Audience Misdirection in Magic Acts

Audience Misdirection in Magic Acts For hundreds of years, magicians have performed acts which are perceived to be impossible, causing the viewer to question how the act was performed. The viewer would generally know that act performed by the magician will use some sort of trickery or illusion, but still viewers are usually unable to detect the change when it occurs, even when the trick is in full view of the audience. Sometimes when a magician performs a magic trick, he uses misdirection to trick the audience. The magician would usually draw your attention elsewhere while the trick is being performed to stop the audience seeing how it is done (Kuhn, Amlani Rensink, 2008). Kuhn and Tatler (2005) recorded eye fixations of the audience as a magician was performing a magic trick developed especially to see the effect of misdirection on the audience. It was a relatively simple trick; lasting only 15 seconds, where the magician was to drop a lighter and cigarette into his lap without the audience seeing, causing the audience to think the items had magically disappeared. First the magician removes the cigarette from the packet and deliberately puts it in his mouth the wrong way round. He then pretends to light the cigarette, which enhances the audiences interest in the mouth/cigarette region. Both magician and the audience then realise the mistake, and the magician turns the cigarette around with his left hand while keeping his gaze fixed on his hand and cigarette. During this time the magician drops the lighter into his lap, which is in his right hand. He then causes attention to go to the disappearance of the lighter by attempting to light the cigarette. When he is unable to light the cigarette, he looks to his right hand, snaps his fingers and waves his hand; pulling the audiences attention to his right hand. While the audience are looking at the disappearance of the lighter in the right hand, the magician drops the cigarette from a height of around 15cm. He then turns his gaze to his left hand, and opens it to show that the cigarette is also disappeared. The magician uses gaze direction to disguise his actions while performing the trick (Tatler Kuhn, 2007). Generally, people have an urge to follow the gaze of others, in particular when there is pointing or another similar gesture involved that pulls the viewers attention to a specific place. While dropping both the lighter and the cigarette from his hand, the magicians gaze is focussed in the opposite hand to which the trick is being performed. This causes the audiences attention to also be focused on where the magician is looking, and makes them miss the lighter and cigarette being dropped. The dropping of the lighter was not very visible and could very easily be missed; however the dropping of the cigarette was done in full view of the audience, from about 15cm above the table top, but this action is also not usually detected, usually due to gaze misdirection. This shows that the magician successfully misdirected the audiences overt and covert attention at the correct time during the trick, right when the disappearance occurs. Surprisingly, when the audience were told that the magician was going to misdirect them while performing the trick, most people are still unable to stop themselves looking where the magician was looking and therefore miss detecting how the disappearance was performed. When in close interaction people tend to look at each other a lot in an conversation setting, the average time people tend to look at each other is 75% of the time when listening, and 40% of the time when talking (Land Tatler, 2009). As the audience are viewing the magic trick, their attention is focussed on the magician who is performing the trick, and so have an urge to follow his gaze in whichever direction he is looking. The sharing of attention is a strong social cue, whereby people appear to look in the direction they see others looking. When an event or fully visible item is not noticed by the audience, it is often called intentional blindness (Kuhn Tatler, 2010). By the magician drawing the attention of the audience to his hand by snapping and waving it, he creates an area of high visual interest, which the audience are preoccupied with by processing those actions of the magician. Because of this, they fail to notice the event occurring in the opposite hand, which is an area of low visual interest to the audience. Kuhn and Tatler (2005) also considered visual factors which could cause the audience not to detect the change, such as blinking, and the distance of the fixations of the audience when the drop is taking place. However, these do not seem to influence whether the drop was detected or not by the audience. Blinking when the drop took place did not influence whether the audience detected the change or not. There was also not much difference in where the audience were looking and whether they detected the drop or not. When the magician dropped the cigarette, most viewers were looking at the magicians face, his right hand or the space in between. In the first trial only 2 people detected the drop and 18 participants did not detect the drop. What is interesting though, when the participants were shown the magician performing the trick again, all participants detected the cigarette being dropped. In the second viewing, most of the audience still look at the same place they were looking before; around the right hand and the magicians face, but this time, they are able to detect the drop. Only three participants looked where the cigarette was at the time of the dropping. This shows that the magician was successfully manipulating the audiences covert attention as well as overt attention in the first trial, but in the second viewing he was less successful at manipulating the audiences covert attention; allowing the audience to see how the trick was performed in the second viewing. There is also a difference in whether the disappearance of the cigarette and the lighter is detected by the audience depending on it being a live performance (when the trick is performed in front of the audience) or whether the audience watch the trick being performed on a screen. Kuhn, Tatler, Findlay and Cole (2008) found that the audience are more likely to detect the disappearance of the cigarette when watching the trick being performed on a screen, rather than in a live performance. This shows that the audience have a closer connection to the magician while performing the