...What is Economics? From my research, the definition of Economics is varied between economists. According to Adam Smith who wrote the book in 1776 entitled Wealth of Nations, Economics is a science of wealth. Another early definition is by Alfred Marshall’s in his book, the Principles of Economics. He defined economics as the study of mankind in the ordinary business of life; it examines the part of individual and social action which most closely connected with the attainment and with the use of the material requisites of well-being. But most contemporary definitions of economics involve the notions of choice and scarcity. This is how I have found Lionel Charles Robbins (22 Nov 1898 – 15 May 1984), a British economist and Head of Economics Department at the London School of Economics. His book, “Nature and Significance of Economic Science” (1932), he defined, ‘Economics is the science that studies human behaviour as a relationship between ends and scarce means which have alternative uses. According to his definition, Economics focused its attention on a particular aspect of human behaviour, that is, behaviour associated with the utilization of scarce resources to achieve unlimited ends (wants). Scarcity limits us both as individuals and as a society. There are 3 main aspects in his definition, which are: 1. ‘Ends’ 2. ‘Means’ 3. ends and scarce resource provides the foundation of economics 4. ‘Scarce means have alternative uses’ 1. ‘Ends’ are the wants. Humans wants...
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...U.S. Economic Struggles Kristen Rose Kaplan University September 6th, 2013 CM107 U.S. Economic Struggles I. Introduction A. Increasing unemployment rates B. Lack of jobs available in the U.S. II. What is causing the unemployment rates? A. Outsourcing to other countries is cheaper. B. Advanced technology is taking over jobs. C. Lack of retraining employees. III. What could we do to change the unemployment crisis? A. Create a better education system. B. Buy items that are made in the U.S. C. Producing what we need to sustain ourselves. IV. Conclusion We need to rely on the United States and the people in it. By doing so they will pull themselves out of debt. By relying on other countries to supply the U.S. with items they can make themselves, it puts more money in other countries pockets rather than back in to the U.S. The U.S. economies are struggling more and more every year. “Over the past three months, the U.S. economy has averaged 148,000 new jobs per month. That’s actually a slower pace than the previous six months. Yet the unemployment rate keeps dropping precipitously, reaching 7.3 percent in August- the lowest since December 2008” (Brad Plumer, 2013, para. 3) The lack of jobs available in the U.S. is becoming a big and concerning problem. Without jobs people in the U.S. are unable pay their bills. Without jobs the U.S. will enter into a more difficult financial hardship. “ The U.S. economy is currently experiencing...
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...Making tradeoffs due to economic scarcity and that every society faces difficult choices do to scarcity. There are many factors involved in the high prices of cancer drugs, some of the those factors are listed below: Research and deployment are a major factor to consider. It cost drug companies a lot of money to research and test new drugs. A single clinical trial can cost $100 million at the high end, and the combined cost of manufacturing and clinical testing for some drugs has added up to $1 billion. The government’s involvement in the cost of cancer drugs is another factor. The reason why from an economic standpoint that these drug firms can in fact charge prices that are above their marginal costs is because they have a protection for a certain number of years for the formulation for their particular drug. It’s not for a particular amount of time that generics can be offered in the market, so the drug firms are a monopoly. They’re the only firm that can offer that particular drug. Monopolies have more market power and can charge a higher price for that drug. Healthcare has its role in the high prices of cancer drugs. The fundamental economic problem lies in the limits as to how much we can spend on healthcare, and this scarcity of resources requires choices. For a given set of laboratory services, there is a defined cost. This cost is further complicated with what we can and will spend to meet these services, taking into account the influence of insurance coverage. We...
