS Company Overview Secondary Research Luxury Products: Getting to know luxury 2. 2 2. 3 Difference between regular luxury goods Consumer Behavior: What is Consumer Buying Behaviour 2. 4 2. 5 2. 6 Stages of Consumer Buying Behaviour Types of Consumer Buying Behaviour Consumer Involvement: Causes of Consumer Involvement 2. 7 3 4 4. 1 4. 2 5 6 Models of Consumer Involvement Research Method Primary Research Qualitative Analysis Quantitative Analysis Recommendations Appendix 23 26 28 30 35 59 60 17 19 21 15 16 Page No. 9 12 14 Jitesh Sanghvi MMS -137, Marketing Page 8 Understanding Consumer Behaviour towards Luxury Products LIST OF FIGURES CHARTS Sr. No 1. 1 1. 2 1. 3 Particulars Difference between regular and Luxury goods Stages of Consumer Buying Behavior Consumer Involvement Page No. 15 18 20 Jitesh Sanghvi MMS -137, Marketing Page 9 Understanding Consumer Behaviour towards Luxury Products COMPANY OVERVIEW. Jitesh Sanghvi MMS -137, Marketing Page 10 Understanding Consumer Behaviour towards Luxury Products About Interface Communications History Interface Communications is the second agency of the Draft FCB Ulka group. The Draft FCB Ulka group has a 125 year heritage of pioneering concepts which define advertising and a 40 year heritage in India. Interface has grown from a single office to 5 offices in India and is one of the 1st few Indian agencies to boast of a pan Asia network. We are a team of 115 professionals across Delhi, Chennai, Bangalore, Kolkata and Mumbai. Interface is the first Indian agency brand that has gone beyond India. Interface has opened offices in Malaysia, Hong Kong, China. In 2003 we launched operations in Taiwan, Singapore. Work with some of the best known brands in each country. Business Interface is a second agency that is created to handle large scale clients. We work with some of the biggest brands across sectors from FMCG to automobiles, from real estate to finance companies, from consumer durables to holidays and many more. Majority of our clients are industry leaders and we are proud to be their strategic partners. Our clients have stuck by us as we are a process driven company. We have our share of global proprietary tools to provide a strategic edge to the clients we work with. Some of the more often used tools include: ? ? ? Mind and Mood and Moments The Wheel VIP and ICON Inspite of being process driven we are still a very people oriented organization. Our teams work together like a family and there is at all times a casual and jovial Jitesh Sanghvi MMS -137, Marketing Page 11 Understanding Consumer Behaviour towards Luxury Products. work environment maintained. We believe in an open door policy where any employee can express himself/ herself freely. As an organization we believe in constant learning and thus stress on training and development at all times. The Draft FCB Ulka group is one of the only advertising agencies in India to run a 2 month long training program for fresh recruits. This program called ‘The Star One training’ is a rigorous training ground for the future advertising biggies. This program is an annual feature and has been going strong for more than a decade. Draft FCB Ulka and Interface are some of the few agencies to have a very low attrition rate and most of the senior level management have been with the company on an average for more than 15 years which is a long time in advertising which sees constant churn. We at Interface live the values we believe in and for us our mantra is : We provide strategic communications partnership to our clients to help sell their brands today, and build brand value over time Jitesh Sanghvi MMS -137, Marketing Page 12 Understanding Consumer Behaviour towards Luxury Products Secondary Research on luxury products Jitesh Sanghvi MMS -137, Marketing. Page 13 Understanding Consumer Behaviour towards Luxury Products Secondary Research: Luxury Products Getting to know luxury Luxury brands have often been associated with the core competences of creativity, exclusivity, craftsmanship, precision, high quality, innovation and premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford these pricey items. The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are more or less price insensitive and choose to spend their time and money on objects that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. Luxury has never been something easy to define, yet this mystery concept is something highly desired by one and all alike. We look at delving deeper into this mystery and aura of luxury goods by way of comparing them against „regular goods? as well as highlighting the characteristics of the luxury industry. But before beginning with that, lets first attempt to understand some common terms associated in the world of high-end goods : ? Luxury and prestige brands such as Rolex, Louis Vuitton and Cartier represent the highest form of craftsmanship and command a staunch consumer loyalty that is not affected by trends. These brands create and set the seasonal trends and are also capable to pulling all of their consumers with them wherever they go. ? Premium brands are those brands like Polo Ralph Lauren, Calvin Klein and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing mix strategies are more attuned to a mass market, albeit a luxury mass market. They are also termed as mass-premium brands or mass-luxury brands. ? Fashion brands on the other hand are those that address the masses. Jitesh Sanghvi MMS -137, Marketing Page 14 Understanding Consumer Behaviour towards Luxury Products Difference between regular luxury goods Fig 1. 