Wednesday, July 17, 2019

Cigarette Tax

Section 1 Cig bette impose hike sparks panic buying By Ashley Hall Updated Thu Apr 29, 2010 What is the master(prenominal) issue presented in the media herald? Discuss what has actually happened In the year of 2010, the Federal Government elevated(a) tax revenuees on cig atomic number 18ttes by an supererogatory 25 per cent, gisting in an annex worth of $2. 16 to every pack of 30 cig bettes. A proclamation stated by flush Minister Kevin Rudd on the crackdown on Internet advertising of prats was menti aced. Mr. Rudd excessively affirmed the loose medication go out spend $27. one million million on an anti- smoke campaign (Hall, 2010) This media physical composition outlines the publics impulsive buying of cig atomic number 18ttes upon the governments mention of the very rapid sum up in taxes, thus resulting in an upward(a) cast up in expenditure. It mentions the dis mays retailers and tobacconists confront cod to the tax hike. Further to a greater extent, ment ioning the concerns of philanthropists and other individuals. foreground the reason for the issue being raise This issue was one that arose quite diddle after its resolve, as it touched the acres in its majority in m whatever ways.The justification behind this issue was the governments insufficiency of planning. The vent of the tax hike occurred only several hours onward its prospected start of mid shadow that night, which at last left teensy or possibly even no time to adjust and prepargon for the ensuant cost change magnitude. (Hall, 2010) Outline what viable upholds this mixture could arrest The unexpected castrate pose umpteen impacts on an abundant firmament of the population. The change impact the consumers (smokers), the suppliers/producers, retailers/tobacconists, charity workers and the government.The abrupt publication of the price increase would locomote to a majority of smokers buy large amounts of cigargonttes than usual, in an attempt to pu rchase the harvest-festival at a cheaper price quite than at its increase price. The retailers/tobacconists face the prospects of high conducts and physical impossibilities much(prenominal) as inadequacy of stock and time to prepare. Although on the reprobate as stated by the executive director of Quit Victoria 100,000 stack entrust quit smoking as the result of the price increase and 250,000 children go out not take up the clothe. (Hall, 2010)From another viewpoint, the rapid increase in tax had an immediate negative impact on the number of mint larnk assistance. This is solely the case, as a wide held proportion of smokers come from impoverished-income throngs, In fact, people from low-income groups are 13 times to a greater extent likely to quit smoking in the face of a prime increase than those from higher(prenominal) income groups. (Hall, 2010) Who are the disclosestone stakeh previous(a)s that are impacted by the issue outline in the tarradiddle? The key gr oups that may be impacted by the issues raised(a) in this report are in the long run the key stakeholders i. e. he customers, suppliers, regulators and opponents. The customers (smokers) are confront with the change magnitude price on packets of cigarettes. Which yieldually puts an excise outcome on consumers income. The suppliers were faced with a rapid increase in indigence in the hours forward the implementation of the tax increase, and perpetual conduct between the power points after the tax. This is referable to the look that smokers are not get outing to go cold turkey over night simply due to an increase of $2. 16, alone last the possible immediate even up in number of packets bought/sold in the event prior to the tax increase.Suppliers are also faced with the concern of consumers opting for fill in scoops (This means a unplayfuls beseech is increased when the price of another good is increased) for physical exercise replacing cigarettes with chewing gu m (even considering that cigarettes are inelastic). (McTaggart, 2010) Regulators, which in this case are the Government, are faced with ageless scrutiny regarding their decisions and lack of planning. However, this tax hike increased an extra $5 billion over quaternion years, which the Government would put towards its health and hospitals renovation (Hall, 2010). So evidently, back into the preservation.An increase in people seeking assistance will also place possible strains on charity workers, as people will continue to spend money on cigarettes instead than necessities. Competitors are also faced with a possible increase in charter, as the price of one good is increased, the lead of the easement good is increased (McTaggart, 2010). Students and groups of people from low socio economical berth will be directly touch on the greatest. For those who come from high-income classes, their wages are primarily increasing as the 25 per-cent emergence is implemented, which ultim ately does not easily venture their income as a whole.However, students and people from low socioeconomic status groups are cock-a-hoop up necessities of life to aliment their smoking addictions. What economic theories can be permeate from this media report? Opportunity comprise graphical record 1 The theory of Opportunity cost ( chart 1) the amount of other wares that essential be sacrificed to obtain an extra unit of any product. The probability cost refers to the benefit forgone from the best alternative use of resources. (McTaggart, 2010) As the economy moves from point B towards point C, it must give up successively bigger amounts of good B to obtain the aforementioned(prenominal) equal increment in good C (Layton, 2009).In relation to cigarette tax, people from lower income groups are giving up the necessities in order to feed their smoking addiction. Demand, Supply and Elasticity graphical record 2 The take on for cigarettes increased during the occlusion of the governments announcement and until midnight when the price increase was implemented i. e. a change in consumers expectations well-nigh prospective prices brings forward an increase in consumption. (McTaggart, 2010) Graph 3 Change in demand is where the demand has shifted to the left hand side. jump in price will see a greater quantity supplied (quantity will rise), shift in supply curve. McTaggart, 2010), (Layton, 2009). From midnight the correspondence shifted to the left side along the demand curve by the price increase. As the result, as it was mentioned above, the quantities demanded drop-offd, due to the tax increase. payoff in consumer and producer paying the burden of the tax increase. (McTaggart, 2010) Section 2 orchard apple tree Shares hit as iPhone gross sales come back Short toss out News Oct 19, 2011 What is the main issue presented in the media report? orchard apple tree, one of the mavining technological companies in the beingness has record revenues unchara cteristically short of expectations. protect street analysts expected iPhone sales during their one-quarter quarter earnings to be 20 million sales, with a short walk out of 17 million sold. With general revenues recorded at $28. 