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...here are conflicting views on how the global financial crisis is affecting medical tourism. The view expressed by organisations such as the Medical Tourism Association is that the "...with the economy and the credit crisis, more people are waking up and paying attention (to medical tourism)." The harsh reality may be somewhat different. BusinessWeek reports that "...in some medical tourism hotspots, formerly booming hospitals are seeing empty beds." The MD of Parkway Hospitals in Singapore, "expects the foreign patient numbers to stabilise after dropping 10 per cent". Whether the credit crunch encourages more people to consider travelling abroad for treatment remains to be seen. People are short of cash, unable to borrow and are delaying expenditure on house purchases, cars and other major expenditures. Healthcare is not immune to this. Although in the last global recession, healthcare was less affected, the likelihood is that people who might have considered medical tourism may decide to postpone their expenditure. Areas likely to be affected most are those “non-urgent”, discretionary treatments such as cosmetic surgery. In countries where medical tourism is influenced by waiting lists, patients may decide to hold out for free treatment in their own country rather than go for the paid for, immediate treatment available elsewhere. In the USA, the story may be different, as the financial crisis puts pressure on health insurers and employers to find ways to cut rising healthcare...
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...Topic 2: “The solutions to economic problems are regional rather than global” The topic asks you to debate whether the problems the world faces are better dealt with regionally, or globally. It wants you to look at the strengths and weaknesses of global institutions and compare them with the strengths and weaknesses of regional ones. Examples of a regional organization are the European Union, NAFTA, ASEAN and Mercosur. Examples of global organizations are the United Nations, World Trade Organization, World Health Organization, International Labor Organization and so forth. Me thanks man what i am thinking is that i should go for both like if china is involved in emissions so it harms surrounding nations also so it need global solutions am i going in right direction http://www.un.org/apps/news/story.asp?NewsID=24558&Cr=peace&Cr1=security The everyday economic activities of a society consist of number of activities linked to the production and consumption of goods and services. There is always a demand for goods and services which arise out of the human wants. Economic problem is one of the elementary economic theories in any economy. Economic problems occur as the resources are limited or scarce and our desire for goods and services to consume is greater than our ability to produce those goods and services. Thus it becomes difficult to satisfy all human wants or needs creating economic problems. Economic problems fall around the question of how...
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...instability due to Musharaf’s position as president, delay in restoring judiciary and resultantly withdrawal of PML (N) from the alliance leaving behind ‘dead’ ministry of finance. In contrast the present government is not showing strong will to cope with the situation. Though some Positive Measures. To end Load Shedding till 14th August, 2009, Benazir income Scheme programmed, Distribution of Land in Sindh, tight Tariff System against luxury items 2-Suicide attacks in the industrial cities-fear among people, disinvestment and maximum outflow of capital, especially in Dubai stock exchange crash. 3-Foreign investment in 2007 was $ 700,63.5 million but in 2008 only $329 million. 4-Soaring oil prices due to increased demand from growing economics of China and India, Iraq crisis, Iran holding its oil export, devaluation of Dollar after Iraq invasion and limited supply by OPEC, refusal of Saudi Arabia to enhance its oil supply....
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...Wall Street Financial Crisis Student’s Name Institution Date Paper Draft Introduction Background of the crisis. The effects and impact of the financial crisis. Results of preliminary reports. Sociological perspective of financial crisis The aspect of sociology in financial crises Senate’s investigative report The key players and their roles Why the workers remained unknowing The sociological explanation of the unpredictability of the crisis Conclusion Introduction The Financial Crisis of 2008 was described by economists, analysts and even sociologist as the worst and most devastating economic crisis since the 1930s Great Depression. It threatened a total collapse of huge financial institutions, banks bailout by governments, and major downturns in security's exchange around the world characterized this dark economic year. The housing sector in many areas in the world t also suffered, with the result being forced and unnoticed evictions (Coxe, 2005). Many people lost their jobs and there was a prolonged unemployment leading to family crisis and debts. Key businesses including banks failed and there was a huge decline in the consumer profits. The small unsecured financial institutions suffered the worst ever insolvency resulting from bank runs that characterized this period. The declines in consumer wealth were estimated in trillions of U.S. dollars. All these activities took a very short active phase, manifested as a liquidity crisis, and dated from August 9...