1 Differences between Regular and Luxury Goods Jitesh Sanghvi MMS -137, Marketing Page 15. Understanding Consumer Behaviour towards Luxury Products Consumer Behaviour What is Consumer Behaviour Buying Behaviour is the decision processes and acts of people involved in buying and using products. Consumer Buying Behaviour refers to the buying behaviour of the ultimate consumer. A firm needs to analyze buying behaviour for: ? Buyers reactions to a firms marketing strategy has a great impact on the firms success. ? The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how consumers buy. Jitesh Sanghvi MMS -137, Marketing Page 16 Understanding Consumer Behaviour towards Luxury Products Stages of Consumer Buying Behaviour Fig 1. 2 Stages of Consumer Buying Behaviour The above figure shows Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions do not always include all 6 stages, determined by the degree of complexity discussed next. The 6 stages are: 1. Problem Recognition (awareness of need)difference between the desired state and the actual condition. Deficit in assortment of products. Hunger-Food. Hunger stimulates your need to eat. Can be stimulated by the marketer through product informationdid not know you were deficient? i. e. you see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes. 2. Information search-o Internal search, memory. Page 17 Jitesh Sanghvi MMS -137, Marketing Understanding Consumer Behaviour towards Luxury Products o External search if you need more information. Friends and relatives (word of mouth). Marketer dominated sources; comparison shopping; public sources etc. A successful information search leaves a buyer with possible alternatives, the evoked set. Hungry, want to go out and eat, evoked set is o o o o Chinese food Indian food Burger king Klondike kates etc 3. Evaluation of Alternativesneed to establish criteria for evaluation, features the buyer wants or does not want. Rank/weight alternatives or resume search. May decide that you want to eat something spicy, Indian gets highest rank etc. If not satisfied with your choice then returns to the search phase. Can you think of another restaurant? Look in the yellow pages etc. Information from different sources may be treated differently. Marketers try to influence by framing alternatives. 4. Purchase decisionChoose buying alternative, includes product, package, store, method of purchase etc. 5. PurchaseMay differ from decision, time lapse between 4 5, product availability. 6. Post-Purchase Evaluationoutcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made the right decision. This can be reduced by warranties, after sales communication etc. After eating an Indian meal, you may think that you really wanted a Chinese meal instead. Jitesh Sanghvi MMS -137, Marketing Page 18 Understanding Consumer Behaviour towards Luxury Products Types of Consumer Buying Behaviour There are four types of consumer buying behaviour which are as follows: ? Routine Response/Programmed Behaviourbuying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc. ? Limited Decision Makingbuying product occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount of time for information gathering. Examples include Clothesknow product class but not the brand. ? Extensive Decision Making/Complex high involvement, unfamiliar, expensive and / or infrequently bought products (Luxury Products). High degree of economic / performance / psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding. Information from the companies MM; friends and relatives, store personnel etc. Go through all six stages of the buying process. ? Impulse buying, no conscious planning. Jitesh Sanghvi MMS -137, Marketing. Page 19 Understanding Consumer Behaviour towards Luxury Products Consumer Involvement Some consumers are characterized as being more involved in products and shopping than others. A consumer who is highly involved with a product would be interested in knowing a lot about it before purchasing. Hence he reads brochures thoroughly, compares brands and models available at different outlets, asks questions, and looks for recommendations. Thus consumer involvement can be defined as heightened state of awareness that motivates consumers to seek out, attend to, and think about product information prior to purchase. Jitesh Sanghvi MMS -137, Marketing Page 20 Understanding Consumer Behaviour towards Luxury Products