Bargaining
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price and exact nature of a transaction. If the bargaining produces agreement on terms, the transaction takes place. Bargaining is an alternative pricing strategy to fixed prices. Optimally, if it costs the retailer nothing to engage and allow bargaining, s/he can divine the buyer's willingness to spend, it allows for capturing more consumer surplus as it allows price discrimination, a process whereby a seller can charge a higher price to one buyer, more eager. Haggling has disappeared in parts of the world where the cost to haggle exceeds the gain to retailers for most common retail items. However, for expensive goods sold to uninformed buyers such as automobiles, bargaining can remain commonplace. Dickering refers to the same process, albeit with a slight negative connotation. Bargaining is the name chosen for the third stage of the Kübler-Ross model though it has nothing to do with price negotiations.
Not all transactions are open to bargaining. Both religious beliefs and regional custom may determine whether or not the seller is willing to bargain. In North America and Europe bargaining is restricted to expensive or one-of-a-kind items and informal sales settings such as flea markets and garage sales. In other regions of the world, bargaining may be the norm for small commercial transactions. In Indonesia and elsewhere in Asia, locals haggle for goods and services everywhere from street markets to hotels. Children learn to haggle from a young age. Participating in that tradition can make foreigners feel accepted. On the other hand, in Thailand, haggling seems to be softer than the other countries due to Thai culture, in which people tend to be humble and avoiding argument. However, haggling for food items is discouraged in Southeast Asia and is considered an insult, because food is seen as a common necessity, not to be treated as a tradable good. In all large complex business negotiations, a certain amount of bargaining takes place.
One simplified'western' way to decide when it's time to bargain is to break negotiation into two stages: creating value and claiming value. Claiming value is another phrase for bargaining. Many cultures take offence; this offence is as a result of their wanting to first create value for longer before they bargain together. The Chinese culture by contrast places a much higher value on taking time to build a business relationship before starting to create value or bargain. Not understanding when to start bargaining has ruined many an otherwise positive business negotiation. In areas where bargaining at the retail level is common, the option to bargain depends on the presence of the store's owner. A chain store managed by clerks is more to use fixed pricing than an independent store managed by an owner or one of owner's trusted employees; the store's ambiance may be used to signal whether or not bargaining is appropriate. For instance, a comfortable and air-conditioned store with posted prices does not allow bargaining, but a stall in a bazaar or marketplace may.
Supermarkets and other chain stores never allow bargaining. However, the importance of ambiance may depend on the cultural commitment to bargaining. In Israel, prices on day-to-day items may be negotiable in a Western style store manned by a clerk; the personality theory in bargaining emphasizes that the type of personalities determine the bargaining process and its outcome. A popular behavioral theory deals with a distinction between soft-liners. Various research papers refer to hard-liners as warriors, it varies from region to region. Bargaining may take place more in semi-urban areas than in a metro city. Bargaining games refer to situations where two or more players must reach agreement regarding how to distribute an object or monetary amount; each player prefers to reach an agreement in these games, rather than abstain from doing so. However, each prefers. Examples of such situations include the bargaining involved in a labour union and the directors of a company negotiating wage increases, the dispute between two communities about the distribution of a common territory, or the conditions under which two countries agree on nuclear disarmament.
Analyzing these kinds of problems looks for a solution that specifies which component in dispute corresponds to each party involved. Players in a bargaining problem can bargain for the objective as a whole at a precise moment in time; the problem can be divided so that parts of the whole objective become subject to bargaining during different stages. In a classical bargaining problem the result is an agreement reached between all interested parties, or the status quo of the problem, it is clear that studying how individual parties make their decisions is insufficient for predicting what agreement will be reached. However, classical bargaining theory assumes that each participant in a bargaining process will choose between possible agreements, following the conduct predicted by the rational choice model, it is assumed that each player's preferences regarding the possible agreements can be represented by a von Neumann–Morgenstern utility theorem function. Nash defines a classical bargaining problem as being a set of joint allocations of utility, some of which correspond to what the players would obtain if they reach an agreement, another that represents what
Lemonade
Lemonade can be any one of a variety of sweetened beverages found throughout the world, but which are traditionally all characterized by a lemon flavor. Most lemonade varieties can be separated into two distinct types: clear. Cloudy lemonade found in North America and South Asia, is traditionally a homemade drink using lemon juice, a sweetener such as cane sugar or honey. In the United Kingdom and Australia, clear lemonade, also carbonated, dominates. A popular cloudy variation is pink lemonade, made with added fruit flavors such as raspberry or strawberry giving the drink its distinctive pink color; the suffix "-ade" may be applied to other similar drinks made with different fruits, such as limeade, orangeade, or cherryade. Alcoholic varieties are known as hard lemonade. In some countries, the name "lemonade" is used for other, non-lemon flavored drinks, such as the German "Orangenlimonade". Although considered a common restaurant drink, lemonade is not considered a "staple"; as lemons and sugarcane are native to India, the Indians first consumed a type of lemonade called nimbu pani.
