AT&T agreed to acquire DirecTV for $49 billion, creating a new pay-TV giant with 26 million subscribers. This deal, along with Comcast's acquisition of Time Warner Cable, shows how telecom and media companies are consolidating to gain scale and leverage in response to changes in media consumption and competition from online streaming services. The AT&T-DirecTV merger will make AT&T a stronger competitor in pay TV and mobile services, but may face regulatory scrutiny over its impact on competition and consumer prices.
This document provides an overview and quantitative analysis of the proposed merger between Comcast and Time Warner Cable. It summarizes the key details of the merger, outlines the companies involved, and calculates the Herfindahl-Hirschman Index (HHI) for pay-TV and broadband markets both before and after the merger. The HHI calculations show a significant increase in market concentration post-merger, indicating potential antitrust issues that could challenge regulatory approval of the deal.
The FTC has accused DirecTV of deceptive advertising practices related to its discounted pricing promotions. The FTC claims DirecTV failed to sufficiently disclose that the discounted prices required a two-year contract, prices increased significantly in the second year, and that consumers would be automatically billed for premium channels after a free trial period. The FTC is seeking a settlement from DirecTV of many millions of dollars in refunds to consumers. DirecTV denies the allegations and says it will vigorously defend itself. The FTC decision was unanimous and based on thousands of consumer complaints about DirecTV's advertising and pricing practices.
How T-Mobile & Sprint will win Deal Approvalthomas paulson
The document discusses a thesis that if T-Mobile and Sprint merge and successfully launch their combined 5G network service as described, T-Mobile's stock should generate an annualized return of nearly 80% through 2020. It outlines key points supporting this, including that regulators will likely approve the merger in early 2019 due to failures in broadband and pay-TV competition, and conditions will be set around 5G service commitments and pricing caps. It also predicts excitement and adoption of 5G will build in early 2019, leading to consensus earnings revisions and multiple expansion, driving the projected stock returns. However, it acknowledges there are no guaranteed 80% returns for large caps and provides sensitivity analysis around potential outcomes.
The ultimate guide to AT&T cell phone network and how to lower billsAnubhai Sura
Tired of paying huge cell phone bills, cable bills, internet bills, electricity bills, insurance bills more than your monthly subscription. Your search ends here. All we need is your bills and we will do the rest part. Till now, 300,000+ customers save $1+ million every month with us. Are You Next?
Comcast plans to merge with Time Warner Cable to become a leading technology and media company. The objectives are to provide faster innovation, better products and communicate the value of the merger to stakeholders. Key stakeholders include subscribers, employees, investors, government regulators and competitors. There are risks such as increased market control drawing regulatory scrutiny, and opportunities like competing against satellite providers. Metrics will measure social media sentiment, media coverage, sales reports and website traffic to assess the merger's success.
T Mobile's Opportunity to win Sprint and 5Gthomas paulson
T-Mobile has created a unique opportunity for substantial value creation through its focus on enhancing consumer value, the limitations of its competitors like Sprint, and the transition to 5G networks. If the proposed merger with Sprint is approved, allowing T-Mobile to realize synergies, and if 5G adoption accelerates industry growth and margins improve, the company's stock price could rise to over $245 per share, representing a 3x return for investors. The document discusses how T-Mobile has gained significant market share and profitability in recent years through its "Un-carrier" strategy of increasing consumer value and how the Sprint merger would replicate T-Mobile's past successful acquisition of MetroPCS.
Provides a clear picture of the current internet and cable industry in the US and where Comcast stands. Also speaks about the financial aspects of Comcast and where it needs to improve.
This presentation analyzes AT&T and its strategies since the early days of the telephone, passing by the divestiture of 1984, and ending in Michael Armstong's days. a SWOT analysis is performed in each of these milestones.
This document provides an overview and quantitative analysis of the proposed merger between Comcast and Time Warner Cable. It summarizes the key details of the merger, outlines the companies involved, and calculates the Herfindahl-Hirschman Index (HHI) for pay-TV and broadband markets both before and after the merger. The HHI calculations show a significant increase in market concentration post-merger, indicating potential antitrust issues that could challenge regulatory approval of the deal.
The FTC has accused DirecTV of deceptive advertising practices related to its discounted pricing promotions. The FTC claims DirecTV failed to sufficiently disclose that the discounted prices required a two-year contract, prices increased significantly in the second year, and that consumers would be automatically billed for premium channels after a free trial period. The FTC is seeking a settlement from DirecTV of many millions of dollars in refunds to consumers. DirecTV denies the allegations and says it will vigorously defend itself. The FTC decision was unanimous and based on thousands of consumer complaints about DirecTV's advertising and pricing practices.
How T-Mobile & Sprint will win Deal Approvalthomas paulson
The document discusses a thesis that if T-Mobile and Sprint merge and successfully launch their combined 5G network service as described, T-Mobile's stock should generate an annualized return of nearly 80% through 2020. It outlines key points supporting this, including that regulators will likely approve the merger in early 2019 due to failures in broadband and pay-TV competition, and conditions will be set around 5G service commitments and pricing caps. It also predicts excitement and adoption of 5G will build in early 2019, leading to consensus earnings revisions and multiple expansion, driving the projected stock returns. However, it acknowledges there are no guaranteed 80% returns for large caps and provides sensitivity analysis around potential outcomes.
The ultimate guide to AT&T cell phone network and how to lower billsAnubhai Sura
Tired of paying huge cell phone bills, cable bills, internet bills, electricity bills, insurance bills more than your monthly subscription. Your search ends here. All we need is your bills and we will do the rest part. Till now, 300,000+ customers save $1+ million every month with us. Are You Next?
Comcast plans to merge with Time Warner Cable to become a leading technology and media company. The objectives are to provide faster innovation, better products and communicate the value of the merger to stakeholders. Key stakeholders include subscribers, employees, investors, government regulators and competitors. There are risks such as increased market control drawing regulatory scrutiny, and opportunities like competing against satellite providers. Metrics will measure social media sentiment, media coverage, sales reports and website traffic to assess the merger's success.
T Mobile's Opportunity to win Sprint and 5Gthomas paulson
T-Mobile has created a unique opportunity for substantial value creation through its focus on enhancing consumer value, the limitations of its competitors like Sprint, and the transition to 5G networks. If the proposed merger with Sprint is approved, allowing T-Mobile to realize synergies, and if 5G adoption accelerates industry growth and margins improve, the company's stock price could rise to over $245 per share, representing a 3x return for investors. The document discusses how T-Mobile has gained significant market share and profitability in recent years through its "Un-carrier" strategy of increasing consumer value and how the Sprint merger would replicate T-Mobile's past successful acquisition of MetroPCS.
Provides a clear picture of the current internet and cable industry in the US and where Comcast stands. Also speaks about the financial aspects of Comcast and where it needs to improve.
This presentation analyzes AT&T and its strategies since the early days of the telephone, passing by the divestiture of 1984, and ending in Michael Armstong's days. a SWOT analysis is performed in each of these milestones.
AT&T is the largest telecommunications company in the US that offers telephone, internet, and wireless services. It was established in 1885 and pioneered many innovations but was broken up in 1982 before reemerging as a wireless and broadband focused company. While it faces competition from Verizon, Sprint, and T-Mobile, AT&T has increased its profits through acquisitions and the success of the iPhone. It expects continued growth through expanding its U-Verse technology and managing high data traffic with tiered pricing plans.
This presentation compares two titans in the wireless service industry: Verizon & AT&T. Although the notes for this presentation are not included, this is a strong example of how to incorporate pictures into a slideshow in order to break up text. I worked on a team of 4 students in a Fundament Information Systems course to produce this Powerpoint presentation.
*I do not claim ownership to the images in this slideshow.
AT&T is a major telecommunications company that provides services to consumers and businesses in the US and internationally. Its services include phone, wireless, internet, TV, security, and equipment. As of 2010, AT&T had 24 million consumer phone and 14 million broadband customers in the US. It also owns Cingular Wireless, the second largest carrier with 95 million subscribers. In 2011, AT&T planned to acquire T-Mobile USA for $39 billion to expand its wireless business further.
AT&T: Twenty Years of Change Case AnalysisMotaz Agamawi
This document analyzes strategic changes at AT&T over 135 years through five milestones:
1) 1875-1893: AT&T established a monopoly by acquiring licenses and Western Electric.
2) 1894-1984: Competition grew after patent expiry. Regulatory acts began in 1913 with the Kingsbury Commitment.
3) 1984: AT&T divested local networks into 7 Baby Bells in an antitrust settlement.
4) 1984-1997: AT&T acquired McCaw Cellular and NCR but struggled with convergence. A second divestiture split it into 3 companies.
5) 1997-2000: CEO Armstrong pursued cable and broadband but overpaid for acquisitions,
AT&T is a major American telecommunications company that provides wireless service, internet access, phone services, and advertising across the US. Formed through mergers and acquisitions of former "Baby Bell" and "Ma Bell" companies, AT&T aims to connect people everywhere through innovative communication solutions. It has a large network and customer base, and seeks to expand into new technologies like U-verse and mobility services to stay ahead of customer demands.
AT&T was originally founded in 1885 as American Telephone and Telegraph Company and grew to become the primary telephone service provider in the United States through a series of acquisitions and mergers. It held a monopoly for much of the 20th century until antitrust action in 1982 broke up AT&T and separated its local and long distance business units. Since then, AT&T has undergone further restructuring and acquisitions to evolve from a telephone company into a global provider of communications and networking services.
1) The media industry saw mixed performance in Q1 2011, with internet advertising growing strongly while radio and TV broadcasting revenues were flat. Overall domestic ad spending grew 7% despite economic headwinds.
2) Internet usage and access points continue to grow, with rising broadband adoption and increased use of smartphones. Internet advertising revenues grew 23% in Q1 2011.
3) Profits from internet advertising also increased, driven by revenue growth and steady margins around 60-62% for major companies. EBITDA less capital expenditures (proxy for free cash flow) was up 18% for these firms.
This document analyzes and summarizes the proposed merger between AT&T and DIRECTV. It provides background on both companies and their operations. The key details of the merger are that AT&T will acquire DIRECTV in a stock-and-cash deal valued at $95 per DIRECTV share. The merger is aimed at combining AT&T's telecommunications networks with DIRECTV's satellite television business. The document analyzes the strategic rationale for the merger from both companies' perspectives, potential synergies, and risks. It considers whether the merger price reflects the value that can be created through synergies between the companies.
This document provides an overview of Verizon Wireless and its business segments. The key points are:
1) Verizon has two main business segments - Verizon Wireline and Domestic Wireless. Wireless provides services to over 91 million customers across the US, while Wireline offers services in the US and over 150 countries.
2) Verizon has invested heavily in its 4G LTE network, launching in 38 major markets in 2010. It plans to expand coverage to over 200 million people by the end of 2011.
3) Data revenues are a major growth area for Verizon, increasing by $4 billion to $19.6 billion in 2010 alone. Verizon is excited by revenue opportunities from 4G
Year 2013 will go down in history as the year of the big risk in Indian television and media. Whether it was with big jump into cable TV digitisation or in the area of experimenting with new programming formats or working on changing the status quo in TV ratings or in battling the Telecom Regulatory Authority of India’s (TRAI's) ad cap, the year saw everyone playing a long hand. India’s economic growth slowed down; inflation went on the rampage as did the dollar when it appreciated drastically against the rupee, but the industry took things in its stride.
Nasmedia is poised to become Korea's largest digital media representative in 2017 with 20% market share. The acquisition of N Search Marketing in 4Q16 extended Nasmedia's coverage to all areas of digital advertising, including programmatic buying and mobile video ads. Nasmedia's 3Q16 revenue grew 37% YoY, beating expectations, driven by strong mobile and IPTV advertising growth. The report maintains a Buy rating on Nasmedia, raising the target price to W65,000 based on 2017 EPS growth of 52% and limited dilution from the rights issue.
2015 2H Outlook: Korean Telecom service industryJeehyun Moon
Telecom Service (Analyst Jee-hyun Moon)
Getting over the hump
[Summary] Getting over the hump
I. 2H15 outlook: Getting over the hump
II. Key themes and issues: O.V.E.R.
III. Valuation & investment strategy
IV. Top pick & stocks to watch
[Conclusion] Look to earnings improvements and dividend payout
Q1 '12 % Chg
Mattress Firm $18.5M 60%
Ashley Furniture HomeStore $13.4M 15%
Rooms To Go $11.7M 15%
Wayfair $10.5M N/A
Source: Miller, Kaplan, Arase & Co.
Department/Discount Stores & Shopping Centers
While only up 1% in Q1 2012, Department/Discount Stores & Shopping Centers remains a consistent top ten
category for Radio. Walmart continues to lead the category with $30.4M in Spot Radio expenditures, up 2%
versus Q1 2011. Target came in at #2
The document is the transcript from AT&T's 1Q09 earnings conference call from April 22, 2009. In the call, AT&T executives discuss the company's financial results for the first quarter of 2009. They note solid execution and cost discipline led to stable margins despite economic pressures. Key highlights included strong growth in wireless subscribers and data usage, continued expansion of U-verse TV and broadband subscribers, and $4.6 billion in free cash flow. AT&T remained focused on disciplined execution and investing in major growth areas like wireless and U-verse to lead in the industry's best opportunities.
The document discusses the implications of spectrum auctions for industry, policymakers, and consumers. It summarizes Canada's 2008 AWS spectrum auction, noting that new entrants bid prices that were 2-3 times higher than in the US auction. This was likely due to the set-aside of spectrum for new entrants and regulations mandating network access. However, high prices may reduce investment. Going forward, continued investment in broadband networks is needed to support economic growth, and intervention should encourage rather than hinder this investment.
The "death by Netflix" scenario for the future of pay TV has been greatly exaggerated – this week, we look at the full picture for the year ahead for pay TV, which is much more complex and optimistic than the headlines might lead us to believe.
Telecom Service/Media: AT&T to acquire Time Warner
- US-based telco AT&T’s acquisition of Time Warner will be an industry game changer
- Note growing investment in premium content (a growth driver for ICT ecosystem)
- Focus on CJ E&M’s efforts to improve original content and telcos’ media expansion
The document analyzes key financial metrics and ratios for telecommunications companies AT&T and Verizon from 2010-2014. It finds that AT&T had greater fluctuations in metrics like return on equity and net profit margin due to variations in net income between years. Verizon generally saw more steady growth in revenue but higher leverage in 2014 following its acquisition of Vodafone's stake in Verizon Wireless. The analysis also examines asset turnover, working capital, return on assets, and dividend payout ratios to compare the financial performance and health of the two major telecom companies.
This document provides an overview of Verizon Communications and the telecommunications industry. It discusses key details about Verizon's history through mergers between Bell Atlantic and GTE, its current operations and international strategy. The document also analyzes Verizon's strengths, weaknesses, opportunities and threats, and compares its financial performance and competitors.
If you were the CEO of ATT would you have bought Time Warner.pdfaceindustriesjal
If you were the CEO of ATT would you have bought Time Warner. Justify your answer
Three years ago, AT&T Inc. T -1.18% executives were in a federal courthouse fighting the Justice
Department to defend their takeover of Time Warner Inc., a more than $80 billion foray into the
entertainment business.
AT&T won the court battle, but lost in the marketplace. Now, at the behest of Chief Executive John
Stankey, the telecom giant is giving up its dreams of marrying media content and distributionone
of the biggest about-faces in corporate deal history.
AT&T said Monday it will spin off its sprawling media empire, including HBO, CNN, TNT, TBS and
the Warner Bros. studio, into a new venture with Discovery Inc. DISCB 1.29% That follows a
February agreement to hive off a 30% stake in satellite broadcaster DirecTV and give up
operational control of its pay-TV unit, which was hollowed out by customers trading pricey channel
bundles for less expensive alternatives.
All told, the two reversals erased tens of billions of dollars of equity value, as AT&T cut deals to
exit its investments and shed debt. AT&T said the full value of the media transaction includes not
just the equity value but also the cash AT&T will receive for divesting itself of the business.
The original idea behind the two big mergers was to help the Ma Bell descendant challenge
Comcast Corp. in the pay-TV business, steal digital-advertising dollars from Alphabet Inc.s GOOG
0.63% Google, and mount a challenge to Netflix Inc. NFLX 0.13% in streaming.
Now, the company will stick to what it knowsthe wireless and broadband business. Its executives
acknowledged the whiplash felt by employees still adjusting to the many changes the telecom
company spurred over the past three years.
The personal reaction is Im a bit sad, Mr. Stankey said in an interview, noting that investors havent
been won over by the companys media strategy. Im disappointed that the shift in the market that
occurred caused us to have to step back and re-evaluate.
Both of the big deals were hobbled by strategic miscalculations and lapses in execution. AT&T
bought DirecTV in 2015 near the peak of the pay-TV market, just before cord-cutting started to
pick up pace. After winning the antitrust fight for Time Warner, AT&T was slow to launch a
streaming service and struggled to keep up with rivals plowing billions of dollars a year into
content.
Cable mogul John Malone, a major Discovery shareholder, said that although he believes Time
Warner is doing fine, merging content and distribution usually doesnt make sense. I think that the
technology of connectivity and digital technologies are one focus, and creating content that people
get addicted to is another focus, he said. And you seldom would find both of those in the same
management team.