trick live, and are more susceptible to following the magicians social cues and misdirection to stop them uncovering how the disappearance occurs. However, even when viewing the trick being performed on a screen, the audience still look in the same area, so they do follow the gaze of the magician. The study found no difference in the fixation of the audience and whether the disappearance was detected or not, bu t they did find a connection in the time taken to go from one fixation to the other. People who detected the disappearance are simply faster at moving their eyes to the left hand from which the cigarette disappeared. It is interesting how the magician manages to avoid this detection of the trick, even though it is fully visible. He pulls the overt and covert attention of the audience away from where the trick is being conducted, simply by his gaze direction. Misdirection usually works as the magician creates an area of high visual interest were most of the audience look, and performs the disappearance in an area of low visual interest. Eye direction plays an important part in misdirection. In another experiment by Kuhn and Land (2006), a magician performs a disappearing ball trick. The magician throws a ball in the air three times while keeping his gaze on the movement of the ball. As the ball goes in the air, his eye gaze also goes in that direction. On the third throw however, the ball seems to disappear while in the air. There are two conditions in this trick; firstly the magicians gaze also goes up when the ball is thrown for the third time, and his gaze follows the movement which the ball is expected to take, and seems as though he is expecting the ball to come back down. In the second condition the magicians gaze is fixed on his hand for the third throw. This experiment shows that misdirection using eye gaze provides a huge impact on the results. 68% of the participants believed that the ball had left the screen in the air when the magician was looking upward on the third throw, but only 32% believed that the ball had disappeared in the air when the magicians gaze was fixed on his hand. This result shows that social cuing and gaze direction plays an important role in misdirection in magic. However, the eye movements of the participants showed that on the third throw, the area in which participants looked differed to where they looked for the first two throws. The eye fixations showed a pattern eye movements went from the magicians hand, to his face, to the air (where the ball would be) and then back down to his hand. This would be repeated again for the second throw, but for the third throw, when the ball disappeared, participants eye gaze was fixed around the area of the magicians face, or not far from his head. This fixation also occurred on those participants who were sure the ball had been thrown and had disappeared upwards. This shows that people perceived something had happened, even though they had not followed the gaze of the magician. This demonstrates that gaze direction matters and influences the audience to look where the magician looks. In conclusion, a magician misdirects his audience mainly through gaze direction. He looks in the opposite hand to which the disappearance is occurring, causing the gaze of the audience miss discovering how the trick had been performed. People generally follow the gaze of others,; look where they see someone else looking, and so the magician uses this strong social cue to influence his audience to also look where he looks. He creates an area of high visual interest for the viewer, by waving and snapping his hand, and performs the trick in an area of low visual interest to the viewer. By doing this he successfully misdirects the audiences attention, and performs the trick without anyone discovering how the cigarette disappeared.

ABC Corp Business Process and Strategy

ABC Corp Business Process and Strategy ABC Corp is million dollar company which deals in data collection and analytics. The company has grown in last two years and is expected to grow rapidly in next 18 months. The company most important assets is information and is important function for the organization and it has to be dealt with very carefully and negotiated in the authority protocols, which furthermore, should be in accordance with the latest outlays and regulations that are laid by the authorities and well established codes of conduct and dealing with information. The aim of the paper is to research the current state of organization in terms of its business processes, IT alignment, personnel and outsourcing activities. The aforementioned organization also deals with the information basics and the dealings of various outlays of structured information and collects records for further development. The company deals in collecting and analyzing web data with the use of various web analytics tools. The a while ago expressed companionship furthermore deals with the information basics and the dealings of diverse costs of sorted out information and accumulates records for further change. The association has been working together of social affair data which is in a way amazingly helpful for the further progression of the operational structure data and securities. For the past 2 years the company has been in business of collecting data which is in a way very useful for the further development of the operational system data and securities. The data is collected to practice current trends, insecurities, business information for their clients. The company has seen a tremendous growth in business in past two years and is expected to grow by 60% in next 18 months. The company is using some information systems that help them in deadline with day to day business needs. Traditional as well as latest methods has been implemented and adopted in order for the data collection to be up to the mark with the synchronized and differential development techniques, which is best done with the help of web analytics. The company needs to upgrade its IT infrastructure and physical infrastructure. The company is looking forward for an information system that will handle increased business needs of the organization. The whole business process of the company revolves around the collection and development t of data, and the process is very intricate in nature, which has a minimal margin of errors and the processing of data can only be done in a proper and fool proof manner, if the integrated units of the system are working in a perfect