Due to company cutbacks, you are now earning 10% less per pay period. How do you plan on managing this new development?
The decrease in the salary reduces my disposable income. Disposable income is the part of the income available for expenditure. Consequently, the goods I will be purchasing will also change. This depends on the income elasticity of goods. The goods that I find crucial, or income inelastic, will be purchased same as they were before. However, the goods that are income elastic, ones that I don’t find as crucial, will be cut down. The cut in luxury or unnecessary spending should give me enough money to feel comfortable even after the 10% cut (Investopedia). The next Apple iPhone costs 3% more than last year’s model. Discuss Apple’s approach to elasticity.The elasticity of the iPhone demand is very dependent on the market in scope. If the discussion targets the first world country with the developed economy and high disposable income of consumers, the iPhone can be considered inelastic and the change in price of 3% will not impact the demand as much. In fact, when the price for iPhone 6 was $100 higher, the demand still was largely more than supply (AppleInsider).However, if the target country is less developed, where the iPhone is viewed as a luxury item, the increase in price might have a devastating impact on sales. However, the 3% change might not be that significant. One of the biggest drives for the demand change is the competitors. However, Apple does not see itself greatly affected by the cheaper Android-operated phones.
Search for articles relating to the drought in California. What impacts can you speak to?
This year is the 4th consecutive year the California state experiences extreme drought. It is called “the drought of the century “. Historically, California has experienced 7 major influential droughts. A drought in California are dangerous for a few reasons. First of all, during a severe drought the groundwater levels are dropping extremely low (Ca.water.usgs.gov). This hurts the hydro-powered energy production, recreational industries and natural habitat. Additionally, California produces the third of the US vegetables and two thirds of its fruits and nuts (Mieszkowski). Considering, with the water saving plan in place, farmers get only a small part of they require. This can hurt the country’s economy quite hard.
How does a company like Airbnb impact the hotel and tourism trade?
According to its website, Airbnb is the company that focuses on connecting those who have spare living space and those who are looking for such. Therefore, Airbnb basically substitutes the service provided by the hotel industry. However, the service level of accommodation provided by Airbnb is less than the one provided by the big expensive hotel chains like Hilton or Ritz.
Thus the conclusion can be made that Airbnb impacts heavily only low-cost hotel chains or not-business oriented. For that type of hotels, Airbnb cuts earnings quite significantly, in some areas up to 10% (Zervas, Proserpio and Byers). It …