http://www.guardian.co.uk/science/2005/mar/30/environment.research

Had just finished reading the article in the link above and oh my, how devastating to see the world suffering from all kinds of human activities. " Two-thirds of world's resources used up." Wow, how serious is that. I started wondering how our future will be like. Will there be enough resources in the years to come. How about our future generations? Are they able to enjoy the benefits the world has to offer?

There are a few issues brought up in the article that is causing harm not only to the world but also humans and animals. Those issues are deforestation, global warming and climate change and extinction of animals. 

In economics, we learn about scarcity. I think this article truly reflects on scarcity where humans desire unlimited wants and without careful planning before producing a good, this causes the world's resources to be "used up" so quickly. 

Deforestation. Forests around the world are now facing deforestation. Deforestation occurs because humans population are increasing and trees are then chopped down for building new houses. If it continues this way, can you imagine the world in years to come? NO.MORE.TREES.. How serious is that? Trees are our main source of oxygen and if there were no more trees, where are we getting our oxygen from? Humans will be having a shorter lifespan as we live in a world full of pollution. Humans will be suffering from respiratory or cardiac illnesses when inhaling those polluted air.

Deforestation indirectly leads to the next issue which is global warming and climate change. Global warming is when greenhouse gases (carbon dioxide gas) traps heat from the sun in the earth's atmosphere thus causing the climate change to increase. Global warming causes icebergs at the North pole to melt. The melting of icebergs is a threat to polar bears because it is their home. Global warming also causes sea level to rise. Rising sea level can be frightening and dangerous because it causes islands to disappear underwater and the death rate might increase. All these causes a change in climate is linked to the deteriorating of humans health. 

The next issue is extinction of animals. Global warming and deforestation are the reasons why animals extinct. Animals lost their habitats and become endangered species. Examples are giant pandas, Javan rhinoceros and tigers which are losing their habitat due to deforestation. Clownfish, polar bears, arctic fox, ringed seals are a few endangered species due to global warming. 

All these issues need to be controlled to sustain a peaceful planet for humans and other living things to live in. Before any good is produced, a careful planning needs to be carried out taking into consideration the externalities and what are the negative externalities that will affect the third parties. 

DATA AND ESSAY WRITING

We had an essay test the other day and yessss, i did so badly ): Definitely need more practice and learn to apply the things learnt into the essay well. I identified some of the mistakes I have done in the essay and I hope to never repeat those mistakes again

My mistakes in the essay

1) Graph not explained
- I had a graph drawn out in my essay but I did not explain the graph. A graph has no mouth so it has to be explained so that the examiners can understand the point of the graph being there. 

2) Poor explanation
- I think what I did most badly was my explanation. It was so vague and everything was so broad and wasn't explained well enough.In part (a), I did not prove how a change may alter the amount of consumer surplus which I think is an important key to gain higher marks and not just saying out the main point and assuming the examiners would understand what I am trying to explain


How to make my essay better

1) Make it simple and clear. 
-My teacher always says its not the quantity of your essay that counts but the quality. No point beating around the bush when writing an essay just to make it longer as this will only cause  confusion to the examiner reading your essay

2) Be more detailed
- I definitely need to work on my explanation skills and explain my essays in a more detailed way. Why write an essay that only you can understand and leave others thinking about it

I'll writing better for my next essay and hopefully I don't repeat those silly mistakes again

ESSAY 4

a) Explain, with examples, the significance of a value of a good's cross-elasticity of demand in relation to its substitutes and complements. 

Cross-elasticity of demand (XED) measures the responsiveness in quantity demanded of a good as a result of a change in the price of its related goods. The value of XED may be positive or negative and the sign is important since it tells us what the relationship between the two goods in question is. 

Substitute goods are the ones with positive value of XED. When the price of product X falls, demand for product X increases causing the demand of its substitute, Y, to decrease. There is a decrease in quantity demanded for good Y and an increase in quantity demanded for good X therefore a positive XED value is produced. For example, Iphone and Samsung. Assuming they are a close substitute. It will produce a higher positive value than products that are not so close. If the price of Iphone increases, consumers will switch over to Samsung causing the sales to increase. 

Complement goods have a negative value of XED. When the price of good A falls, the demand for good A increases and its complement, good B will also increase. There is an increase in good B and a decrease in the price of good A thus a negative XED value is produced. For example, mobile phones and sim cards. Assuming they are a close complement. It will produce a lower negative value than products that are not so close. An increase in prices of mobile phones may lead to a significant fall of quantity demanded of it and so a large fall in the demand for sim cards. 

b) Discuss the usefulness to businesses of a knowledge of price elasticity of demand and income elasticity of demand.

Price elasticity of demand (PED) measures the responsiveness of the quantity demanded of a good to a change in its price. PED is useful to a business because businessmen will be able to know whether they should increase or decrease their prices for a good so that they will gain profits and earn more revenue. 