John Malone, a major Discovery shareholder, said merging content and distribution usually doesnt
make sense.
The two most successful players in direct-to-consumer streaming video, Netflix and Walt Dis.
AT&T has faced many challenges throughout its history such as competitors infringing on its patents, antitrust lawsuits from the government, and a rapidly evolving industry. However, AT&T has remained a leader in communications technology for over a century by pioneering technologies like pay phones, radio broadcasts, and transatlantic phone cables. Today, AT&T must continue to innovate and provide superior service and devices to consumers to remain competitive against other major carriers like Verizon, Sprint, and T-Mobile in the tightly contested US market. Recent acquisitions of DirecTV and Time Warner will help AT&T expand its video and media offerings internationally and domestically.
AT&T is the largest telecommunications company in the US that offers telephone, internet, and wireless services. It was established in 1885 and pioneered many innovations but was broken up in 1982 before reemerging as a wireless and broadband focused company. While it faces competition from Verizon, Sprint, and T-Mobile, AT&T has increased its profits through acquisitions and the success of the iPhone. It expects continued growth through expanding its U-Verse technology and managing high data traffic with tiered pricing plans.
This presentation compares two titans in the wireless service industry: Verizon & AT&T. Although the notes for this presentation are not included, this is a strong example of how to incorporate pictures into a slideshow in order to break up text. I worked on a team of 4 students in a Fundament Information Systems course to produce this Powerpoint presentation.
*I do not claim ownership to the images in this slideshow.
AT&T is a major telecommunications company that provides services to consumers and businesses in the US and internationally. Its services include phone, wireless, internet, TV, security, and equipment. As of 2010, AT&T had 24 million consumer phone and 14 million broadband customers in the US. It also owns Cingular Wireless, the second largest carrier with 95 million subscribers. In 2011, AT&T planned to acquire T-Mobile USA for $39 billion to expand its wireless business further.
AT&T: Twenty Years of Change Case AnalysisMotaz Agamawi
This document analyzes strategic changes at AT&T over 135 years through five milestones:
1) 1875-1893: AT&T established a monopoly by acquiring licenses and Western Electric.
2) 1894-1984: Competition grew after patent expiry. Regulatory acts began in 1913 with the Kingsbury Commitment.
3) 1984: AT&T divested local networks into 7 Baby Bells in an antitrust settlement.
4) 1984-1997: AT&T acquired McCaw Cellular and NCR but struggled with convergence. A second divestiture split it into 3 companies.
5) 1997-2000: CEO Armstrong pursued cable and broadband but overpaid for acquisitions,
AT&T is a major American telecommunications company that provides wireless service, internet access, phone services, and advertising across the US. Formed through mergers and acquisitions of former "Baby Bell" and "Ma Bell" companies, AT&T aims to connect people everywhere through innovative communication solutions. It has a large network and customer base, and seeks to expand into new technologies like U-verse and mobility services to stay ahead of customer demands.
AT&T was originally founded in 1885 as American Telephone and Telegraph Company and grew to become the primary telephone service provider in the United States through a series of acquisitions and mergers. It held a monopoly for much of the 20th century until antitrust action in 1982 broke up AT&T and separated its local and long distance business units. Since then, AT&T has undergone further restructuring and acquisitions to evolve from a telephone company into a global provider of communications and networking services.
1) The media industry saw mixed performance in Q1 2011, with internet advertising growing strongly while radio and TV broadcasting revenues were flat. Overall domestic ad spending grew 7% despite economic headwinds.
2) Internet usage and access points continue to grow, with rising broadband adoption and increased use of smartphones. Internet advertising revenues grew 23% in Q1 2011.
3) Profits from internet advertising also increased, driven by revenue growth and steady margins around 60-62% for major companies. EBITDA less capital expenditures (proxy for free cash flow) was up 18% for these firms.
This document analyzes and summarizes the proposed merger between AT&T and DIRECTV. It provides background on both companies and their operations. The key details of the merger are that AT&T will acquire DIRECTV in a stock-and-cash deal valued at $95 per DIRECTV share. The merger is aimed at combining AT&T's telecommunications networks with DIRECTV's satellite television business. The document analyzes the strategic rationale for the merger from both companies' perspectives, potential synergies, and risks. It considers whether the merger price reflects the value that can be created through synergies between the companies.
This document provides an overview of Verizon Wireless and its business segments. The key points are:
1) Verizon has two main business segments - Verizon Wireline and Domestic Wireless. Wireless provides services to over 91 million customers across the US, while Wireline offers services in the US and over 150 countries.
2) Verizon has invested heavily in its 4G LTE network, launching in 38 major markets in 2010. It plans to expand coverage to over 200 million people by the end of 2011.
3) Data revenues are a major growth area for Verizon, increasing by $4 billion to $19.6 billion in 2010 alone. Verizon is excited by revenue opportunities from 4G
Year 2013 will go down in history as the year of the big risk in Indian television and media. Whether it was with big jump into cable TV digitisation or in the area of experimenting with new programming formats or working on changing the status quo in TV ratings or in battling the Telecom Regulatory Authority of India’s (TRAI's) ad cap, the year saw everyone playing a long hand. India’s economic growth slowed down; inflation went on the rampage as did the dollar when it appreciated drastically against the rupee, but the industry took things in its stride.
Nasmedia is poised to become Korea's largest digital media representative in 2017 with 20% market share. The acquisition of N Search Marketing in 4Q16 extended Nasmedia's coverage to all areas of digital advertising, including programmatic buying and mobile video ads. Nasmedia's 3Q16 revenue grew 37% YoY, beating expectations, driven by strong mobile and IPTV advertising growth. The report maintains a Buy rating on Nasmedia, raising the target price to W65,000 based on 2017 EPS growth of 52% and limited dilution from the rights issue.
2015 2H Outlook: Korean Telecom service industryJeehyun Moon
Telecom Service (Analyst Jee-hyun Moon)
Getting over the hump
[Summary] Getting over the hump
I. 2H15 outlook: Getting over the hump
II. Key themes and issues: O.V.E.R.
III. Valuation & investment strategy
IV. Top pick & stocks to watch
[Conclusion] Look to earnings improvements and dividend payout
Q1 '12 % Chg
Mattress Firm $18.5M 60%
Ashley Furniture HomeStore $13.4M 15%
Rooms To Go $11.7M 15%
Wayfair $10.5M N/A
Source: Miller, Kaplan, Arase & Co.
Department/Discount Stores & Shopping Centers
While only up 1% in Q1 2012, Department/Discount Stores & Shopping Centers remains a consistent top ten
category for Radio. Walmart continues to lead the category with $30.4M in Spot Radio expenditures, up 2%
versus Q1 2011. Target came in at #2
The document is the transcript from AT&T's 1Q09 earnings conference call from April 22, 2009. In the call, AT&T executives discuss the company's financial results for the first quarter of 2009. They note solid execution and cost discipline led to stable margins despite economic pressures. Key highlights included strong growth in wireless subscribers and data usage, continued expansion of U-verse TV and broadband subscribers, and $4.6 billion in free cash flow. AT&T remained focused on disciplined execution and investing in major growth areas like wireless and U-verse to lead in the industry's best opportunities.
The document discusses the implications of spectrum auctions for industry, policymakers, and consumers. It summarizes Canada's 2008 AWS spectrum auction, noting that new entrants bid prices that were 2-3 times higher than in the US auction. This was likely due to the set-aside of spectrum for new entrants and regulations mandating network access. However, high prices may reduce investment. Going forward, continued investment in broadband networks is needed to support economic growth, and intervention should encourage rather than hinder this investment.
The "death by Netflix" scenario for the future of pay TV has been greatly exaggerated – this week, we look at the full picture for the year ahead for pay TV, which is much more complex and optimistic than the headlines might lead us to believe.
Telecom Service/Media: AT&T to acquire Time Warner
- US-based telco AT&T’s acquisition of Time Warner will be an industry game changer
- Note growing investment in premium content (a growth driver for ICT ecosystem)
- Focus on CJ E&M’s efforts to improve original content and telcos’ media expansion
The document analyzes key financial metrics and ratios for telecommunications companies AT&T and Verizon from 2010-2014. It finds that AT&T had greater fluctuations in metrics like return on equity and net profit margin due to variations in net income between years. Verizon generally saw more steady growth in revenue but higher leverage in 2014 following its acquisition of Vodafone's stake in Verizon Wireless. The analysis also examines asset turnover, working capital, return on assets, and dividend payout ratios to compare the financial performance and health of the two major telecom companies.
This document provides an overview of Verizon Communications and the telecommunications industry. It discusses key details about Verizon's history through mergers between Bell Atlantic and GTE, its current operations and international strategy. The document also analyzes Verizon's strengths, weaknesses, opportunities and threats, and compares its financial performance and competitors.
If you were the CEO of ATT would you have bought Time Warner.pdfaceindustriesjal
If you were the CEO of ATT would you have bought Time Warner. Justify your answer
Three years ago, AT&T Inc. T -1.18% executives were in a federal courthouse fighting the Justice
Department to defend their takeover of Time Warner Inc., a more than $80 billion foray into the
entertainment business.
AT&T won the court battle, but lost in the marketplace. Now, at the behest of Chief Executive John
Stankey, the telecom giant is giving up its dreams of marrying media content and distributionone
of the biggest about-faces in corporate deal history.
AT&T said Monday it will spin off its sprawling media empire, including HBO, CNN, TNT, TBS and
the Warner Bros. studio, into a new venture with Discovery Inc. DISCB 1.29% That follows a
February agreement to hive off a 30% stake in satellite broadcaster DirecTV and give up
operational control of its pay-TV unit, which was hollowed out by customers trading pricey channel
bundles for less expensive alternatives.
All told, the two reversals erased tens of billions of dollars of equity value, as AT&T cut deals to
exit its investments and shed debt. AT&T said the full value of the media transaction includes not
just the equity value but also the cash AT&T will receive for divesting itself of the business.
The original idea behind the two big mergers was to help the Ma Bell descendant challenge
Comcast Corp. in the pay-TV business, steal digital-advertising dollars from Alphabet Inc.s GOOG
0.63% Google, and mount a challenge to Netflix Inc. NFLX 0.13% in streaming.
Now, the company will stick to what it knowsthe wireless and broadband business. Its executives
acknowledged the whiplash felt by employees still adjusting to the many changes the telecom
company spurred over the past three years.
The personal reaction is Im a bit sad, Mr. Stankey said in an interview, noting that investors havent
been won over by the companys media strategy. Im disappointed that the shift in the market that
occurred caused us to have to step back and re-evaluate.
Both of the big deals were hobbled by strategic miscalculations and lapses in execution. AT&T
bought DirecTV in 2015 near the peak of the pay-TV market, just before cord-cutting started to
pick up pace. After winning the antitrust fight for Time Warner, AT&T was slow to launch a
streaming service and struggled to keep up with rivals plowing billions of dollars a year into
content.
Cable mogul John Malone, a major Discovery shareholder, said that although he believes Time
Warner is doing fine, merging content and distribution usually doesnt make sense. I think that the
technology of connectivity and digital technologies are one focus, and creating content that people
get addicted to is another focus, he said. And you seldom would find both of those in the same
management team.
John Malone, a major Discovery shareholder, said merging content and distribution usually doesnt
make sense.
The two most successful players in direct-to-consumer streaming video, Netflix and Walt Dis.
AT&T has faced many challenges throughout its history such as competitors infringing on its patents, antitrust lawsuits from the government, and a rapidly evolving industry. However, AT&T has remained a leader in communications technology for over a century by pioneering technologies like pay phones, radio broadcasts, and transatlantic phone cables. Today, AT&T must continue to innovate and provide superior service and devices to consumers to remain competitive against other major carriers like Verizon, Sprint, and T-Mobile in the tightly contested US market. Recent acquisitions of DirecTV and Time Warner will help AT&T expand its video and media offerings internationally and domestically.
A report from the Writer's Guild of America on how media mergers has not benefitted writers or consumers and criticizes the government for failing to enforce anti-trust rules.
The Proposed Merger of Comcast and Time Warner Cable In Febr.pdfaarushfootwear
The Proposed Merger of Comcast and Time Warner Cable In February 2014, Comcast and Time
Warner announced their intention to mergea deal worth about $45 billion. The merger would form
the largest cable TV and Internet provider in the United States and enable the company to control
27 of the top 30 markets in the United States, and three-fourths of the overall cable market. The
merger first had to be approved, however, by the Department of Justice (to assess antitrust
concerns) and the Federal Communications Commission (the FCC, which evaluates media deals
to assess their influence on the public interest). Comcast and Time-Warner argued that the deal
would not significantly influence competition in the cable industry because the companies
operated in nonoverlapping geographic markets, so customers would not be losing an option for
getting cable service. They also argued that the merger would enable the companies to make
investments that would provide customers with faster broadband, greater network reliability and
security, better in-home Wi-Fi, and greater Video on Demand choices. As argued by David Cohen,
Comcasts executive vice president, in front of a Senate panel: I can make you and the members
of this committee one absolute commitment, which is that there is nothing in this transaction that
will cause anybodys cable bills to go up. Opponents of the merger, however, argued that the size
and scale of the merged company would make the company dangerously powerful (particularly
given that Comcast had recently acquired NBC Universal). Whereas the merger might not change
the cable options available for end consumers, it definitely would change the options available for
content providers such as Disney and Viacom, or on-demand programming providers such as
Netflix, Cinema Now, Hulu, and others. The merged companys overwhelming bargaining power
over suppliers could also create cost advantages other TV or Internet providers might be unable to
match, thereby enabling it to squeeze competitors out of the market. For example, satellite
operator Dish Network argued that the combined company would be able to use its size to force
providers of content to lower their prices, and that companies such as Dish Network would be at a
competitive disadvantage. Dish also argued that the merged company might undermine video
services such as Netflix or Cinema Now by altering streaming speeds either at the last mile of the
Internet (where it is delivered into peoples homes) or at interconnection points between Internet
providers. Netflix noted that Comcast had already required the Netflix to pay terminating access
fees to ensure that customers did not get a downgraded signal. If the cable companies
downgraded the signal for on-demand providers, customers would abandon services like Netflix
and turn to on-demand options the cable operators themselves were providing. Senator Al
Franken pointed out that when Comcast had acquired NBC Universal in 2010, it had defended .
Time Warner Cable is proposing to revolutionize the cable TV industry by offering "a la carte" programming packages that allow customers to choose individual channels rather than bundled packages. This would give customers more control over costs by only paying for desired content. While networks currently rely on bundled revenue, TWC believes it can negotiate new affiliate deals under this model using its large subscriber base. However, TWC also has weaknesses like the worst customer service ratings in the industry currently. It is working to improve its image and address common complaints like vague installation windows.
Strategic Management Case
T-Mobile US
03/26/2017
Mba-599
Introduction
T-Mobile US, Inc. (NASDAQ: TMUS) is Based in Bellevue, Washington. T-Mobile US is the third largest provider of wireless voice, messaging and data communications services in the United States. T-Mobile US was named after T-Mobile Germany. T-Mobile US offers its services through its subsidiaries such as GoSmart Mobile. T-Mobile US operates two flagship brands, T-Mobile and MetroPCS. T-Mobile acquired MetroPCS in a reverse takeover in 2013. T-Mobile offers post-paid plans and MetroPCS offers pre-paid plans. Deutsche Telekom is the majority shareholder of T-Mobile US, owning 65% of the company. Deutsche Telekom is a German based company. T-Mobile US sells mobile phones, tablets, and wireless internet. T-Mobile US offers unlimited wireless voice, messaging, and data communications. T-Mobile also offers WIFI calling when overseas or if network is out of reach. This technology allows customers to turn a WIFI connection to their own towers. The company offers its services through its advanced 4G LTE network to 71.5 million customers as of 2016. T-Mobile is capable of reaching 308 million in their homes and workplace. The company also offers global plans. T-Mobile US customers can use their services in Canada and Mexico at no extra charge. Customers can also use their phones in Europe using Deutsche Telekom’s network. Customers can also use their cellular devices in Puerto Rico and the U.S Virgin Islands. T-mobile has about 55 million post-paid customers which make up about 77% of its customers. MetroPCS has about 16 million pre-paid customers. T-Mobile also sells service wholesale, including to Google's Project Fi- program, adding another 373,000 customers in the quarter. Between T-Mobile and MetroPCS, T-Mobile US operates about 8000 stores. Most of the stores are authorized vendors and the rest are company owned. According to Fortune.com, Approximately 230 million people live within 10 miles of T-Mobile's (tmus, +1.66%) roughly 3,600 current stores. The company reaches 98% of Americans. T-Mobile US has about 50000 employees. The CEO of the company is John Ledger. He is known to be an outspoken leader and does not fit the mold of a typical CEO. According to CNNMoney.com, Consumer Reports named T-Mobile the number one American wireless carrier and in 2017, T-Mobile was ranked number one in Customer Service Satisfaction by Nielsen.
T-Mobile US started as VoiceStream Wireless PCS which was a subsidiary of Western Wireless Corporation. VoiceStream Wireless was purchased by Deutsche Telekom in 2001 for $35 billion and renamed T-Mobile USA, Inc. Deutsche Telekom completed the acquisition of VoiceStream Wireless Inc. for $35 billion and Southern US regional GSM network operator Powertel, Inc for $24 billion. In 2013, T-Mobile US, Inc. was formed through the business combination between T-Mobile USA and MetroPCS Communications, Inc. The business combination was accounted for a.
