Economic Case Studies

Length: 2 Pages 588 Words

Part I According to 2007 numbers, the average income for families at the poverty level was around $20,650. Yet a third, or around $6876.45 monthly, of this income is typically used to put food on the table. That leaves a mere $13,773.55 a month for other living expenses, which breaks down to around $459 a day for an entire family. This daily income would then cover the cost of rent, medical bills, educational costs, and etc. This mere amount of annual monthly income for an entire family. This does not prove a sufficient amount of funds for an entire family. According to the Department of Health and Human Services, this would barely cover a family of two individuals, and fall quite short of the normal family number of around four individuals. Yet, there is no real way of discerning the consumption category which takes up the most amounts of funds other than the Continue...

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In many cases, the 13,773 a month fails to keep a family of four afloat when income is looked at after taxes. This then makes one wonder if the costs were truly worth it in the end. And so, there is no true way to define exactly what the line of poverty is or how much each family should be making in order to be categorized as impoverished. strict one-third delineation for food. Yet, this move proves to be a costly one. After this cap is placed, the trade element is incorporated to produce a competitive market place where the less pollutant companies receive more business based on their levels of environmentally friendly production methods. Within the context of case study 1, which examined the affect of SCO2 which creates acid rain within earth's atmosphere, cap and trade regulations addressed the market failure of considering environmental pollutions within production methods and budgeting. This implantation of cap and trade has been successful thus far, although the decrease has been incredibly slow to accommodate changing markets without destroying local businesses. This fails to take into consideration the net income, which is significantly less, and therefore places the family deeper into poverty than previously thought. Part II In 1998, the three major domestic car producers, General Motors, Ford, and Chrysler, announced that they would cut car pollutants by 70 thanks to encouragement by the Federal Government. It helps environmental groups reach businesses, and businesses make compromises with environmental groups. This then helps create a cooperative atmosphere which fosters environmental responsibility. Yet, these cleaner cars also entail much larger marginal costs, and therefore place the security of the big three auto makers in jeopardy. Once a cap was placed on the levels of SCO2 a plant could produce, it was then up to the individual plants to come up with proper emission-reduction plans.


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