Causes of consumer involvement The factors that influences consumer involvement include personal, product and situational. ? Personal Factors Self-concept, needs and values are the three personal factors that influence the extent of consumer involvement in a product or service. The more product image, the value symbolism inherent in it and the needs it serves are fitting together with the consumer self- image, values and needs, the more likely the consumer is to feel involved in it. Celebrities for example share a certain self image, certain values, and certain needs. They tend to use products and services that reflect their life style. They get highly involved in purchasing prestigious products like designer wear, imported cars, health care products etc. ? Product Factors The consumer involvement grows as the level of perceived risk in the purchase of a good or service increases. It is likely that consumers will feel more involved in the purchase of their house than in the purchase of tooth paste, it is a much riskier purchase. Product differentiation affects involvement. The involvement increases as the number of alternatives that they have to choose from increases. This may be due to the fact that consumers feel variety which means greater risk. The pleasure one gets by using a product or service can also influence involvement. Some products are a greater source of pleasure to the consumer than others. Tea and coffee have a high level of hedonic (pleasure) value compared to, say household cleaners. Hence the involvement is high. Involvement increases when a product gains public attention. Any product, that is socially visible or that is consumed in public, demands high involvement. For example, involvement in the purchase of car is more than the purchase of household items. Jitesh Sanghvi MMS -137, Marketing Page 21 Understanding Consumer Behaviour towards Luxury Products ? Situational Factors The situation in which the product is brought or used can generate emotional involvement. The reason for purchase or purchase occasion affects involvement. For example, buying a pair of socks for yourself is far less involved than buying a gift for a close friend. Social pressure can significantly increase involvement. One is likely to be more self conscious about the products and brands one looks at when shopping with friends than when shopping alone. The need to make a fast decision also influences involvement. A consumer who needs a new refrigerator and sees a „one- day- only sale? at an appliances retailer does not have the time to shop around and compare different brands and prices. The eminence of the decision heightens involvement. The involvement is high when the decision is irrevocable, for example when the retailer does not accept return or exchange on the sale items. Thus involvement may be from outside the individual, as with situational involvement or from within the individual as with enduring involvement. It can be induced by a host of personal-product-and situation related factors, many of which can be controlled by the marketer. It affects the ways in which consumers see, process, and send information to others. Jitesh Sanghvi MMS -137, Marketing Page 22 Understanding Consumer Behaviour towards Luxury Products Models of consumer involvement Learn-Feel-Do Hierarchy Model Buying decisions vary according to the way there are taken. Some decisions are taken with lot of thinking; others are taken with great feelings. Some are made through force of habit and others are made consciously. The learn-feel-do hierarchy is simple matrix that attributes consumer choice to information (learn), attitude (feel), and behaviour (do) issues. The matrix has four quadrants, each specifying a major marketing communication goal to be informative, to be effective, to be habit forming, or promote self-satisfaction. Thinking and feeling are shown as a continuum some decisions involve one or the other and many involve elements of both. High and low importance is also represented as a continuum. Fig 1. 3 Consumer Involvement ? High Involvement / High Thinking Purchases in first quadrant require more information, both because of the importance of the product to the consumer and thinking issues related to the purchases. Major purchases such as cars, houses and other expensive and infrequently buying items come under this category. The strategy model is learn-feel-do. Marketers have to furnish full information to get consumer acceptance of the product. Luxury products fall in this category. Jitesh Sanghvi MMS -137, Marketing Page 23. Understanding Consumer Behaviour towards Luxury Products ? High Involvement / High Feeling The purchase decisions in second quadrant involve less of information than feeling. Typical purchases tied to self-esteem- jewellery, apparel, cosmetics and accessories come under this category. The strategy model is feel-learndo. To encourage purchases marketers must approach customers with emotion and appeal. ? Low Involvement / Low Feeling The purchases in this quadrant are motivated primarily by the need to satisfy personal tastes, many of which are influenced by self-image. Products like news paper, soft drinks, Liquor etc., fall under this category. Group influences often lead to the purchase of these items. The strategy model is do-feel-learn. It helps marketers to promote products through reference groups and other social factors. ? Low Involvement / Low Thinking It involves less in thinking and more of habitual buying. Products like stationery, groceries, food etc. , fall under this category. Over a period of time any product can fall in this segment. The role of information is to differentiate any „point of difference? from competitors. Brand loyalty may result simply from the habit. The strategy model is do-learn-feel. It suggests that marketers induce trial through various sales promotion techniques. Jitesh Sanghvi MMS -137, Marketing Page 24 Understanding Consumer Behaviour towards Luxury Products Research Method: The study is classified based on the consumer buying preferences and factors that influence purchase decisions. The research method adopted is exploratory as the research is still in its initial stage and the preliminary information that will be gathered will help in defining the problems and suggest hypotheses. We are set to learn about consumer behaviour across various product categories of luxury. We intend to understand the influence of various factors including family members and friends on purchase decision, emotional attachment with the product, purchase of counterfeit products and endorsing a film or sports personality for luxury product. We also want to understand purchase behaviour for car, planning of holidays and perception of holiday clubs. Jitesh Sanghvi MMS -137, Marketing Page 25 Understanding Consumer Behaviour towards Luxury Products PRIMARY RESEARCH Jitesh Sanghvi MMS -137, Marketing Page 26 Understanding Consumer Behaviour towards Luxury Products Primary Research: Methods Primary research was done in two steps. ? Qualitative Research – Depth Interview Method ? Quantitative Research – Survey Method 1) Qualitative Research: For qualitative research, few high income people were asked open ended questions which were formulated based on the secondary research and in line with the hypothesis. Depth interview of 10 people were taken which gave an insight into their purchase behavior and their decision making process for a luxury good. Based on this interviews and a further review of the secondary research reports, a final survey questionnaire was prepared. 2) Quantitative Research: For quantitative research, after making the initial questionnaire it was pretested with 5 participants and was improvised. The final sample was 30 with target group being A and A+ socio-economic class people. In June 2009, the survey was conducted to observe the behavior pattern of consumers in buying luxury products. Purpose Based on the existing data and the findings of the survey, it can be understood what influences a consumer to buy a luxury product and how to reach a consumer. The different perspectives of luxury products from a consumer?s point of view can be understood giving a detailed insight as to how to position a product as luxury product. Consumer? s expectations from a luxury product will help us to understand the modifications needed in a product to be categorized as luxurious product. Jitesh Sanghvi MMS -137, Marketing Page 27 Understanding Consumer Behaviour towards Luxury Products Sampling Sampling procedure: The sample is selected in a random way, but those having a car with nearly worth more than 5lakhs. It was collected through mails and personal visits to the known persons, by formal and informal talks and through filling up the questionnaire prepared. The data has been analyzed by using the graphical method prepared in Microsoft Excel. Sample size: The sample size of my project is limited to 30 only. This is limited due to time constraints. Sample design: Data has been presented with the help of bar graph, pie charts, stacked graphs etc. Limitation: ? Time limitation ? Research has been done only at Mumbai ? Some of the persons were not so responsive ? Possibility of error in data collection ? Possibility of error in analysis of data due to small sample size Jitesh Sanghvi MMS -137, Marketing Page 28. Understanding Consumer Behaviour towards Luxury Products Analysis: In qualitative research, a personal interview was conducted of 10 people to understand the perception of luxury products and their purchase decision making process. The layout of the interview was: Warm up General details about the person, his family background, his interests and his lifestyle Luxury Product To understand their perception of luxury products and steps involved in purchasing a luxury product. Car, Holiday Club To understand his perception of a luxurious holiday and his planning process while going on a holiday. To understand his