Microeconomics about Fresh Water Supply Essay

Scarcity of fresh water is emerging as the most critical resource issue which world is facing in recent years. The signs of a shrinking water supply can be seen worldwide. Many restaurants no longer provide a free glass of water to diners and cities restrict its use for private pools and gardens. The supply of fresh water is limited, but with the increase in population, the demand of water increases rapidly. We use water faster from our resources than it can be replaced. This paper will discuss the issues regarding fresh water supply in the future with the already shrinking resources and fast growing world population, pollution of major water resources, impact of climate changes and longer drought seasons etc. The major factor of increasing water usage is the faster growth of world’s population. Demand for water is also rising due to increase in economic activities, urbanization and people’s lifestyles. Moreover, increasing population is shrinking the supply of water. Despite the fact that 75 percent of the Earth’s surface is covered by water, only 2. 5 percent of it is fresh water, and three-quarters of that is locked up in the form of glaciers and ice caps in polar areas, where human reach is nearly impossible. Only 0. 3 percent of the water is surface water, found in rivers and lakes. The rest is buried deep in the ground. (Hinrichsen & Tacio, 2001) The root cause of current global water crisis, especially in the third world countries, is population and there is a serious need to meet this crisis with modern techniques of water management. In the age of population explosion, more water is required for irrigation and we need to develop a sound planning to utilize water resources. Water scarcity has become a greater concern at present as people were facing shortage of water. Because of overpopulation, mass consumption, misuse, and water pollution, the availability of drinking water per capita is inadequate and shrinking. Because of population growth – coupled with industrialization and urbanization – will result in an increasing demand for water and will have serious consequences on the environment. The connection of Fresh Water and population is much closed, increase in population, urbanization affect the quality and availability of water resources. Also, population growth enhances the demand of fresh water for agriculture use, and house hold consumption. Scares and contaminated water supply also cause health problems. The shortage of water may arises political conflicts among countries, the example is India and Pakistan, both of them shares two or more rivers the India have advantage because he uses upstream water and the left is for Pakistan’s use. But they are not satisfied with all this, and try to get more and more by agreements and table talks. Some times it seems that they both are ready to fight for water, this type of situation is dangerous for the economy of both countries. (Hinrichsen & Tacio, 2001) Water is a strategic resource in the globe and an important element in many political conflicts. Some have predicted that clean water will become the â€Å"next oil†, making Canada, with this resource in abundance, possibly the richest country in the world. The Middle East region has only 1 percent of the world’s available fresh water, which is shared among 5 percent of the world’s population. Thus, in this region, water is an important strategic resource. By 2025, it is predicted that the countries of the Arabian Peninsula will be using more than double the amount of water naturally available to them. Jordan, for example, has little water, and dams in other countries have reduced its available water sources over the years. Other dispute on water is on river Gangus between India and Bangladesh. India controls the flow to Bangladesh. The two countries have now signed an agreement to use the water of Gangus River equally to prevent further conflicts in future. (Water Politics, 2008) As shortage of water increases by time to time, many countries of the world try to prevent this shortage by making laws and strategies for efficient use of water in house holds and industrial sectors. They attempt to make water reservoirs like dams and barrages to control the flow of water down stream and to fully utilize the river water and make it sure that not a single drop of water wastes. Dams are emerged as the major step which different governments take to overcome the crisis of water. There are at least 40,000 dams that are built to date in the world. (Hinrichsen & Tacio, 2001) Among these countries, India is the one, who increasingly rely on Dams to meet its water needs. The shortage of water may arises political conflicts among countries, the example is India and Pakistan, both of them uses 2 or more than 2 rivers the India have advantage of having the upstream water of all the major rivers which flow towards Pakistan. Thus there is a high probability of emergence of any new conflict over fresh water between these two countries. There are some other countries