sync and each and every element is giving out the best in efficiency. The company develops web analytics which is a tricky situation as far as the developmental techniques and implementation of all such techniques is concerned. Web analytics take into account several trends and curves as well as findings of the website development business, and the whole set of this data is very important for the very existence of such a business and it should be provided at each end of the elemental node. Information flow is carried out by using a perfect systematic adjustment between machines and personnel. Acknowledged and moreover latest frameworks must be executed and gained set up for the data get-together to be reliant upon the engraving with the synchronized and differential headway systems, which is best done with the support of web examination. Data sorting out and data progression is a system which is fast expecting control over whatever feasible industry, out and significant and orderly the restriction is stretching because of the passageway and vicinity of a couple of contenders and the exact vicinity of the developmental fundamentals, which are broad in nature, and all the new competitors are speedy setting aside a few minutes with the latest examples. The company as is a data collection and analytics company have lot of outsource and offshore in order to have skilled pool of resources and save cost. The company is currently outsourcing all legal activities to an outside law firm which handles the entire contract that they have to maintain with their clients. This also includes description of regulations for maintaining data privacy of the clients and information collected over web. Other than this, the development work is offshore as nowadays, it is a very well-known fact that the majority of personnel who are coming up and excelling in the field of Information Technology are from Asian countries, such as China, India, Pakistan Bangladesh, Philippines and Indonesia, who have a great amount of competition in the market by offering IT related services at the bare minimum costs, which has benefitted IT and related businesses all over the world and this trend has propelled outburst in the global outsourcing scenario, wherein big western corporations are now looking east for gaining benefits of the low cost services and the same trend is followed by the above mentioned organization. The company is going on same footsteps and have all its information systems developed from companies that belong to these countries. The company looks ahead to offshore further IT work. The company possesses strong personnel who are dedicated for providing and handling services and issues related to information system in the company. The company personnel list is provided below CIO (Chief Information Officer): CIO is responsible for formulating strategic goals of the company and defines a plan for aligning the strategic goals with information technology in the company. DBA (Database administrator): The database administrator manage database employed in the company. He is an experienced database developer in MYSql and core responsibilities include Database development, management, maintaining security, monitoring, and optimization are responsibilities of DBA. Project Manager: The project manager is responsible for managing the IT projects. HE is the person who heads all in-house projects and deals with projects heads of the companies to whom the projects are outsourced. HRM (Human resources manager): HRM is responsible for maintaining the human resource of the company as well as Information technology. Chief finance officer: Chief finance officer is responsible for all budgeting and financial planning for IT projects. Software Engineers: The Company employs five software engineers for handling in-house development activities. Data is a critical capacity for any association and it must be managed painstakingly and arranged in the power conventions, which besides, ought to be as per the most recent expenses and regulations that are laid by the powers and settled sets of principles and managing data. (Shokrey, N., 2011). The previously stated association additionally manages the data rudiments and the dealings of different expenses of organized data and gathers records for further improvement. The organization has been doing business of gathering information which is in a manner extremely handy for the further advancement of the operational framework information and securities. Specifically, data is collected for their client that further helps them in making various decisions based upon analysis. For the purpose, company is collecting following type of information by using web analytics and other tools. Visitors information: The visitors coming on any website are tracked with the information about their IP addresses, visiting time and other details Number of hits: Some of clients needs to track the hits they received from their clients are also observed. Tracking repeat visitors: Tracking repeat visitors by storing the details on how many times a visitor visits etc. Customer feedback: Customer feedback is also taken as a part of the company of client that will help them in improving their services. Customer behavior: There are number of clients who are interested in knowing behaviors of the customer for setting target markets, product niche etc. Details about web pages: Details about page including page response time, frequency, site overlay etc are some other types. The company is currently using web analytics tools and some information system to process data collected through web analytics tools. The company is using different web analytics tools and data processing information system for storing, processing, retrieving and analyzing information. The information systems used by the company are listed below Decision support system: The system helps the management to take decisions based upon the input provided from various web analytics tools. The system works on MySql database and is developed in PHP. The system is based on graphical user interface where users are provided with drag and drop facility to facilitate ease of operation. The company uses proper authentication mechanism for ensuring security. Client server architecture is used where are clients are authenticated and can only access the information by login to system. Management information system: The system helps the company in managing the different resources and information in a right and balanced