The earliest written evidence of lemonade has been found in Egypt, dated to around AD 1000. It is believed that the fruit was introduced from Asia around AD 700. Here, a drink made with lemons and honey was enjoyed by peasants, bottles of lemon juice with sugar, known as qatarmizat were imported and consumed locally. In 1676, a company known as Compagnie de Limonadiers was founded in Paris. Having been granted monopoly rights to sell lemonade, vendors roamed the streets serving the drink in cups from tanks on their backs. While carbonated water had been invented by Joseph Priestley in 1767, the first reference found to carbonated lemonade was in 1833 where the drink was available in British refreshment stalls. R. White's Lemonade, now produced and sold by Britvic, has been sold in the UK since 1845; the predominant form of lemonade found in the US, India, cloudy lemonade known as "traditional lemonade" in the UK and Australia, is non-carbonated and made with fresh lemon juice. Served cold, cloudy lemonade may be served hot as a remedy for congestion and sore throats, frozen, or used as a mixer.
Traditionally, it is common for children in US and Canadian neighborhoods to start lemonade stands to make money during the summer months. The concept has become iconic of youthful summertime Americana to the degree that parodies and variations on the concept exist across media. References can be found in comics and cartoons such as Peanuts, the 1979 computer game Lemonade Stand; the subject has attracted controversy as some unlicensed lemonade stands have been shut down due to health regulations. A popular variation of cloudy lemonade, pink lemonade, which – true to its name – has a distinctive pink color, is created by adding additional fruit juices, flavors, or food coloring to the recipe. Possible additions may include raspberries, cherries, red grapefruit, cranberries, grenadine, or the fruit of the staghorn sumac; the invention of pink lemonade was credited to Henry E. "Sanchez" Allott in his obituary in The New York Times, saying he had dropped in red cinnamon candies by mistake. Another theory, recorded by Joe Nickell in his book Secrets of the Sideshows, is that the drink was first invented in 1857 by Pete Conklin, when he made lemonade using water dyed pink from a horse rider's red tights.
The predominant form of lemonade in the UK and Australia is a lemon-flavored soda. Schweppes and R. White's Lemonade are common brands, stores carry a store branded lemonade as well. Schweppes uses a blend of lime oils. Other sodas which are both lemon and lime flavored may sometimes be referred to as lemonade, such as Sprite and 7 up. There are speciality flavors, such as Fentimans Rose Lemonade, sold both in the UK, the US, Canada. Shandy, a mixture of beer and clear lemonade, is sold pre-bottled. In India and Pakistan, where it is known as limbu paani or nimbu paani, in Bangladesh, lemonades may contain salt and/or ginger juice. Shikanjvi is a traditional lemonade from this region, can be flavored with saffron and other spices. Limonana, a type of lemonade made from freshly squeezed lemon juice and mint leaves, is a popular summer drink in Israel, Jordan and Syria. Limonana was created in the early 1990s in Israel after an advertising agency promoted the then-fictitious product to prove the efficacy of advertising on public buses.