which have very little amount of fresh water within their boundaries, so they must use alternate way to get fresh water. They must resort to the conversion of sea water into fresh water to fulfill their needs, not to mention land locked countries. The process is known as Desalination. Without this process they are not able to support there population. The technology is very high energy consuming and is very expensive; it is beyond the reach of most poor countries which facing water shortage, like some countries of Africa. (Hinrichsen & Tacio, 2001) The major use of water is in Agriculture sector, industrial sector and by house holds. With the increase in population, the usage requirements are rise proportionally. Increase in population’s living standards, increases per capita water consumption. Increasing Agricultural and Industrial usage reflects improving in living standards. Agriculture Dominates global water use, accounting for 69 percent of all water withdrawals. Industry accounts for about 23 percent, followed by municipal consumption at 8 percent. (Hinrichsen & Tacio, 2001) In the coming years, population of world grows rapidly and the per capita consumption of water in coming years shrinks the world’s water resources, as a result the demand for water exceeds more than reserves to provide it. It is expected in future that a large number of countries facing water shortage due to exceeding demand of water. Water demand is also rises due to the growth of industrial usage, rising demand for household consumption and increasing use of water for irrigation to produce more food to feed rising population of world. Take United States of America as an example, while the average American in 1900 just consume 10 cubic meter of water per year for personal and household use, that figure had jumped by an average of 200 cubic meters a year. (Hinrichsen & Tacio, 2001) Most people in developing countries get their water from a public tap, community wells, rivers, lakes and rain water collected from ponds. As most of the developing countries become urban, people get their water from city water system. As we know that cities are ever growing larger and larger, their demand for water increases with the increase in population. Such growth of population puts pressure on city’s water reservoirs and most of them are unable to provide or fulfill that demand due to lack of resources. In Middle East, the amount of renewable water is declining due to increase in population. â€Å"The practice of heavily subsidizing water is costing Middle East governments dearly, both in terms of revenues and efficiency. Governments in the region, advised by water industry experts, are realizing that a fresh approach is required, one based on managing the region’s scarce water resources, rather than just reacting to uncontrollable consumer demand,† says Edmund O’Sullivan, Chairman of MEED Events. (Mideast faces fresh water crisis, By Staff Writer on Sunday, March 16, 2008) Due to shrinking water supply in Dubai, last month, the Dubai and Water Authority increased the tariff of water and electricity. This was the first time; Dubai has increased the tariff since 1998. â€Å"Tariff increases are bound to be met with resistance, so a gradual approach may be the best way forward. Although the change will not apply to UAE nationals, the biggest consumers of water, it is a step in the right direction. Managing existing water assets better could go some way to reducing the need for new capacity,† O’Sullivan said. (Mideast faces fresh water crisis, By Staff Writer on Sunday, March 16, 2008) Another major cause of shrinking water supply is water pollution; it becomes a major problem for all the countries of world, developed countries in Europe and North America face problems due to water pollution. In many countries of world, especially in developing countries, lakes, rivers and streams are used as receptacles for an assortment of industrial wastes, including untreated and partially treated municipal sewage, industrial poisons, and dangerous chemicals that mix into surface and ground water during agricultural activities. Caught between scare and polluted supply of water, and rising demand from population and industrial sector, most of developing countries are facing difficulties to provide demanded amount of fresh and clean water (Hinrichsen & Tacio, 2001). As the World Bank has warned, lack of water is likely to be the major factor limiting economic development in the decades to come (Serageldin, 1995). More than half of the world’s rivers are now so polluted that they pose serious health risks. One-third of Africa’s people already endure conditions of water scarcity, and water supplies are in jeopardy in China, India, Japan, Spain, southern France, Australia, the southwestern U. S. and many other parts of Asia and Europe. Rapidly growing populations, ever-increasing pollution, desertification and falling water tables endanger a fragile, finite resource. Toxic chemicals are contaminating water, endangering the world’s most precious supplies