European journal of law economics The WritePass Journal

European journal of law economics 1 Introduction European journal of law economics 1 Introduction2 The optimal choice of the firm without financial responsibility3 Financial responsibility4 Concluding remarksReferencesRelated 1 Introduction Liability rules are important tool of environmental risks management in Canada, United States and Europe. The major legislations are CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) adopted by the American Congress in 1980 and the Directive of the European Parliament and the Council on Environmental Liability with regard to the Prevention and remedying of environmental Damages which came into force in April 2004. A  *E.J.L. E. 78  liability rule induces correct incentive for risk prevention only if information is symmetric and the potential injurer has sufficient wealth to cover his liability. Indeed, it is well known from the previous literature that when the injurers wealth is not sufficient to  pay  liability judgments ex post (the injurer is said to be judgment-proof) this leads to underprovision of care ex ante (Summers 1983; Shavell 1986). In the case of environmental risks, on the one hand, perfect control of firms actions in prevention is not possible, and on the other hand, the wealth of the  polluter  may be small relative to the clean-up costs and victims compensation. There are many  policies  to alleviate the judgment-proof problem. The first one is to extend liability to the parties who have a contractual relationship with the risky firm, the case under CERCLA which imposes extended liability to lenders. The economic analysis of the extended liability has given raise to mitigated results. Pitchford (1995) considers a one-period moral hazard model with two states of nature (accident or not). Since the loan fee fixed by the lender included his expected liability costs, the more the lender is liable, the more he charges the firm in the no-accident state. Then, the state of the nature â€Å"no-accident† becomes unfavourable for the firm and the full liability of the lender2  leads to a suboptimal level of effort whereas partial lenders liability allows achieving the optimal level of prevention. In a two-period model, Boyer and Laffont (1997) show that partial liability of lender is optimal. Consequently, these authors conclude that the society has to make a tradeoff between prevention and compensation. In an alternative setting in which environmental damages are stochastic and prevention cost is a monetary investment that needs external funding, Dionne and Spaeter (2003) show that lender extended liability has a positive effect on the firms prevention level if and only if an increase in the face value of the debt implies an increase in prevention investment. Moreover, Balkenborg (2001) and Lewis and Sappington (2001) show that the benefits of extending liability to lenders depend on the observability of the firms prevention level by the lender, the bargaining power of each party and the nature of environmental damages. Finally, Hutchison and Vant Veld (2005) consider a model with both observable damage-reducing activities and non-observable probability-reducing measures and show that introducing extended liability to lender induces judgement-proof firms with high gross profits to take socially optimal levels of ca re, those with intermediate gross profits to take suboptimal level of care and drives those with low gross profits out of business. Financial responsibility is another remedy for the judgment-proof problem. Under a regime of financial responsibility, the firm is required to demonstrate that the cost of the harm she can cause is covered. The most common instrument of financial responsibility is the insurance contract. But as it is well known, the compulsory liability insurance induces the efficient level of prevention only when the insurer is able to observe the prevention level performed by the firm (Shavell 1986; Jost 1996; Polborn 1998). Following the analysis of Jost (1996), Feess and*E.J.L. E. 79  Hege (2000, 2003) consider a model with monitoring-based incentives and show that the mandatory liability coverage for total harm leads to an allocation that is closed to the first-best. In this paper, we investigate how the socially optimal allocation can be implemented through ex ante financial responsibility and ex post strict liability rule. We do not restrict our analysis to insurance contract but on contrary analyze financial guarantee contract. Indeed, in the Directive of the European Parliament and the Council on environmental liability there is a focus on a future legislation that imposes financial responsibility on the polluting firms. Then we analyze the consequences of financial responsibility on the incitation to prevention in a context of asymmetric information and show that the first-best allocation may be attainable. This follows from the fact that the level of damages provides a signal of the firms prevention level (Lewis and Sappington 1999) and can be used to design an optimal contract. But contrary to Lewis and Sappington (1999), in our setting, prevention measures do not only involve a disutility for the firm but also reduce the funds available f or compensation and clean-up (Beard 1990; Lipowsky-Posey 1993; Dionne and Spaeter 2003; Dari-Mattiaci and De Geest 2005). We consider a firm which activity yields a non-random gross profit and generates random environmental damages. The firm can improve the distribution of damages by an investment in prevention at the beginning of the period and safety measures during the production process. At the end of the period, only the damages and the resources of the firm net of the prevention cost are observable. Moreover, it is assumed that the firms wealth is lower than the highest amount of damages its activity can generate. We establish a necessary and sufficient condition for the implementation of the socially optimal allocation in spite of moral hazard when the firm is mandated to cover the highest amount of damages its activity can generate. We also demonstrate that the set of contracts that implement the socially optimal level of prevention includes a particular contract of the form â€Å"reward or maximal penalty† which is closed to a finite risk product referred to as spread loss treaty. The re st of the paper is organized as follows. The following section presents the firms optimal choice in the absence of the financial responsibility regime. Section 3 investigates the impact of financial responsibility on the firms prevention level. Finally, Section 4 concludes. 