way. Same configuration as that for DSS is used for MIS. Security maintenance Security is maintained though proper authentication mechanism. All authenticated users are given login ID and passwords through which they can access companys database. The company also employs biometrics for authenticating server area. Physical security has also been employs at main gates. Following configuration is used for both the systems Hardware requirements Memory requirements are RAM, a minimum of 64 MB A minimum of PIII Supported Motherboard + 568 MHZ Pentium Processor is required. Hard Disk, a minimum of 40 GB SATA. Any Normal keyboard and mouse. A 1024*768, true type color- 32 Bit Display is required. Software requirements: Windows XP Professional or updated versions are required as operating system. PHP editor (notepad ++) for frontend. Installation requirements Xampp 1.6 software, which is included server info given below + Apache 2.2.3 + Zend Optimizer 3.0.2 + SQLite 2.8.15 + phpMyAdmin 2.9.1.1 Â  + MySQL Â  5.0.27 + Open SSLÂÂ   0.9.8d + FileZilla FTP Server 0.9.20 References Shokrey, N. (2011). ANALYZING THE IMPACT OF VISITORS ON PAGE VIEWS WITH GOOGLE ANALYTICS. International Journal of Web Semantic Technology, 2(1), 14-32. Retrieved from http://arxiv.org/ftp/arxiv/papers/1102/1102.0735.pdf Farney, T. (2013). Web Analytics Strategies for Information Professionals: A LITA Guide. Journal of Library Innovation, 4(2), 149-150. Loftus, W. (2012). Demonstrating Success: Web Analytics and Continuous Improvement. Journal of Web Librarianship, 6(1), 45-55. Retrieved from http://www.tandfonline.com/doi/abs/10.1080/19322909.2012.651416#.U1FlrlWSy8Y Elias, (2011). Learning Analytics: The Definitions, the Processes, and the Potential. Referred from http://learninganalytics.net/LearningAnalyticsDefinitionsProcessesPotential.pdf

Wonder Collar :: Animals Product Advertisement Essays

Wonder Collar Pet owners, you know that technology has given us great many tools to make life easier and happier for you and your pet. With things like invisible fencing and the microchip ID, you pet's safety is greatly increased. And with noise training products, you can live at peace with you pet humanely. But the problem with these products is that you have to buy four or five different products each with its own collar. It is impossible to use them all at one. Well this is a problem no longer with the WonderCollar. The WonderCollar is a all in one collar. NO more switching collars for training and for your fence. The best part is that you get to decide which products you want. By visiting our webpage, you can choose the options you want and your collar will then be custom made! Here is a look at some of the options featured on the WonderCollar. Noise Training Does your dog have a hard time listening to you? Are you at your wits end because your dog chews on the furniture, jumps on visitors, digs in the yard, or excessively barks and you have tired all the tricks in the book to get him to stop? Now there is help. Our system comes with a noise training option to help deter unwanted behaviors and to teach your dog some basic obedience. As we all know, there is a wrong way and a right way to use "trainers". That is why each of our products comes with a training manual and video, and we have a hotline available so that you can find the answer to any other questions you might have. Here is a closer look at the WonderCollar's noise training options. The Collar The remote training collar attachment allows you to "train without pain." It uses the same technology as a pager. A remote sends a signal to the collar, which then vibrates or produces a noise. There is a switch on the collar attachment that allows for eight levels of noise and three levels of vibration. Another switch allows you to choose the noise or vibration option, or both! The pager has a range of up to 100 ft. and can be used indoors and out-of-doors. The collar attachment has an internal antenna and is waterproof. Perfect for all types of environments. It also comes with an on/off safety switch. It is powered by a 6-volt battery pack that is interchangeable between all the WonderCollar's attachments. Wonder Collar :: Animals Product Advertisement Essays Wonder Collar Pet owners, you know that technology has given us great many tools to make life easier and happier for you and your pet. With things like invisible fencing and the microchip ID, you pet's safety is greatly increased. And with noise training products, you can live at peace with you pet humanely. But the problem with these products is that you have to buy four or five different products each with its own collar. It is impossible to use them all at one. Well this is a problem no longer with the WonderCollar. The WonderCollar is a all in one collar. NO more switching collars for training and for your fence. The best part is that you get to decide which products you want. By visiting our webpage, you can choose the options you want and your collar will then be custom made! Here is a look at some of the options featured on the WonderCollar. Noise Training Does your dog have a hard time listening to you? Are you at your wits end because your dog chews on the furniture, jumps on visitors, digs in the yard, or excessively barks and you have tired all the tricks in the book to get him to stop? Now there is help. Our system comes with a noise training option to help deter unwanted behaviors and to teach your dog some basic obedience. As we all know, there is a wrong way and a right way to use "trainers". That is why each of our products comes with a training manual and video, and we have a hotline available so that you can find the answer to any other questions you might have. Here is a closer look at the WonderCollar's noise training options. The Collar The remote training collar attachment allows you to "train without pain." It uses the same technology as a pager. A remote sends a signal to the collar, which then vibrates or produces a noise. There is a switch on the collar attachment that allows for eight levels of noise and three levels of vibration. Another switch allows you to choose the noise or vibration option, or both! The pager has a range of up to 100 ft. and can be used indoors and out-of-doors. The collar attachment has an internal antenna and is waterproof. Perfect for all types of environments. It also comes with an on/off safety switch. It is powered by a 6-volt battery pack that is interchangeable between all the WonderCollar's attachments.