of water. Toxic brew of pesticides, nitrogen fertilizers, industrial chemicals, and heavy metals is fouling water everywhere, and that the damage is often worst in the very places where people most need water. In the next 50 years, an additional 3 billion people are expected to inhabit the Earth, creating even more demand for water for drinking, irrigation, and industry. But we’re polluting our cheapest and most easily accessible supply of water. (Sampat, 2000) Distribution of Freshwater: One major issue that is likely to have a major impact on freshwater’s supply and demand in the years to come is that of distribution. Like many other natural resources, freshwater’s distribution around the globe is extremely uneven. Areas inhabiting less than one third of the world’s population currently receive more than 75% of the annual rainfall. With global warming rapidly changing the environmental outlook of the globe, this natural distribution of freshwater is likely to become even more uneven. In some regions, where freshwater is available in abundance or annual rainfall is moderate enough to meet the demands of the local population, lack of proper resources and infrastructure restricts access to the freshwater supply. For instance, in South Asia, rainfall is the major source of freshwater. However, above 80 percent of the rainwater runs off too quickly to be effectively utilized. A number of methods and processes have been developed over the years to preserve freshwater resources and to ensure that runoff from the rainfall doesn’t go wasted. Dams and desalination are the two most commonly used processes world over. It should however be noted that not all countries suffering from shortage of water supply have enough resources to properly develop or employ such methods for the preservation of freshwater supply. Freshwater Resources: The Microeconomic Perspective: From a microeconomic perspective, the cost of freshwater is likely to increase sharply as soon as the planet starts running out of resources. Decline in quality of available freshwater resources such as river or lakes, change in rainfall trends and drying up of glaciers are some of the many factors that will eventually lead to a decline in the supply of freshwater in different parts of the world. Demand, on the other hand, will continue to increase as a result of an increase in population, lifestyle changes and improvement in quality of life in developing economies. The result will be a shift in the supply curve. In simple terms the price for freshwater will shoot up in the long run. There will be severe economic as well as sociopolitical consequences of such a shift in the supply curve. Economies suffering from freshwater shortages are already facing challenges that directly impact their economic performance and social progress. The only way out of this disaster is broad and extensive collaborative initiatives by the world nations to ensure the fresh water supply in the future. There should be immediate measures to be taken to sort out and cope with the problem of pollution of fresh water resources, because it is the most fatal blow on our already shrinking resources. Comprehensive awareness programs should be launched in every part of the world on local community bases so that the individuals become aware of the danger they are about to face in the near future and be prepared for it. Deliberate misuse of water should be considered a crime and extensive punitive measures should be taken in order to curb deliberate misuse and pollution of water supplies and resources. The overall condition of fresh water supply gives a clear indication that in the near future the fresh water supply will not only will be reduced but it will also become costly and the consequences will be very harsh and brutal for poor people who are already deprived off clean water supply may be completely left without water supply in the future. If immediate measures are not taken there is a very high probability that fresh water will become a luxury of the elite only and the commoners will have to survive without it if they can survive. References Hirichsen, Don & Tacio, Henrylito, (2001) The Coming Fresh Water Crisis is Already Here, Wilson Center, Retrieved on 17th March 2008 http://www. wilsoncenter. org/topics/pubs/popwawa2. pdf Middle East Faces Fresh Water Crisis, (2008) Emirates Business 24/7, Retrieved on 18th March 2008 http://www. business247. ae/cs/article_show_mainh1_story. aspx? HeadlineID=3929 Sampat Payal, (2000) The Hidden Freshwater Crisis, World Watch Institute Retrieved on 18th March 2008. http://www. worldwatch. org/node/1684 Water Politics, (2008) Wikipedia The Free Encyclopedia. Retrieved on 17th March 2008 http://en. wikipedia. org/wiki/Water_politics#Water_as_a_critical_resource Saijel Kishan and Madelene Pearson, Bloomberg News Published: Monday, July 03 2006 http://www. canada. com/edmontonjournal/news/business/story. html? id=60e8a4c1-b733-4f96-a85c-d723c1f4e221&k=50181 http://www. business24-7. ae/cs/article_show_mainh1_story. aspx? HeadlineID=3929