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...Economics Notes ****The Economic Problem |What Do These Notes Cover? | |To have a look at the mind map for this resource, please follow this link. | |If you would like to listen to these notes as an audio recording, please follow this link [2MB]. | Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version. [pic] • Scarce Resources: o Land ▪ Rent o Labour ▪ Wages o Capital ▪ Interest o Enterprise ▪ Profit o Uneven Distribution • The Science of Choice (linked to Scarce Resources) o Value o Utility o Sacrifice ▪ Opportunity Cost How do we sum up the basic economic problem? We all suffer from it and spend most of our lives trying to resolve it. Essentially, the economic problem stems from the fact that as humans, we have unlimited wants and needs. A need is something that can be seen as being essential to survival, such as food, water, shelter and warmth. A want is something that we would like to have but which is not essential to survival - a car, the latest version...
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...The focus on this page is about the water scarcity problem due to drought in Tampa Bay region and how the Swiftmud and Tampa Bay Water could allocate the available resource to the public both economically as well as empathetically. Authors Robert L. Beekman and Brian T. Kench, have used Friedrich Hayek’s ideas to construct a rational economic order. Friedrich has stressed on few points in his book “The Use of Knowledge in Society”, on how to solve the economic problems and how to make the best possible decisions with the given information, which we will see in this paper. The economist Friedrich Hayek has explained in his papers on how to find an economic order with a few considerations and assumptions. According to him, there is a solution to all economic problems if we possess all the relevant information, if we can start from a given system of preference and if we had the complete knowledge of available means. From his view the mathematical equations, which is used to solve the problem gives the best emphatic solution but does not solve the economic problem of the society. This is because the economic calculus never gets the data from the macro level but from a single mind. And this in return will help us on how to allocate the given resources but not how to secure the best of the resources. One of the major points that Friedrich talks about in his paper is knowledge transfer and how the inefficiency in the transfer could hurt the economy in a long term. The “planning” is...
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...Analysis of the Trade Impacts of the Global Recession of 2008 International Economics Oliul Islam (352949) Table of content 1. Introduction 2. The Recession 3. The Recession * Poor risk management * Over reliance on the Bull market * Trade Imbalance and debt bubbles * Lack of Transparency * Misguided information from the rating agencies 4. Effects on global trade * Trade and Industrial production * Unemployment * Financial market * Travel * Insurance * Small business lending * Pollution 5. Global responses 6. Policy recommendations 7. Risks 8. References Introduction In 2008, the world experienced a major financial crisis which was rooted from the US housing market; moreover, many economists considered it as one of the great recession since the Great Depression in 1930s. After posing a huge affect on the U.S economy, the financial crisis expanded to Europe and the rest of the world...
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...Recession Looms for the U.S. Economy in 2007 z 1 Introduction The recovery that began in November of 2001 is likely to come to an end in 2007. The main factor pushing the economy into recession will be weakness in the housing market. The housing market had been the primary fuel for the recovery until th e last year, as there was an unprecedented run-up in house prices since 1997. With prices now he aded downward, construction and home sales have dropped off by almost 20 percent against year ago levels. Even more importantly, borrowing against home equity, which had been the main factor fue ling consumption growth, will plummet as many homeowners lack any further equity to borrow against. The result will be a downturn in consumption spending, which together with plun ging housing investment, will likely push the economy into recession. The economy will see a subst antial net loss of jobs, with nominal wage growth slowing as the labor market weakens over the course of the year. Overview This recovery has been fueled to a very large exten t by a housing bubble, just as the second half of the nineties cycle was fueled by a stock bubble. Sin ce 1997, average house prices have risen by more than 50 percent, after adjusting for inflation. Hist orically, house prices have moved at approximately the same pace as the overall rate of inflation. 1 This unprecedented run-up has not been associated with extraordinary population or income growth...
