ECO/365 Version 4 Principles of Microeconomics

ECO/365 Version 4
Principles of Microeconomics
Team Reflection
Discuss this week’s objectives with your team. Include the topics you
feel comfortable with, any topics you struggled with, and how the topics
relate to your field.
Public Policy
in Economics
Prepare a 350- to 1,050- word paper detailing the findings of your
Learning Team Weekly Reflection
There were many objectives in week four that related to each of the team member’s personal
experiences within our field. Analyzing the effects of externalities on market outcomes and the
differences between horizontal, vertical, and conglomerate mergers has allowed us to understand
how the market really works and how we and our employers fit into the grand scheme of things.
This week, it was also important using critical thinking to analyze what the government actually
does and whom it impacts when they decide to intervene in certain areas.
Effect of Externalities
In understanding externalities, the team was able to understand the positive and negative
impacts associated with externalities. Theses impacts are factors that are a result of agreements
by two parties without consideration of the effects of a third party. The book used a good
example in referencing the positive impact of furthering one’s education and the environmental
impact pollution has on society. The federal government has an active role in the overall
economy. It uses fiscal policy to assist in guiding the economy from a recession or inflation.
With implementing expansionary or contractual policies, government spending is either
increased or decreased along with an increase or decrease in taxes. As a result of government
intervention, it can cause the nation to run a deficit or have a surplus.
Horizontal, Vertical, and Conglomerate Mergers
There are three different types of mergers. They are horizontal mergers, vertical mergers, and
conglomerate mergers. A horizontal merger is the combination of two companies that are in the
same industry. When it comes to horizontal merging the Justice Department must review all
merges. They have to look at the merge and see if there would still be enough competition after
the merge to keep prices at a competitive level. If there would not be enough competition it
would create a monopoly. A vertical merger is when there is a combination of two companies
that are at different areas of the same industry. An example would be if a clothing manufacturer
were to buy a retail store that sells clothes. The Justice department looks at all mergers and
decides if the company would gain too many in shares if they merged. The constrictions have
lessened since the 1980’s. Conglomerate mergers are when companies merge when they have
relatively unrelated business. A lot of times companies will do these merges for a good buy or to
ward off a take-over bid. The reason for the merge or how the merge happens does not matter if
it means they own too much of the market the merge will be denied. The company I work for
has created several businesses to supply needs of the parent company. An advertising agency, a
construction company and a property leasing company are a few of the developed companies.
These companies were not acquired through a merger but created to make the parent company
more efficient.
Effect of Governement Interventions, Taxation, and Regulations
This week was helpful to understand the many factors that impact the economy and the
changes in business that could be influenced by critical thinking decisions. Minimum wages was
one of the topics discussed that had many influences toward product pricing of businesses. It is
important to understand these concepts and understand the political decisions that may influence
the strengths of companies whether they are massive or small. Understanding the negative
impacts and comparisons between companies can also help individuals understand the
weaknesses that may cause failure to the growth and structure. Some of the factors given in the
material for this week have proven severe consequences to past businesses. These factors are
very “eye-opening” when discussing the factors that could cause businesses to be put out of
business or lose substantial returns on the investment.
In closing, the team did not feel that this weeks objectives were very complicated and we all
got a decent grasp on the information. It became clear seeing how these factors could cause
struggles to our current or future employers. The information given this week was very
straightforward to understand the ramifications of decisions made in an informal manner.
Colander, D. C. (2010).Economics (8th ed.). New York, NY: McGraw-Hill.
Related flashcards

Open content projects

19 cards

Google acquisitions

56 cards

Corporate finance

17 cards

Create Flashcards