Business Benefits of Agile

Business Benefits of Agile Agile marketing has proven to be one of the most vital business concepts leading to success in both individualized customer experience, as well as overall product performance. The key component of this type of marketing, agility, represents an organizations ability to assess environmental change and then efficiently and effectively respond to that change. This approach improves the predictability, adaptability, speed, and transparency to change of the marketing function. Being able to tailor their efforts in a quick manner is a must for marketers, so to successfully respond to changes that occur in market conditions, customer behavior, and business direction to benefit market share. By doing so, marketers will gain the ability to gain a more individualized connection with customers in a dependable, effective and engaging way, therefore achieving what is known as individualized marketing. As a result of keeping customers up to date with all marketing affairs and therefore gaining a le gitimate grasp of their habits and issues, marketers put themselves in the best position of creating rewarding relationships. Marketing agility is centered around the ability of marketing organizations to collaborate in an efficient fashion, while also being able to adjust their performance to potential changes. In combination with this, it is imperative that marketing organizations also focus on the execution of the following key initiatives: Centralizing the management of all marketing programs Aligning marketing activities to budgets and spending accounts Developing reusable process workflows Responding at the speed of the customer Adjusting campaign execution based on analytical insights Improving marketing performance by employing proven strategies for success Remaining agile throughout a campaign so changes can be made in real time There are three primary operations considerations in agile marketing. The first is Planning Spend Management, which is the ability to fully access limited marketing resources so that marketers can get the most ROI from their marketing initiatives. Next is Workflow Collaboration Management, or the ability to prioritize and execute all incoming marketing requests with pre-established, reusable workflows. And finally, Marketing Asset Management, the ability to design, edit, produce, and deliver creative assets that consistently and automatically invoke executive, marketing, and legal approval mechanisms. Planning Spend Management: Marketers have the chance to get the most on their investment, but in order to do so, they need to have the option of seeing limited marketing resources more clearly and thoroughly. Focusing on planning and spend management can help this happen. If there is a lack of perceptibility in terms of how marketing resources are being designated, both marketing costs and missed opportunities are likely to increase. Implementing current insights into spending rates and budget adherence, enables marketers to make well-informed decisions concerning the success of strategic initiatives and make immediate and responsive adjustments. Another consideration for improving planning and spend management is creating a centralized marketing calendar which links every action to the spend that supports it, allowing greater visibility into every strategic initiative and its measurable results. Access to this information also allows for informed conversations and eliminates opinio n battles with fact-based data. Workflow Collaboration Management: In order to better manage workflow and collaboration, there needs to be a clear understanding of all incoming marketing requests so work can be prioritized and carried out with pre established, reusable workflows. This will not only maximizes an organization’s marketing efforts, but also ensure process compliance and reporting. Additionally, the ability to choreograph and manage all the intra-agency and inter-agency communications and activities that support the creation, execution, and governance of omni-channel customer campaigns is essential to an organization’s efficiency, agility, and overall success. The system manages itself, providing the opportunity for marketers to focus on creativity. The true power of workflow and collaboration management is exposed when the broad aspect of it enables a complete end-to-end process and encompasses all steps of the marketing activity. Marketing Asset Management: The best and most effective marketing efforts require that an organization’s creative assets are designed, edited, produced, and delivered in a way that consistently and automatically invokes executive, marketing, and legal approval mechanisms. By harmonizing these operations in an efficient and compliant way, marketers can ensure their digital and creative content is both effective and compliant. By prioritizing a close and efficient process with creative asset production partners, marketers can position their organizations to successfully deliver streamlined, approved, and compliant assets at the speed each customer wants and expects. The best marketing asset management approach establishes a consistent process for creation and a single place to store properly licensed and approved assets. The financial benefits of this repository are undisputable – marketers have the most up-to-date creative pieces they require at their fingertips, and there is never a cost associated with replacing lost or misplaced assets. The benefits of increasing marketing agility are both measurable and substantial. In fact, highly agile organizations report they meet goals and business objectives 83% of the time, compared to 59% of less agile organizations. Increase in productivity is a big one, which can be measured in ways such as completed marketing tasks, results, points, etc. There is also more transparency, allowing other branches of management to see the whereabouts of marketing. Because two agile marketing core values are accountability and measurability, this emphasis better develops marketing’s contribution communication skills. Customer satisfaction also increases as a result of customer needs being met quickly and with honesty, encouraging them to make a purchasing decision. Agile marketing allows for marketing teams to have a better overall connection with their different departments and allows for improved communication internally and with their customers. Experience and performance will not o nly improve exponentially, but marketers’ ability to do their job will prove to be more straightforward and more fun. Being able to share and collaborate with the people you work with makes way for greater respect and satisfaction throughout the workplace.