2 The optimal choice of the firm without financial responsibility Consider a risk-neutral firm which activity generates a fixed profit P and creates a possibility of environmental damages ## ]0,  L[. The firm can improve the distribution of damages by an investment in prevention at the beginning of the period and safety measures during the production process; these two measures are represented by a single prevention variable denoted  e.  However, the reduction of risk generates a cost c(e) when the firm chooses a level of prevention  e.  Moreover we assume that before engaging in its activity, the firm has initial wealth (equity)  Rwhich can be partially used to cover the cost induced by prevention measures. Let  f(##/e) and  F(##/e) be respectively the density and the distribution function of the damages; the following is assumed: *E.J.L. E. 80  Ã‚  Assumption 1  ##e,  f(##/e) 0, decreases with ##.3  This means that the observation of a lower level of damage is relatively more likely if a higher level of prevention has been adopted. This assumption implies the first order stochastic dominance: ## ]0,  L[,Fe  (##/e) 0. Moreover,  Fe  (0/e) =  Fe  (L/e) = 0. Assumption 2  ## ]0,  L[,  Fee  (##/e) 0. This distribution function is strictly concave in  e.  4 Assumption 3  ce  (e) 0 and  cee(e) 0. The prevention cost is strictly convex in  e. Assumption 4  If the amount of damages is very high, the firms assets may be insufficient for compensation; then the firm will be pushed into bankruptcy. Assume that the discount rate is null so that the firms net value without investment in prevention noted ## equals  R  +  P.Formally, this liability assumption can be written as  L   ##. What about the optimal level of prevention from the firms point of view? The intuition suggests that a firm facing limited liability will underinvest in prevention. But, as stated by the following lemma this is not always true. Lemma 1  A judgment-proof firm does not always choose a suboptimal prevention level. Proof: See the â€Å"Appendix†. The social welfare criterion is assumed to be the minimization of the total cost which is the sum of the expected damages and the prevention cost. We assume that the regulator observes the prevention level. At the social optimum, the expected marginal benefit of prevention equals the expected marginal cost. The objective of the firm is to maximize its net revenue which equals to the sum of its profit and equity minus the expected liability payments (compensation and clean-up costs). The firm can only  pay  up to her assets. Hence the private expected marginal benefit is lower than the social one because of the partial internalization of environmental damages by the firm. Moreover, the private expected marginal cost of prevention is lower than the social one because the funds invested in prevention are not available for compensation and clean-up. At the private optimal level of prevention, the private expected marginal benefit of prevention equals the private expected marginal cost. Consequently, the optimal private level of prevention may be lower or higher than the socially optimal one, depending on which effect dominates. However, the judgment-proofness of the firm may result in a partial remediation of damages. One can think about compulsory liability insurance which covers the h ighest amount of damages as a solution to this problem. But it is well known from economics literature that when care is non-observable, a full insurance leads to underprovision of care by the insured. In the following section we demonstrate that under a guarantee structure, incentives work well even if it is  *E.J.L. E. 81  impossible to observe the care by the  polluter. The reason is that under the guarantee the  polluter  receives a return on investment in prevention. Moreover, this scheme provides the full coverage of damages: prevention and compensation are both satisfied. 3 Financial responsibility This section is devoted to the economic analysis of a hybrid regime of ex ante regulation through financial responsibility requirement and ex post strict liability. More precisely, in our setting the financial responsibility takes the form of a guarantee provided by another party that has deep pockets. Then the hybrid regime can be viewed as a regime of vicarious liability in which the guarantor and the firm are joint liable. As we know, in this setting, the victims generally choose to collect from the guarantor because the later has deep-pockets. Then, in what follows, we will assume that the firm and its guarantor are jointly liable and that it is the guarantor who has to compensate for the damages generated by the firm.5,6 The analysis is based on the principal-agent paradigm. In this framework, the firm is the limited liability risk neutral agent and the guarantor is the risk neutral principal. The prevention level performed by the firm and consequently the cost of such a measure are not observable by the principal. Moreover, the amount of damages and the  net  resources of the firm at the end of the period are observable. The timing of the model is as follows. First, the guarantor and the firm sign a contract which stipulates the state-contingent-payments (transfers) that the firm has to make to his guarantor. Secondly, the firm performs a level of prevention and bears the associated cost which is unobservable by the guarantor. Then, the profit is realized and the damages occur and finally the transfer is made to the guarantor. Moreover, it is assumed that the guarantor has all the bargaining power and his objective is to design a scheme of transfers that maximizes his profit. However, the guaran tor has to take into account some constraints. The first one is the participation constraint of the firm which reflects the fact that the financial guarantee  must  yield expected revenue at least equals to what the firm would have obtained without contracting (condition 1). The second one is the firms limited liability constraint (condition 2). The third constraint reflects the fact that the transfer is bounded below in such a way that the firm could be rewarded (condition 3).7  The last condition is the incentive compatibility constraint which reflects the optimal behaviour of the firm in choosing the prevention level (condition 4).8 *E.J.L. E. 82  Formally, if we denote  t(##) the transfer made by the firm when the amount of damages equals ##, the guarantors problem (P1) can be written as: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE subject to TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE The existence of schemes of transfers that solve the problem above is not guaranteed. Then it is essential to characterize the conditions under which the problem (P1) admits a solution for a given utility  u  (expected firm revenue) and a given prevention level  e.  