The campaign generated so much consumer demand that restaurateurs and manufacturers began producing the drink, which would become popular. In Northern Africa, a drink called cherbat is made of lemon and rose water. Switcha is a version of the drink made in the Bahamas and Turks & Caicos that can be made with limes instead of lemons. In France, it is common for restaurants to offer citron pressé, an unmixed version of lemonade in which the customer is given lemon juice and water separately to be mixed in their preferred proportions. Limeade is a variation of lemonade, flavoring with lime. Like lemonade, both cloudy and clear varieties exist, it is popular in nations where limes are common, such as Guyana and Trinidad, as well as India, Pakistan and throughout South-East Asia. A Thai-styled limeade tastes salty, sometimes does not have any sugar. Most major beverage companies now offer their own brand of limeade, such as A. G. Barr of Glasgow and Newman's Own since 2004, with Minute Maid introd
Goods
In economics, goods are materials that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods that are tangible property, services, which are non-physical. A good may be a consumable item, useful to people but scarce in relation to its demand, so that human effort is required to obtain it. In contrast, free goods, such as air, are in abundant supply and need no conscious effort to obtain them. Personal goods are things such as televisions, living room furniture, cellular telephones anything owned or used on a daily basis, not food related. Commercial goods are construed as any tangible product, manufactured and made available for supply to be used in an industry of commerce. Commercial goods could be tractors, commercial vehicles, mobile structures and roofing materials. Commercial and personal goods as categories are broad and cover everything a person sees from the time they wake up in their home, on their commute to work to their arrival at the workplace.
Commodities may be used as a synonym for economic goods but refer to marketable raw materials and primary products. Although in economic theory all goods are considered tangible, in reality certain classes of goods, such as information, only take intangible forms. For example, among other goods an apple is a tangible object, while news belongs to an intangible class of goods and can be perceived only by means of an instrument such as print or television. Goods may increase or decrease their utility directly or indirectly and may be described as having marginal utility; some things are useful, but not scarce enough to have monetary value, such as the Earth's atmosphere, these are referred to as'free goods'. In normal parlance, "goods" is always a plural word, but economists have long termed a single item of goods "a good". Ugly though this may sound, an alternative is hard to find. In economics, a bad is the opposite of a good. Whether an object is a good or a bad depends on each individual consumer and therefore, it is important to realize that not all goods are good all the time and not all goods are goods to all people.
Goods' diversity allows for their classification into different categories based on distinctive characteristics, such as tangibility and relative elasticity. A tangible good like an apple differs from an intangible good like information due to the impossibility of a person to physically hold the latter, whereas the former occupies physical space. Intangible goods differ from services in that final goods are transferable and can be traded, whereas a service cannot. Price elasticity differentiates types of goods. An elastic good is one for which there is a large change in quantity due to a small change in price, therefore is to be part of a family of substitute goods. An inelastic good is one for which there are few or no substitutes, such as tickets to major sporting events, original works by famous artists, prescription medicine such as insulin. Complementary goods are more inelastic than goods in a family of substitutes. For example, if a rise in the price of beef results in a decrease in the quantity of beef demanded, it is that the quantity of hamburger buns demanded will drop, despite no change in buns' prices.
This is. It is important to note that goods considered complements or substitutes are relative associations and should not be understood in a vacuum; the degree to which a good is a substitute or a complement depends on its relationship to other goods, rather than an intrinsic characteristic, can be measured as cross elasticity of demand by employing statistical techniques such as covariance and correlation. The following chart illustrates the classification of goods according to their exclusivity and competitiveness. Goods are capable of being physically delivered to a consumer. Goods that are economic intangibles can only be stored and consumed by means of media. Goods, both tangibles and intangibles, may involve the transfer of product ownership to the consumer. Services do not involve transfer of ownership of the service itself, but may involve transfer of ownership of goods developed or marketed by a service provider in the course of the service. For example, sale of storage related goods, which could consist of storage sheds, storage containers, storage buildings as tangibles or storage supplies such as boxes, bubble wrap, tape and the like which are consumables, or distributing electricity among consumers is a service provided by an electric utility company.
This service can only be experienced through the consumption of electrical energy, available in a variety of voltages and, in this case, is the economic goods produced by the electric utility company. While the service is a process that remains in its entirety in the ownership of the electric service provider, the goods is the object of ownership transfer; the consumer becomes electric energy owner by purchase and may use it for any lawful purposes just like any other goods. Fast-moving consumer goods Final goods Intangible asset Intangible good List of economics topics Goods and services Service Tangible property Bannock, Graham et al.. Dictionary of Economics, Penguin Books. Milgate, Murray, "goods and commodities," The New Palgrave: A Dictionary of Economics, v. 2, pp. 546–48. Includes historical and contemporary uses of the terms in economics. Media related to Good
Economic interventionism
Economic interventionism is an economic policy perspective favoring government intervention in the market process to correct the market failures and promote the general welfare of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods. Economic intervention can be aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, raising or reducing prices, promoting income equality, managing the money supply and interest rates, increasing profits, or addressing market failures; the term intervention assumes on a philosophical level that the state and economy should be inherently separated from each other. The term intervention is used by advocates of laissez-faire and free markets. Capitalist market economies that feature high degrees of state intervention are referred to as mixed economies.