Research paper over positives and negatives of war bonds during world

Over positives and negatives of war bonds during world war 2 - Research Paper Example However as with regular bonds the purchaser always has the option of redeeming the bond for its face value at a later date. Typically war bonds tend to have a yield which is below market value and are usually sold in different denominations to suit different purchasing power of prospective buyers. All things considered these government issued bonds are considered as steady and reliable investments (Altius directory). War bonds were issued by many countries, including United States and Germany during World War I and II. The role of War Bonds During the Second World War, a number of companies encouraged citizens to buy war bonds. In addition to funding the government, war bonds also reduced the amount of currency on the  open market, with the hope of keeping inflation rates down. Many Americans think of the Series E Bond when they hear the term â€Å"war bonds.† This bond was initially marketed as a â€Å"defense bond† in 1935, and with the outbreak of war, the Treasury switched to calling it a â€Å"war bond.† Series E Bonds were available from the Treasury until 1980. The funds from the sale of war bonds are used to finance the military. American Patriot Bonds may seem like war bonds, but the sale proceeds actually go into a general fund, rather than supporting the military specifically. For people who dislike the idea of supporting military action but want the safety and stability of government securities, other Treasury securities are available for sale, including treasury bills, notes, and general bonds. War bonds during World War 2 United States Initial offerings The last time it was seen that the United States issued war bonds was during the World War 2. This was in the event when full employment clashed with rationing, and the only way money could have been removed from circulation in order to reduce inflation was through the introduction of war bonds. These bonds were issued by the U.S Government, and they were initially called Def ense Bonds. However post the attack on Pearl Harbor, on December 7, 1941; they were renamed to War Bonds. War bonds were primarily debt securities issued for the purpose of financing military operations in the war period, these bonds yielded a 2.9 percent return after a 10 year maturity. If you analyze the median income of a resident of the United States during the World War 2 phase, annual earnings equaled to a total of $2000. It was during this period that regardless of the hardships the American citizens were facing 134 million Americans were asked to purchase war bonds to aid in financing the war. Another option was to purchase stamps, costing 10 cents each, these could be saved towards the future acquisition of a bond. The first series labeled as the ‘E’ U.S. Savings bond was purchased by President Franklin. D. Roosevelt and it was sold to him by Henry Morgenthau, the Treasury Secretary. These bonds served as a loan to the government so that the war could be financ ed. The E Series bonds were sold at 75% of their face value in denominations of $ 25 up to $ 10,000, with some limitations. Promoting the War Bonds The voluntary promotion of the War Bonds was the key responsibly of the War Advertising Council whereas the sales were supervised by the War Finance Committee. Together the work of these two agencies resulted in the

The commonest form of contract law Essay Example | Topics and Well Written Essays - 750 words