1) Ironic shifts in negotiations and competitive changes are informing the latest round of negotiations between broadcast stations and cable distributors.
2) Looking back to 2008, predictions of issues like cord cutting did not fully come to pass, while subscriber shifts between cable and satellite platforms did occur.
3) Looking forward, the valuation of broadcast stations' signals continues to evolve with technology, and distribution is expected to see further seismic shifts over the next three years towards broadband and over-the-top delivery of content.
This document analyzes AT&T's strategy using Porter's Five Forces analysis and a PESTEL analysis. It finds that the threats of new entrants and substitute products are high for AT&T due to capital costs, market competition, and price wars between providers. However, the bargaining power of suppliers is low. It also examines AT&T's value chain, core competencies, competitive advantages in services, and corporate strategy of vertical integration. Recommendations include vertically integrating security platforms, expanding IP services, and unifying wireline and wireless offerings.
Time Warner shares rose 2% after an analyst upgraded the stock and said Time Warner would experience significant growth in 2007. The analyst expects estimates to increase and upgraded the stock to "overweight." DIRECTV shares also rose after an upgrade due to its HD capabilities. Analysts predict the FCC commissioner will approve the AT&T/BellSouth merger along party lines.
Nibc 2016 mba-m fin - true north investments - pptJohn McGlynn
Our Team was selected as one of 25 teams from the 350 applicants to advance to the final round!
Created a Pitch-Book for a hypothetical presentation to AT&T, outlining our current valuation of the firm under multiple valuation techniques, and describing how my team's recommended corporate action fits AT&T's current strategy and increases shareholder value.
This pitch included a detailed valuation of AT&T using a Discounted cash flow approach, Comparable Firms approach, and a Precedent Transactions approach.
Our Corporate Action recommendations were tailored to AT&Ts current strategy. For acquisition recommendations a accretion/ dilution analysis was provided.
I canada fcc chairman remarks on open access and gigafying america apr 14 15Barry Gander
The document is the remarks of FCC Chairman Tom Wheeler at the Broadband Communities Summit in Austin, Texas on April 14, 2015. In the summary:
Wheeler discusses the importance of fast, fair, and open broadband networks and the FCC's efforts to promote competition. He highlights examples where community broadband networks have expanded access and benefited local economies when private providers did not, such as in Chattanooga, TN and Wilson, NC. Wheeler argues that restricting community broadband limits consumer choice and that the FCC acted to preempt laws in two states that blocked municipal broadband expansion.
Investment thesis and pitch slides for Notre Dame Investment Club. The leaders of the club, after our presentation, and after questions, decided to take our recommendation and hold the stock.
PwC Entertainment, media and communications deal insightsQ3 2015PwC
Deal volumes continue to stay the course with deal values declining in the absence of cable megadeals. PwC provides a summary of third quarter 2015 deal activity, megadeal activity and an outlook for key sectors.
Final hh - 12.2.6 portage county mb additional carrier releasehmhollingsworth
AT&T expanded mobile broadband wireless capacity in Portage County, Ohio by adding new frequency layers to 19 cell sites, improving connectivity and performance. This investment enhances AT&T's network to better manage increasing demand for mobile broadband services. State officials praised AT&T for investing in technology that improves business opportunities and the state's economic climate.
How communities can protect themselves and their citizens through local reviews of the proposed merger (where permitted by a local franchise or state law); and by filing comments with the Federal Communications Commission, to either deny the merger, or to establish merger conditions.
Ba401 Case II-4 The U.S.TelecommunicationsaristoTuEY
The Telecommunications Act of 1996 aimed to stimulate competition in the telecommunications industry in the United States. It specified regulations around local and long-distance phone services, and deregulated cable TV rates. Major players in the industry at this time included the Regional Bell Operating Companies (RBOCs) like AT&T, MCI WorldCom, and Qwest. Technological developments expanded broadband access through technologies like DSL, cable modems, and dense wavelength-division multiplexing (DWDM).
Final hh - 12.2.7 lorain county mb cell site deployment and additional carr...hmhollingsworth
AT&T announced the expansion of its mobile broadband network in Lorain County, Ohio through the activation of a new cell site in Avon and adding additional frequency layers to 20 existing cell sites. These network upgrades will enhance coverage, increase capacity, and improve the performance of mobile broadband and data/voice connectivity for local residents and businesses. The investments are part of AT&T's ongoing efforts to support growing demand for advanced mobile devices and applications by delivering the nation's fastest mobile broadband experience.
Within the roof of the luxury developing at the edge of Central Park, 585 ft previously mentioned the concrete, an attorney named David Goodfriend has attached a modest 4-foot antenna That may be a risk to the complete Tv set-industrial intricate.
The device is there to soak up TV indicators coursing from the air — content material from NBC, ABC, Fox, PBS and CBS, which include megahits like “This can be Us” which Sunday’s broadcast of Tremendous Bowl LIII. As soon as plucked with the ether, the content is piped by way of the web and assembled into an app referred to as Locast. It’s a streaming provider, and it would make all this community programming available to subscribers in ways in which tend to be more easy than counting on a house antenna: It’s viewable on Nearly any gadget, at any time, in pristine high-quality that doesn’t cut in and out. It’s also completely totally free.
Qualcomm is developing a new streaming adapter reference design that supports 4K video streaming and LTE Broadcast. This could enable streaming of 4K content from services like Netflix without needing a wired broadband connection. The adapter uses Qualcomm's Snapdragon processors and Android OS. CE makers like Apple, Google and Roku could use this design to add 4K and LTE Broadcast capabilities to their own streaming devices.
Content providers are working to integrate online streaming services with traditional TV by indexing content across sources. However, a true "holy grail" device or service that seamlessly combines all online and traditional TV content has not been achieved yet.
Sony plans to restructure by spinning off its less profitable TV and
Final hh - 14.3.6 - 2013 capex cincinnati releasehmhollingsworth
AT&T invested nearly $130 million in its wireless and wired networks in the Cincinnati area from 2011 to 2013. This investment enhanced speed, reliability, coverage and performance for customers. Upgrades included new cell sites and additional network capacity. The investment positions Cincinnati to take advantage of new services and tools and helps businesses compete. AT&T operates the nation's largest 4G LTE and WiFi networks to provide fast, reliable connections for residents and businesses.
Similar to Business at&t to buy directv in $49 billion deal, creating pay tv (20)
PaperSelect one of the quality topics in healthcare from th.docxhoney690131
Paper:
Select one of the quality topics in healthcare from the list below. Prepare a summary document using the table format below (be sure your assignment is submitted in a table). The table should be single spaced and no more than 3-4 pages in length (11 to 12 point font). Except in the case of titles, use complete sentences, i.e., write using narrative format. Include a cover page and a list of references (this is separate from the summary pages).
Select from the following quality topics. NOTE: If there is another related topic that you would like to write on, please get approval from Prof. Powell.
1. Medical Errors
2. Quality and Disparities
3. Patient Safety
4. Quality/Core Measures
5. Value-based Purchasing
6. Pay for Performance (P4P)
7. COVID-19's Impact on Quality
HGMT420 Quality Topic Research Summary
Student Name
Type your name here.
Quality Topic
Provide the name of the quality topic chosen.
Quality Topic Description
Provide a detailed description and origins of the quality topic chosen. Indicate in detail who is affected (and how) by this topic (healthcare providers, patients, healthcare organizations, etc.).
Legislation
Research legislation and/or policies related to the quality topic chosen. Provide a detailed description of the policies/legislation. Describe the scope of the legislation and how it impacts the organization, providers, and patients.
Regulatory
Research Regulatory Agencies that implement policies and enforce legislation related to the quality topic chosen. Discuss in detail at least three (3).
Conclusion
Indicate any upcoming changes, regulations, etc. that will impact the quality topic chosen. What does the future hold for this issue? How should healthcare leaders manage this issue in their organizations?
The grading rubric for this assignment appears below, if you opened the Assignment in the Assignment Folder, or can be opened by clicking on the 'Written Assignment Rubric' tab in the lower right corner of the screen, if you opened the Assignment in Content.
.
Part 1 - Microsoft AccessView GlossaryUse Access to create a.docxhoney690131
Part 1 - Microsoft Access
View Glossary
Use Access to create a database in which you can store and retrieve information about the Rio Salado Theme Park operating departments, their managers, and their employees.
Create a
new blank database
.
Save the database with the filename
RSC_Theme_Park_Database_MEID.accdb
. Replace “MEID” with your actual MEID.
Structure of the Database
NOTE:
Read the requirements for the database and be sure you understand how it should work before creating your design.
You will need to complete the following:
Create two tables.
Establish table relationships.
Create one form.
Create two queries.
Create one report.
As you work on the project, remember to follow best practices for creating databases as described in your TestOut materials and the online lesson content.
Create the Tables
Tables and their relationships form the backbone of a relational database. In this database, you will create a table for the Rio Salado Theme Park operating departments and their managers, and a table for employees in each department. When creating fields for your tables, it is important to break down your data into the smallest chunks you can (fine granularity) to make it easier to extract data from the database later. Remember to assign the most appropriate data type to each of the fields and that one of the fields in each of your tables must be set as the
Primary Key
using the
AutoNumber
data type. You do not need to enter data records into your tables at this time; you will create a form later in this project for data entry.
Department Table
Create a
table
named
Department Table
. At a minimum, your table should include the following fields:
Department ID
Department Name
Manager First Name
Manager Last Name
Manager Email Address
Manager Phone Number
Employee Table
Create a
table
named
Employee Table
. At a minimum, your table should include the following fields:
Employee ID
Department ID
Employee First Name
Employee Last Name
Employee Date of Hire
Employee Rate of Pay
Establish Table Relationships
Once the design of the tables has been completed, the next step is to
establish relationships
between the tables. You will join the Department Table with the Employee Table on common fields through the following tasks:
Join the
primary key
of the Department Table with the
foreign key
of the Employee Table in a
One-To-Many
relationship.
Enforce referential integrity.
Cascade update related fields.
Cascade delete related records.
Create a Form
Once the tables have been designed and the relationships have been established, it is time to enter data. You will use
one form
to enter and edit data in the two tables:
Create
one form
named
Department Form
that can be used to enter data into both tables.
Insert a row
below the Employee Table subform. Add a
button
in the new row to perform the
Add New Record
action with the text:
Add Record
.
Use the form to enter
a m.
Part 1 - Microsoft Access 2019Use Access to create a database to.docxhoney690131
Part 1 - Microsoft Access 2019
Use Access to create a database to store and retrieve Manufacturer Contact and Inventory information for Rio Salado Boat and Marine dealership.
Create a
new blank Access database
.
Save the file as
BoatDatabase_MEID.accdb
. Be sure to replace “MEID” in the filename with your actual MEID.
Structure of the Database
Read the requirements for the database below and understand how the database should work before you create the design. Remember to follow the best practices presented in TestOut and the online lesson content for creating professional Access databases.
Create the Tables
You will create new tables that contain information about the Rio Salado Boat and Marine Dealership’s manufacturers and inventory. When creating fields for your tables, it is important to break down your data into the smallest chunks you can (
fine data granularity
) to make it easier to extract data from the database later. You will also need to join the tables on common fields later in the project. For this project, assume a manufacturer can supply the boat dealership with multiple types of boats for the dealership’s inventory.
NOTE:
Remember to assign the most appropriate data type to each of the fields and that one of the fields in each of your tables must be set as the
Primary Key
. You do not need to enter data records into your tables at this time; you will create a form later in this project for data entry.
Manufacturer Contact Table
Create a new
table
named
Manufacturer Contact Table
. At a minimum, your table should include the following fields:
Manufacturer ID
Manufacturer (e.g., Bayliner)
Manufacturer Address
Sales Representative Name
Phone Number
Email Address
Inventory Table
Create a new
table
named
Inventory Table
. At a minimum, your table should include the following fields:
Inventory ID
Manufacturer ID
Boat Type (e.g., Sailboat)
Model Number
Dealer Cost
MSRP (i.e., Manufacturer Suggested Retail Price)
Quantity in Inventory
Establish Table Relationships
Once the design of the tables has been completed, the next step is to
establish relationships
between the tables:
Join the Manufacturer Contact Table with the Inventory Table on common fields.
Enforce referential integrity.
Create a Form
Once the tables have been designed and the relationships have been established, it is time to enter data. Remember that
each field of each record will need to include data
. You will use
one form
to enter and edit data in the two tables.
Create
one form
named
Manufacturer Form
that can be used to enter data into
both
tables.
Use the form to enter a
minimum of four manufacturers
. Include
your name
in one of the records as a Sales Representative for one of the manufacturers.
Use the form to enter
at least two different boat types
for
each
manufacturer.
Create the Queries
The ability to extract data from one or more tables is one of the most important functions provi.
ParkinsonsPathophysiology, progression of disease, complication.docxhoney690131
This document discusses the pathophysiology, progression, complications and treatment options for Parkinson's disease, detached retina, and cerebral vascular accident (CVA). It covers topics such as the development of atheroma, predisposing factors, and treatments for left-sided CVA over 1000 words in APA style.
Parenting Practices among DepressedMothers in the Child Welf.docxhoney690131
The study analyzed parenting practices among depressed mothers involved with the child welfare system using data from the National Survey of Child and Adolescent Well-Being. It found that maternal depression was associated with increased risk of emotional maltreatment and neglect over 36 months. Depression levels remained high over time and emotional maltreatment risk also remained elevated. This implies the need for better identification of mental health needs for mothers in the system and parent training to address positive parenting practices.
Paragraph Structure with Use of Text(P) Topic Sentence-(I).docxhoney690131
Paragraph Structure with Use of Text
(P) Topic Sentence-
(I) Follow-Up Development-
(E) Engage the text-
1. Attribution Tag (optional)
2. Paraphrase/Quote ENGAGE TEXT IN MIDDLE 1/3
3. Address or analyze quote
(S) Connect Back to Main Point/Further Insight-
Rules for Paraphrase/Quoting – English 101
· Functions as support
· Centrally located – middle 1/3 of paragraph
· Short quotations only – 4 lines of text or less
· Citation and possible attribution required
· MLA Format
Example Approach to a paragraph with a quote/paraphrase:
1. Identify a passage that includes a key idea from the text to quote/paraphrase:
Robert Hartmann McNamara authored a report on “Homelessness”, which presented that drug use amongst the homeless is prevalent. Research from the 80’s routinely presented a clear connection between homelessness and addiction (1027).
2. Create a topic sentence that connects to or sets up the text support:
A key issue challenging the homeless community, and those working to help the homeless out of their situation, is the rate of addiction to drugs and alcohol.
3. Follow up and develop the idea with your analysis breaking down the point.
4. Notice the set up of the text by attributing the author (sometimes title) of the source.
Robert Hartmann McNamara authored a report on “Homelessness”, which presented that
5. Add in text citation after the source use – (1027).
6. Close out paragraph by addressing the source use and returning back to your main idea for further analysis.
Put it all Together w/ Source Support Highlighted:
(P) A key issue challenging the homeless community, and those working to help the homeless out of their situation, is the high rate of addiction to drugs and alcohol. (I) Substance abuse can cripple one’s ability to maintain a common standard of living. Those suffering in the throes of addiction will struggle to hold a job and often lose connection to the support of their loved ones. This disconnect from a steady income, family, and friends, plus the cost of their addiction, may lead to a life on the streets. Once there, the addiction can further manifest and take hold continuing a dangerous spiral. (E) Robert Hartmann McNamara authored a report on “Homelessness”, which presented that drug use amongst the homeless is prevalent. Research from the 80’s routinely presented a clear connection between homelessness and addiction (1027). This connection can be powerful and extremely challenging to break. (S) Even if addiction did not cause the homeless state, living without shelter, physical and emotional, creates an opportunity for substances to replace security and love. When trying to rise out of a homelessness, the need to kick the addiction becomes paramount to become self-reliant again. The clear relationship between homelessness and substance abuse creates a challenging set of circumstances for both the individual and those attempting to intervene and help.
Remember the “Rule of Thirds”
To.
Paper should explain the difficulties on the Use of government trave.docxhoney690131
Paper should explain the difficulties on the Use of government travel card.
it should have and : introduction a) attention b) motivation c) overview with main points
II body
mainpoint 1 the problem
main point 2 discussion
main point 3 recommendation
iii conclusion
a ) summary review main points
b) remotivation
with references. 3 pages
.
paper should be between 750 – 1500 words. APA formatting is required.docxhoney690131
paper should be between 750 – 1500 words. APA formatting is required
find two advertisements from any source (newspaper, magazine, tv, etc). One will be an example of the ways that the advertisement perpetuates ideas about race and/or ethnicity in a negative, prejudicial, or stereotypical way. The other should be an advertisement that challenges those prejudicial and stereotypical ways. Compare and contrast the advertisements. What ages, genders, races, etc are present in each advertisement (think back to the discussion of social statuses from chapter 5). What message do those statuses send? What key message is being sent by each advertisement? Summarize a thesis statement of 1-2 sentences that wraps up succinctly one message that can be gleaned from each of the advertisements about race and ethnicity. This will be presented as part of your main body, and the discussion should include discussion of many of these topics: socialization, race and ethnicity, prejudice, discrimination, us/them, and norms and/or values. You will need to bring in the social construction of reality, as well.