We can establish the following result: Proposition 2  The problem  (P1)  admits a solution, i.e. the levels of utility u and prevention e can be implemented if and only if: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Proof:  See the â€Å"Appendix†. The intuition underlying the proposition 2 is the following. For a given level of prevention  e  it is not possible to find a scheme of transfers that gives a level of utility  u  if the marginal cost of such a measure is greater than the marginal benefit. Let us remark that the marginal benefit of prevention is reflected by the reduction of the expected transfers that the firm has to  pay  to her guarantor. We have demonstrated (see the â€Å"Appendix†) that there is a scheme  %23t(##) that gives the maximum marginal benefit of prevention, which equals [##   c(e)   B]Fe  (##). If this upper limit of the marginal benefit of prevention is lower than the marginal cost of prevention for a given  e,  then any scheme of transfers cannot implement the prevention level  e. From the analysis above we can derive the following result: Proposition 3  The social optimum  (u, e*)  can be implemented with the financial responsibility if and only if: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE *E.J.L. E. 83  Ã‚  Proof:  See the â€Å"Appendix† The left-hand-side term of the condition (5) represents the rate of change of the marginal benefit of prevention at the point  e* with a transfers scheme  %23t(##), whereas the right-hand-side represents the rate of change of the marginal cost of prevention at the same point. Consequently if there is a level of damage ## such that the rate of change of the marginal benefit is at least equal to the rate of change of the marginal cost of prevention then the social optimum can be implemented. The last step of the analysis is devoted to the characterization of a scheme of transfers that implements the first-best level of prevention. We can establish the following proposition: Proposition 4  The set of transfers that implement the socially optimal level of prevention contains a scheme of the following form: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Proof:  See the â€Å"Appendix† The scheme of transfers  23t(##) is such that if at the end of the period, the actual damage is lower than the target level ##, then the firm is rewarded by receiving the bonus payment B, so her net revenue at the end of the period equals ## Conversely if the actual damage is greater than the target level ##, then the payment made by the firm to the guarantor equals ##   c(e*) and the firm net revenue at the end is null. This form of contract can be approached to a spread loss treaty. It is an alternative risk transfer (ART) solution, more precisely a finite risk product. By this contract, the financial responsibility of the firm is transferred to her guarantor (that can be a bank or an insurer).9,10  At the beginning of the contract, the firm  pays  either annual or single premium into a so-called experience account. Furthermore, the two parties contractually agree on an investment return. The funds are used to compensation and the rest is returned to the client. But if the claims payments exceed the funds available, the client has to  pay  the remainder. In this paper, we consider a one-period model. Consequently, the model can be viewed as if we have aggregated the periods of the spread loss treaty. Moreover, if the realized damages are low, the funds into the experience account are sufficient for compensation whereas in the bad states of nature (high realized damages), the funds  *E.J.L. E. 84  are not sufficient. Hence, because of its limited liability, the firm cannot  pay  back the claims payments of the guarantor. Then, the guarantor takes this fact into account by penalizing the firm in the intermediate states of nature [those such that the amount of damages is between the target level ## and ##   c(e*)]. Consequently, the reward is used as an incentive device. 4 Concluding remarks A potentially judgment-proof firm may not internalize the social cost of its activity and then may have insufficient incentives to choose the socially optimal level of prevention. Whereas most of papers studied the incentive effect of extending liability to the lenders of the injurer-firm, this paper on contrary considers another remedy to the problems generated by the judgment-proofness. I demonstrate that a full financial responsibility (operation licence subject to the demonstration of a financial guarantee which covers the highest remediation cost) is compatible with the socially optimal level of prevention and establish a necessary and sufficient condition under which this is realized. Furthermore, I have shown that when the socially optimal outcome is attainable, a contract of the form â€Å"reward or maximum penalty† is included in the set of first-best solutions. Such a contract rewards the firm when the actual damages are lower than a target level because the guarantor infers that the firm took an adequate prevention level. Conversely, if the amount of the damages exceeds the target level, then the firm is maximally punished. This particular contract can be approach to an alternative risk transfer product referred to as spread loss treaty. Consequently, the alternative risk transfer solutions seem suited not only for the hedging of environmental risks, but also for incentive purpose. Finally, recall that the Directive of the European Parliament and the Council on Environmental Liability has a special focus on a future legislation which imposes financial responsibility on the polluting firms. It is necessary that before the promulgation of such legislation, European authorities help insurance and banking sectors to develop the market for environmental guarantees. Acknowledgments  I am very grateful to an anonymous referee and to the editor for helpful remarks on a previous version of the paper. I would like to thank Jean-Marc Bourgeon, Georges Dionne, Marie-Cà ©cile Fagart, Mahamadou Fall, Claude Fluet, Bruno Jullien, Anne