Liberals and other advocates of free market or laissez-faire economics view government interventions as harmful due to the law of unintended consequences, belief in government's inability to manage economic concerns and other considerations. However, modern liberals and contemporary social democrats are inclined to support interventionism, seeing state economic interventions as an important means of promoting greater income equality and social welfare. Furthermore, many center-right groups such as Gaullists, paternalistic conservatives and Christian democrats support state economic interventionism to promote social order and stability. National-conservatives frequently support economic interventionism as a means of protecting the power and wealth of a country or its people via advantages granted to industries seen as nationally vital; such government interventions are undertaken when potential benefits outweigh the external costs. On the other hand, Marxists feel that government welfare programs might interfere with the goal of overthrowing capitalism and replacing it with socialism because a welfare state makes capitalism more tolerable to the average worker.
Socialist]]s criticize interventionism as being untenable and liable to cause more economic distortion in the long-run. From this perspective, any attempt to patch up [[capitalism's contradictions would lead to distortions in the economy elsewhere, so that the only real and lasting solution is to replace capitalism with a socialist economy; the effects of government economic interventionism are disputed. Regulatory authorities do not close markets, yet as seen in economic liberalization efforts by states and various institutions in Latin America, "financial liberalization and privatization coincided with democratization". One study suggests that after the lost decade an increasing "diffusion of regulatory authorities" emerged and these actors engaged in restructuring the economies within Latin America. Latin America through the 1980s had undergone hyperinflation; these international stakeholders restricted the state's economic leverage and bound it in contract to co-operate. After multiple projects and years of failed attempts for the Argentine state to comply, the renewal and intervention seemed stalled.
Two key intervention factors that instigated economic progress in Argentina were increasing privatization and the establishment of a currency board. As one can see this exemplifies global institutions including, the International Monetary Fund and the World Bank and propagate openness to increase foreign investments and economic development within places, including Latin America. In Western countries, government officials theoretically weigh the cost benefit for an intervention for the population or they succumb beneath coercion by a third private party and must take action. Intervention for economic development is at the discretion and self-interest of the stake holders, the multifarious interpretations of progress and development theory. To illustrate this, during the 2008 financial crisis the government and international institutions did not prop Lehman Brothers up, therefore allowing them to file bankruptcy. Days when the American International Group waned towards collapsing, the state spent public money to keep it from falling.
These corporations have interconnected interests with the state, therefore their incentive is to influence the government to designate regulatory policies that will not inhibit their accumulation of assets. In Japan, Abenomics is a form of intervention with respect to Prime Minister Shinzō Abe's desire to restore the country's former glory in the midst of a globalized economy. President Richard Nixon signed amendments to the Clean Air Act in 1970 that expanded it to mandate state and federal regulation of both automobiles and industry, it was further amended in 1977 and 1990. One of the first modern environmental protection laws enacted in the United States was the National Environmental Policy Act of 1969, which requires the government to consider the impact of its actions or policies on the environment. NEPA remains one of the most used environmental laws in the nation. In addition to NEPA, there are numerous pol
International Monetary Fund
The International Monetary Fund is an international organization headquartered in Washington, D. C. consisting of "189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, reduce poverty around the world." Formed in 1944 at the Bretton Woods Conference by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money; as of 2016, the fund had SDR477 billion. Through the fund, other activities such as the gathering of statistics and analysis, surveillance of its members' economies and the demand for particular policies, the IMF works to improve the economies of its member countries.
The organisation's objectives stated in the Articles of Agreement are: to promote international monetary co-operation, international trade, high employment, exchange-rate stability, sustainable economic growth, making resources available to member countries in financial difficulty. IMF funds come from two major sources:quotas and loans. Quotas, which are pooled funds of member nations, generate most IMF funds; the size of a member's quota depends on its financial importance in the world. Nations with larger economic importance have larger quotas; the quotas are increased periodically as a means of boosting the IMF's resources. The current Managing Director and Chairwoman of the International Monetary Fund is French lawyer and former politician, Christine Lagarde, who has held the post since 5 July 2011. Gita Gopinath was appointed as Chief Economist of IMF from October 1, 2018, she received her Ph. D. in economics from Princeton University. According to the IMF itself, it works to foster global growth and economic stability by providing policy advice and financing the members by working with developing nations to help them achieve macroeconomic stability and reduce poverty.