Then, find two more advertisements. One should include white models, and one should include individuals of color as the models. Challenge yourself to pick them at random without trying to find the “perfect” example, as we want to see what the average ad does. Explain how this example from the media adds to the social construction of our perceptions of race and ethnicity. Be sure to provide ample evidence of how this process occurs, and the role that the social institution of the media plays in the construction of race and ethnicity. Your discussion should include a clear explanation of what the social construction of our perceptions of race and ethnicity is, and how cultural transmission occurs through the media. This will be presented as part of your main body.
For your concluding paragraph, you will bring together a solid conclusion about race and ethnicity, giving a nice sociological analysis.
.
Paper Requirements 4 pages (including title page, 2 pages .docxhoney690131
The document outlines the requirements for a 4-page paper including a title page, 2 pages of content, a reference page, 1 inch margins, a running header, 12pt font, double spacing, references from the text, use of outside references, and questions to consider when drafting the response such as the main lessons learned, why they resonated, easy and challenging concepts, how it could be used now and in the future, and lessons with direct experience.
Paper RequirementsRequired topic headings for your paper shou.docxhoney690131
Paper Requirements:
Required topic headings for your paper should include the background surrounding the issue, a historical perspective, current issues that are applicable, legislation dealing with this topic, examples, global dynamics/impact (such as issues, processes, trends, and systems),personal impact from a global perspective, and a summary. These are the topics to be discussed in the term paper
Each paper should contain a reference list of at least five (5) different substantial and quality references. The references and reference citations for the term paper must be to a current event less than 3 years old (a reference with no date (n.d.) is not acceptable). This requires a reference citation in the text of the paper and a reference at the end of the paper to which the reference citation applies. You must include some information obtained from the reference in your answer. The references must be found on the internet and you must include a URL in your reference so that the reference can be verified.
You cannot use information from the text book or any book/article by the author of the text book as a current event. Make sure that your reference has a date of publication.
The body of the paper should be a minimum of six typed double spaced pages. Your cover page and reference page cannot be counted in this number. You should use the APA format for your reference citations and the reference page.
Grading Rubric for Term Paper
Grading criterion Unit Points Total Points
Uploaded to correct Dropbox 4 4
Submitted on time 15 15
Document Filename:
Your Last Name,first and middle initial with correct quiz number 4 4
Documentation that you placed the term paper in your ePortfolio in Mane Sync 10
Minimum of 6 typed, double-spaced pages 5 15
(excluding cover and reference pages - use APA style)
Rationally expressed opinions, experiences (personal or observed), 8
arguments and premises (where appropriate) to support responses
(did not simply restate/summarize author/textbook/article)
Clearly presented classical ethics theories relative to topic 5
Included ‘URL’ for appropriate verifiable current event 10 23
(i.e., example of topic being discussed WITH EXPLANATION)
NOTE: Must be less than 4 years old
Grammatically correct and appropriate tone 7
(professional, non-offensive language)
Typographically correct 7 14
Included a minimum of five (5) 7
different substantial and quality references
full citations as needed 3
Used correct APA format 5 15
Used required and appropriate headings 10 10
Maximum grade 100 100
PUB 407 ML
Productivity Improvement in the Public Sector
Class 1
Chapter 1
· What is a government’s role and purpose?
· To provide services to their citizens.
· Name some types of governments
· Federal
· State
· County
· City
· Special Districts
· Name some services:
· Police
· Fire
· Military
· Water
· Sewer
· Electric
· Emergency
· What else?
· The public’s, often negative, perception of government is sha.
Paper must be double spaced, with 12 point font and include section .docxhoney690131
Paper must be double spaced, with 12 point font and include section headers for each of the paper sections noted below (Three Representational Roles and Role You Choose, Influence of Legislative Leaders, Rank and Explain Influences of Institutional Factors, and Explain Your Vote)
Objective: The objective for this assignment is for students to understand and critically analyze the multiple pressures on policy makers in Texas as they most listen to their leaders, the governor, the voters (social responsibility) and their own conscience (personal responsibility) in deciding how to cast their vote on a controversial issue.
Assignment: You have recently been elected as a Republican to the Texas Senate from a competitive district (even number of Democrats, Republicans and Independents) just outside of Dallas. One of the first bills that you must vote on is House Bill 3- a Bill to forbid the creation of sanctuary cities (protecting undocumented immigrants from deportation). Your constituents support the bill as does the Governor your party, but you oppose it on grounds that most undocumented Texans are hardworking people who want to become legal citizens. The Speaker of the House opposes the bill as well.
In explaining how you will vote on the bill, be sure to explain the following:
What Representational Role you will adopt (trustee, delegate or politico). (Unit 4 Written Lectures, Slide 4-25). Be sure to discuss all three representational roles.
How will the Speaker of the House, the Lt. Governor and Governor of Texas influence the fate of the bill? (Unit 4 Written Lectures, Slides 4-9, 4-10, 4-18 & 4-22 )
How do you think constituents might try to influence your vote? (Unit 4 Written Lectures, Slide 4-20)
Which factors noted above and in your notes (constituents, governor, party leaders and your own opinion) will influence your vote? Rank them in importance. (Unit 4, Written Lectures, Slide 4-20, 4-21)
Will you vote for or against the bill? Please explain your answer thoroughly. You should refer back to the representational role here. (Unit 4 Written Lectures, Slide 4-25)
.
Paper OrganizationStart with a title page and organize your pa.docxhoney690131
Paper Organization
Start with a title page and organize your paper with the following guidelines: 5-7 pages
· Title Page: Include a title page with the following title: Ethical Behavior, Diversity, Civil Discourse, and Educating Adults: A Literature Review.
· Introduction: The opening content should directly follow the title of the paper (repeated from the title page). In this section, list or summarize the issues you selected from the literature related to ethical behavior, diversity, and civil discourse, and provide a summary or road map for the content included in your paper.
· Overview of Issues: Begin the body of your paper with an overview of the issues related to ethical behavior, diversity, and civil discourse you chose for this review. Describe connections among these issues and their significance to adult education. Write in third person and include literature support.
· Diversity Issue Related to Specialization: Provide detailed descriptions and examples of how the issues you chose to review specifically relate to educating adults. Write in third person and include literature support.
· Ethical Behavior Issue Related to Specialization: Provide detailed descriptions and examples of how the issue you chose to review specifically relates to Adult Education. Write in third person and include literature support.
· Civil Discourse Issue Related to Specialization: Provide detailed descriptions and examples of how the issue you chose to review specifically relates to Adult Education. Write in third person and include literature support.
· Review of the Literature: The literature review should include a minimum of six references from peer-reviewed journal articles related to Adult Education. Analyze this scholarly literature, focusing on the connections between Adult Education and the issues of ethical behavior, diversity, and civil discourse you chose to research. Continue writing in third person and cite the literature for support.
· Conclusion: Your conclusion should emphasize the main themes in your paper and provide a synthesis of the literature reviewed, with special attention to the connections and relationships among the issues you chose to research and your educational specialization.
· References: Include a minimum of five different scholarly, peer-reviewed journals (related to your field of specialization) that are also cited in the paper. Your citations must have references and your references should be included within your paper as in-text citations.
Ethical Behavior, Diversity, and Civil Discourse Scoring Guide
Due Date: Sat 5/30
CRITERIA
NON-PERFORMANCE
BASIC
PROFICIENT
DISTINGUISHED
Describe connections among issues of ethical behavior, diversity, and civil discourse and a given educational specialization.
20%
Does not identify connections among issues of ethical behavior, diversity, and civil discourse and a given educational specialization.
Identifies connections among issues of ethical behavior, diversity, a.
Paper on topic Date visualization A critical evaluation of its ar.docxhoney690131
Paper on topic: Date visualization: A critical evaluation of its art & science.
Abstract (1 page)
Introduction ( 1 Page)
Literature Review (3 pages)
Methodology (3 pages)
Interpretation (3 pages)
Conclusion (1 page)
Recommendation (1 page)
References - 8
.
PAPER EXPECTATIONSFollow the instructions.Make your ideas .docxhoney690131
PAPER EXPECTATIONS
Follow the instructions.
Make your ideas concise.
Use as few words as you can to make your statements. This will allow you more room to develop your great ideas!
Avoid repetition and redundancy
of both ideas and words. This is the issue that I usually subtract the most points for, so take care.
For example, when you edit your papers, make sure that you don’t say “Cool Herc is widely accepted as the originator of hip hop”, and then two sentences later, “As Cool Herc is the originator of hip hop…”. See how these two are the same idea? If the reader already has the information, repeating it just takes up space. Another thing to avoid is using the same word multiple times in quick succession. For example: “I found it exciting to listen to the this music. Eri B. has an exciting tone to his voice. When I hear how he flows when he strings words together, I feel excited.” See how ‘excitement’ occurs three times in three sentences? Here’s another more subtle example: “He used the turntable as a way to switch songs seamlessly, using the scratch method to cover up the different beats that were used in each song.” In this example, the word ‘use’ occurs three times in the same sentence! Because it’s a less emotional word, it might be harder to catch, but it’s just as problematic.
I like to see ‘I’ statements.
I find that turning the focus on yourself (especially when we are dealing with sensitive issues and incorporating personal experience, as I encourage) is a great way to avoid generalizing groups and ideas. If your statement is clearly from your perspective, then I as a reader can empathize with your position. If you use lots of ‘we as a generalized group of people act and feel this specific way’, it makes me wonder what research you’ve done, what data points you have, and how many people you have interviewed in order to have that knowledge.
Going off of the previous expectation:
BE SPECIFIC!
If you do make a generalized statement about a situation, back it up with details. Show the research. Reference or quote the authors who initially made the observations and put their work into context. If you tell me that Cool Herc is largely agreed to be the originator of hip hop, tell me why and give examples.
For example, something with detail and context would be: “Although Jamaican soundsystem culture is at the roots of hip hop, Cool Herc was the first to create tracks sourced from James Brown, using the funkier, harder beats that we’ve come to associate with hip hop today.” See how this gives specific details and context on either end of the statement that Cool Herc was the first person to make hip hop?
Make sure you include proper internal references, and construct your bibliography following MLA format
. In your paper, I like to see at least (Author, Date of Publication). For example: “Cool Herc is widely agreed to be the originator of hip hop(Babin 2020).” This tells me you got the information from the .
Paper Instructions 5) Paper should be 5-7 pages (excluding title pag.docxhoney690131
Paper Instructions 5) Paper should be 5-7 pages (excluding title page and references). APA format is required. There should be headings for each question answered. Be sure to review the rubric prior to writing your paper. Be careful to answer each section of the question asked. https://excellentwriter.xyz/education-homework-help/for-this-assignment-you-will-conduct-a-taste-test-using-at-least-7-participants/ This is a formal paper, so formal, professional language should be used, rather than conversational language.
Engage with Individuals, Families, Groups, Organizations, and Communities Social workers understand that engagement is an ongoing component of the dynamic and interactive process of social work practice with, and on behalf of, diverse individuals, families, groups, organizations, and communities. Social workers value the importance of human relationships. Social workers understand theories of human behavior and the social environment, and critically evaluate and apply this knowledge to facilitate engagement with clients and constituencies, including individuals, families, groups, organizations, and communities. Social workers understand strategies to engage diverse clients and constituencies to advance practice effectiveness. Social workers understand how their personal experiences and affective reactions may impact their ability to effectively engage with diverse clients and constituencies. Social workers value principles of relationship-building and inter-professional collaboration to facilitate engagement with clients, constituencies, and other professionals as appropriate. Social workers: apply knowledge of human behavior and the social environment, person-in-environment, and other multidisciplinary theoretical frameworks to engage with clients and constituencies; and use empathy, reflection, and interpersonal skills to effectively engage diverse clients and constituencies. VIGNETTE Billy Brown Case Billy Brown is an 11 years old, and referred to you because it has been determined that he has been abused by his mother. Billy’s teacher reported the situation to protective services when she saw unexplained bruises on Billy’s arms and the intake worker who responded, founded a case of abuse. You are employed by Child Protective Services and will manage the case, which has been transferred to you from the intake emergency worker. Lorene Brown is Billy’s Mother. She is 28 years old, unemployed, and did not complete her high school education. She receives welfare benefits and lives in a small apartment she shares with a man whom she calls her boyfriend. Lorene is divorced and Billy’s father has shown no interest in him since he was born. Lorene is uncertain if he is incarcerated or not, and doesn’t know his whereabouts. Lorene and her boyfriend often engage in sexual behavior in the presence of Billy, who pretends not to see it, as their apartment is a studio. Lorene knew her boyfriend for 2 weeks before he moved in.
Lorene app.
Paper format and information4-5 pages in length.Papers mu.docxhoney690131
Paper format and information:
4-5 pages in length.
Papers must thoroughly explore the notable contributions of each performer.
Double spaced.
Use an easily readable font like Arial. Also use 12 point type.
Include sources in a bibliography at the end of your paper: Books, periodical articles, internet articles, etc.
EXAMPLE:
Follow the guidelines for writing as presented in one of the following style manuals:
A Pocket Style Manual
(Links to an external site.)Links to an external site.
(2016), by Diana Hacker and Nancy Sommers (7th edition) Publisher: Bedford/St. Martin's: ISBN-10: 1319083528
The MLA Handbook (Links to an external site.)Links to an external site.
(Eighth edition)
, by Joseph Gibaldi. New York: Modern Language Association. 2016 ISBN-10: 1603292624
Note: At least 4 different sources for your information!
.
Paper in Health care quality management strategies - recent arti.docxhoney690131
Paper in Health care quality management strategies - recent articles it could be in Quality risk factors, Management strategies, Risk management patient, quality management in health care.. Use previous articles compare one disease for two countries then analyze and develop their strategies Make Saudi Arabia one of them or compare Saudi Arabia with other health care system such as European or America.
.
Paper 2 Assignment POT 2002.Assignment Write a 1000 wor.docxhoney690131
Paper 2 Assignment
POT 2002
.
Assignment: Write a 1000 word paper (= 3-4 pages, double-spaced) on one of the
following topics:
1.) In The Prince, Machiavelli writes: “And let no one resist my opinion on this
with that trite proverb, that whoever founds on the people founds on mud.”
According to Machiavelli, how should a prince “found on the people”? How does
his advice ultimately benefit the people?
2.) Take a look of the foundations of the social contract in both Hobbes and
Locke. How do their different assumptions about human nature and the state of
nature inform their theories? How does this result in their different conceptions
of civil society/government? Identify and analyze at least two different
assumptions and speak about the implications for their theories.
Papers cannot be submitted by email under any circumstances
Guidelines for Papers
1. Your paper is supposed to be an interpretation of some aspect of the
work(s): in other words, an argument concerning some aspect of the work
based on analysis of relevant textual evidence. Your paper is not supposed
to be a summary of the work, a statement of your opinion about the work, or a
discussion of its historical significance or relevance. Frame your paper as an
investigation of why and how the author makes the argument he or she does
rather than simply saying what is said. Turn your topic into an argument.
2. Give a clear statement of your argument at the beginning of your paper.
3. Unify your paper with a single argument with a logical development from one step of
the argument to the next. Do not make your paper a collection of separate points or
examples.
4. Every time you state that the author states or argues something you should
have evidence to support your statement, either in the form of a quotation or a specific
textual reference. Only quote what you need for your purposes. Try to look at your
quotations as something more than mere evidence, and instead as material that you
can analyze (break down into its parts in order to interpret it) in order to make your
argument.
5. Use clear and simple language, but a formal style. Obscurity is not profundity. Make
sure that you know the meaning of the words you use. You are writing a formal paper,
not an email message. Avoid colloquial or chatty language. Do not use contractions:
not using them reminds you of the appropriate level of discourse for your paper.
Criteria for assessing your work:
1. Do you have a clear statement of your argument?
2. Do you provide relevant evidence?
3. Are your reasoning and writing clear and effective?
4. Do you demonstrate understanding of the work(s) you are analyzing?
5. To what degree do you address the most important questions and problems
posed by the work(s) you are interpreting?
Warning: If your paper is effectively a summary of the work rather than an interpretation
of it, then the best grade you can possibly receive .
Paper detailsUnit 4 Discussion Prompt1. What is the .docxhoney690131
Paper details:
Unit 4 Discussion Prompt:
1. What is the primary distinction between early management theories and contemporary theories?
2. Discuss how management differs from leadership and give an example contrasting the two functions.
3. How do you define personal power? Of the power bases described, what resonates most with you?
4. Do leaders always need to be team players? Why or why not?
Participation Requirements:
Consult the grading rubric for the grading criteria.
Original discussion board posts:
• Create a thread for your original post identified with your name.
.