Lavigne, Rà ©mi Moreau, Pierre Picard, Sandrine Spaeter, Jean-Marc Tallon and Daniel Zajdenweber. The paper also benefited from the comments of session participants of the 2005 SCSE congress in Charlevoix, 2005 AFSE congress in Paris and seminar participants at HEC Montrà ©al, Università © dOrlà ©ans, Università © de Sherbrooke and Università © du Quà ©bec Montrà ©al. Financial support by CREF-HEC and the hospitality of the Canada Research Chair in risk management are acknowledged. Appendix Proof of lemma 1 The social optimum  e* is the solution of the following problem: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE *E.J.L. E. 85  The associated first-order condition is given by: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE The firms problem can be written as: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE The left-hand-side term of Eq. 6 (7) represents the social (private) expected marginal cost of prevention and the right-hand-side represents the social (private) expected marginal benefit. From the comparison of (6) and (7)  eP  can be lower or higher than  e*. Proof of proposition 2 Part 1: u  ## [u,##   c(e)   B] Every level of utility  u  is given by the following expression: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Taking into account this expression, the objective function of the guarantor becomes: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Moreover, (2) and (3) imply: ##   c(e) ≠¥ ##  t(##)f(##/e)d## ≠¥Ã‚  B; thus 0≠¤u  Ã¢â€° ¤ ##   c(e)   B Consequently, the existence of a transfers scheme verifying (1), (2) and (3) implies that the utility of the firm is bounded:  u  ## [u,##   c(e)   B]. Note that the principals objective function depends only on the expected transfer (by  u). Therefore, all solutions that verify the agents incentive constraint and that have the  *E.J.L. E. 86  same expectation are equivalent from the principals point of view. However, the existence of such solutions is not guaranteed. Indeed, if the problem does not admit a solution, then it is not possible to implement a given level of prevention  e  for a given level of utility  u. Part 2: [##   c(e)   B]Fe  (##/e) ≠¥Ã‚  ce(e) Let us assume that  u  ## [u,##   c(e)   B], then the next step consists to establish conditions under which the incentive constraint (4) is satisfied. Let ## = {t(##)/B  Ã¢â€° ¤Ã‚  t(##) ≠¤ ##   c(e)##}, be the set of admissible transfers. Let us define:G[t(-)] = ##  t(##)fe(##/e)d##;  m  = min ##  t(##)fe(##/e)d## and  M  = max ##t(##)fe(##/e)d##. We can establish that  m  is strictly negative and  M  strictly positive.11  Thus the function  G  [t(.)] is bounded in the set of admissible transfers. Then the validity of the incentive constraint depends on the value taken by  m  as follows. Lemma 2  the incentive constraint is satisfied for a given e and u if and only if: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Lemma 3  the scheme of transfers  %23t(##)  which minimizes the function G  [t(-)] = ##  t(##)fe(##/e)d##  has the following form  12: TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE The second part of proposition 2 follows from lemmas 2 and 3. Proof of proposition 3 From proposition 2, we can derive that when the guarantors problem (P1) admits at least one solution, it is equivalent to the following problem (P1bis): TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Conditions (9) and (10) imply proposition 3. *E.J.L. E. 87  Ã‚  Proof of proposition 4 From the proposition 3 we know that the socially optimal prevention level can be achieved if  Fe(##/e*)/F(##/e*) ≠¥Ã‚  ce(e*)/u. Moreover, we can demonstrate that the function  Fe(##/e*)/F(##/e*) is not increasing in ##.13  Consequently, if  Fe(##/e*)/F(##/e*) ≠¥Ã‚  ce(e*)/u, there is a level of damages ## ## such that  Fe(##/e*)/F(##/e*) =  ce(e*)/u. References Balkenborg, D. (2001). How liable should a lender be? The case of judgment-proof firms and environmental risk: Comment.  American Economic Review, 91,  731-738. Beard, R. (1990). Bankruptcy and care choice.  RAND Journal of Economics, 21,  626-634. Boyer, M., Laffont, J.-J. (1997). Environmental risks and bank liability.  European Economic Review, 41,  1427-1459. Dari-Mattiacci, G., De Geest, G. (2005). Judgment Proofness under four different precaution technologies.  Journal of Institutional and Theoretical Economics, 161(1), 38-56. Dionne, G., Spaeter, S. (2003). Environmental risk and extended liability: The case of green technologies.  Journal of Public Economics, 87(5-6), 1025-1060. Feess, E., Hege, U. (2000). Environmental harm and financial responsibility.  Geneva Papers on Risk and Insurance, Issues and Practice, 25(2), 220-234. Feess, E., Hege, U. (2003). Safety monitoring, capital structure and financial responsibility.  International Review of Law and Economics, 23,323-339. Hutchison, E., Vant Veld, K. (2005). Extended liability for environmental accidents: What you see is what you get.  Journal of Environmental Economics and Management, 49,  157-173. Jost, P. (1996). Limited liability and the requirement to purchase insurance.  International Review of Law and Economics, 16,  259-276. Lewis, T., Sappington, D. (1999). Using decoupling and deep pockets to mitigate judgment-proof problems.  International Review of Law and Economics, 19,  275-293. Lewis, T., Sappington, D. (2001). How liable should a lender be? The case of judgment-proof firms and environmental risk: Comment.American Economic Review, 91,  724-730. Lipowsky-Posey, L. (1993). Limited liability and incentives when firms can inflict damages greater than worth.  International Review of Law and Economics, 13,  325-330. Pitchford, R. (1995). How liable should a lender be? The case of judgment-proof firms and environmental risk.  American Economic Review, 85,1171-1186. Polborn, M. (1998). Mandatory insurance and the judgment proof problem.  International Review of Law and Economics, 18,  141-146. Ringleb, A. H., Wiggins, S. N. (1990). Liability and large-scale long-term hazards.  Journal of Political Economy, 98,  574-595. Rogerson, W. (1985). The first-order approach to principal-agent problems.  Econometrica, 53,  1357-1367. Shavell, S. (1986). The judgment proof problem.  International Review of Law and Economics, 6,  45-58. Summers, J. S. (1983). The case of disappearing defendant: An economic analysis.  University of Pennsylvania Law Review, 132,  145-185. IRDES, 10 rue Vauvenargues, 75018 Paris, France e-mail: [emailprotected]; [emailprotected] E.J.L. E. 2010, 30(2), 77-87