Adaptation of Modern African-American Writers Essay -- Lucille Clifton

Adaptation of Modern African-American Writers Modern writers learn from the past by reading works written by authors of that particular era. Contemporary African-American writers gain knowledge and insight into the horrendous and sometimes harmonious conditions that plagued Africans during slavery and the slave trade. By reading the actual words, thoughts, and feelings of these enslaved Africans, modern writers receive information from the perspective of the victimized. Lucille Clifton's "slaveship" is a vivid example of a contemporary writer borrowing from the past to depict another account of the slave trade. The fact that Clifton's father told her stories about her family's struggle and she, herself, traced her lineage back to Dahomey, West Africa helped to impact the tone, ideas, and imagery used in her poem. Although "slaveship" is not written by someone who has experienced slavery herself, it does use similar elements found in Olaudah Equiano's Narrative of the Life of Olaudah Equiano and Phillis Wheatley's "On Being Broug ht from Africa to America". Clifton's "slaveship" begins with the image of people tightly packed and close together in the bottom of a ship. The narrator says that they were "loaded like spoons into the belly of Jesus" (lines 1-2). Later in the poem, the narrator describes being "chained to the heart of the Angel" (line 8). Equiano also speaks of the crowded conditions he faced on his journey to America. He states that he "was soon put down under the decks" (p 157) where "this wretched situation was again aggravated by the gallings of chains" (p 159). The human cargo on these slave ships endured weeks and months of dreadful and disgusting odors as a result of these cramped conditions. Clifton's slav... ...Equiano at the end of Chapter Two. He says, "O, ye nominal Christians might not an African ask you, learned this from your God, who says unto you, Do unto men as you would men should do unto you" (p 161). In order to give an accurate depiction of life during the Atlantic Slave Trade, contemporary African ‚American writers must research and read to find out exactly how life was for those enslaved. The opinions and thoughts of those who endured and survived this wretched time are valuable pieces of information about what was happening. Modern writers, such as Lucille Clifton, adapt from previous writers. Without having lived during that particular time, modern African-American writers must rely on past authors and their knowledge of human nature to put forth accurate stories with the purpose of educating and informing today's readers about America's ugly history.

Catherine Lucille Moores Shambleu and Greek Mythology :: Science Fiction Greece Myth Essays

Catherine Lucille Moore's Shambleu and Greek Mythology Throughout history, humans have had legends, myths and folk tales. Many of these dealt with monsters that cannot be found on the planet Earth, at least any more, especially the myths of ancient Greece. In such cases, there can be a fine line between where myth ends and science fiction starts. In Catherine Lucille Moore’s short story "Shambleau," one such myth crosses that line. That myth is the ancient Greek myth of the Gorgons. Gorgons had snakes for hair and could turn anyone into stone by looking at them in the eyes. "Shambleau" tells the tail of something very much like a Gorgon with snakes as its hair. This creature, called a "Shambleau," comes to and terrorizes a town. In the American Heritage College Dictionary, myth is defined as: "A traditional story dealing with supernatural beings, ancestors, or heroes that informs or shapes the world view of a people" (903). The same dictionary has science fiction defined as: "A literary genre in which the plot is typically based on†¦space travel, or life on other planets" (1221). Both definitions deal with life that is not natural to Earth. While the origins of such creatures may be different, they both deal with non-human sentient beings. Several science fiction stories deal with extraterrestrials visiting Earth in what humans would call the "Ancient" era and becoming part of a culture’s mythology. Then they might come back in the "Modern" era. One such story is Moore’s "Shambleau." Gorgons from ancient Greek mythology are creatures who look human but have snakes for hair and can make anyone or anything that looks them in the eye turn into stone. In "Shambleau," a female extraterrestrial, resembling a Gorgon but with subtle differences, terrorizes a town. A man, not knowing what she is or what she does, tries to protect her from an angry mob until he finds out her true intentions. The story ends with him promising to go off and kill her. However, it is said that she does something to humans which is like an addictive drug. Unlike a Gorgon, however, she had feline qualities such as "three fingers and a thumb, and her feet had four digits apiece too, and all sixteen of them were tipped with round claws that sheathed back into the flesh" (528). Yet, like a Gorgon, she had hair that "squirmed of itself against her cheek" (531).