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Training: ISO/IEC 27001 Information Security Management System - EN | PECB
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Reimagining Your Library Space: How to Increase the Vibes in Your Library No ...Diana Rendina
Librarians are leading the way in creating future-ready citizens – now we need to update our spaces to match. In this session, attendees will get inspiration for transforming their library spaces. You’ll learn how to survey students and patrons, create a focus group, and use design thinking to brainstorm ideas for your space. We’ll discuss budget friendly ways to change your space as well as how to find funding. No matter where you’re at, you’ll find ideas for reimagining your space in this session.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
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How to Manage Your Lost Opportunities in Odoo 17 CRMCeline George
Odoo 17 CRM allows us to track why we lose sales opportunities with "Lost Reasons." This helps analyze our sales process and identify areas for improvement. Here's how to configure lost reasons in Odoo 17 CRM
Liberal Approach to the Study of Indian Politics.pdf
Business at&t to buy directv in $49 billion deal, creating pay tv
1. Business
AT&T to Buy DirecTV in $49 Billion Deal, Creating Pay-TV
Giant
AT&T's and DirecTV's Boards Approve Acquisition Agreement
by
Thomas Gryta And
Shalini Ramachandran
Updated May 18, 2014 6:30 p.m. ET
AT&T agreed to buy DirecTV for $49 billion, creating a new
pay-TV giant and giving AT&T CEO Randall Stephenson more
clout with content companies as video moves to the Internet.
Shalini Ramachandran reports. Photo: Getty.
AT&T Inc. T -0.65% agreed to acquire DirecTVDTV +1.25%
for $49 billion, a deal that would make it a major player in pay
television and increase its clout with media companies at a time
when video consumption is moving online.
The agreement, which the companies' boards approved on
Sunday, comes just three months after Comcast Corp.'s CMCSA
+1.38% $45 billion agreement to buy Time Warner Cable Inc.
TWC +1.33%
The deals show how the biggest companies in television and
telecommunications are bulking up to face a changing media
landscape. Growth is slowing in some markets, like pay TV and
wireless subscriptions, and is exploding in others, like
streaming video. The companies are betting that bigger scale
will give them the resources to invest in new capabilities and
the leverage to hammer out commercial arrangements in the
media world.
The combination would create a company with 26 million pay-
TV subscribers in the U.S. That is second only to Comcast and
Time Warner Cable, which would have about 30 million
combined subscribers if regulators approve their deal and
pending divestitures are completed.
"There would not be many people who could put together
2. something with a nationwide mobile platform, nationwide video
platform and a 70 million household broadband build," AT&T
Chief Executive Randall Stephenson said in an interview.
AT&T said it would pay $95 per DirecTV share, about $66.50 a
share in the form of its own shares and $28.50 in cash.
The companies have considered a combination for years and the
CEOs came to the basic outline of the deal two weeks ago, Mr.
Stephenson said. DirecTV CEO Mike White gave him a tour of
the DirecTV offices in Los Angeles, and the final terms were
sealed between the two over the phone, he said.
The deal is Mr. Stephenson's biggest bet so far and is AT&T's
largest acquisition since its 2006 purchase of BellSouth for $85
billion. Mr. Stephenson became CEO in 2007 after his
predecessor, Ed Whitacre, took a regional phone company and
turned it into a national giant.
Mr. Stephenson has struggled to pull off a big-ticket
transaction. He attempted to buy T-Mobile US Inc. TMUS
+0.90% in 2011, but was shot down amid regulatory concerns.
He said on Sunday the Comcast deal didn't factor into his
decision on DirecTV, saying that the two deals aren't similar in
nature and highlighting the mobile-video aspect of the
combination.
For DirecTV, the combination ends a period of uncertainty
during which the company has struggled to chart a road map for
growth in a stagnating U.S. pay-TV industry. Unlike cable
providers, the satellite company doesn't have a piece of the
burgeoning broadband-access market.
DirecTV's smaller but faster-growing Latin American arm,
which serves 12 million subscribers, has come under pressure
due to political and economic instability in the region. Mr.
White has recently played down those threats.
AT&T agrees to buy DirecTV for $49 billion. Above, a DirecTV
employee installs a satellite. Bloomberg
The deal leaves Dish Network Corp. in an uncertain position
strategically. Many analysts have seen AT&T and DirecTV as
3. potential buyers of the satellite-TV provider. Verizon
Communications Inc. VZ +1.05% was also seen by some
industry experts as a potential acquirer of Dish but has signaled
it isn't interested in a deal.
A spokesman for Dish pointed to a conference call in which its
chairman outlined its strategic options, saying: "We have to be
well positioned so that no matter what happens it's all good for
us, and I think we're there."
Many Wall Street analysts have questioned whether DirecTV
has significant strategic value to AT&T, especially as U.S.
wireless competition has picked up with the resurgence of T-
Mobile and SoftBank Corp.'s acquisition of Sprint Corp. last
year.
AT&T, which has 5.7 million subscribers for its U-Verse TV
service, will become a more powerful force in pay TV by
joining with the larger DirecTV. Theoretically, as a bigger
provider, AT&T would get better rates from companies that
license TV programming.
Still, media executives said, AT&T won't automatically get
those volume discounts without thorny negotiations.
Having DirecTV in the fold could also advance AT&T's
ambitions in online video. Like many other telecom and tech
companies, it is looking for ways to capitalize on surging
consumer demand typified by the growth of streaming services
like Netflix. Last year, AT&T and DirecTV each made
unsuccessful bids for streaming service Hulu LLC, whose
owners ultimately decided not to sell.
AT&T has started approaching media companies about a
potential "over the top" Web video service that would run on
wireless broadband connections and serve up TV programming,
people familiar with the matter said. The company also recently
formed an online video venture with media mogul Peter Chernin
and said it is weighing a number of online-video options,
including launching niche services or premium products like
Netflix's.
4. AT&T's main rival, Verizon, has taken similar steps and is
further along, some media-industry executives said. Like
AT&T, it is interested in deploying a technology called
"multicasting," which can deliver bandwidth-intensive video
streams to many users simultaneously without tying up too
much spectrum—the frequencies used to transmit voice and
video wirelessly.
Verizon in January bought Intel Corp.'s "OnCue" media unit,
and it has approached several TV-channel owners about
launching a wireless TV service, said people familiar with the
approaches. Verizon declined to comment.
One clear benefit for AT&T from the acquisition, analysts said,
is that DirecTV's cash flow will help the company cover its
almost-$10 billion in annual dividend payments. In January,
AT&T projected 2014 free cash flow of $11 billion, making
many analysts nervous about its ability to cover the payout.
The agreement puts another major communications deal in front
of regulators, combining companies that operate in industries
where Americans already have narrowing choices and overseers
have expressed a desire to promote competition.
In part to allay concerns from regulators, AT&T stressed in its
news release that it would invest in rural broadband, commit to
abide by net-neutrality rules and spend at least $9 billion in a
coming government auction of wireless airwaves.
As part of the deal, AT&T plans to sell its long-held $6 billion
stake in Latin American phone giant America Movil SAB to
avoid regulatory conflicts.
John Bergmayer, senior staff attorney with advocacy group
Public Knowledge, warned that AT&T will need to demonstrate
that new services would offset any harm to the wireless and
video markets.
"The industry needs more competition, not more mergers," he
said. "The burden is on AT&T and DirecTV to show otherwise."
"It just doesn't make sense to me," said New Street Research
analyst Jonathan Chaplin, who asserts that AT&T would be
better off buying Dish Network because of that company's
5. wireless-spectrum holdings.
The acquisition raises the prospect that AT&T customers may
one day watch "Mad Men" episodes or football games over a
fast cellular broadband connection without subscribing to
traditional pay-TV service, but developing such offerings may
be difficult. Nothing is likely to change in the short term for
AT&T or DirecTV customers.
Blair Levin, former chief of staff at the Federal
Communications Commission and author of its road map for
expanding Internet access, said it's not immediately clear how
the deal would impact consumers. While the deal could be
perceived as eliminating a competitor in 25% of the country and
result in higher prices, DirecTV is a national service and
therefore prices may stay in check due to competition in other
markets. AT&T will also be able to package wireless-phone
service with home-TV subscriptions, which could result in
better deals.
Mr. Levin said AT&T's acquisition of DirecTV was likely a
response to Comcast's Time Warner deal.
"Sometimes, deals are driven by hope and opportunity and
sometimes they're driven by fear and locking down customer
bases," Mr. Levin said.
—Ryan Knutson contributed to this article.
Health Care
Chapter 22 - Health Care
Chapter twenty-Two
health careCHAPTER OVERVIEW
This chapter addresses one of the most prominent economic and
political issues of our time. Providing health care is an
economic issue, and the American public‘s concern ranges from
the problem of rising health care costs, to gaps in health
insurance coverage, to government insurance programs draining
Federal and state budgets. The debate over the desirability of
more government involvement in providing health insurance
6. continues.
This chapter also examines the economic aspects of our health
care problems, offers a demand and supply analysis to explain
rapid increases in health care costs, as well as potential methods
for containing costs and evaluates the Patient Protection and
Affordable Care Act (PPACA).WHAT’S NEW
This was chapter 21 in the 19e.
A fourth Quick Review has been added to the end of the
chapter.
There are three new “Consider This” discussions in the chapter.
The first is “Why do Hospitals Sometimes Charge $25 for an
Aspirin?”. The second is “Electronic Medical Records.” The
third is “PPACA Implementation Problems.”
The “Consider This” in the 19e, "Cancer Fight Goes Nuclear",
has been eliminated.
There is a new learning objective for the chapter.
All of the data and tables have been updated.INSTRUCTIONAL
OBJECTIVES
After completing this chapter, students should be able to:
1. Describe what is meant by the health care industry and
approximate its size with relevant data.
2. Identify the problem connected with rising health care
costs.
3. Give the negative effects associated with rising health care
costs.
4. Identify two consequences associated with employer
provided health insurance in the U.S.
5. Explain what is meant by the overallocation of resources
to the health care industry.
6. Describe the extent of the problem regarding a lack of
health insurance coverage.
7. Identify four special characteristics of the health care
market.
8. Give four factors that have contributed to the rise in the
demand for health care.
9. Explain the role of physicians in increasing the demand for
7. health care.
10. Explain the “moral hazard” problem arising from health
insurance coverage.
11. Explain how the Federal income tax structure subsidizes
health care demand.
12.
Identify three supply factors that contribute to rising health care
costs.
13. Describe how rationing health care services can reduce
costs.
14. Explain how deductibles and copayments, health savings
accounts (HSAs), managed care, Medicare and DRG, and limits
on malpractice awards can decrease incentives to overconsume
health care thereby reducing costs.
15. Present arguments for and against the PPACA.
16. Explain the major provisions of the Patient Protection
and Affordable Care Act.
17. Define and identify terms and concepts listed at the end
of the chapter.COMMENTS AND TEACHING SUGGESTIONS
1. There is a wealth of information available on health care
in the popular press. This topic provides an excellent
opportunity for student debates, papers, and presentations.
Because it is an issue that concerns so many of us, you can
easily get students to relate their personal experiences to the
economics of health care. Once you have their interest, you can
relate their concerns to many of the theoretical and structural
concepts raised in microeconomics. The material can also be
used to help students better appreciate the macroeconomic
tradeoffs, especially as they pertain to health care reform
proposals.
2. The National Issues Forum has some excellent teaching
materials that provide a focus for discussing some of the major
issues. Related to this chapter are two of their topics, “The
Health Care Cost Explosion: Why it’s so Serious, What Should
Be Done," and “Health Care for the Elderly: Moral Dilemma,
Mortal Choices.” This organization also has units that focus on
8. “Coping with AIDS” and “The Drug Crisis,” which may be
useful supplements in a more interdisciplinary course. For
more information about their issue books, audiocassette tapes,
and videocassettes, call 18004337834 or write to them at 100
Commons Road, Dayton, Ohio 454592777.
3. The Nebraska Council on Economic Education has an
excellent set of activities, suitable for secondary or college -
level classes, which revolve around the economics of health
care and are available for about $10. They also have a video,
“Code Blue,” of a teleconference panel highlighting some of the
major issues. For more information call 4024722333 or FAX
4024729700.
4. The health care industry can be analyzed from the
perspective of market structure, which reinforces what students
have just learned about the different market models, from
perfect competition to pure monopoly. How do the markets for
various types of health care services fit the various market
models? If the market being examined does not fit the
competitive model, or if consumers pay indirectly through
prepaid insurance plans, does it make sense to talk about market
solutions? If market solutions are possible, should reforms be
aimed at enhancing competition? The health care industry, or
particular components of it, provides excellent opportunities for
using the casestudy method to teach economic concepts.
5. Price elasticity and income elasticity of demand both play
an important role in the problems of the health care industry.
Most health care services are a necessity with few substitutes,
making the demand for them relatively priceinelastic. This fact
means that rising costs of production that decrease supply will
have more impact on the price of health care than on the
quantity purchased. Health care is a normal good, meaning that
as incomes rise the demand for health care will also increase.
Employing this chapter as a demonstration when studying the
theory of elasticity in Chapter 6 can be an effective
combination.
6.
9. The discussion of health care can lead easily to the discussion
of how we value human life. A fun and illuminating exercise is
to place students on “organ donation” boards, where they (in
small groups) must decide which candidate receives a vital
organ (the non-recipients die). Write profiles for four or five
prospective recipients, assume that all have the same level of
compatibility with the donor’s organ, and include information
such as age, reason for organ need (genetics, unhealthy
lifestyle, accident, etc.), annual income (or prospective annual
income for students), and family situation (single, married,
children, etc.). These are of course hypothetical, but for an
added bit of fun write profiles of what would happen to each
candidate if they received the organ (brilliant student flunks
out, welfare recipient goes on to win Nobel Prize, and so
on).STUDENT STUMBLING BLOCKS
Do not assume that your younger students know anything about
health insurance coverage, even at the personal level. Unless
they have encountered some problem, it is probably one of those
economic costs that they have ignored, since they are covered
by their parents’ insurance or university health center. The
students who have encountered some problem with coverage
will help you “open other students’ eyes.”LECTURE NOTES
I. Introduction
A. Learning objectives – After reading this chapter, students
should be able to:
1. Convey important facts about rising health care costs
in the United States.
2. Relate the economic implications of rising health care
costs.
3. Discuss the problem of limited access to health care
for those without insurance.
4. List the demand and supply factors explaining rising
health care costs.
5. Describe the cost containment strategies that rely on
altering the financial incentives facing either patients or
health service providers.
10. 6. Summarize the goals of the Patient Protection and
Affordable Care Act and the major changes it institutes.
B. This chapter focuses on several issues.
1. The United States’ system of health care.
2. The economics of health care costs.
3. The PPACA and whether its policies will achieve its goals.
II. The Health Care Industry
A. Government’s definition of this far-reaching industry
includes many aspects.
1. Services provided in hospitals, nursing homes, labs,
physicians’ and dentists’ offices,
2. Prescription and nonprescription drugs, artificial limbs,
and eyeglasses,
3. Services of many nontraditional practitioners, but not
fitness club services, or health foods.
B. The size of the industry is immense.
1. 17 million are employed in the industry, including 850,000
physicians.
2. There are about 5,800 hospitals with almost 925,000
million beds.
3. Health care accounts for 17.3 percent of GDP.
III. U.S. Emphasis on Private Health Insurance
A. Private health insurance is uniquely American and began in
World War II to attract workers in light of price ceilings that
government had placed on wages.
B. Other countries like Canada, have a national health care
system.
1. They use tax revenue to provide each person with free or low
cost health care.
2. Very few individuals have to buy private health care.
C. In the U.S. Federal tax law makes it cheaper for employers to
provide health insurance rather than the individual buying it.
D. Consequences of employer provided benefits:
1. Creates an incentive to overuse health care.
2. Leads to a focus on regulating a familiar health care system
11. rather than creating a new one.
IV. Twin Problems: Cost and Access
A. Health care costs include the “price” of health care as well
as the “quantity” of health care services provided.
B. Health care costs have been rising rapidly because of
higher prices and an increase in the quantity of services
provided. The price of medical care has been increasing far
faster than the overall price level.
C. Efforts to reform health care have focused on controlling
costs and increasing accessibility. A dual system of health care
(one for those who can afford to pay and the other for those who
cannot) may be evolving.
V. High and Rising Health Care Costs.
A. Health care spending in the U.S. is rising in absolute
terms, as a percentage of domestic output and on a per capita
basis.
B. Figure 22.1 shows major types of spending and major
sources of funds for these expenditures.
1. 32 cents of each health care dollar is spent on
hospitals; 20 cents goes to physicians; 21 cents goes to dental
and vision care, and 26 cents pays for other health care services,
including prescription drugs, home care, and program
administration.
2. About 81 percent of expenditures are paid for by
public and private insurance; the remaining amount is paid by
the health-care consumer.
C. Health care absorbed 5.2 percent of GDP in 1960, and
17.9% in 2011. (Figure 22.2)
D. Global Perspective 22.1 shows that spending on health care
as a percentage of GDP is higher in the U.S. than in any other
major industrialized nation.
E. Quality of care: Are we healthier?
1. Medical care in the U.S. is probably the best in the world,
but not our health.
2. As a result of medical research, the incidence of certain
12. diseases has been declining and the quality of treatment has
been improving in the U.S. But the U.S. has a lower life
expectancy, higher maternal mortality and infant mortality
rates, an AIDS epidemic that has claimed over 616,400 lives;
and an increase in tuberculosis.
3. The U.S. Office of Technology Assessment has concluded
that the U.S. ranks low internationally on may health indicators.
F. There are economic implications of rising costs.
1. The increase in health care costs is the main reason
for rising health care spending.