The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences; the IMF provides alternate sources of financing. Upon the founding of the IMF, its three primary functions were: to oversee the fixed exchange rate arrangements between countries, thus helping national governments manage their exchange rates and allowing these governments to prioritize economic growth, to provide short-term capital to aid the balance of payments; this assistance was meant to prevent the spread of international economic crises. The IMF was intended to help mend the pieces of the international economy after the Great Depression and World War II; as well, to provide capital investments for economic growth and projects such as infrastructure.
The IMF's role was fundamentally altered by the floating exchange rates post-1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy; the IMF researched what types of government policy would ensure economic recovery. A particular concern of the IMF was to prevent financial crisis, such as those in Mexico 1982, Brazil in 1987, East Asia in 1997–98 and Russia in 1998, from spreading and threatening the entire global financial and currency system; the challenge was to promote and implement policy that reduced the frequency of crises among the emerging market countries the middle-income countries which are vulnerable to massive capital outflows. Rather than maintaining a position of oversight of only exchange rates, their function became one of surveillance of the overall macroeconomic performance of member countries, their role became a lot more active because the IMF now manages economic policy rather than just exchange rates.
In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality, established in the 1950s. Low-income countries can borrow on concessional terms, which means there is a period of time with no interest rates, through the Extended Credit Facility, the Standby Credit Facility and the Rapid Credit Facility. Nonconcessional loans, which include interest rates, are provided through Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line, the Extended Fund Facility; the IMF provides emergency assistance via the Rapid Financing Instrument to members facing urgent balance-of-payments needs. The IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries; this activity facilitates international co-operation. Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved by way of changes in procedures rather than through the adoption of new obligations.
The responsibilities changed from those of guardian to those of overseer of members' policies. The Fund analyses the appropriateness of each member country's economic and financial policies for achieving orderly economic growth, assesses the consequences of these policies for other countries and for the global e
Externality
In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit. Externalities occurs when a product or service’s price equilibrium cannot reflect the true costs and benefits of that product or service. Externalities can be both negative. Governments and institutions take actions to internalize externalities, thus market-priced transactions can incorporate all the benefits and costs associated with transactions between economic agents. For example, manufacturing activities that cause air pollution impose health and clean-up costs on the whole society, whereas the neighbors of individuals who choose to fire-proof their homes may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if the producer were required to pay all associated environmental costs; because responsibility or consequence for self-directed action lies outside the self, an element of externalization is involved.
If there are external benefits, such as in public safety, less of the good may be produced than would be the case if the producer were to receive payment for the external benefits to others. For the purpose of these statements, overall cost and benefit to society is defined as the sum of the imputed monetary value of benefits and costs to all parties involved. Two British economists are credited with having initiated the formal study of externalities, or "spillover effects": Henry Sidgwick is credited with first articulating, Arthur C. Pigou is credited with formalizing the concept of externalities. A negative externality is any difference between the private cost of an action or decision to an economic agent and the social cost. In simple terms, a negative externality is anything. An example is the toxic gases that are released from industries or mines, these gases cause harm to individuals within the surrounding area and have to bear a cost to get rid of that harm. Conversely, a positive externality is any difference between the private benefit of an action or decision to an economic agent and the social benefit.