Explain for Which Reasons the Real Wage Is Expected

Explain for which reasons the real wage is expected to be acyclical in the classical model, countercyclical in The Keynesian Model and Procyclical in the New Keynesian model. Which model better fits the empirical evidence? Introduction The concept of real wages has increasing significance in the current world. Rising inflation and recession in almost all major economies have led to the importance of studying real wage with respect to prices and economies themselves. Such a study would require an in-depth understanding of the business cycle of real wages.From Classical theory to New Keynesian theory, Cyclicality of real wage has been defined in contrasting terms. Much of the conflicting evidence is simply characteristic of empirical research. Researchers use different model specifications and estimation techniques. Empirical results are often sensitive to the choice of cyclical indicators and time period chosen (Dimelis, 2007). This essay seeks to explain why real wage is expected to be acyclical in the classical model, counter-cyclical in the Keynesian model and procyclical in the New Keynesian model and shed light on which model best fits empirical evidence.Real Wage Real wage is defined as the â€Å"wage paid to the average worker divided by the price level. †(Delong and Olney,2006 p. 535) It therefore measures the cost of labour in real terms as it is the number of units of output that can be exchanged for one time-based unit of work. (Levacic and Rebmann, 1982) The Classical Model In the classical model, the basic assumption is that prices and wages are flexible. The basis of classical theory is that the markets work perfectly, that prices adjust rapidly to cover any gap that may arise due to a difference in the quantities demanded and supplied. Delong and Olney,2006) The classical model thus assumes full employment, i. e. the actual output matches the potential output of the economy. Since prices are flexible, an increase in the supply of labour wil l lead to a deficit in the demand, as a result some workers will become unemployed, and some of the unemployed will offer their labour at a lower wage in an attempt to secure employment. As a result, those employed will also lower their wages causing the wage to decline relative to price level P, and real wage to fall.Due to the law of diminishing returns of marginal product of labour, as real wage falls, firms wishing to maximize their profit will employ more workers leading to an automatic adjustment of the labour market which is once again at equilibrium. In the case of demand exceeding supply, firms will offer higher wages to attract workers which will cause the real wage to rise. As a result other firms will reduce their labour such that the demand equals the supply again, and the labour market is at equilibrium.Thus real wage, in the classical model ,its movement is independent of the direction of growth of economy and is thus said to be acyclical. (Delong and Olney,2006; Mank iw, 2003) Though few empirical studies support the theory that wages are acyclical, most critics pointed out that many wages and prices are not flexible and it is this inflexibility that explains both the existence of unemployment and the non-neutrality of money (Mankiw,2003) .Gamber and Joutz(2001) in their paper ‘Real wages over the business cycle’ studied the movement of real wage with respect to labour supply,demand ,aggregate demand and oil prices and concluded that increases in oil prices and reduced hours had little impact on the real wage thus making real wage acyclical. This could be true of the data studied, however many researchers including Solon et al (1994) have questioned evidence that claimed real wage to be acyclical, saying that a compositional bias tends to mask the true cyclical behaviour of a particular group’s real wage.The Keynesian Model While the classical model is only appropriate when wages and prices are flexible, it provides a simplif ied analysis of how the economy works. A more realistic model is however the Keynesian model which is very different from the classical model in many ways. To begin with, the model does not guarantee full employment and the actual output does not always equal potential output which is due to the basic assumption that prices and wages are â€Å"sticky†. That is, they will not move freely and rapidly in response to a change in demand or supply. (Delong and Olney, 2006)The reasons behind sticky prices have been identified by many economists; some explanations given include the impact of implicit contracts which involve non variable wages together with a probability of layoff, without appealing to risk averse behaviour (Levacic and Rebmann, 1982). Another