2. Increased health care costs have other effects as well.
a. Fewer uninsured can afford health care; fewer employers
can offer health insurance to workers.
b. Adverse effects on labor markets exist.
i. Wages grow more slowly because health care benefits
are taking a larger share of the “compensation” package.
ii. Employers use more parttime and temporary workers
to avoid the high cost of health insurance coverage for workers.
Employer may contract-out the work of low-paid workers to
avoid paying health care costs.
iii. Employers have shifted work to domestic or
international suppliers (outsourcing and offshoring), reducing
costs because these outside suppliers provide less medical
benefits to their employees.
c. Large medical bills not covered by insurance may lead to
personal bankruptcies as the patient or his or her family lacks
the means to pay.
d. Government budgets at all levels have to deal with
spiraling health care expenditures.
i. Medicare and Medicaid has been the fastest growing
segment of the Federal budget.
ii. Higher taxes or reductions in other budget
components (national defense, education, and environmental
programs) must be used to cover the increases.
iii. States are finding it difficult to cover their share of
Medicaid costs and must reduce other expenditures
13. (infrastructure, education, and welfare).
iv. Local governments face similar strains.
G. Are we spending too much?
1. Most industries are happy to have increased spending.
Why are we alarmed about more spending on health care?
According to economist William Nordhaus, the economic value
of increased longevity is roughly equal to the increased GDP
over the last 100 years.
2. University of Chicago economists Kevin Murphy and
Robert Topel has found that reduced mortality from heart
disease benefits the U.S. economy $1.5 trillion each year.
3. Despite the successes, economists see health care
expenditures as inefficiently large, a product of the unique
features of the health care market.
4. Experts are concerned that at the margin, the
consumption of health care is worth less than the alternative
goods and services that could otherwise have been produced
with those resources. In other words, there is an overallocation
of resources to health care, which imposes a real economic cost
on society.
VI. Limited Access: Many are uninsured.
A. In 2011 about 49 million Americans (16 percent of
population) had no health insurance for the entire year. This
number grows as health care costs rise.
B. Which groups have no insurance?
1. Fifty percent of the uninsured are families where the head
works full time, the family income is too high to qualify for
Medicaid, but the earned income is not enough to afford health
insurance. Demographically, many are single-parent families,
African American, or Hispanic.
2. Young people with excellent health choose not to buy
health insurance.
3. The chronically ill find it impossible or too costly to
obtain insurance because of the likelihood they will incur
substantial costs in the future.
14. 4. The unemployed lack insurance because most policies
accompany employment.
5. Workers for small firms are unlikely to have insurance
because high administrative costs make it costly for small
business employers to offer this benefit.
6. Part-time and low-wage workers are also less likely to be
insured.
C. The uninsured will sometimes pay directly, but often wait
until their illness is so critical that the hospital emergency room
is the only alternative, and this adds to hospitals’
uncompensated health care burdens, estimated at $36 billion per
year. Hospitals are forced to shift these costs to other health-
care customers.
VII. Why the rapid rise in costs?
A. Health care market is unique.
1. Ethical and equity considerations are intertwined. Society
regards much of health care as a right and is reluctant to ration
it solely on the basis of who can afford it.
2. Information is asymmetric: Physicians and other
caregivers possess more information about the product than the
consumer. Often the provider orders the service for the
consumer or patient.
3. External benefits exist. Healthy individuals make the
entire society more productive and contribute to general
prosperity and well-being.
4. Third-party payment or payment by the insurance company
means that the consumer has little or no direct out-of-pocket
expenditure for health care services. Therefore, the consumer
does not seek out the lowest cost alternative.
B. Demand for health care has been increasing.
1. Health care is a “normal” good, so when incomes rise, the
demand for health care rises proportionately. Elasticity with
respect to income is estimated about 1 and may be as high as
1.5 in the U.S.
2. Demand for most health care is believed to be price
15. “inelastic;” the quantity demanded does not decline
significantly with rising prices.
a. Most health care is a necessity.
b. There are few substitutes for most health care services.
c. Consumers do not “shop around” for doctors in most cases.
d. Patients with insurance do not care much about the price of
each service received since they prepay for the total package.
3. The population is aging. By 2000 the proportion of those
over the age of 65 had risen to 12.4 percent from 9 percent
thirty years earlier. Those over 65 consume 3 1/2 times more
health care services as those between 19 and 64. Those over 84
consume nearly two and one-half times as much as those in the
65-69 age group. By 2030, 76 million members of the baby
boomer generation will turn 65.
4. Unhealthy lifestyles, particularly substance abuse, are
common. Although smoking is declining, obesity-related
medical costs are about $147 billion per year, with taxpayers
paying more than half the bill through Medicare and Medicaid.
5. The role of physicians may increase the demand for health
care.
a. Supplier-induced demand. Asymmetric information exists,
meaning that doctors possess more information about health
care needs than do their patients (consumers) and doctors order
the services for them. Also doctors are paid on a “fee-for-
service” basis, which encourages them to order more services,
and patients seldom have advance information on the cost or
necessity of these services.
b. Defensive medicine is common in that doctors err on the
side of being overly cautious to avoid any charges of
malpractice. They often order many procedures that may not be
necessary.
c. Medical ethics cause doctors to use the “best practice” to
serve their patients and to try to sustain human life regardless
of cost.
6. Insurance pays about 79 percent of health care costs.
While this is positive in providing security against devastating
16. losses, it creates a “moral hazard” problem.
a. Insured may seek more health care and engage in more
damaging behavior than the uninsured.
b. Overconsumption occurs because people regard health care
as “free,” since they have prepaid for their services.
c. Price provides a direct incentive to restrict use of a
product, but insurance coverage, removes the consumer’s
budget constraint when he or she decides to consume health
care.
7.Consider This ... Why do Hospitals Sometimes Charge $25 for
an Aspirin?
a. To save taxpayers money, Medicare and Medicaid set
their payment rates for medical services above marginal cost,
but below average total cost.
b. These programs do not pick up their share of fixed
costs. Thus, patients with private insurance must cover this
shortfall.
8. Employer-financed health insurance constitutes a “tax
subsidy” because the health benefits are exempt from both
federal income tax and payroll (social security) taxation.
9. Figure 22.3a gives graphic portrayal of a competitive
health care market (on the demand side) that might exist if all
consumers were uninsured. Allocative efficiency occurs only
when we pay in full for a product. In Figure 22.3b we see the
effect of health insurance paying half the price of health care,
so the consumer’s bill for the service is the same as half price.
Therefore, the quantity consumed will be Qi rather than Qu and
there is more health care consumed than would be justified by
the total cost of this amount of care to society. Figure 22.3b
illustrates this “welfare loss” as the area abc.
10. The “equity-efficiency” tradeoff is illustrated here. The
dilemma is that if we provide social insurance that is believed
equitable, then overconsumption will occur, which is
inefficient. Efficiency may be achieved when less insurance is
17. provided, but this may be inequitable.
C. Rationing to Control Costs
1. Countries with national health insurance use
mechanisms to restrict the quantity supplied of health care,
decreasing money spent on health care.
2. Waiting helps to ration health care where patients
might have to wait weeks, or months for specific medical
appointments or procedures.
3. In the U.S. insurance is private so government
regulators are focused on the benefits of insurance instead of
the costs because the money is not the government’s money.
a. Over the years regulators have increased the
conditions to be covered under insurance.
b. As a result, insurance companies increased
premiums.
4. Other countries focus on denying coverage
and decreasing costs while the U.S. expands health insurance
coverage.
D. Supply factors also cause rising costs.
1. Some believe that the supply of physicians has been
restricted artificially, but the evidence for this argument is not
strong, since the number of physicians per 100,000 people has
increased over the years. But the increase in the suppl y of
physicians has not kept up with the increase in demand for
services provided.
2. Physicians’ incomes are high in part because of the high
costs incurred during their education. Although doctors have
high rates of return on their educational expenses, these returns
are below those for lawyers and business school graduates.
3. Productivity growth has been slow in health care because it
is labor intensive and there is no strong incentive to raise
productivity in a fee-for-service system.
4. Changes in medical technology have often caused rising
costs, because private and public insurance pays for new
technology regardless of costs. Some studies estimate that this
accounts for as much as one-half of the growth of health care
18. expenditures.
5. Consider This .. Electronic Medical Records
E. Relative importance.
1. Health care costs have escalated because of both demand
and supply side factors as enumerated above; however some
factors are more important than others.
2. Most experts attribute the relative rise in health care
spending to the following:
a. Advances in medical technology.
b. The medical ethic of providing the best treatment
available.
c. Private and public health insurance (the presence of third
partypayers).
d. Fee-for-service physician payments.
VIII. Cost Containment: Altering Incentives
A. Deductibles and Copayments
1. Creates opportunity costs for consumers and a direct cost for
health care.
2. Decreases the overuse of health care.
3. Decreases the administrative costs for health insurance
companies.
B. Health Savings Accounts (HSAs)
1. For those who qualify, individuals can make tax-deductible
contributions to their HSAs
2. They can then use the money in their HSAs to pay for
qualified medical expenses and whatever is not used in the
current year is still available for future use.
3. By using their own money, consumers will be more careful in
evaluating their MC and MB of health services and compare
prices.
4. They can use the money for non-medical reasons giving them
greater reason to be frugal, but they will have to pay income tax
on it.
C. Managed Care
19. 1. There are two main types of managed care systems.
a. Preferred Provider Organizations (PPOs)
i. If the individual goes to a provider on the list of PPOs, the
insurance will cover 80 – 100% of costs.
ii. If they go outside of the PPO, insurance only covers 60 –
70% of the costs.
iii. The dollar amount covered by health insurance for most
services is less than the prices charged, decreasing premiums
and expenditures.
b. Health Maintenance Organizations (HMOs)
i. Provides services for enrollees who pay an annual fee.
ii. With a fixed annual revenue, there is an incentive to avoid
too much care and therefore reduce costs.
iii. There is also an incentive for more preventative care to
keep costs low.
2. Physicians and hospitals are closely monitored, so physicians
are more reluctant to perform unnecessary tests with a fixed
budget and inspection of their behaviors.
3. The prices are lower than with traditional insurance.
4.
Patients are restricted to physicians within the managed health
care system and it has been argued that perhaps there is too
much incentive to reduce costs.
D. Medicare and DRG
1. Federal government used to automatically pay all costs of a
patient’s medical expenses.
2. In 1983 Federal government started making payments based
on diagnosis-related-group (DRG) system.
a. Now, the hospital receives a fixed payment for a patient’s
care based on detailed diagnostic categories that best
characterize a patient’s conditions and needs.
b. DRG gives hospitals an incentive to lower their costs.
c. DRG has decreased the length of hospital stays.
d. It has been criticized that these changes are actually
reflective of diminished quality of medical care.
E. Limits on Malpractice Awards
20. 1. Supporters: capping malpractice awards reduces malpractice
premiums, lowering health care costs.
2. Opponents: Large malpractice awards are the best tool for
preventing medical malpractice and medical malpractice awards
are a very small part of total health care costs.
IX. The Patient Protection and Affordable Care Act (PPACA)
A. PPACA was meant to extend and expand the existing health
care system rather than creating a new national health care
system. Its purpose is to have health insurance for nearly all
Americans.
B. Many who did not have private insurance had costly medical
conditions, so significant revenue sources had to be found
through the personal mandate to buy insurance and a variety of
new taxes.
C. Preexisting Conditions, Caps, and Drops
1. It is illegal to deny insurance for pre-existing medical
conditions.
2. PPACA prevents insurance companies from imposing annual
or lifetime caps.
3. Both of these changes result in a significant increase in costs
for insurance companies.
D. Employer Mandate
1. Every firm with 50 or more full-time employees must buy
health insurance for employees, or pay a $2,000 fine per
employee.
2. Extends insurance to as many workers as possible without
increasing the costs to government.
E.
Personal Mandate
1. Individuals must buy insurance for themselves and their
dependents if they are not already covered by insurance, or pay
a fine of $695 per uninsured family member or 2.5% of income.
2. Health subsidies are in place to prevent financial devastation
of the poor.
3. In essence, the wealthier, healthy individuals pay for health
21. insurance to make insurance less costly for lower income
groups.
F. Covering the Poor
1. The employer mandate means that larger employers must
provide insurance for all employees which include the poor.
2. Medicaid system was expanded to cover anyone with income
that is less than 133% of poverty level.
3. PPACA subsidizes the purchase price of health insurance for
those who have to buy it on their own and these subsidies reach
far into the middle class.
G. Insurance Exchanges
1. Individuals buying their own insurance will buy it in a
government-regulated market called insurance exchange.
2. Regulators don’t set the prices, but they can withdraw
approval of an insurer if the price increase is deemed by
regulators to be too high relative to costs.
3. The hope is that the insurance exchange will create a
competitive environment among health insurance companies.
H. Other Provisions
1. The act mandates that adult children can remain covered on
their parents’ employer-provided insurance until they are 26.
2. PPACA makes it illegal for insurance companies to charge
copayments or deductibles for annual check-ups or preventative
care.
3. It requires insurers to spend at least 80% of the money
received from health premiums on health care or improving
health care.
I. Taxes
1. .9% increase in Medicare payroll taxes for individuals
earning more than $200,000/year and more than $250,000/year
for married couples.
2. 3.8% increase in capital gains tax for individuals earning
more than $200,000/year and more than $250,000/year for
married couples.
3. A 40% tax is paid by employers for any employer-provided
insurance with a premium greater than $10,200/year for an
22. individual or $27,500/year for a family.
4. 2.9% excise tax for all goods sold by medical device
manufacturers.
5. 10% tax on indoor tanning.
J.
Objections and Alternatives
1. Objections
a. Not a single Republican in either chamber of Congress voted
for PPACA.
b. There will be greater inefficiencies with government
controlling pricing and the content of insurance policies.
c. Might be the first step towards a national health care system
with nonprice rationing required to keep costs down.
d. Revenue sources are insufficient to meet the costs of PPACA.
e. Large subsidies that many families qualify for will result in
significant increases in health care spending.
2. Alternatives
a. In Singapore and Indiana, wasteful spending was reduced by
increasing the out-of-pocket expenditures of the consumers and
forcing them to really evaluate their marginal benefits/costs and
the opportunity costs.
K.Consider This ... PPACA Implementation Problems
X. Last Word: Singapore’s Efficient and …
Government's Role and Government Failure
Chapter 05 - Government's Role and Government Failure
CHAPTER FIVE
GOVERNMENT'S ROLE AND GOVERNMENT
FAILURECHAPTER OVERVIEW
The chapter begins by reviewing the topic of market failure and
the important role that the government can play in (potentially)
improving economic efficiency. The chapter then discusses the
difficulties that democratic governments face when making
specific laws and regulations that govern economic activity in
an attempt to correct for this market failure. It is then argued
that as a result of these difficulties, a government can
23. sometimes pursue policies for which the marginal cost exceeds
the marginal benefit. These inefficient outcomes, defined as
government failure, are just as important as market failure in
understanding economic activity. In effect, the lesson from this
chapter is that society should be just as vigilant in looking for
instances of government failure as in looking for instances of
market failure.
The appendix to this chapter discusses public choice theory.
The theoretical discussion includes an examination of the
inefficiency of voting outcomes, interest group influence,
political logrolling, and the paradox of voting outcomes. The
median-voter model is also considered. WHAT’S NEW
The “Consider This … Unintended Consequences!” has been
replaced with a new “Consider This … Government, Scofflaw”.
This should make the discussion more relevant for today’s
students and highlight potential issues related to government
owned companies.
The “Last Word: Government Failure in the News” has been
updated replacing some old examples with new examples.
There are also minor changes in wording in the chapter and the
data has been updated.
The appendix to the chapter discusses the median-voter theorem
and a potential voting paradox.INSTRUCTIONAL
OBJECTIVES
After completing this chapter, students should be able to:
1. Describe how government's power to coerce can be
economically beneficial.
2. Explain some of the difficulties associated with managing
and directing the government.
3. Explain Government failure and explain why it happens.
4. Explain why representative democracy suffers from the
principal-agent problem.
5. Discuss the idea of clear benefits and hidden costs.
6. Define unfunded liabilities and provide some examples.
7. Define and identify the terms and concepts listed at end of
24. the chapter.
8. (Appendix) Explain the difficulties of conveying economic
preferences through majority voting.
9. (Appendix) Explain the problems created with majority
voting and the median-voter outcome.LECTURE NOTES
Learning Objectives – After reading the chapter, students
should be able to:
Describe how government's power to coerce can be
economically beneficial and list some of the difficulties
associated with managing and directing the government.
Discuss "government failure" and explain why it happens.
(Appendix) Explain the difficulties of conveying economic
preferences through majority voting.
Government's Economic Role
0. Although the U.S. economy is primarily a market system
where markets and prices coordinate and direct economic
activity, there is still a prominent role for government in
determining how the economy functions.
Government's Right to Coerce: One key difference between the
economic activities of government and those of private firms
and individuals is that government possesses the legal right to
force people to do things. In many cases this can improve
economic efficiency.
Force and Economic Efficiency: The government can correct for
market failure by providing public goods and by providing the
appropriate incentives to firms (or households) in the presence
of externalities. This will most likely increase economic
efficiency. The government can also reduce private-sector
economic risks by enforcing property rights and enforcing
contracts. This will also most likely increase economic
efficiency.
