Public Goods, Private Goods, Common Resources, and

¶ … public goods, private goods, common resources, and natural monopolies. Public goods are when there is a focus on providing benefits to someone without them having to offer different forms of compensation. This is because the interests of the community will outweigh the need for making any kind of profit. Some examples of this include: fire, police, and national defense. Private goods are those products that are sold directly to consumers with the intention of making a profit.

This is when a private producer, will realize that there is unmet demand and provide this to consumers. In exchange for delivering these services or products, they will receive some form of compensation. (Mankiw, 2011) Common resources are those reserves that are available to everyone. The most notable include: the fish in the ocean, the air that everybody is breathing and public lands. While natural monopolies are when there is one organization which can effectively address needs of the public.

Some examples of this include: toll roads, water / sewage service and police / fire protection. These are important, because they play a role that is serving the interests of communities and the general public. (Mankiw, 2011) The differences between each of these areas are based upon, if the product or service is used by everyone. This means that when something is not in the interests of the general public or it is serving select groups. There will be a fee charged for them (i.e. private goods).

While in situations where the public has a stake, there will be no money associated with the using a particular resource or service (i.e. public goods and common resources). In some cases, there is a single entity that has the control of meeting these objectives (i.e. A natural monopoly). These distinctions will vary depending upon the interest of the general public. In those situations where there is no conflict, is the point that a private goods transaction will occur.

(Mankiw, 2011) Explain how labor market equilibrium is affected by the supply and demand of labor. The labor market is directly impacted by supply and demand. The way that this occurs is employers will hire new employees when they feel confident about the future and are expanding their business. This means that they need to see an increase in sales. When this happens, they will enlarge the size of their firm and the number of staff members.

(Mankiw, 2011) However, during times of declining profit margins and sales is when they will decrease their employees. This is because they do not know about the future and need to adjust with demand from their customers. It is at this point that they will layoff staff, in an effort to adjust with these declines. (Mankiw, 2011) The way that these two factors are affecting labor market equilibrium is to create changes in the overall unemployment rate.

This occurs, based on transformations that are taking place in the economy (which will lead to periods of increased hiring and layoffs). As different firms make these adjustments, is when they will have a dramatic impact on labor market equilibrium. This will increase or decrease the total amounts of available workers (who are seeking employment). (Mankiw, 2011) For example, during periods when the economy is slow, firms will layoff more employees.

This will affect labor market equilibrium by increasing the supply of available workers in the economy (leading to a rise in unemployment). It is at this point that employers can become more stringent on who they are hiring from the increased supply. (Mankiw, 2011) While during times, when the economy is strong, there will be demand for a variety of workers. This is helping companies to keep up with rising sales and profit margins.

The way this will impact labor market equilibrium is to create a situation where there is a shift in the unemployment rate. This is from more firms requiring a variety of individuals with different skill sets. These factors are showing how labor market equilibrium will become very volatile, depending upon the supply and demand from employers. (Mankiw, 2011) Select an organization with which you are familiar and identify the market structure of that organization. Describe the characteristics of the organization that make it a specific market structure.

Evaluate the implications of this structure for the organization's profitability and make recommendations that will help the organization sustain economic profits. In the case of Starbucks, the firm is using a monopolistic competition structure. This is when there are a number of different firms. Each one of them is directly competing against the other and controls a certain amount of the marketplace. The basic characteristics of Starbucks market structure is focusing on finding the best brands at the lowest costs.

Furthermore, they want to buy from producers who are following the best environmental and labor practices. The basic idea is that the firm wants to help those farmers that are giving something back to society. ("Coffee Industry," 2010) (Simon, 2009) Moreover, tastes have shifted in the last 15 years. This is because everyone wants to try specialized brands vs. drinking decaffeinated or regular coffee. What make Starbucks so unique is they are able to address these needs in a social atmosphere.

To enhance the retail location, the staff will play an important part in the customer experience. This means that they receive better forms of compensation and are encouraged to become involved in community related activities (which are sponsored by the firm). These factors have helped Starbucks to enhance their profits and become the market leader. ("Coffee Industry," 2010) (Simon, 2009) To ensure that they can sustain these levels, there needs to be an emphasis on continually understanding and responding to what the customers demand.

This means identifying new trends and being the first organization to implement them. The way that.