Tarchia - Facts and Figures

Tarchia - Facts and Figures Name: Tarchia (Chinese for brainy); pronounced TAR-chee-ah Habitat: Woodlands of Asia Historical Period: Late Cretaceous (75-65 million years ago) Size and Weight: About 25 feet long and two tons Diet: Plants Distinguishing Characteristics: Large, armored head with slightly larger than usual brain; quadrupedal posture; sharp spikes lining back About Tarchia Heres more evidence that paleontologists have a good sense of humor: Tarchia (Chinese for brainy) earned its name not because it was particularly smart, but because its brain was the tiniest smidgen bigger than those of comparable ankylosaurs, among the dumbest of all the dinosaurs of the Mesozoic Era. The trouble is, at 25 feet long and two tons Tarchia was also bigger than most other ankylosaurs, so its IQ was probably just a few points above that of a fire hydrant. (Adding insult to injury, it may well be the case that the type fossil of Tarchia actually belonged to a closely related genus of ankylosaur, Saichania, the name of which translates, equally ironically, as beautiful.) The ankylosaurs were among the last dinosaurs to succumb to the K/T Extinction 65 million years ago, and when you look at Tarchia, its easy to see why: this dinosaur was the equivalent of a living air-raid shelter, equipped with massive spikes on its back, a powerful head, and a broad, flat club on its tail that it could swing at approaching predators. The tyrannosaurs and raptors of its day probably left it in peace, unless they were feeling particularly hungry (or desperate) and ventured to flip it onto its enormous belly for a relatively easy kill.

The Changing Price of Oil and Its Impact on the American Consumers Essay

The Changing Price of Oil and Its Impact on the American Consumers - Essay Example In the words of Lionel Robbins (1898-1984), Head of the Economics Department at the LSE: "Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses." (Robbins, 2007,3). This scarcity definition proposed by Lionel Robbins in 1923 reflects the fact that we have to make economic choices in daily life. Economic goods may be defined as those that are relatively scarce, have value and command a price. The price of a particular good or commodity as always is determined by the laws of demand and supply. Demand may be defined as the amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price (www.about.com). Supply may be defined as the total amount of a product (good or service) that is available for purchase at a given price (www.investorwords.com). It is the interaction of the forces of demand and supply in a marketplace that determines the price of a produ ct at any given time. Price is the quantity of payment or compensation given by one party to another in return for goods and services. We talk of individual demand when we refer to a particular transaction made by a buyer or seller at a given price. We speak of aggregate demand when we talk of the entire demand of the world buyers for a particular commodity, in this case, oil. This aggregate demand is thus the sum of demand for oil by all the countries interested in buying this commodity from a certain supplier at a given point in time. The biggest supplier of oil in the world market is a consortium or group of producers called OPEC or the Organization of Petroleum Exporting Countries, an intergovernmental group of presently 12 oil producers. The graph below shows the price of Brent Crude oil per barrel for the four weeks beginning 07 November 2011 and ending on 07 December 2011. Price is indicated on the vertical axis and the time period on the horizontal axis of the graph. From th e movement of oil prices on the graph, we can see that Brent Crude hit a high of $116 on 08 November 2011, probably as the war in Libya was still raging between Gaddafi loyalists and forces opposing the decadent regime. Ultimately as the liberating forces gained the upper hand, Gadaffi was captured from a sewer in his hometown of Sirte. Still, the battle raged on for a few days more as forces loyal to the former leader took their last stand. The OPEC nations meanwhile had temporarily increased their supply to the world in the light of the fact that access to Libyan oil, which totals 5 percent of the world supply, was unavailable during this period. There is a drop in oil price to $107 per barrel on 17 November 2011 as the world debate on what to do in post-war Libya was finalized and funds were released to the emerging leadership and the commander of the liberating forces was even invited to France to talk with Sarkozy and other leaders. Once it was clear that a transition to democr acy was on the cards and there was no danger of further insurgencies or threat of an Islamist radical group taking over, Libya was given its funds, sanctions were lifted and supplies of oil to the world could be resumed. Meanwhile, as Iran and Syria face increasing sanctions, they would like to keep the price of oil as high as possible.