For example, if the product is and elastic good, businessmen can decrease the price of the good because a small decrease in price will lead to a big increase in quantity demanded. The total revenue will increase. Businessmen should not increase the price of an elastic good  because it will result in a big decrease in quantity demanded and total revenue will also decrease.

If the product is an inelastic good, businessmen can increase the price of a good because an increase in price causes a small decrease in quantity demanded and therefore total revenue increases. Businessmen should not decrease the price of an inelastic good because it only affects a small increase in quantity demanded and therefore a decrease in total revenue

Income elasticity of demand (YED) measures the responsiveness of the demand for a good to a change in income. During an economy boom period, people tend to buy more as they can afford more of it. This applies to normal goods such as cars. Firms producing normal goods will tend to increase their production. 

For some goods, during an economy boom, when price increases, there is a decrease in quantity demanded because people can afford better. People start switching from inferior goods that they had been using to superior goods. For example, people who always carry inexpensive bags will tend to change to using branded handbags when income increases. Firms producing inexpensive handbags during an economy boom period should cut down on their production while firms producing branded handbags should increase production. 

During an economy downturn, people will give up on luxury goods such as the branded handbags and carry inexpensive handbags. This time, firms producing branded handbags should cut down on production while firms producing inexpensive handbags increases their production.

PROJECT

So i guess this will be my first ever project to be done in high school. So basically our main aim on doing this project is to learn more about the theory of demand. We have been told by our economics teacher to do a research on a housing development project on the factors affecting demand and factors affecting supply of that particular housing project. We then have to calculate the ped, yed and xed of the project and lastly make an evaluation. 

After being told what we were suppose to do for our projects, many thoughts came running through my mind. I mean its definitely our first time working together. Will it turn out well? Were we able to complete them in time? It's the night before our presentation, I'm glad to say that we're almost done with the project. 

Everyone has their different criteria when deciding to buy a house. Either its within area with  easy access to the public transportation (Lrt, bus stop), single storey house?, double storey house? We call all those factors affecting demand. There are many other factors evolving when buying a house. One of the most important factor is the price. Factor of affordability. We did a survey surveying buyers on what they think is most important when buying a house. Majority chose factor of affordability being most important. What's the point if he/she sees her dream house but can't afford it. They will have to settle for another house that is within their budget. The availability of loans are one of the factors as well which is also the complement to the housing project. 

After getting to know on factors affecting demand of a housing project, we now talk about factors affecting supply. I always had this simple mindset that it is easy to start a new housing project. Architects designing the plan, contractors start building and taaa-daa, a brand new house ready to be sold. Guess i was wrong. There are so many things to be done before getting a property built. An important factor would be the customers preference. If this factor was unknown and when the property has been without meeting the customers preference suppliers will face a hard time selling them.

There are so many properties being built. Land, labour, capitals. All these are important resources that we need before being able to build a house. Developers have to know the price range for the houses, whether they would like to build a middle priced housing project or a lower priced housing project. This is important so that developers does not exceed the limit for their cost of production. 

Our housing project,  Kingsley Hills is a luxury good which is an elastic good. Developers should decrease the price of the houses so that more customers will buy it. However, in the real world, developers would not decrease the prices simply because they will suffer a loss as the cost of production has been high. 

I can say that I've absorb some knowledge throughout this project. It made me understand better on this chapter regarding theory of demand. Carrying out this project together with my classmates made things easier to understand and of course, learning became funner. Oh yes, and from now on, at least I'll know how troublesome and all the many decisions i will be making when buying my own house in the future =p 

Essay 3

Explain how an equilibrium price for a product is established in the market and how it may change

Equilibrium price is a price that buyers are willing to pay is same as the price that the sellers are willing to accept and all goods sellers want to sell are cleared. 

At Price P1, the quantity Q1 is both demanded and supplied. The market is in equilibrium at price P1 since the amount of kiwi that consumers wish to buy at that price is equal to the amount of kiwi suppliers wish to sell at that price. 

Before every price equilibrium is achieved, producers will do price and quantity of stock adjustments.

If producers set the original price of kiwi at P1, the quantity supplied of kiwi is at Q1 but the quantity demanded of kiwis are at Q2. A shortage of kiwis occurs. Producers then increases the price from P1 to P2. The quantity demanded decreases from Q2 to Q3 when price increases. Quantity supplied is also at Q3. A price equilibrium has been achieved. 

When producers set the price at P1, the quantity supplied is at Q1 but the quantity demanded is at Q2. This causes a surplus of kiwis. Producers will then decrease the price from P1 to P2 . The quantity demanded increases from Q2 to Q3 when price decreases. The quantity supplied at price P2 is also at Q3. A price equilibrium has been achieved. 