The commonest form of contract law - Essay Example A court of law usually enforces the contract as long the offeree proves that he posted the letter. For the case of Bella, the letter he posted on 25th September 2006, but arrived on 30th September 2006, the contract to purchase the text book became binding immediately he sent the letter of acceptance. It does not matter that the letter was delayed by the post office. On the issue that since the recommended textbook for the course has changed, and Bella does not wish to buy the textbook, this would not apply. Acceptance one made, it cannot be revoked. The moment Bella expressed his acceptance of an offer, that very moment the contract is concluded, and it does not matter whether the acceptance is by word of mouth or even by writing. On the case of Chu who accepted Arun's offer by telephone, his contract became complete when the acceptance was heard by Arun on 30th September 2006. According to the law of contract, there is an exception to the communication of acceptance. A contact is complete only when acceptance is actually communicated to the offeror. But a contract made by telephone is complete only when the acceptance is heard by the offeror. For this case, Chu should not revoke the acceptance on the basis that the book will not be useful since it is not recommended text book in his course. An acceptance once made, it cannot be revoked. On the case of Dilma, who accepted the offer by email sent on 27th September 2006 but read by Arun on 28th September 2006, the contract became binding immediately the email of acceptance was sent. According to law of contract, there is an exception to the communication of acceptance as acceptance made by cable takes effect from the moment of posting is an exception to the general rule, that a contract is complete only when acceptance is actually communicated to the offeror. For this case, Dilma cannot be able to revoke the acceptance since an acceptance made cannot be revoked. Past Consideration is Sufficient Consideration Although consideration must not be past, there are three exceptions to this rule that past consideration is no consideration. The exceptions to this rule are applicable when:- The past consideration consists of services rendered at the express or on legally implied request of the promissor. A relevant case studied on this concept is that of:- Lampleigh vs. Braithwait In this case B, under death sentence, requested L to obtain King's pardon for him, which he did. B subsequently promised to pay 100 to L, which he failed to pay, and pleaded the defence that his promise was based on past consideration. It was held that as the plaintiff performed services as the express request of the defendant, a subsequent T promise to pay would be binding on him. When a debt, the payment of which is barred by statute of limitations, is revived by a fresh promise in writing for example if a creditor does not demand the repayment of the loan from his debtor within six years of the loan hence he cannot enforce his claim in the court in case the debtor refuses to pay. Lastly in the bill of exchange Act that provides that an antecedent debt or liability on the part of the promisor or drawer of the

Inter to accounting Research Paper Example | Topics and Well Written Essays - 1000 words

Inter to accounting - Research Paper Example Mutiny Gold Limited is one of the key major players in gold, copper and nickel mining and exploration activities and has great control in this sector. It is a public company which is listed in ASX, and has two main competitors; Kingsgate Consolidated Limited and Eldorado Gold Corporation who will also be analyzed in this report. This report consider the released quarterly activities and cash flow results in the year 2011 and the impact the half year profit result had on the stock prices. In the cash flow report, Mutiny Gold Limited had its net cash flow improve significantly. This made the share prices of Mutiny Gold Limited gain slightly as portrayed by the positive residual over time. Profit announcement Mutiny gold limited as a limited company must always adhere to the capital market regulation. Therefore, it is obligated to provide financial results and report to the shareholders and members of the public. In conformance to this requirement the company on 29th July, 2011 released a report having information about the quarterly activities and a cash flow report. The announcement made through the Australia Security Exchange press made information available to both investors and members of the public. ... h at the end of the quarter 1588 On this report, the progress of mutiny gold limited of major and almost all projects that the company was undertaking thus offering the investor a mere forecasting of Mutiny Gold Limited profit. In addition, the company showcased improved cash flow management implying that the company will be able to ruin its operation smoothly without cash flow problems. To achieve the objective of this report, we will analyze the company stock prices while considering all market indices for the period starting 8th July 2011 to 20th August, 2011, to establish whether there were positive residual which would delineate the impact of the announce on the price of shares. In addition to this, the tow major competitions, Kingsgate Consolidated Limited and Eldorado Gold Corporation share prices will also be analyzed so establish the industrial effect the announcement brought forth. Residual returns of MYG Source: (Austailia security Exchange, 2011) Trend analysis of share c losing prices of Mutiny Gold Limited, The share prices immediately after the announcement increased by 0.005 but later dropped. This price increase can be associated with the announcement made the company on its activities and cash flow report. Source; (Austailia security Exchange, 2011). Now let us analyzes the residual returns of the company, As showcased in the above graph the residual returns of the company improved from, -5.86 to -2.47, this can be attributed to the announcement made by the company. The residuals returns did not improve, since the company announcement did not change the potential investor’s perspective (Austailia security Exchange, 2011). The company action of realizing the quarterly report of its activities and cash flow statement did not win the confidence of the