attitude towards clubs and decision making of a car Factors influencing To understand various factors that influence his decision for buying a particular luxury product. For qualitative questionnaire see appendix 1 For quantitative questionnaire see appendix 2 Jitesh Sanghvi MMS -137, Marketing Page 29 Understanding Consumer Behaviour towards Luxury Products Qualitative Analysis: The Depth Interviews conducted gave some valuable insights into the mindset of the consumer? s perception about luxury products and their decision making process during purchase. Some of the interesting responses based on which quantitative questionnaire was made are as follows: 1) What is your opinion about luxury products? â€Å"Depends, it may be different for different people. DVD, TV and other stuffs would be luxury for me. † â€Å"They are good for show off† â€Å"Luxury products are created by seller. They are not necessities for a buyer but a need has been created by the seller. The way the products are advertised, branded and presented, a need is created to buy it. † â€Å"First and foremost it gives you a satisfaction in life, satisfaction that you are making use of the dreams that are available in the market. It can also be used as a status symbol. † â€Å"If you can afford it one must consider luxury products. What is the point if you can earn so much money and still don’t spend on luxury products? † Jitesh Sanghvi MMS -137, Marketing Page 30 Understanding Consumer Behaviour towards Luxury Products Observation: Luxury Products have different perceptions with different people. Some think it is a need created by buyer where as some feel these are products good for show-off. Some consider it as a status symbol. 2) Is luxury a necessity? â€Å"Today a four vehicle has become a necessity. Though a four wheeler is a luxury still it becomes a necessity. Second example is the latest technology mobile phones. We use mobile phones even while travelling, before sleeping, after getting up, checking emails. So whatever you say about these products they have become a necessity. â€Å"It is all in the minds of the people. If they get attracted to the promotions of the product and offers, it becomes a necessity for them. As said earlier, the need is created by the seller. † 3) Name a few luxury products? Expensive Car/Bike Jewellery Club Membership Branded Perfumes Travel Holidays Expensive Car/Bike Big House Jewellery Trendy Mobile Club Membership Travel Holidays. Club Membership Travel Holidays Electronic Gadgets Branded Perfumes Branded Apparels Club Membership Electronic Gadgets Travel Holidays Branded Perfumes Branded Apparels Observation: Club Membership, Travel Holidays and Expensive Car/Bike are considered Luxury products whereas other products like Jewellery, Electronic Gadgets, Branded Perfumes and Branded Apparels are considered semi-luxury products. Jitesh Sanghvi MMS -137, Marketing Page 31 Understanding Consumer Behaviour towards Luxury Products 4) Can you take us through the entire process of buying this product right from the wish to buy – actual purchase? â€Å"My process to buy a new house started 10-12 years back. I saw an advertisement in the newspaper and then went and saw the house. Once finalised, I took a loan, sold the old house and bought this new house. † â€Å"My old car was giving me lot of problem. So I decided to buy this new car. I wished to buy this a year back. I didn’t want to take loan, so saved money for a year and finally bought this. In this period, the prices went down, so it helped me. † â€Å"I had a car before I bought this new one. It took me 2 years to buy this. It was the European car of the year. I saw the ad in the newspaper and decided I wanted to buy this. Observation: Purchase of a luxury product requires lot of planning and it takes many months to buy such high value products. Proper research and information needs to be obtained about the product before finalising the product. 5) What is your opinion of holiday clubs? Would you consider them as a luxury holiday club? â€Å"If you travel around a lot, than it is worth. It is not a luxury holiday because they have different offers which are affordable by most of the people. † I would consider it as a luxury. Most of these packages are designed in such a manner that you can get discount during weekdays. Weekends are expensive. So those are the times when you have time. † â€Å"They are good and give you the necessary relaxation. I don? t consider them entirely luxury because nowadays most of the people can afford it. † Observation: Opinions about holiday clubs are varied as there is not clear understanding of necessity. There are number of clubs providing cheap holidays and hence clubs seem to be losing on the title of luxury club. Jitesh Sanghvi MMS -137, Marketing Page 32 Understanding Consumer Behaviour towards Luxury Products 6) Would you buy a counterfeit Rolex watch for a cheaper price? â€Å"I am not a watch person so I would definitely go for a counterfeit. But for.