The established equilibrium price in a market may change over a period of time. When consumers changes their preference in fruits, for example, consumers prefer apples that year and leads to a decrease in quantity demanded for kiwis. The demand curve will shift from D1 to D2. At P1, the quantity supplied at quantity demanded is at Q1. When the demand curve shifts from D1 to D2, at P1, the quantity demanded is at Q2 but the quantity supplied is at Q1. This causes a surplus of kiwis from Q2 to Q1. Producers will then have to do some price and quantity of stock adjustments to find its new price equilibrium. When the price decreases from P1 to P2, the quantity supplied and quantity demanded are both at Q3. The equilibrium price has been achieved. 

Essay 2

Explain how microeconomic and macroeconomic issues may be represented using production possibility curves

Production possibility curve is a curve thats shows the various possible combinations of two goods a country can produce if all its resources are fully utilized. MIcroeconomics is the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others. An example of microecomics that may be represented using ppc is opprtunity cost which is the next best alternative forgone.

The country is producing 10 units of T-shirt and 2 unit of Jackets. If the  wants to produce 10 unit of Jackets, it can only afford to produce 4 units of T-shirts. The opprtunity cost of producing 10 unit of Jackets is 6 T-shirts. In other words, the country has to give up producing 6 units of T-shirts to produce 10 unit of Jackets.

The next microeconomy issue that may be represented using ppc is scarcity. Humans have unlimited wants but there is only limited resources. 

At point Z, it is outside the ppc and this point is unattainable because there are not enough resources in that country to produce 10 units of capital good and 6 units of consumer goods

Macroeconomics is focused on the movement and trends in the economy as a whole. An example of macroeconomic is  recession. 

If an economy moves from point A to point B, the economy suffers a recession. Recession causes unemployment. At point P, everyone is employed but at point B, there are some unemployment occurring 

REFLECTION 1

Economics is so far so good to me. I'm not sure about others but I actually find econs the most interesting subject so far. Well, that is for now. I know things are still in its basic and there are more to learn and things might even get tougher. I do hope I'll be able to cope well but one thing I know for now is that I sure am looking forward to more of the new things I'll be learning in Economics as time comes.

Okay let's see, we have learnt about scarcity which is the basic economic problem that arises among humans. Humans have unlimited wants but there are only limited resources available. Humans want all  the goods and services but sadly the resources/ FOP's  ( Factors of production ) are limited. The FOP's are land, labour, capital and enterprise.

After getting to know about what scarcity is, this brings us to opportunity cost. It is the next best alternative forgone. It is when humans have to give up something in order to get another. All economic goods have an oppurtunity cost thus they have an economic value towards it. Free goods on the other hand does not have an opportunity cost as the good is not scarce and will not have monetary value to it.

Then, there is the production possibility curve/ frontier ( PPC/PPF). The ppc shows us what we are about to give up in order to achieve another. In other words the ppc is used to illustrate the opportunity cost.

We then moved on to the 3 economic systems. I was absent from class when the lecturer was teaching on this subtopic. To be honest, I was a little lost when I got back. After reading through the notes and doing some research, here is what I have understood on the 3 economic system. We begin with the free market economy.

In a free market economy, economic resources are owned largely by the private sector with very little state intervention. The allocation of resources is via the price mechanism. Consumers are the one who indicate what goods they want and the price willing to be paid on those goods.

Next in line is the planned/command economy. All the decisions are made done by the central planning board known as planning mechanism. Planners decide on what goods to produce, how to produce and for whom the goods are produced for.

Lastly, the mixed economy. In my opinion, I find the mixed economy the best because economic resources and owned are own and controlled by both private and public sectors.

We then move on to specialisation. Workers specialize on a specific task that they are best in to produce goods and services. Workers have to give up performing other tasks which they are not as skilled, leaving them to others who are better suited for them. Specialisation by individual is known as division of labour. Specialisation increases output as workers do not waste time shifting among tasks. The downside of specialisation is that workers might get bored doing the same job after a long period of time. Besides, machinery may eventually replace the workers and this may lead to unemployment.


And finally, we come into $$$. MONEY. Money has four functions. They act as a medium of exchange, unit of account, a store of value and a standard deferred payment. Imagine a world without money, all transactions would have to be conducted by barter. The barter system is not the best choice because exchange can only take place there is a double coincidence of wants between two transacting parties.Money effectively eliminates the double coincidence of wants problem by serving as a medium of exchange that is accepted in all transactions.

Money also function as a unit of account. It is used to establish the value of all goods and services. Besides, money also acts as a store of value. People save money for future use therefore money must hold its value over time. Money may not even be the best store of value because it depreciates with inflation. However, money is more liquid than most other stores of value because as a medium of exchange. Finally, money can act as a standard deferred payment. Creditors are willing to allow you to defer your payments because they are assured that at the end of the credit period, they will be receiving money which is something of worth.