POEMS Essay Example | Topics and Well Written Essays - 500 words

POEMS - Essay Example The poem illustrates the theme of productivity among the American citizens in the totality of its stanzas. In at least each line of the poem, it (the poem) mentions and describes individuals engaged in an activity geared towards productivity. The productivity here is economic and it encompasses all Americans as illustrated in the first line of the first stanza as: â€Å"I hear America singing, the varied carols I hear† (Wallenfeldt, 2012, 26). This first line indicates that the carols in the poem are not from one source, but many sources with a common goal: productivity. The poem â€Å"I hear America Singing† has deployed a huge use of repetition to add more weight and emphasis on the theme. The clause â€Å"makes ready for work, or leaves off work,† in the 4th line brings out the repeated word â€Å"work†. The word â€Å"work† in this line informs that productivity here is achieved only through physical involvement in jobs (Wallenfeldt, 2012, 26). Moreover, the â€Å"singing† has been repeated to put emphasis on how Americans enjoy any practice of productivity they are involved in. Exploration of the reader’s emotions is the most critical part of a poem and what better way to do it by employment of imagery? In the poem â€Å"I hear America Singing† imagery has been employed to reach the needed emotional attachment between the reader and the poem. The line â€Å"The shoemaker singing as he sits on his bench, the hatter singing as he stands,† brings an image to the reader’s mind making them understand the flow and the meaning of the poem (Oliver, 2006, 97). â€Å"I hear America Singing† is a poem showcases great flow of ideas coupled with a fine language use which describes its rhythmic details. Each line in the poem conveys similar information, but only with great emphasis for instance â€Å"The delicious singing of the mother, or of the young wife at work†, each line has an ideological connection with the previous

Why traffic congestion is a classic example of the problem of Essay

Why traffic congestion is a classic example of the problem of externalities - Essay Example This research will begin with the statement that traffic congestion is the most significant problem in a large number of cities of the world. Traffic congestion is regarded as an example of consumption externality. It is reported by the experts that negative externalities do take place when consumption or production of a good or service by one person imposes a burden of cost on the other people. The result which is achieved from such a scenario does damage the environment. Traffic Congestion produces negative externalities. The present research has identified that various external costs are imposed upon by journeys through cars in the forms of air pollution, traffic congestion, noise pollution, change in climate and accident.   Peaking is responsible for creating traffic congestion. Suppose that a road network is already running at its full capacity. At this kind of situation, if an additional car joins the network, then it is quite evident that it would result in the fall of an av erage speed of all the cars in that road network that in turn would increase the time of journey for all.   Beyond the full road capacity, the cost that a journey through a private car has to bear gets increased due to congestion as it creates more delays in time as well as larger costs of fuel. If an individual takes the decision to drive his/her car at the time of going to work, the ability of the decision actually makes the same road a bit more crowded.... All the additional costs are taken into account, such as extra costs of fuel. Negative externalities are always considered by the economists as undesirable because they help in creating inefficiencies. It simply implies that people indulge in driving even if they should not do so from a societal perspective. For instance, if one estimates that all the benefits of going for a drive including more comfort and more flexible journey surpass the costs of driving in the form of fuel costs and costs of maintenance, then the person would choose driving through personal car as the best mean for going out to work. But, in this calculation, the person has surely neglected some vital component: the costs for longer period which the person would impose on other commuters inadvertently. Thus traffic congestion becomes a classic example of the problem of externality. (Litman, 2003; Lindsey, 2006) 2. Consider the ways in which private motorists will respond to road charges and comment on the private motorists' price elasticity of demand for road use. According to the theory of demand, an increase in price of a normal good/service will cause a fall in the quantity demanded for that good. This logic holds true for the road use by private cars as well. Imposition of road charges implies that costs of road use will increase for private motorists. Given the same benefits derived from going out with a private car, road charges cause the average costs to rise. It will simply result in a fall in the road use by private motorists. They would now prefer to go with a bus or travel in some other time when congestion is lower. Thus the private motorists respond to a road pricing either by reducing the same road usage at peak