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...normal case as each country will have the advance technologic to predict and know before the crisis happened. Besides that, most of the country will face a crisis because it is a flow. From my own view point, a crisis can bring lots of advantages to the human being and the country. Furthermore, it is a ways which can let a country reborn and restructure. Firstly, in an economic crisis it is an opportunity for the investors because most of the investors will buy or get a cheaper share at the time when economic is downturn. Besides that, the investors will earn a lot of money and income if they can hold the share until the economic get well or reach the peak season. In addition, the investors also can get a good return on their investment. Subsequently, economic crisis is an opportunity for the environment as it can reduce the pollution. Generally, in the period of economic downturn, there is lack of business transaction can make for each industry. For example, Airlines Company will reduce the number of flying because at the time of economic crisis less people will spend their money on travel. This problem will directly reduce the air pollution and save the environment. Besides that, people who drive the car will also try to spend less on the petrol. Lastly, in a financial crisis will force the human being to change their spending habit as people virtually like to spend their money on the luxury and unnecessary goods. Especially to those people who prefers to buy the brand...
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...Table of content I. Introduction to credit crisis and Bank CEO Incentives…………………….2 II. Other factors of credit crisis………………………………………………3-4 a) Housing bubble b) Interest rate and inflation c) Unemployment III. Conclusion…………………………………………………………………..5 IV. References……………………………………………………………………6 In my following essay, I will try to explain clearly about credit crisis and Incеntivеs оf Bаnk Chiеf Exеcutive officеrs are nоt mаjоr fаctоr in crеdit slump. At first, lets to еxplаin what are сredit сrisis and its rоle in еcоnоmy. Making a hard to obtain financing to debtors by shortening of funds in the credit market is called as credit crisis. It is because of limited assets obtainable for lending and the price for assets for borrowing are increases so fast. Creditors don’t want or can not to lend an asset again, because they meet to losses on previous loans. This is caused by non-payment by debtors and defaults on loans, which decreases their value. In this situation, banks are trying to recover expenses and to return all money that they lost by selling debt. Then, if prices fall, the bank suffers losses. They cannot borrow a huge amount of funds if capital reduces. Also, if the banks take on more risk in the market, they will increase interest rates on loans to reward for this risk. It will bring to increasing the price of borrowing, but also will bring to decreasing the borrowers. In general, reducing the liquidity of capital and reducing...
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...much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing 'imperfect' institutional arrangement.” This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements. Comparative institutional analysis focuses on the rules people operate by and is defined as the assessment of feasible organizational or policy alternatives. Comparative institutional analysis goes conjointly with robustness, which is the normal standard we apply. Robustness asks questions such as, ‘what set of rules produces better outcomes in bad circumstances?’ and ‘how well does it keep the really bad things from happening?’ Mark Pennington on Robust Political Economy, draws on two problems: the knowledge problem and the incentive problem. This goes hand in hand with the economic calculation problem proposed by Ludwig von Mises and later expanded by Friedrich Hayek as well as the comparison between private versus public property in economics. All economic and political systems must challenge both knowledge problems and incentive problems. When there is a knowledge problem, one has the proper resources but does not know how to use them in order to climb up the ladder of success. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem, which remains, is...
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...The Reader’s Digest condensed version of The Road to Serfdom The Road to Serfdom FRIEDRICH A. HAYEK The condensed version of The Road to Serfdom by F. A. Hayek as it appeared in the April 1945 edition of Reader’s Digest The Institute of Economic Affairs First published in Great Britain in 1999 in the ‘Rediscovered Riches’ series by The Institute of Economic Affairs 2 Lord North Street Westminster London sw1p 3lb Reissued in the ‘Occasional Paper’ series in 2001 This condensed version of The Road to Serfdom © Reader’s Digest, reproduced by kind permission The Road to Serfdom is published in all territories outside the USA by Routledge. This version is published by kind permission. All other material copyright © The Institute of Economic Affairs 1999, 2001 Every effort has been made to contact the copyright holders associated with this edition. In some cases this has not been possible. The IEA will be pleased to include any corrections in the next edition. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. A CIP catalogue record for this book is available from the British Library. isbn 0 255 36530 6 Many IEA publications are translated into...
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