The Problem of Directing and Managing Government
The government can substantially improve allocative and
productive efficiency if it directs its coercive powers toward
rectifying market failures and providing a low-risk economic
environment for the private sector. However, governments face
25. the daunting challenge of organizing millions of employees to
carry out thousands of tasks. An understanding of these
challenges and complexities will give you a better sense of how
well most governments manage to do despite all of the problems
associated with government failure.
No Invisible Hand: Government economic policies are not self-
correcting. If a government program is inefficient there is no
pressure forcing this program to become more efficient or
forcing it "out-of-business".
Massive size and scope: The size and scope of government
makes it difficult to identify and fix economic inefficiencies.
The need for bureaucracy: Given the size of government,
elected officials must rely upon many layers of supervisors to
run and manage government programs.
The need for paperwork and inflexibility: To make sure that
laws are uniformly enforced, the bureaucracy is regulated by
detailed rules and regulations governing nearly every possible
action that any individual bureaucrat might be called upon to
make.
The information aggregation problem: Because of their massive
size and scope, bureaucracies have difficulty with effectively
aggregating and conveying information from their bottom layers
to their top layers. As a result, top officials will tend to make
inefficient choices.
Lack of accountability: Democratic elections do take place, but
because the government undertakes so many activities, it is
difficult for the electorate to know the details of even a small
fraction of what the government is up to at any particular time.
As a result, many programs are run poorly without affecting the
reelection chances of the incumbent politicians.
Consider This … Does Big Government Equal Bad Government?
The actual size of the government is not necessarily "good" or
"bad". It is whether or not the marginal benefit of a government
program exceeds the marginal cost of the program. Thus, the
debate over "large" or "small" government is misplaced. It is
really a debate about the marginal benefit and marginal cost of
26. government programs.
Government Failure
0. Government can fail despite knowing the preferences of
voters (as discussed in the appendix) because government puts
their own interests ahead of the voters’ interests and/or
government chooses policies that create large benefits for a
small group while creating small losses for the majority.
Representative Democracy and the Principal-Agent Problem
The principal-agent problem occurs because conflicts arise
when tasks are delegated by one group of people (principal) to
another group of people (agents).
In a democracy, elected officials (agents) have goals like
reelection which conflict with the interests of the voters.
Special interests may promote the interests of a small group at
the expense of society at large.
The special-interest effect refers to the situation where a small
number of people will receive large gains at the expense of a
much larger number of people who individually suffer small
losses. The small group will be well informed and highly vocal
on the issue and press politicians for approval. The large
numbers who will each suffer small losses will not have the
incentive to be informed or feel strongly. The result is that the
politician will support the specialinterest program, whose
supporters will notice the vote in their favor, and ignore the
majority who don’t feel strongly.
Pork-barrel politics is an example of the special-interest effect.
In this case, the benefit goes to a single political district and to
the politician from that political district. The cost of the project
is spread out to many individuals who will never receive the
benefits. Pork-barrel politics is often combined with logrolling.
Rent-seeking behavior occurs when a transfer of wealth at
someone else’s or society’s expense occurs through government
action. Here the term “rent” means any payment to a resource
supplier, business, or other organization above that which
would accrue under competitive market conditions. Examples
include tax loopholes that benefit only certain groups; public
27. works projects that cost more than the benefits they yield; and
occupational licensing that requires more than is necessary to
protect consumers.
Clear benefits, hidden costs (or the reverse, immediate costs and
future more vague benefits) are another dilemma for politicians
trying to decide on public programs. Where the benefits are
recognizable and popular, the politician may vote for the
program even if the costs exceed these benefits if the costs are
diffuse or hidden.
Unfunded Liabilities: The political tendency to favor priorities
that have immediate payouts but deferred costs also leads to
many government programs having unfunded liabilities. An
unfunded liability occurs when the government commits to
future expenditures without simultaneously committing to
collect enough tax revenues to pay for those expenditures
(unfunded liability = present value of projected expenditures on
the program - present value of projected tax revenue for the
program).
Social Security is one of the largest programs with an unfunded
liability.
Medicare also has a large unfunded liability component.
Chronic Budget Deficits: A budget deficit occurs whenever tax
revenues are less than spending in a particular year.
Deficits might result in economic inefficiency by allowing the
government to control and direct a large fraction of the
economy's resources.
A Debt Crisis might occur because the government has
accumulated so much debt that creditors are no longer willing to
lend to the government. This can result in a major "shock" to
the economy as the government raises taxes and cuts spending
at unprecedented levels. It is better to gradually raise taxes and
phase out programs (spending) rather than to implement a
drastic adjustment to an economy.
Misdirection of Stabilization Policy: Stabilization policy
attempts to use fiscal and monetary policy to "smooth-out"
business cycle fluctuations.
28. Fiscal policy attempts to stimulate spending by changing tax
rates and spending levels.
Monetary policy attempts to stimulate spending by changing
interest rates.
The problem is that the politicization of fiscal and monetary
policy might result in abuse and inefficiency by government
officials. For example, the government might direct
expenditures to specific companies in their district. Or might
attempt to change interest rates before an election (an
independent Federal Reserve reduces this possibility).
Limited and bundled choice is another problem with publi c
goods. The voter must choose between a few candidates who
will have the power to select the public goods and services to be
financed by the voter’s tax money. The choices are “bundled” in
that the limited set of candidates will govern over a variety of
issues, and the voter’s preferences may not perfectly align with
any candidate. In the private sector, the consumer has a
multitude of choices available, and can generally separate out
those goods and services not desired.
Consider This … Government, Scofflaw
An interesting example of government failure occurs when
public companies operated by the government violate the law at
higher rates than private companies.
A 2015 study found that public companies were substantially
more likely than private companies to violate health and safety
laws.
One explanation is that public companies may have a difficult
time getting the tax revenue, or funding, that would be needed
to comply with the law.
Another explanation is that the law appears to be applied much
more leniently against public companies.
Bureaucracy and inefficiency can be another problem in the
public sector because the profit motive or competitive pressure
to perform efficiently is not present. Ironically, a potential
response of government to a program’s failure is to increase its
budget and staff.
29. Government employees, together with the special-interest
groups they serve, often have the political clout to block
attempts to pare down or eliminate their agencies.
There is a tendency for government bureaucracy to justify
continued employment by looking for and eventually finding
new problems to solve.
Inefficient Regulation and Intervention: Governments regulate
many aspects of the economy with the hope that these
regulations improve economic outcomes. Examples include the
environmental laws and banking supervision.
Regulatory Capture occurs when the government agency that is
supposed to supervise a particular industry becomes heavily
influenced by the industry that it is supposed to be regulating.
Some argue that regulatory capture has occurred in the FDA
with respect to the pharmaceutical industry.
Deregulation as an alternative to regulation will reduce (or
eliminate) regulatory capture, but this might result in other
inefficiencies, such as monopolies, false claims and unsafe
drugs, and potential negative externalities from pollution.
Government's poor investment track record
Loan guarantees reduce downside risk and result in potentially
inefficient investments.
Loan guarantees also socialize losses and privatize gains. If the
project fails then the taxpayer picks up the tab. If project
succeeds then the private investors reap the reward.
Corruption often occurs in government when officials abuse
their power.
A government official is bribed to do what he should already be
doing.
A government official accepts a bribe to do something he does
not have the legal authority to do.
An interesting debate is whether or not campaign contributions
constitute a bribe.
Imperfect institutions exist in both the public and private
sectors, which often makes it difficult to decide which
institutions would perform best in the production of certain
30. goods and services.
LAST WORD: “Government Failure” in the News
0. Despite Disney making a profit of over $2 billion per year
running nine of the world's 10 largest amusement parks, two
Disney contractors received $1.4 million of federal loan
guarantees in 2014.
The $878 billion American Recovery and Reinvestment Act of
2009 had many questionable spending projects. For example,
$10 million was set aside to renovate a train station in
Elizabethtown, PA that hadn't been used in 30 years.
Between 2009 and 2014, the U.S. Department of Agriculture
spent $34 million on a program to encourage Afghanis to
cultivate and consume soybeans—despite soybeans growing
poorly in Afghanistan.
The government paid out funds on over 900,000 false claims for
disaster relief from Hurricane Katrina.
APPENDIX TO CHAPTER 5: PUBLIC CHOICE THEORY AND
VOTING PARADOXES
1. Public Choice Theory
0. Economic analysis of government decision making, politics,
and elections.
Understanding government failures highlights how changes in
government processes can lead to greater efficiency.
Revealing Preferences through Majority Voting
0. Majority voting can lead to inefficient outcomes; that is, the
majority can defeat a proposal that would have provided greater
benefits than costs and adopt one that costs more than the
benefits it provides (Figure 1).
Illustration of an inefficient “no” vote result: Suppose there are
3 voters who each will have to pay $300 in tax if a proposal is
adopted. It is worth $700 to one, $250 to the second and $200 to
the third. The second and third voters will vote “no” and defeat
the proposal despite the fact that the total benefits ($1150)
exceed the $900 cost.
Illustration of an inefficient “yes” vote result: Take the same
three voters as above and the same level of taxation. Now the
31. proposal is worth $100 to the first voter and $350 to each of the
others. The vote will be 2 to 1 in favor of the proposal even
though the total benefit of $800 is less than the $900 cost.
Conclusion: The problem is that the oneperson onevote rule
does not measure intensity of preferences, so the result may not
be economically efficient. Too much or too little of the good is
produced.
Interest groups may improve the economic efficiency of results
by registering intense feelings with elected representatives or
by organizing major efforts to get the vote to go their way.
Logrolling or vote trading may also secure favorable decisions
for those who feel strongly about certain issues, but it may also
negate an efficient outcome in favor of a special interest group
where the value of the benefits received does not justify the
cost. The efficiency of the outcome will depend on the
circumstances.
The paradox of voting is that society may not be able to rank its
preferences consistently through majority voting.
Table 1 demonstrates a situation in which three voters have
expressed their rankings of three public projects; each has a
different ranking. If voting is done on pairs of projects, it can
be shown that national defense will win over roads, and roads
will win over weather warning systems. But the logical
conclusion that the community prefers national defense to
weather warning systems is not the case—they would each get
the same number of points (if points were awarded for a 1st,
2nd, and 3rd choice). In other words, if one choice must receive
a majority of the votes, there will not be a consistent outcome
in this case unless somehow the strengths of the rankings can be
measured.
Government might find it difficult to provide the “correct”
public goods by acting in accordance with majority voting.
Consider This … Voter Failure
The median-voter model suggests that under majority rule the
median voter will in a sense determine the outcomes of
32. elections. The median voter is the person holding the middle
position on an issue.
The textbook example has three voters deciding among three
types of weather warning systems. The first is willing to spend
$400; the second, $800; the third, $300. The median-voter
model suggests that the $400 proposal will win. In a choice
between the $400 and $800 proposal, the first and third will
vote for the $400 type. In a choice between the $400 and $300,
the first and second will vote for the $400 type. In other words,
both extreme voters prefer the median choice rather than the
other extreme, so the median voter will tend to predominate.
Real-world examples occur in political positions where
candidates seem to aim their appeal at the median voters within
each party to get the nomination and later at the middle of the
population in an effort to win the election.
Implications of the median-voter model:
Many people will be dissatisfied by the extent of government
involvement in the economy.
Some people may “vote with their feet” by moving into political
jurisdictions where the median voter’s preferences are closer to
their own.
Median preferences can change over time.
QUIZ
1. Which of the following are potential problems with directing
and managing government?
The government's massive size and scope
Politicians aren't as intelligent as the rest of society
It is difficult for the government to effectively aggregate
information from bottom to top
Answer A and C are correct
Answer: D
What is the correct criterion in evaluating government
programs?
33. 1. The size of government: A larger government provides more
goods.
The size of government: A smaller government has lower taxes.
By comparing the marginal benefit to the marginal cost of the
government program. If the marginal benefit exceeds the
marginal cost this is an efficient program.
By comparing the marginal benefit to the marginal cost of the
government program. If the marginal cost exceeds the marginal
benefit this is an efficient program.
Answer: C
An unfunded liability for a government program implies that:
1. projected government expenditure exceeds projected
government revenue for the program.
the government program is self-sustaining.
projected government revenue exceeds projected government
expenditure for the program.
the government has yet to establish the program.
Answer: A
A special-interest issue is one whose passage yields:
1. large private benefits compared to external benefits.
large external benefits compared to private benefits.
small economic losses to a small number of people and large
economic losses to a large number of people.
large economic gains to a small number of people and small
economic losses to a large number of people.
Answer: D
Politicization of fiscal and monetary policy:
1. Refers to the use of fiscal and monetary policy to help
foreign governments.
Is the primary reason for public sector efficiency.
Refers to the use of fiscal and monetary policy to help
politicians before an election.
Creates the opportunity for the fallacy of limited decisions.
34. Answer: C
Which of the following is the most likely cause of unfunded
liabilities?
1. The cost of the program is immediate while the benefit is in
the distant future.
The benefit of the program is immediate while the cost is in the
distant future.
Politicians are helping as many people as they can.
Voters prefer taxes now rather than in the future.
Answer: B
It is often argued that government laws and regulations have
unintended consequences. Which of the following is an
unintended consequence of the 2010 healthcare reform law?
1. Everyone will now have insurance.
Companies are now willing to employ more full-time workers.
Companies are reducing full-time employees to part-time
employees.
Insurance markets are now more efficient.
Answer: C
The concept of limited choices, as used in public choice theory,
refers to the fact that:
1. Politicians may not be objective in evaluating economic
policy programs.
Because of the importance of television and other modern
communication techniques, the best and brightest candidates
may not be selected by voters.
Voters must select a candidate who represents a "bundle" of
various public policy programs and who can't register support or
opposition for specific programs.
The most economically efficient public policy programs may
not be selected because political leaders do not know enough
about economics.
Answer: C
36. chapter examines demand-side and supply-side market failures
and their impacts on resource allocation. Students will learn
that under some circumstances goods are overproduced while in
other situations goods are underproduced.
Then the chapter analyzes government’s role in producing
public goods and how this impacts resource allocation. Marginal
analysis is used to evaluate public goods and externalities.
Various approaches for limiting negative externalities are also
presented.
The end of the chapter addresses potential government
inefficiencies that may arise, mitigating the benefits from
government’s policies.
The appendix discusses how asymmetric information results in a
third type of market failure. Since individuals may possess
different information at a given time, markets may fail to
develop or operate in a limited capacity. WHAT’S NEW
There are minor changes in wording in the chapter and the data
has been updated.
The term “Pigovian tax” replaces the term “specific tax”. This
makes the text consistent with the language of optimal
taxation.INSTRUCTIONAL OBJECTIVES
After completing this chapter, students should be able to:
1. Distinguish between demand-side and supply-side market
failures and the kinds of externalities that are created by each.
1. Define, measure, and graphically identify consumer surplus.
1. Define, measure, and graphically identify producer surplus.
1. Identify and explain efficiency (or deadweight loss) using
consumer and producer surplus.
1. Explain how equilibrium achieves both productive and
allocative efficiency.
1. Identify the characteristics of public goods and explain how
they differ from private goods.
1. Describe graphically the collective demand curve for a
particular public good and explain this curve.
1. Explain why the supply curve for public goods is upward
37. sloping and explain how the optimal quantity of a public good is
determined.
1. Identify the purpose of cost-benefit analysis and explain the
major difficulty in applying this analysis.
1. Explain what is meant by externalities.
1. Describe graphically and verbally how an overallocation of
resources results when negative externalities costs are present
and how this can be corrected by government action.
1. Describe graphically and verbally how an underallocation of
resources occurs when positive externalities are present and
how this can be corrected by government action.
1. Describe government policies that would reduce negative
externalities.
1. Analyze government’s role in the economy and government’s
inefficiencies.
1. Define and identify terms and concepts listed at the end of
the chapter.
1. (Appendix) Discuss the role information asymmetries play in
market development.
1. (Appendix) Discuss how government may intervene to deal
with this potential market failure.LECTURE NOTES
Introduction
0. Learning objectives – After reading this chapter, students
should be able to:
0. Differentiate between demand-side market failures and
supply-side market failures.
0. Explain the origin of both consumer surplus and producer
surplus, and explain how properly functioning markets
maximize their sum, total surplus, while optimally allocating
resources.
0. Describe free riding and public goods, and illustrate why
private firms cannot normally produce public goods.
0. Explain how positive and negative externalities cause under -
and overallocations of resources.
0. Show why we normally won’t want to pay what it would cost
to eliminate every last bit of a negative externality such as air
38. pollution.
0. (Appendix) Describe how information failures may justify
government intervention in some markets.
0. Everyone uses goods and services that are provided by
government.
0. The questions to be answered are: why doesn’t the private
sector provide these goods and services efficiently, and what is
the role of government in bringing about a better allocation of
resources?
Market Failures in Competitive Markets
0. Market failures can occur in competitive markets.
Demand-side market failures:
3. Occur because at times it’s impossible to charge people what
they’re willing to pay.
3. Fireworks are an example.
3. There’s no way to prevent people who didn’t pay to see
fireworks from watching them.
3. Private firms therefore are not willing to produce the
fireworks.
Supply-side market failures:
3. Occur because the producer fails to pay the full cost of
production.