Authentic Assessment Essay Example | Topics and Well Written Essays - 1250 words

Authentic Assessment - Essay Example The concepts of organizing, planning, leading, staffing, and controlling should be taken seriously by the supervisor. Supervisors act as intermediaries by communicating upper management’s objectives so as to realize the set goals. Supervisors facilitate the processes so as to keep the business operating. Based on the functions of the supervisors as well as their major roles, it is good for them to remain a key in steering forward the organization. The decisions made by supervisors on day to day activities affect attitudes and morale of employees as well as profits (Mosley et al, 2010). In the case of this supervisory development plan, the approaches of improving organizational performance through employee development will be reviewed. Developmental goals The goals of the supervisory development plan will be as follows. a. Improvement of communication between employees b. Better training for employees c. Develop a reward system for employees d. Efficient conflict management As a supervisor I have to ensure that my employees are well versed with skills and knowledge required for undertaking their roles. One of the main goals is to establish good communication with the employees. Good communication is essential in running efficient department. Without good communication, daily tasks will not be executed smoothly. Communication enhances efficiency in employee performance by minimizing workplace conflicts. It is essential for the supervisor to be a good listener and teach the employees how to be good listeners of one another. Good communication facilitates problem-solving and teamwork, which is essential for attainment of organizational objectives. Another key goal is ensuring better training of employees. This is essential for ensuring efficiency and increasing productivity. Well trained employees will be efficient in executing his or her duties. With proper employee training, issues of time wastage and flaws in business operations will be addressed. From an other perspective, the supervisory plan seeks to come up with a better reward system for employees. Employees need to be motivated by offering them regular rewards based on their performance. Rewarding employees serves as motivation, uplifts their esteem and acts as appreciation for their hard work. It is also a primary goal for the development plan to ensure effectiveness in conflict resolution. It is my focus that all departments are run well and as smoothly as possible without conflicts. This will be attained by ensuring good communication, proper training, motivation, and building trust with employees. Since best development plans are not always perfect, critiquing will be welcome to ensure constant review of the goals and adjust them accordingly for the benefit of all (Houldsworth & Jirasinghe, 2006). Performance gaps In order to improve employee performance, proper communication and training will be adopted. Employees will be taught on the fundamentals of good communication wi th one another as well as with their managers. There is a great performance gap in good employee performance. This entails the creation of a shared vision with all employees. There is need to communicate effectively with employees on the objectives of the organization and how to executive their roles. By creating a shared vision, the employees will be inspired

My Study Plan Essay Example for Free

My Study Plan Essay Im glad that Ive such a determination to France for further study. I do hope you will accept me for higher education in your distinguish college. Â  I was always appeal to the romantic and mysterious culture in France, Especially the state of art. Its really astonished by the world. Personally, one should have artistic mentality even if hes major in Mechanical. But, the main reason for study in France is actually the education. Its a country that pay serious attention to education, and government in France has invested a lot in this field. As for this, our overseas students got a best opportunity for study with the low school fee, the abundant teaching resources and a good learning environment. Its no wonder the best choice for further study as a n overseas student. I have a well foundation in Mechanical as I study Mechanical Engineering in my home country. I had took part in lots of relevant competitions and held the position of assistance in the laboratory, all these experience gave me a valuable assets. I know that its far from enough to be an excellent engineer, so I sincerely hope that I can reach a higher level to further study in France. I love study and have a strong desire for study; I wish to receive your recognition in future. Even though my family is not so wealthy, I hope you can understand me and I will do my best to fulfill my peruses in my study aboard. My study plan is as follow: 1. I will finish the foundation course in home country, and meet the assessment of Language for study in France. 2. The first half year in France, I will go on intensive study in French, and hope to meet the requirement of Language for the subject as early. 3. After finished the Language study, I will spend the rest time for learning the master degree in Mechanical, and minor in the relevant subjects for Automobiles. 4. I will work through the two years study in France, itll not only strengthen my French and also can support me to complete the study. 5. After finished study in campus, Ill spend a period of time for working in France to thank the education Ive got there. 6. During study aboard, I will learn more about French culture and the society, also its scenery, and I will do my best for contribution in the further communication and cooperation between the two countries. I believe Im qualified enough to accept by you, and Ive well prepared. Thanks for reading my plan of study. Wish you all in good health and smooth in work.

