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centerbottomSoakai Vea | BUS 5520/AM 5104 | October 16, 2018950000Soakai Vea | BUS 5520/AM 5104 | October 16, 2018center750007132320ECONOMIC ENVIRONMENTFREE MARKET FAILURE & NATIONAL Economy950000ECONOMIC ENVIRONMENTFREE MARKET FAILURE & NATIONAL Economycentertop00

Article 1

OUTCOME TITLE: Free Market Failure.

TITLE OF THE ARTICLE: Tonga’s Largest Cannabis Bust in Vava’u.

NEWSPAPER TITLE: Matangi Tonga Online. (
DATE OF PUBLICATION: 25th September, 2018.

Huge Cannabis of 2,665 plants were apprehended and relocated in Mataika village at a bush plot in Vava’u.

Making it the largest Cannabis found in Tonga on date.

This proves no other investment decision from government.

Resulting having Cannabis market for the plantation.

How is money get and spend on obtaining the plants and the illegal seeds?
Unforgettable risk taken for planting a huge amount of quantity.

A supply chain arrangement of distributors and actual buyers.

Investigation agents follow up the money stream.

This apprehend worries whole Tonga as drug trade is flattering and maybe already more organized then personal backyard plantation for consumption.

No other outcomes but for improving the economy of the country with certain things to be done for decreasing and minimizing drug trade.
ECONOMIC ANALYSISConcerning of the article, the discussion is about the gap of investment decision done by the government the greater the gap, the likelihood of people will participate in drug trade and drug dealers leading to committing illegal approach which this I believe it is not good for the economy. This article also states that relocating 2,665 Cannabis making it the biggest Cannabis apprehend in Tonga on date. This is where Negative Consumption externalities comes in, referring to consumption when one-self imposes a negative benefit on others as excessive consumption of addictive drugs known as one of those demerit goods. Having this huge amount of plantation and seeds would be silly not believing there is a supply chain planning Cannabis market.
This article relates to one of the assumptions of underlying allocative efficiency of “Marginal Private Benefits Equals Price”. Concerning of the government not having other investment decision to improve the economic condition, schooling and Ministries. This is the outcome as people in the society seek ways to equity but for the fact of investment. MPB=P shows that consumers achieve the optimal benefit from consumption which this means that by consuming an additional unit the consumer adds more to their benefits from consumption MPB than they sacrifice in terms of the value of expenditure on the product.

People having “insufficient income” results in Cannabis plantation, despite the fact there are illegal substance or drugs available that significantly improve the quality of life of people. There are certain ways to be done for the fact to minimize drug trade, it does not consider to be a hopeless situation but we can go through this drug situation. Again, with no other investment decision to improve the economic condition of the country in terms of schooling and Ministries so on, the society will commit offense for the government and the economy.

Article 2

OUTCOME TITLE: National Economy.

TITLE OF THE ARTICLE: Tonga’s Overseas Workers Help Boost Kingdom’s Growing Economy.


DATE OF PUBLICATION:16th July, 2017.

Tonga’s economic growth boost with Tongans heading overseas working and sending the money home.

The economic development rise supported by global and regional economies.

Expected rate of economic growth 3.4 % in 2017/2018.

Government budget shows growth supported via construction projects and agriculture sector for recovery.

Remittances increases making it in line with number of seasonal workers take part in Australia’s Seasonal Worker’s Program and New Zealand’s Recognized Seasonal Employers’ Program, further on to Diaspora and the domestic economy.

An average of 2.8 % of economic growth in mid-terms with the help of tourism.

Financial situation stables in terms of optimism, theirs still growth expectation in 2 years’ time.

Inflation stays high in terms of high imported prices such as gasoline, diesel and food back in 2016 making an increase of 13.2 % in price.

Domestically, the largest contributor is the price of Kava-Tonga with 71.4 % over last year including some food items in terms of season factors.

Global economic factors beyond Tonga’s control also global warming stance a possible risk to the economy.

This article discussion is about how Tongans working overseas help growing the Tongan economy as believed by the Minister of Finance Hon. Tevita Lavemaau. This occurs at certain points like new income package, investment and population growing. The economic development is growing via “robust” by the support of global and regional economies with the expected rate of economic growth to be 3.4 % at 2017/2018.
The business cycle concern of some events symbolling of series of waves. Starting with “Growth” up to a time that reach “Peak” then goes to” Downturn” and reaching the bottom is “Trough” as the business is to shut-down rule.
The article shows Growth in business cycle are supported from construction projects somehow also known called as “recovery”, expansion or upturn as we notice this by the business willing to engage in expenditure, goods and assets looks very cheap, interest rates are low. The growth phase cannot forever-go but believes this is where the business doing investing as reaching the Peak, as the economy anticipated to increase at an average 2.8 % in mid-term with the help of Tourism for like the operation of Tanoa International Dateline Hotel in Tongatapu and the still single cultural contributor Kava-Tonga at 71.4 % over past years. It exists when theirs high level of borrowing, debt and price of the asset, feelings of great confidence in terms of bordering, high level of employment and inflation rate leading to a large balance of payments deficit. Downturn is like having uncertainty as expenditure and demand falls in confidence. For this happening, the business would cut employment and production resulting in low level of income as price of food items increase due to seasonal factors. The Trough phase is a general feeling of suspicion and fear. As the Kingdoms’ indebtedness to China forecasting borrowing for 2019/2020 to TP$48.7 million with repayment $25.4 million to cast of long shadow, individuals fearing of job losses, wages cut and bankruptcy, not willing to spend, leads to delaying of spending not urgent but concentrating on survival instead not decreasing debts and saving for any weather condition.


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