Friday, November 15, 2019

Determinants of Productivity :: essays research papers

Determinants of Productivity Determinants of Productivity Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity they are also called factors of production. There are four major determinants of productivity of any country’s economy.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Land: the land itself, and raw materials such as oil and minerals beneath it. The natural resources that is available without alteration or effort on the part of humans. Land as a resource includes only unique fertility and mineral deposits, topography, climate, water and vegetation. Trees grown are not categorized as land because they have been deliberately grown on the other hand Trees in a natural rainforest are a natural resource and thus classify as land. The reward for letting others use land is called rent.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Labor: In order to produce the things, a human resource must be used. human resources consist of the productive aid of labor made by individuals who work—for instance, miners, artists, and professional baseball players. The contribution of labor to the production process can be amplified. Whenever potential workers obtain schooling and training and whenever actual workers acquire new skills, labor’s contribution to productive output will raise. In other words it is human effort, mental or physical. The reward to labor is label wages.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Capital: When labor is applied to land to grow wheat, for instance, something else is used. Generally it is a plow or a tractor. That is to say, land and labor are shared with manufactured resources in order to produce the things that we need. These manufactured resources are called capital, which consists of machines, buildings, and tools. Additionally, capital consists of enhancement to natural resources, such as irrigation ditches. Money is used to buy factors of production – it is not a factor itself. The return for investing in capital is called interest.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Enterprise or Entrepreneurship: The fourth factor of production, involving human resources that carry out the functions of raising capital, organizing, managing, bringing together other factors of production, and making fundamental business policy decisions. Determinants of Productivity :: essays research papers Determinants of Productivity Determinants of Productivity Productivity is the quantity of output formed by one unit of production input in a unit of time. Inputs used in the production of the goods and services are the major determinants of any country’s productivity they are also called factors of production. There are four major determinants of productivity of any country’s economy.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Land: the land itself, and raw materials such as oil and minerals beneath it. The natural resources that is available without alteration or effort on the part of humans. Land as a resource includes only unique fertility and mineral deposits, topography, climate, water and vegetation. Trees grown are not categorized as land because they have been deliberately grown on the other hand Trees in a natural rainforest are a natural resource and thus classify as land. The reward for letting others use land is called rent.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Labor: In order to produce the things, a human resource must be used. human resources consist of the productive aid of labor made by individuals who work—for instance, miners, artists, and professional baseball players. The contribution of labor to the production process can be amplified. Whenever potential workers obtain schooling and training and whenever actual workers acquire new skills, labor’s contribution to productive output will raise. In other words it is human effort, mental or physical. The reward to labor is label wages.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Capital: When labor is applied to land to grow wheat, for instance, something else is used. Generally it is a plow or a tractor. That is to say, land and labor are shared with manufactured resources in order to produce the things that we need. These manufactured resources are called capital, which consists of machines, buildings, and tools. Additionally, capital consists of enhancement to natural resources, such as irrigation ditches. Money is used to buy factors of production – it is not a factor itself. The return for investing in capital is called interest.  ·Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Enterprise or Entrepreneurship: The fourth factor of production, involving human resources that carry out the functions of raising capital, organizing, managing, bringing together other factors of production, and making fundamental business policy decisions.