The Great Depression of the 1930s in Canada Essay -- World History

The Great Depression of the 1930s in Canada The Great Depression of the 1930's is a benchmark for all depressions and recessions in the past and in the future. In the booklet "The Great Depression of the 1930s in Canada" , Michiel Horn gives an intellectual dissection of the events that occurred during the Great Depression. Michiel Horn's approach leaves the reader with a foul taste for the Dirty Thirties. This essay will summarize Michiel Horns key points as well as discuss the ability of Michiel Horn to report his findings. Michiel Horn is currently the Chairman of the History Department at York University. His interests in the Great Depression revolve around the history of taxation. Therefore, he is interested in making sure that this sequence of events is fully understood so that future generations never allow it to happen again. There are several causes of the Great Depression which Michiel Horn touches on throughout his writings. The initial tool that he used to help understand the situation was to look at statistical data from that time. Through use of this data, a greater understanding of the physical hardships could be quantified and compared to present day. The reading begins with statistics about the shocking rate of unemployment. In 1933, at the height of the depression, the unemployment rate was between 19.3and 27 percent. The industrial activity in 1933 was only 57 percent of the average activity for the years 1925-29. The causes for the Great Depression were easy to see, but hard to fix. The problems included the inability of foreign countries to purchase surplus goods produced by other countries. Before the Great Depression, the British used this tactic to stabilize the market. Unfort... ...ults of the recession. In order for this never to happen again, there is a need to learn from the mistakes in the past and to look for the warning signs. The problem is not just restricted to one country, but is a global problem and needs to be addressed as such. The Great Depression often seems very distant to people of the 21st century. This article is a good reminder of potential problems that may reoccur. The article showed in a very literal way the idea that a depression can bring a growing country to its knees. The overall ramifications of the event were never discussed in detail, but the historical significance is that people's lives were put on hold while they tried to struggle through an extremely difficult time. Bibliography Michiel, Horn. The Great Depression of the 1930s in Canada. Ottawa: The Canadian Historical Association, 1984.

College Life

I said. WOW. Then I went next to my Chemistry Class. College life is a life of freedom. I remember my first day at college. I had looked forward to this day from my school days. Life at college meant for me a new life. When I entered my college for the first day, I looked around with a mixed feeling of perplexity and joy. I was puzzled as I was not habituated to the ‘college-ways’ of things. The students in batches were moving up and down the corridors for their classes. The professors were coming smilingly and exchanging greetings with the students in a friendly manner. The first item on the routine was a lecture on Plane and Trigonometry.I joined my class in room GV208. I arrived earlier than my Professor. I sat beside a white guy with blue shirt, next to him was another guy with fair complexity. With too much confidence, I introduced myself and asked their names. Bon Axl and Keil Cerbito. I remembered the girl who’s sitting next to me, she’s just using h er cell phone that time. AS IF SHE WAS TEXTING HAHA ?. I know that she’s shy. Afraid to socialize. It was Ms. Josephine Macasieb’s Math class. The professor came with the attendance register. After finishing roll-call, she gave us our assignments. What impressed me most was the way she smiles.She advised us to take the maximum advantage of college-life. Consulting my day’s routine I found that the next was my break. This gave me a chance to make a tour round the college premises. I noted with a sense of relief that I would no longer be confined to the same room for hours together as I used to be in high school. I went to the Canteen with my newly met friend. It was a big room with plenty of noise. The senior students were there, talking, gossiping or discussing things. Then I saw my seatmate who’s texting with my other classmate and Jennifer Pulongbarit was her name. Pulong for short and Krina Doria, a valedictorian.

Capella unit

In The Workplace In many business's today important vital customer information is stored within a company's database, easily accessed by employees with the right verification. The vulnerability of sensitive information is at an alarming risk. Most company's password policies are vague only asking for a one step verification, which entails either the employee's date of birth, or the last four digits of their social security number. I have vast experience working in hotels, and the one common thing I have personally foundIs that the password authentication process can easily be manipulated. As years of working In the hotel business I have had access to customers' credit card numbers, addresses, phone numbers, as well as email addresses. I have personally seen the ease of accessing another person's password. Hypothetically In the hotel business If a customer or any other unauthorized person or persons were able to access the hotel computers, It wouldn't be too difficult to hack one of t he employees' passwords and gain access to the customer files containing all of their information.It is my personal pinion that every company big or small should have a complex password authentication system in place to protect the very customers that keep them afloat. We see it not quite daily but do see it often in the news where business's get hacked into and hundreds of thousands of people are affected. Most of the time these â€Å"hacks† would have been easily avoided had the company put in place a more complex password authentication system. In closing I hope to one day develop a hack proof password system, to protect not only consumers, but corporate database, as well as their integrity.