3 billion, really short of expectations (Sky News, 2011). orchard apple tree untried question executive Tim Cook does not take care concerned about the recorded short fall of the gild since the brief of Co-founder Steve Jobs. save losses in revenue for orchard apple tree fourth quarter could be meaningfully the result of many factors (Sky News, 2011). The main modify factor, being the short after release of the iPhone 4s.Due to the release of the iPhone 4s, consumers were withholding from purchasing older models of the iPhone, with the thought I would rather wait a litter longer to purchase a freshly and updated adaptation. Ultimately the thought of consumers posses greater chance for apple sales in the prox but resulted in revenue fal l short in their fourth quarter. The recorded revenue had a negative impact on the family. With the actual versus predicted sales of the iPhone fall short, apple bundled dropped 5% upon the announcement (Sky News, 2011).A drop in parcel price negatively affected the ships company, specially since a drop in partake price has now only occurred since the passing of co-founder Steve Jobs. A drop in share price could result in consumers disbelieving whether they should continue to purchase orchard apple tree products, or if the drop in share price is a polaritying factor that at that place is a higher demand for substitute goods. This could be the case as many other leading technological companies are constantly trying to innovate new and improve models of phones, laptops and tabloids to keep up with apples constant improvements.For example Samsung release of their new tablet caused large amounts of disputes between themselves and Apple, as Apple saw a large opportunity for threat to sales of their iPad. Although this is the case, the new iPhone 4s has flick rocketing sales of four million in its first three days on the market. As new chief executive Tim Cook said customer response to iPhone 4s has been fantastic, we digest momentum going into the vacation season, and we remain really enthusiastic about our product pipeline. (Sky News, 2011). Who are the key stakeholders that are impacted by the issue adumbrate in the report?The key groups that may be impacted by the issues raised in this report are ultimately the key stakeholders i. e. the customers, suppliers, shareholders and competitors. The customers are ultimately those who predict they continuing success of the company, without customer sales Apple would not exist. The hit of Apple shares could negatively impact consumer sales. A pass up in the share price could signal a train of though in consumers mind that possibly there is a need for greater innovative or the threat of higher competito rs in regards to Apple products.If consumers are being told that a company is recording predicted short falls in their expected revenue consumer might be apposed to their products, resulting in customers opting for substitute goods. (McTaggart, 2010) The suppliers in this report are in fact Apple and all other retailers that stock Apple products. The short fall of iPhone sales resulted in a drop-off in revenue. Which ultimately lead to a decrease in the price of Apple shares. A decrease in share price could lead to a resist in possible sales, which results in a supplier surplus.Suppliers get hold of a greater number of products to cover in relating to consumers who are lodge ined in buying their product (McTaggart, 2010). In the event of the release of the iPhone 4s, suppliers are faced with higher consumer demand, which could result in a dearth of iPhone 4s in relation to consumer demands. Apples brand let on and reputation is a very master(prenominal) asset to the company, with this issue being raised, it could have an impact on one of their largest assets. Shareholders, are those individuals or companies who have financially invested an interest in Apple, a decrease in share price negatively impacts shareholders. gloaming in the share price by 5% results in a decrease in the value of shareholders wealth. The final group that is impacted by issues of a capitulation in Apples share price is competitors. This could have a positive impact to competitors. prejudicious public announcement over such a large and dominant company could result in a substantial amount of consumers opting to purchase products competitors offer, simply due to the decisions of other individuals. A consistent course in the public shows, that if a product is negatively represented in more than one way consumers will be very reluctant to purchase that product.Resulting in a positive advantage for competitors products. The group that would be impacted the most would be the supplier s. They are the key foundation of the company, without continued success the company could face greater hardships and decline in sales leading to a decline in revenue and share price as which occurred in the month of October 2011. What economic theories can be drawn from this media report? Supply and Demand Graph 1 Demand curve during period of Apple reporting shortfall of sales and lessen revenue in recording during their fourth quarter.The graph above is a standard of changes in demand. Apple change in demand during this period is caused by consumer expectations, tastes and preferences. Where the concisely to be released iPhone 4s resulted in the decrease of occurrent iPhone sales. (McTaggart, 2010), (Layton, 2009). Graph 2 The Above graph is a representation of the supply and demand curve during the first release of the iPhone 4s. The alter curve remains constant (from period before and after the release of the iPhone 4s). Where significant changes occurred in relationship t o the demand curve.The increase in demand which resulted in a right ward shift of the demand curve was a direct result of taste or preferences of consumers a key determinant in the changes in demand (Layton, 2009). This was the case as consumers withheld from purchasing older models of the iPhone with anticipation of purchasing the newer and improved translation of the iPhone (iPhone 4s). This resulted in Apple experiencing greater quantities demanded as stated in the article iPhone 4s has huckster rocketing sales of four million in its first three days on the market. Change in demand results in change in new equilibrium (Sky News, 2011). ReferencesMcTaggart, D. , Findlay, C. , and Parkin, M. (2010), political economy, Sixth Edition, Addison-Wesley, Sydney Lecture Slides, Blackboard, University of Technology, Sydney, Insearch (2011), political economy for argumentation Unknown. 2011, Apple shares hit as iPhone sales fall Short, Sky News, YAHOO, viewed 4 November 2011, http//news. yahoo. com/apple-earnings-hit-drop-iphone-sales-220800212. html Layton, A. , T. Robinson and I. Tucker (2009), Economics for Today, Cengage Learning Australia, Australia South Melbourne. Faculty of Business (2010), Guide to Writing Assignments (3rd ed. ), Faculty of Business, University of Technology, Sydney

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