simplified explanation is that managers and workers find re negotiating wages costly or they lack sufficient information. The problem of â€Å"money illusion† is also a possible explanation where workers and managers over look the effect of price level changes when assessing the impact of changes in wages or prices on their real income. Delong and Olney,2006) In the Keynesian model, if there is a decline in a consumer’s propensity to consume, there will be a fall in expenditure for goods. However, there is no change on the spending on investment goods, flow of exports or government expenditure. When firms see the spending on their products declining, they will reduce the production rather than prices since prices are sticky to avoid accumulating unsold inventory. When firms reduce their production, naturally they will fire some of the workers since workers will not reduce their wages (as they are sticky).This leads to an overall drop in the national income, which as a result of the multiplier effect is greater than the decline in consumer spending. (Delong and Olney, 2006) Keynes’ theory assumes that there is a negative correlation between real wage and output or employment, i. e. that real wage in the Keynesian model is counter-cyclical (Blanchard and Fisher, 1989). Some empirical data supports this behaviour, Swanson(2007, p. 33), in his paper says that â€Å"anecdotal evidence from the Great Depression and the 1920–21 contraction strongly suggests that real wages were countercyclical during these episodes: e. . , â€Å"[Benjamin] Strong wanted to wait until wage rates were lower. He noted that deposits had fallen off considerably, retail prices had fallen moderately, wholesale prices precipitously [56%], but wages had hardly been affected (Friedman and Schwartz (1963) as cited in Swanson (2007), p. 33). † Swanson (2007, p. 34)also notes that â€Å"workers’ wages have been counter cyclical over both the post-War and post-1967 period when those wages are deflated by the price index of the worker’s own 2-digit or 4-digit industry and compared to the state of economic activity in that same industry. And studies using data disaggregated by industry have shown a rather countercyclical behaviour for the US (Mehra, 1982; Burda, 1985 as cited in Dimelis, 1997 p. 312)) Although the Keynesian model was a more realistic model, it was criticised for its lack of clarity on how the labour market, and equilibrium is attained. This led to the development of New Keynesian Economics. (Mankiw, 2003) New Keynesian Model Partly due to criticism of Keynesian Economics, New Keynesian Economics was developed.The new Keynesian model tries to explain how wages and prices behave in the short run by identifying the market imperfections that make them sticky and cause the economy to shift from its natural state. (Mankiw, 2003) In other words, it uses micro foundations to explain macroeconomic effects. The model, like the Keynesian model builds on the assumptions of sticky wages and prices with the traditional model of aggregate demand and supply and tries to provide a better explanation of why wages and prices are sticky in the first plac e.It proposes that small costs of adjustment or rigidities can have large macroeconomic effects. (Mankiw, 2003). Blanchard and Gali (2005, p. 10)assume that â€Å"real wages respond sluggishly to labor market conditions, as a result of some (unmodelled) imperfection or friction in labor markets. † It also assumes that real wages of the current period to some extent depend on the real wage of the previous period. And that current inflation is the result of decisions based on news about future demand and cost conditions obtained in previous periods, in addition to current information.A consequence of that â€Å"distributed lag† property is the emergence of inertia in inflation. (Blanchard and Gali, 2005) Real wages are procyclical and are thus positively correlated with the output, they rise as output rises (above its natural level) and fall as output declines (relative to its natural level). This is because nominal wages are positively correlated with the business cycle , while prices in the New Keynesian model are sticky. (Mankiw, 2003) In the above explanation of the classical and Keynesian model, there is some empirical evidence that supports the behaviour real wage as acyclical and counter-cyclical.However, there are a larger number of studies that conclude that real wage generally exhibits procyclical behaviour ( Keane, et al. (1988);Kydland and Prescott (1989);Solon et al. (1994);Peng and Siebert(2008)). According to Blanchard and Fisher(1989, p. 19), real wage is weakly procyclical, showing a positive correlation between real wage and output but being â€Å"statistically insignificant†. However, Solon