3. Pollution is an example.
3. The firm pays for all of the resources it uses, but it doesn’t
pay for the pollution it creates.
3. The firm therefore produces more electricity and pollution
than the firm would produce if they paid for the pollution they
emit.
Efficiently Functioning Markets
0. To be efficient:
4. Demand must fully reflect consumers’ willingness to pay.
4. Supply must fully reflect all costs of production.
0. Consumer Surplus
5. Definition – the difference between the maximum price a
consumer is (or consumers are) willing to pay for a product and
the actual price.
39. 5. The surplus, measurable in dollar terms, reflects the extra
utility gained from paying a lower price than what is required to
obtain the good.
5. Maximum price a consumer is willing to pay depends on the
opportunity cost of goods and services he must forego.
5. Consumer surplus can be measured by calculating the
difference between the maximum willingness to pay and the
actual price for each consumer, and then summing those
differences.
5. Consumer surplus is measured and represented graphically by
the area under the demand curve and above the equilibrium
price. (Figure 4.1)
5. Consumer surplus and price are inversely related – all else
equal, a higher price reduces consumer surplus.
0. Producer Surplus
6. Definition – the difference between the actual price a
producer receives (or producers receive) and the minimum
acceptable price.
6. Producer surplus can be measured by calculating the
difference between the minimum acceptable price and the actual
price for each unit sold, and then summing those differences.
6. A producer’s minimum acceptable price is based on his
marginal cost and the opportunity cost of using resources to
produce other goods.
6. Producer surplus is measured and represented graphically by
the area above the supply curve and below the equilibrium
price. (Figure 4.2)
6. Producer surplus and price are directly related – all else
equal, a higher price increases producer surplus.
Efficiency Revisited and Efficiency Losses
0. Efficiency is attained at equilibrium, where the combined
consumer and producer surplus is maximized. (Figure 4.3)
7. Consumers receive utility up to their maximum willingness to
pay, but only have to pay the equilibrium price.
7. Producers receive the equilibrium price for each unit, but it
only costs the minimum acceptable price to produce.
40. 7. Allocative efficiency occurs at quantity levels where three
conditions exist:
2. MB = MC (as represented by demand and supply).
2. Maximum willingness to pay = minimum acceptable price.
2. Combined consumer and producer surplus is at a maximum.
0. Efficiency (Deadweight) Losses
8. Underproduction reduces both consumer and producer
surplus, and efficiency is lost because both buyers and sellers
would be willing to exchange a higher quantity. (Figure 4.4a)
8. Overproduction causes inefficiency because past the
equilibrium quantity, it costs society more to produce the good
than it is worth to the consumer in terms of willingness to pay.
(Figure 4.4b)
Public Goods
0. Private goods are produced and sold in competitive markets,
and have two characteristics:
9. Rivalry in consumption – when one person buys and
consumes a good, it is not available to others.
9. Excludability – Sellers can restrict the benefits to those who
pay for the good.
0. Market demand for private goods is found by horizontally
summing the individual demand schedules.
0. Private markets allocate goods and resources efficiently –
those willing to pay to obtain goods get them. Sellers produce
goods to satisfy consumer wants, and consumer buying behavior
tells them whether to produce more or less of any particular
good.
0. Unlike private goods, public goods are those goods that are
nonrival and nonexcludable.
0. Public goods suffer from the free-rider problem, where a
consumer can enjoy the benefit of the good without having to
pay for it.
13. As a result of free-riders government must provide the good.
13. Government doesn’t prevent free-riders, but government can
finance production of the good through taxes.
13. Sometimes public goods can be subsidized through private
41. related goods and therefore provided by private firms.
0. Consider This … Street Entertainers
14. Street entertainers regularly appear in popular tourist areas
in major cities. Even though some people pay when the “hat is
passed,” many benefit from the shows without contributing to
the cost (free-riding).
14. Because local businesses benefit from the customers
attracted by these performers, the businesses or local
government will sometimes pay these entertainers.
14. Even when government is not contributing to the cost of
street entertainers, a public good is still being provided.
0. The demand for public goods differs from the market demand
for private goods.
15. It is a “phantom” demand since the consumers will not be
making individual purchases.
15. To find the collective demand schedule for a public good,
we add the prices people collectively are willing to pay for the
last unit of the public good at each quantity demanded (Table
4.3).
15. Figure 4.5 is a graphical illustration of this table. A
collective demand curve is the vertical sum of the individual
demand curves for the public who want that good.
15. Recall that the market demand for a private good was a
horizontal summation of the individual demand curves.
0. The supply curve for any good is its marginal cost curve. As
with private goods, the law of diminishing returns applies to the
supply of public goods.
0. The optimal quantity of a public good can be determined by
comparing the collective demand curve with the supply
(marginal cost) curve to determine their point of intersection or
by looking at the demand and supply (marginal cost) schedules
to see at what price and quantity marginal benefit equals
marginal cost (Figure 4.5c).
0. Cost-benefit analysis is a technique for decision making in
the public sector.
18. The concept involves comparing the benefit of providing
42. incremental units of public goods with the costs of providing
these additional units. Note that the comparison is a marginal
one, i.e., the comparison is made between the costs and benefits
of additional amounts of a public good or service.
18. Table 4.4 illustrates this concept in determining the scope of
a national highway construction project. Four possible phases of
projects are considered, with costs and benefits compared. By
comparing the marginal costs and benefits as one moves from
the least expensive phase to the mostexpensive phase, we see
Plan C is the optimal choice.
18. The rule for this decisionmaking technique is to use the
marginal benefit = marginal cost rule; if the marginal cost
exceeds the marginal benefit, that part of the project should not
be included.
18. The problem with this technique is the difficulty in
measuring costs and benefits. Benefits are particularly difficult
to estimate, because there are many related aspects that are not
easily calculated. Nevertheless, the method is widely used.
0. Quasipublic goods are those that have large positive
externalities, so government will sponsor their provision.
Otherwise, they would be underproduced. Medical care,
education, and public housing are examples.
0. Resources are reallocated from private to public use by
levying taxes on households and businesses, thus reducing their
purchasing power and using the proceeds to purchase public and
quasipublic goods. This can bring about a significant change in
the composition of the economy’s total output.
0. Consider This … Responding to Digital Free-riding
21. The music industry struggles with digital piracy. In this
example four friends start a rock band and eventually get signed
by a major record label. However, since people can download
their music for free they have a difficult time making a living.
21. To overcome this problem the band provides the free music
downloads to increase their popularity (they do not fight the
public goods nature of their music). However, they now charge
a higher price to attend their concerts, which is still a private
43. good.
Externalities
0. Externalities occur when costs or benefits accrue to an
individual who is external to the market transaction.
0. Figures 4.6a and 4.6b, respectively, illustrate that an
overallocation of resources occurs when negative externalities
are present and an underallocation of resources occurs when
positive externalities are present.
23. Negative externalities occur when producers are able to
shift some of their costs onto the community.
23. Positive externalities occur when the benefits of a good are
received by others in the community although they did not pay
for them. These benefits are not reflected in the individual
demand curve.
0. Consider This…The Fable of the Bees
24. The Coase theorem, named after Nobel prizewinning
economist Ronald Coase, suggests that government is not
always needed to remedy external costs and benefits.
24. With the right conditions, externalities can be solved with a
market approach to individual bargaining.
24. Bees provide many positive externalities to farmers by
pollinating their crops.
2. Farmers and beekeepers used individual bargaining to
determine payment, avoiding government intervention.
2. All farmers in an area hire beekeepers simultaneously,
avoiding free-riders.
2. Farmers willingly pay the beekeepers to maintain their
services because without the bees the farmers’ crops would be
devastated.
24. Government’s role should be to encourage bargaining
wherever possible, rather than to get involved in direct
restrictions or subsidies.
0. Direct government controls or taxes may be needed to reduce
negative externalities, or provide subsidies or government
provision where positive externalities exist.
25. Direct controls place limits on the amount of the offensive
44. activity that can occur. Clean air and water legislation are
examples. The effect is to force the offenders to incur costs
associated with pollution control. This should shift the product
supply curve leftward and reduce the equilibrium quantity.
Therefore, it should reduce the resource allocation in a socially
optimal way. (See Figure 4.7a)
25. Pigovian taxes can be levied on polluters. The tax payment
will increase costs to the producer, shifting the product supply
curve leftward, and reducing resource allocation to this type of
production as desired and increasing the equilibrium price. (See
Figure 4.7b)
25. Subsidies and government provision suggest three options.
2. Buyers may be subsidized. For example, new parents may be
given coupons to receive inoculations at reduced prices for their
children. This would increase the number of vaccinations and
eliminate the underallocation of resources. (See Figures 4.8a
and 4.8b)
2. Producers could be subsidized so that producers’ costs are
reduced, thus shifting the supply curve rightward, increasing
equilibrium output, and eliminating the underallocation. (See
Figure 4.8c)
2. The government could provide the product as a public good
where spillover benefits are extremely large. An example would
be administering free vaccines to all children in India to end
smallpox.
0. Table 4.5 reviews the methods for correcting externalities.
Society's Optimal Amount of Externality Reduction
0. Society’s optimal amount of externality reduction is not
necessarily total elimination.
27. To determine the correct amount of negative externalities
like pollution, it’s necessary to find the point where the MC of
cleaning it up equals the MB of cleaner air.
27. The cost of reducing spillover costs increases with each
additional unit of reduction. The benefit received from each
additional unit of reduction decreases due to diminishing
marginal utility.
45. 27. When MC=MB, society has found its optimal amount of
pollution abatement (Figure 4.9).
27. In reality it is difficult to measure benefits as well as costs,
but this analysis demonstrates that some degree of pollution
may be socially efficient.
0. Government's Role in the Economy:
28. Identifying and correcting for market failures can be
difficult, time consuming, and costly.
28. Introducing politics into the equation complicates the
situation even more and can lead to undesirable economic
outcomes.
28. In the political environment, there can be over- and
underregulation.
28. Public and quasi-public goods may be produced because of
powerful politicians, not because the benefits of the good
exceed its costs.
28. Without a profit incentive, government is often inefficient.
Last Word…Carbon Dioxide Emissions, Cap-and-Trade, and
Carbon Taxes
0. An owner of a landfill has full property rights and charges
people to dump their garbage.
0. The payment that the landowner receives fails to account for
the negative externalities from pollution.
0. It is possible to use cap-and-trade systems where government
sets a limit on the total amount of a particular pollutant allowed
then issues permits to firms, enabling them to emit a certain
amount of the pollutant.
0. Firms can then trade permits with each other.
32. Smokestack Toys might have a permit for 100 tons of
carbon dioxide that can be used to produce toys that will
generate a profit of $100,000.
32. A power plant could use the 100 tons of carbon dioxide to
produce energy and generate $1 million in profit.
32. Smokestack Toys can sell its permit for more than $100,000
to the power plant who will willingly buy it for up to $1 million
46. (its expected profit).
32. Society benefits because when the energy company emits
the carbon dioxide, society gets greater net benefits from it than
it would from the production of toy cars as implied by the much
greater profits without any change in the total amount of
pollution.
0. Cap-and-trade systems are ineffective when it’s difficult for
regulators to verify that firms are following the standards like
the problems with the European Union’s cap-and-trade system
for carbon dioxide.
0. Cap-and-Trade has been very effective in the U.S. for sulfur
dioxide emissions because there are very few firms emitting this
pollutant so regulators can easily verify that firms are not
exceeding their limit.
0. To control carbon dioxide, economists recommend a carbon
tax.
Appendix to Chapter 4
This appendix discusses another potential market failure. Since
different individuals have different information about products,
health etc… markets may fail to develop or operate on a limited
basis. For example, the buyer of a used car knows less about the
quality of the used car than the seller. Thus, the two may not be
able to agree on a price.
1. Information failures are another form of market failure.
0. Information is often asymmetric – buyers and sellers don’t
have the same information about the good, service, or resource
being sold, and the cost of obtaining better information is often
prohibitive.
0. Inadequate information about sellers—two examples:
37. Assume that the gasoline market exists in an absurd
situation in which there is no system of weights and measures
established by law. In such a world, the station could advertise
highoctane gas that was actually lowoctane gas; pumps could
register more gallons than were actually being pumped. Without
government regulation, one could imagine some incentive for
some stations to cheat in such ways. Government intervenes in
47. such markets to prevent such cases of market failure. This
provides reliable information to buyers and also helps sellers
through enforcement of fair sales practices.
37. Licensing of surgeons is another example in which the
consumer would find it difficult to gather information about a
physician’s expertise without government licensing standards.
Such rules set minimum standards for competence. There will
still be physicians of varying abilities, but the consumer can be
confident that basic standards were met.
0. Inadequate information about buyers may lead to potential
problems for sellers.
38. The moral hazard problem occurs when there is a tendency
of one party to a contract to alter his/her behavior in ways that
are costly to the other party. Examples include the driver who
behaves more recklessly after obtaining insurance; guaranteed
contracts for athletes, which may reduce their performance;
unemployment compensation insurance, which may discourage
incentives to work.
38. The adverse selection problem arises when information
known by the first party to a contract is unknown to the second
and, as a result, the second party incurs major costs. Examples
include those in poor health who take out health insurance, the
person planning an arson attempt who takes out fire insurance
and the person whose marriage is failing who takes out the
book’s hypothetical “divorce” insurance. In areas where
insurance is traditionally underprovided, the government has
provided insurance or subsidized insurance.
38. Qualification: There are private methods of overcoming lack
of information problems.
2. Product warranties overcome lack of information about the
seller or product.
2. Franchising helps set uniform standards, so that most
McDonalds or Holiday Inns have similar quality.
2. Firms have specialized in providing information to buyers
and sellers; consumer reports, travel guides, and credit-checking
agencies are some examples.
48. QUIZ
Consumer surplus arises in a market because:
At the market price, quantity supplied is greater than quantity
demanded
At the current market price, quantity demanded is greater than
quantity supplied
Some consumers are willing to pay more than the equilibrium
price but do not need to do so
Some consumers are willing to pay less than the equilibrium
price but do not need to do so
Answer: C
Negative externalities arise:
1. when firms pay more than the opportunity cost of resources.
when the demand curve for a product is located too far to the
left.
when firms "use" resources without being compelled to pay for
their full costs.
only in capitalistic societies.
Answer: C
Rivalry and excludability are the main characteristics of:
1. capital goods.
private goods.
public goods.
consumption goods.
Answer: B
The market system does not produce public goods because:
1. there is no need or demand for such goods.
private firms cannot stop consumers who are unwilling to pay
for such goods from benefiting from them.
public enterprises can produce such goods at lower cost than
can private enterprises.
49. their production seriously distorts the distribution of income.
Answer: B
A demand curve for a public good is determined by:
1. summing vertically the individual demand curves for the
public good.
summing horizontally the individual demand curves for the
public good.
combining the amounts of the public good that the individual
members of society demand at each price.
multiplying the per-unit cost of the public good by the quantity
made available.
Answer: A
Cost-benefit analysis attempts to:
1. compare the real worth, rather than the market values, of
various goods and services.
compare the relative desirability of alternative distributions of
income.
determine whether it is better to cut government expenditures or
reduce taxes.
compare the benefits and costs associated with any economic
project or activity.
Answer: D
At the optimal quantity of a public good:
1. marginal benefit exceeds marginal cost by the greatest
amount.
total benefit equals total cost.
marginal benefit equals marginal cost.
marginal benefit is zero.
Answer: C
An important problem in evaluating public projects through the
use of cost-benefit analysis is that:
50. 1. real costs cannot be stated in monetary terms.
one must decide whether to compare total costs and total
benefits or marginal costs and marginal benefits.
positive and negative externalities associated with such projects
may be difficult to measure.
the funding of such projects is inherently inflationary.
Answer: C
From the economist's perspective, "market failures" basically
arise when:
1. The quantity demanded for a good or service is greater than
the quantity supplied of the good or service
The quantity supplied of a good or service is greater than the
quantity demanded for a good or service
Demand and supply do not accurately reflect all the benefi ts and
all the costs of production
The market system is unable to adapt to or to accommodate
change
Answer: C
When the production of a product creates external costs greater
than external benefits, a market economy will:
1. Not produce the product without government intervention
Produce a socially optimal allocation of resources
Allocate too few resources to production of the product
Allocate too many resources to production of the product
Answer: D
51. Financial Uncertainty due to change in consumer trends
Lack of brand awareness
Poor Customer
Satisfaction
Reduced Cash Flow
Majority of current stock "last season"
Inability to sell stock
Border closures
No change of mind refunds
Shippit takes percentage of profits
Unable to keep staff during current climate
Customers servicing their old gear unaware of stock
No travelling customers
$1 million worth of stock sitting on shelves in 2022
Uncertainty in economic and consumer trends
Border closures
Inability to sell stock
No travelling customers
Unsatisfied customers
due to refund policy
Unable to keep staff during current climate
$1 million worth of stock sitting on shelves in 2022
Reduced Cash flow
Lack of goods and
services awareness
Lack of awareness of
multi-purpose products
Customer disinterest
Cancellation of domestic ski holidays
Majority of current
52. stock "last season"
Dependence on
distributors
Further reliance on online sales
Distributors take percentage of profit
Less customer engagement with sales channels
Less impromptu purchases when servicing gear
2