Suppose that there are K different possible allocations and N different agents, where K, N < ∞ and N ≥ 2. Suppose that each agent has a type θ i ∼ F i and that each agent gets payoff v i + t i, where t i is the transfer paid by the i -th agent. A map f = is a social choice function if ∑ i = 1 N t i ≤ 0 for all θ ∈ N. An allocation κ: N → K is ex-post efficient if ∑ i = 1 N v i ≥ ∑ i = 1 N v i for all θ = ∈ N and all k ∈ K. Let κ ∗ denote an ex-post efficient allocation and let κ ~ i denote an ex-post efficient allocation without agent i; the externality imposed by agent i on the other agents is ∑ j ≠ i v j − ∑ j ≠ i v j, where θ − i is the type vector θ without its i {\displaysty
Ecosystem
An ecosystem is a community of living organisms in conjunction with the nonliving components of their environment, interacting as a system. These biotic and abiotic components are linked together through nutrient cycles and energy flows. Energy is incorporated into plant tissue. By feeding on plants and on one-another, animals play an important role in the movement of matter and energy through the system, they influence the quantity of plant and microbial biomass present. By breaking down dead organic matter, decomposers release carbon back to the atmosphere and facilitate nutrient cycling by converting nutrients stored in dead biomass back to a form that can be used by plants and other microbes. Ecosystems are controlled by internal factors. External factors such as climate, the parent material which forms the soil and topography, control the overall structure of an ecosystem, but are not themselves influenced by the ecosystem. Ecosystems are dynamic entities—they are subject to periodic disturbances and are in the process of recovering from some past disturbance.
Ecosystems in similar environments that are located in different parts of the world can end up doing things differently because they have different pools of species present. Internal factors not only control ecosystem processes but are controlled by them and are subject to feedback loops. Resource inputs are controlled by external processes like climate and parent material. Resource availability within the ecosystem is controlled by internal factors like decomposition, root competition or shading. Although humans operate within ecosystems, their cumulative effects are large enough to influence external factors like climate. Biodiversity affects ecosystem functioning, as do the processes of disturbance and succession. Ecosystems provide a variety of services upon which people depend; the term ecosystem was first used in 1935 in a publication by British ecologist Arthur Tansley. Tansley devised the concept to draw attention to the importance of transfers of materials between organisms and their environment.
He refined the term, describing it as "The whole system... including not only the organism-complex, but the whole complex of physical factors forming what we call the environment". Tansley regarded ecosystems not as natural units, but as "mental isolates". Tansley defined the spatial extent of ecosystems using the term ecotope. G. Evelyn Hutchinson, a limnologist, a contemporary of Tansley's, combined Charles Elton's ideas about trophic ecology with those of Russian geochemist Vladimir Vernadsky; as a result, he suggested. This would, in turn, limit the abundance of animals. Raymond Lindeman took these ideas further to suggest that the flow of energy through a lake was the primary driver of the ecosystem. Hutchinson's students, brothers Howard T. Odum and Eugene P. Odum, further developed a "systems approach" to the study of ecosystems; this allowed them to study the flow of material through ecological systems. Ecosystems are controlled both by internal factors. External factors called state factors, control the overall structure of an ecosystem and the way things work within it, but are not themselves influenced by the ecosystem.
The most important of these is climate. Climate determines the biome. Rainfall patterns and seasonal temperatures influence photosynthesis and thereby determine the amount of water and energy available to the ecosystem. Parent material determines the nature of the soil in an ecosystem, influences the supply of mineral nutrients. Topography controls ecosystem processes by affecting things like microclimate, soil development and the movement of water through a system. For example, ecosystems can be quite different if situated in a small depression on the landscape, versus one present on an adjacent steep hillside. Other external factors that play an important role in ecosystem functioning include time and potential biota; the set of organisms that can be present in an area can significantly affect ecosystems. Ecosystems in similar environments that are located in different parts of the world can end up doing things differently because they have different pools of species present; the introduction of non-native species can cause substantial shifts in ecosystem function.
Unlike external factors, internal factors in ecosystems not only control ecosystem processes but are controlled by them. They are subject to feedback loops. While the resource inputs are controlled by external processes like climate and parent material, the availability of these resources within the ecosystem is controlled by internal factors like decomposition, root competition or shading. Other factors like disturbance, succession or the types of species present are internal factors. Primary production is the production of organic matter from inorganic carbon sources; this occurs through photosynthesis. The energy incorporated through this process supports life on earth, while the carbon makes up much of the organic matter in living and dead biomass, soil carbon and fossil fuels, it drives the carbon cycle, which influences global climate via the greenhouse effect. Through the process of photosynthesis, plants capture energy from light and use it to combine carbon dioxide and water to produce carbohydrates and oxygen.
The photosynthesis carried out by all the plants in an ecosystem is called the gross primary production. About half of the GPP is consumed in plant respiration; the remainder, that portion of GPP, not used up by respirati