The Yellow Wallpaper Questions for Study and Discussion

The Yellow Wallpaper Questions for Study and Discussion The Yellow Wallpaper Questions for Study and Discussion: The Yellow Wallpaper is the most famous work by Charlotte Perkins Gilman. She also wrote about why she created this short work in Why I Wrote The Yellow Wallpaper .Students often are asked to read this story in  Literature classesthe description is compelling, and the storyline is unforgettable. Here are a few questions for study and discussion related to this famous work. What is important about the title, The Yellow Wallpaper?Could the wallpaper have been any other color? How would a change in color have changed the story? How does the color yellow affect you? Do you like (or dislike) it? What are the psychological implications of the color yellow? How would a different color change the story?How does the narrators description of the wallpaper change over time? How is the wallpaper representative of the domestic sphere?Could the story have taken place in a different place (or at a different time)? Why does the narrator live in a colonial mansion? What does the setting mean? Is it important?Why does Charlotte Perkins Gilman change the point of view? Is it an effective technique?Why does the narrator say: what can one do How does that statement represent her state of mind?Why do you think Charlotte Perkins Gilman wrote The Yellow Wallpaper? Historically, the story was based on personal experience (autobiographical)how effectively does Gilman employ the events of her life to create this work of literature? What are the conflicts in The Yellow Wallpaper? What types of conflict (physical, moral, intellectual, or emotional) did you notice? Is the conflict resolved?How does Charlotte Perkins Gilman reveal character in The Yellow Wallpaper?Do you care about the characters? Do you like (or dislike) them? How real (or well-developed) do they seem to you?What are some themes in The Yellow Wallpaper? Symbols? How do they relate to the plot and characters?Does The Yellow Wallpaper end the way you expected? Did you expect a longer (or more involved narrative)? How? Why?What is the central/primary purpose of The Yellow Wallpaper? Is the purpose important or meaningful?What is the role of women in the text? How are mothers represented? What about single/independent women? What is important about womenin the historical context?How does the narrators relationship with her husband evolve/change? Does her mental state improve or worsen?Compare the main character in The Yellow Wallpaper with the mad wom an in the attic (from Jane Eyre). What does love have to do with it? What about mental illness? Compare the narrator in The Yellow Wallpaper with Edna in The Awakening. Is the narrator suicidal?Compare the narrator in The Yellow Wallpaper with Susan from Doris Lessings To Room 19. Is the narrator suicidal?Compare the narrator in The Yellow Wallpaper with the narrator from Virginia Woolfs Mrs Dalloway. Why is the party so important?Would you recommend The Yellow Wallpaper to a friend? Why? Why not?What did you enjoy (or hate) most about The Yellow Wallpaper? Why?Why is The Yellow Wallpaper sometimes considered essential reading in Feminist Literature? What are the qualities that make it representative?How does The Yellow Wallpaper fit in with the other known works of literature by Charlotte Perkins Gilman? Study Guide The Yellow Wallpaper QuotesWhy I Wrote The Yellow WallpaperCharlotte Perkins Gilman Biography

Watch Television Get Paid to Write About it!

Watch Television Get Paid to Write About it! Love television? Did you know you could make money writing about it? You can make a steady income that’s residual, much like royalties, and there’s also the option of getting paid per article or even becoming a staff writer. I write for MoviePilot.com. This site has thousands of writers, but not all of them get paid. There’s a vetting process, but passing it gets you started to earning money per every thousand views you get. And once you’re a verified creator, Movie Pilot’s editors actually help you get more views! This site thrives on science fiction and fantasy shows like Game of Thrones, Arrow, and Vampire Diaries and movies like Star Trek Beyond and Suicide Squad. They also have a big superhero following. CinemaBlend offers a wider array of topics, including TV show recapper and reviews. Though an older post indicated they are always looking for writers, they now post their job openings, which includes writers, here when they have some available. FanSided is the site that owns HiddenRemote.com, a site dedicated to all things television. This site has a lot more flexibility when it comes to television topics, and they are actively looking for paid contributors. You’ll have to fill out a Writer’s Application to get started. Screen Rant is another option, but it requires writers that will write about casting calls and television news rather than just the shows themselves. They have part-time positions, and according to the site, the pay is good. And finally, BuddyTV seeks contributors as well. They have different options available, but several are for writers able to write twenty to thirty pieces a week.  If you’re interested in applying, you will need to write at least two articles about television or movies to submit as they like to know your style.  BuddyTV also posts openings at Pro Blogger. The sites will help you grow your audience and share your articles with the world, and some fortunate writers get their posts shared So say, for instance, you write vampire romance and love The Vampire Diaries and The Originals. The connection to your readers is evident, and you have more to share with them! Sure you could post your comments on your blog, but why not post it where you can earn money? It really is a win-win situation. Along with getting paid, you can build up an audience of fans. It will help new readers find you, and you will tap into a network of millions of fans who may not know anything about you yet. So if you love television, considering writing for the fans and pocketing some cash as you add readers to your platform.

This I Believe essay Example | Topics and Well Written Essays - 500 words

This I Believe - Essay Example He should also learn how to respect other people instead of fight them, and to temper his desires and focus on his education instead of having a girlfriend at a young age. I was always the butt of jokes every time my friends would know that I did not have a girlfriend yet or that I have not tried any beer yet. I wonder why they would not mind how many books I have read at this point in my life. I really wonder why they would consider having dated a girl more important than anything else instead. What is also more annoying is that no matter how many times I explained to these people how important studying is more than having a girlfriend or drinking beer, they simply did not agree nor did they listen. What is even worse is that they would sometimes either label me as a nerd or a sissy or gay. I have nothing against nerds, sissies and gays but it is not good to call someone this if it is not true anyway. I believe that older people in the community should also try to help foster the value of good education and should at least help minimize the ridicule that young people like me get from those who constantly criticize every effort of mine to be an excellent student at school. It even seems to me that the society I was in would praise me more and make me more welcome if I were a dropout and if I got myself tattoos of snakes and women all over my arms and the rest of my body. The problem with this society is that the older people tolerate such beliefs because they are the same and they believe in the same thing about being a man. I remember arguing with my father on the subject of having to conform to society, and my father insisted on following what people say in order to avoid being ridiculed. Although I got my father’s point and although I knew that he was just protecting my interests and that he just did not want me to get into trouble, I believe there is always a point at which an individual has to stop conforming to what