Economics Study Set 18

Business

Quiz 30 :
the Economics of Social Security

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Quiz 30 :
the Economics of Social Security

The use of internet has dramatically increased in past decade. The number of websites increased from 16,000 to 100 million and above in just 16 years. The number of people using internet also increased during 1990s to 2010. It has now become a worldwide phenomenon. The internet is used as a library for educational and other references, as sharing media and most importantly as virtual market. The boom in the internet it has affected the efficiency of the market in number of ways: 1. The internet has provided the link between millions of businesses and provided match between buyers and sellers at lowest cost. The internet has increases the competitiveness of a market. 2. The internet guarantees lower transaction cost and search cost. Thus, it promotes the smoother performance of a market and increases gain from any trade. 3. Internet has helped promoting globalization. A free and efficient market that promote growth at lower cost. The consumer can have the good of their choice and have access to the market of every country and city. The internet lowers the transaction cost as well as the search cost for right match between buyers and sellers. These will likely to reduce the production cost for any good that are sold through internet and will promote growth in near future. The business has larger and wider market with greater demand for their goods. The buyers can have customized product and at cheaper cost. This way both the buyers and the sellers will gain from mutual trade and internet will thus increase productivity an growth of output in near future.

The use of internet has dramatically increased in the past decade. The number of websites increased from 16,000 to 100 million and above in just 16 years. The number of people using internet also increased during 1990s to 2010. It has now become a worldwide phenomenon. The internet lowers the transaction cost as well as the search cost for the right match between buyers and sellers. These will likely to reduce the production cost for any good that are sold through internet and will promote growth in near future. The most widely sold product on the internet is the computer hardware and software amounting 37.8% of the total online sell. The next in line is the travel including the air ticket amounting 22.8% of the total sales. However the food items including groceries amounted only 0.6% of the total sale online. This is because the buying of food items and groceries need to be physically tested and there is no much information available about the items online. These products are not standardized and the people are needed to touch, feel or taste the product in order to buy them. For these reason people avoid buying these product online and hence sell of groceries remain minuscule till date.

a. The market for popular music is dependent on the taste and preference of the listeners. Through internet the popular music artists can find a vast audience at the lowest cost. It will help them to popularize their music at a relatively cheaper rate. This characteristic of internet will increase the production of popular music as more and more people will be attracted towards the industry for its potential lower cost. The marketing of popular music will be relatively easy due to availability of low cost online advertisement and social networking sites. Hence, internet will increase the production, distribution and market of popular music. b. Due to social networking sites it is now easy to reach wide audience with relatively low cost than to advertise via other popular media. The movie trailers are promoted through online social networking sites and ads. Hence, internet will increase the production, distribution and market of movies. c. The internet has become a popular choice to promote any product including automobile. The problem with internet is that it virtual. Buy and sell of a car need real test drives. On the other hand, the transportation cost attached to any automobile is far greater; it is relatively easy to buy a car from local store than to book it online. Therefore, the production and distribution of automobiles are likely to depend on market demand and not likely to be affected by markets. d. Through its improved search software the internet has decreases the cost of search. Now it is relatively easy for employees and employers to find the right match through virtual employment sites. For past few years these agencies are allowing anybody to register and search for their right job free of cost. Hence, the demand for commercial employment agencies has declined overtime. Hence, internet will likely to decrease the production, marketing and distribution of commercial employment agencies. e. The physician service cannot be obtained virtually through internet. The physician needs to check the patients in order to prescribe the medicine. f. The same applies to health care. Hence, the production, marketing and distribution of health care will likely to be unaffected by the use of internet.

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