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Regional rivals Manila , Singapore , Kuala Lumpur and Bangkok , all got there first.

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Difficulties acquiring land rights in the south of the city have delayed the overground section of the project but, when the first stage opens in , it is set to halve the hour it takes to travel 12 miles from Lebak Bulus to Bunderan Hotel Indonesia in the centre by car. A northern extension to Kampung Bandan near the waterfront is set to open in A second line running east-west, where many journeys are made, is under consideration.

A long-awaited link from the airport is set to start operating next year and the first phase of a light rail system is due to open in , in time for the Asian Games. The new network should boost rail capacity from , to 1. Excess passengers no longer ride on the roof or hang out of the doors after a recent crackdown, but inside the carriages the rush hour crush is as bad as ever. The metro, light rail, airport link — and a planned bullet train from Bandung miles to the east — will centre on a new hub at Dukuh Atas.

The inevitable swanky shopping mall is being planned. But is there a faster way to transform public transport in the city? The mile Transjakarta network gives good coverage, within the city at least, and carries , people a day. Buses are air conditioned, with a separate section for women at the front, and 10 pink women-only buses have recently started operation. Commuters trying to get to and from the outer cities of Bogor, Depok, Tangerang and Bekasi find the dedicated lanes stop as soon as they leave the city limits.

A rush-hour BRT from Bogor to the centre takes two or three hours, and in Jakarta itself police officers turn a blind eye to cars and motorbikes using bus lanes when gridlock strikes. Spotting cyclists on other days is harder. He uses smaller side streets where he can but says major roads are unavoidable.

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• The world's worst traffic: can Jakarta find an alternative to the car? | Cities | The Guardian?

Many firms advertise their goods or services, but are they wasting economic resources? Some economists reckon that advertising merely manipulates consumer tastes and creates desires that would not otherwise exist. By increasing product differentiation and encouraging brand loyalty advertising may make consumers less price sensitive, moving the market further from perfect competition towards imperfect competition see monopolistic competition and increasing the ability of firms to charge more than marginal cost. Heavy spending on advertising may also create a barrier to entry, as a firm entering the market would have to spend a lot on advertising too.

However, some economists argue that advertising is economically valuable because it increases the flow of information in the economy and reduces the asymmetric information between the seller and the consumer. This intensifies competition, as consumers can be made aware quickly when there is a better deal on offer. Consumer desire. Consumer taste. Consumer sensitivity. Consumer loyalty. Asymmetric information. A better deal. Flow of information. Petunjuk Jawaban Latihan 3 B 4 c D.

Agency costs arise because of core problems such as conflicts of interest between shareholders and management. Shareholders wish for management to run the company in a way that increases shareholder value. But management may wish to grow the company in ways that maximize their personal power and wealth that may not be in the best interests of shareholders. These can arise when somebody the principal hires somebody else the agent to carry out a task and the interests of the agent conflict with the interests of the principal.

An example of such principal-agent problems comes from the relationship between the shareholders who own a public company and the managers who run it.

The owners would like managers to run the firm in ways that maximize the value of their shares, whereas the managers' priority may be, say, to build a business empire through rapid expansion and mergers and acquisitions, which may not increase their firm's share price. But this can be costly, too. It may be impossible to define the agent's job in a way that can be monitored effectively. For instance, it is hard to know whether a manager who has expanded a firm through an acquisition that reduced its share price was pursuing his own empire-building interests or, say, was trying to maximize shareholder value but was unlucky.

For instance, an increasingly common solution to the agency costs arising from the separation of ownership and management of public companies is to pay managers partly with shares and share options in the company. This gives the managers a powerful incentive to act in the interests of the owners by maximizing shareholder value.

But even this is not a perfect solution. Some managers with lots of share options have engaged in accounting fraud in order to increase the value of those options long enough for them to cash some of them in, but to the detriment of their firm and its other shareholders. See, for example, Enron. To build a business empire B. To expand the firm through an acquisition C.

To maximize the value oftheir shares 6 What is too expensive or too difficult to do in reducing agency costs? To pay managers partly with shares B. To make the interests ofthe agent more like those ofthe principal C. To give the managers a powerful incentive to act in the interests of the owners D. This has been achieved by the setting of intervention prices; when the market price for a commodity falls to this level the EU will buy the entire production at the intervention price.

It is this policy which led to the accumulation of the notorious 'wine lakes' and 'butter mountains', and to high food prices within the Community. Countries often provide support for their farmers using trade barriers and subsidy because: 1. Broadly speaking, governments have tried two methods of subsidizing agriculture. The first, used in the United States during the s and in the United Kingdom UK before it joined the EU, is to top up farmers' incomes if they fall below a level deemed acceptable.

Farmers may be required to set aside some of their land in return for this support. The second is to guarantee a minimum level of farm prices by buying up surplus supply and storing or destroying it if prices would otherwise fall below the guaranteed levels. To keep down the direct cost of this subsidy the EU used trade barriers, including import levies, to minimize competition among EU farmers, to produce available more cheaply on world agriculture markets. Recent American farm-support policy has combined income top-ups and some guaranteed prices.

As most governments have become more committed to international trade, such agricultural policies have come under increasing attack, although 8. Finding a way to end agricultural support had become by far the biggest remaining challenge for those trying to negotiate global free trade. The total value ofinternational trade in agriculture has risen steadily.

But the global agriculture market remains severely distorted by trade barriers and government subsidy, such as the European Union's common agricultural policy. Government subsidy B. Smaller national income 9. Free trade D. ALTRUISM It is unselfish concern for the welfare of others; selflessness It is often alleged that altruism is inconsistent with economic rationality, which assumes that people behave selfishly.

Certainly, much economic analysis is concerned with how individuals behave, and homo economicus economic man is usually assumed to act in his or her self-interest. However, self-interest does not necessarily mean selfish. Some economic models in the field of behavioral economics assume that self-interested individuals behave altruistically because they get some benefit, or utility, from doing so. For instance, it may make them feel better about themselves, or be a useful insurance policy against social unrest, say. Some economic models go further and relax the traditional assumption of fully rational behavior by simply assuming that people sometimes behave altruistically, even if this may be against their self-interest.

Either way, there is much economic literature about charity, international aid, public spending and redistributive taxation. Behavioural economics. Economic man. Economic rationality. Economic analysis. With loans that are not amortized, the borrower pays only the interest during the period of the loan and then repays the sum borrowed in full.

According to Keynes, animal spirits are a particular sort of confidence, "naive optimism". He meant this in the sense that, for entrepreneurs in particular, "the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death". Where these animal spirits come from is something of a mystery.

He is one of the fathers of modem theoretical macroeconomics and considered by some to be the most influential economist of the 20th century. Expectation of death B.

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Naive optimism C. Animal spirits D. Antitrust is government policy for dealing with monopoly. Antitrust laws aim to stop abuses of market power by big companies and, sometimes, to prevent corporate mergers and acquisitions that would create or strengthen a monopolist.

There have been big differences in antitrust policies both among countries and within the same country over time. This has reflected different This prohibited contracts or conspiracies to restrain trade or, in the words of a later act, to monopolize commerce. In the early 20th century this law was used to reduce the economic power wielded by so- called "robber barons", such as JP Morgan and John D. Rockefeller, who dominated much of American industry through huge trusts that controlled companies' voting shares.