et al. (1994) found the aggregate real wage to be significantly procyclical and in a further investigation found that micro study of the same data revealed stronger procyclicality of real wage than that revealed by aggregate data. Kandil and Woods, 2002) Several empirical studies of real wage cyclicality of various countries such as Germ any(Dimelis, 1997), Italy(Peng and Siebert, 2008) and USA( Solon et al. , 1994; Kandil and Woods, 2002) conclude that real wage is more procyclical in nature. One can draw the conclusion that, real wage, as supported by empirical evidence, is procyclical, whether it is weakly procyclical or significantly so. Conclusion It can thus be concluded that, the three models explained differ in many aspects particularly their explanation of the behaviour of real wage.Studies have been undertaken to understand the cyclicality of real wage with respect to real market conditions, and although some studies support that real wage is acyclical and counter-cyclical, a larger number of studies show that real wage is procyclical on an average. On a micro level as well, real wage has shown strong procyclicality. As mentioned before, the great variance of results in the study of real wage could be a result of the different techniques employed for research, the sample of data studied or if the study was aggregate based or disaggregate based.Thus, while the Classical and Keynesian models are applicable in certain cases, the new Keynesian model is appropriate for many of the prevalent markets or economies. References Blanchard, O. J & Fisher, S, 1989, Lectures on Macroeconomics, MIT press Blanchard, O. J. and Gali, J. , Real Wage Rigidities and the New Keynesian Model (October 31, 2005). MIT Department of Economics Working Paper No. 05-28; FRB Boston Working Paper No. 05-14. Available at SSRN: http://ssrn. com/abstract=842285 Delong , J. B & Olney, M.L, 2006, Macroeconomics, Second Edition, New York: Mcgraw-Hill/Irwin Dimelis, S. P, 1997, ‘Cyclical and causal relations between real wages and employment in the EU', Applied Economics,Vol: 29: 3, p. 311-324 Gamber, E. N. ; Joutz, F. L. , Real Business over the Business Cycle, Eastern Economic Journal, Summer 1997, v. 23, iss. 3, pp. 277-91 Kandil, M & Woods, J. G, 2002, ‘Employment composition and the cyclical behaviour of the aggregate real wage', Applied Economics, Vol: 34: 6, p. 689-708 Keane, M. , Mofitt, R. nd Runkle, D. E. (1988) Real wages over the business cycle: estimating the impact of heterogeneity with micro data, Journal of Political Economy, Vol: 96, p. 1232- 66. Kydland, F. E. and Prescott, E. C. (1989) Cyclical movements of the labour input and its implicit real wage. Research Department Working Paper 413, Federal Reserve Bank of Minneapolis. Levacic, R & Rebmann, A, 1982, Macroeconomics-An introduction to Keynesian-neoclassical controversies, Second Edition, Hampshire: Macmillan press Mankiw, N.G, 2003, Macroeconomics, Fifth Edition, New York: Worth Publishers Peng,F. & Siebert, S. W , 2008,Real wage Cyclicality in Italy, Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2465. Solon, G. , Barsky, R. and Parker, J. A. (1994) Measuring the cyclicality of real wages: How important is composition bias? , The Quarterly Journal of Econo mics, Vol:CIX,p. 1- 25. Swanson, E, 2007,Real wage cyclicality in the PSID, working paper series, Federal bank of San Francisco

S&S Air

3. Depreciation percentage=$1,640,200/$15,411,620 = 10. 64% New Fixed Assets=$15,411,620 + $30,000,000 = $45,411,620 $45,411,620*. 1064 = $4,831,796 new depreciation Pro forma Income Statement Sales ($36,599,300*1. 12)$40,991,216 Cost of Goods Sold ($26,669,496*1. 12) 29,869,836 Other Expenses ($4,641,000*1. 12) 5,197,920 Depreciation 4,831,796 EBIT 1,091,664 Interest 573,200 Taxable Income 518,464 Taxes (40%) 207,386 Net Income $311,078 Dividends ($311,0786*0. 30)$93,323Add to Retained Earnings $217,755 Pro forma Balance Sheet AssetsLiabilities and Stockholder’s Equity Current AssetsCurrent Liabilities Cash ($396,900*1. 12)$444,528 Accounts Payable ($844,550*1. 12) $945,896 Accounts Receivable ($637,560*1. 12) 714,067 Notes Payable 1,928,500 Inventory ($933,400*1. 12)1,045,408Total Current Liabilities 2,874,396 Total Current Assets $2,204,003Long-term Debt $5,050,000 Fixed Assets Net Plant and Stockholder’s EquityEquipment $45,411,620 Common Stock $322,500 Retained Ear nings 9,451,685 Total Equity $9,774,185 Total Assets $47,615,623 Total Liabilities and Stockholder’s Equity $17,698,581 EFN=$47,615,623-$17,698,581 = $29,917,042 Since the fixed assets have increased at a faster percentage than sales, capacity utilization for next year will decrease because the addition of the new line would expand capacity much more than would normally be required.