LABRST 1C03 Lecture Notes - Lecture 2: Informal Sector

24 views1 pages

blueswan303

3 May 2016

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

A type of economics system- a way that we organize production and distribution of goods in society has an effect on everyday life experiences (how and what we produce/consume/how we relate to each other) Most people work is performed by people who do not own they company they work in or what they produce. Capitalism: a type of economics system- a way that we organize production and distribution of goods in society has an effect on everyday life experiences (how and what we produce/consume/how we relate to each other) Not something that always existed nor will it always exist. Profit/surplus value: extra money that companies make from selling their product. Selling it for more than it costs to produce a product. The richest 2% of the world"s population covers more than half the world"s wealth. The richest 10% of the world"s population owns 85% of the world"s wealth. Half of the world"s population owns barely 1% of the world"s wealth.

Related Questions

Need help revising, and recommendation for a conclusion.

Throughout this paper is my understanding of what I have learned in class chapters 1-4, expressing my understanding and opinions. Economics is the study of how we deal with scarce resources. Microeconomics specially deals with business in the home country exclusively. This type of economics affects small businesses in the home country only. On the other hand, macroeconomics concerns our national welfare concerning trade and international business.

I believe that many things affect our economy on a microeconomics level. Things such as our understanding of our country in reflection to the world are very important. That is why we study ourselves before we study the macroeconomic principle of the world. Understanding ourselves is what microeconomics teaches us. Working from the inside out. The world is a place where there are differences in our wants and what we get. That is what makes items scarce. That is what positive economics is. Positive economics deals with what is and what we have. The other type of economics is called normative statements. This deals with what we should receive instead of what is and deserved to some extent. It's our scarce resources that determine our allocation of resources and how we use our resources and time. This is where opportunity costs come in, giving up something to do something. A successful business or country never ignores opportunity costs. We must ensure that we have a comparative advantage instead of the absolute advantage. Our resources must be used to achieve maximum output. Comparative is met when we have fewer opportunity costs to make some certain products than the other person or entity.

My initial understanding was scarcity was oil potentially running out, but we have so much of it that you can always find more with techniques such as fracking. Now it's obvious to me, one of our most scarce resources is time. You cannot avoid the 8,760 hours in a year. I understand that people have unlimited wants but limited resources. Everything has a cost and we must make a choice as we don't have unlimited farms, factories workers, etc. scarcity forces choices and this ties in with opportunity cost, for every gun made, a theft from the hungry is made. The opportunity cost not being used to feed the poor, but to make guns. And I find it easy to understand no one can have everything choices must be made on benefits. If I'm going to school, imp giving up making cash, as I'm giving up money for an education, I value education more. Scarcity is also related to the invisible hand. As it's an achievement that leads free markets and capitalism through competition for scarce resources.

My understanding of the invisible hand is a person neither intends to promote public interest and does not know how much he is promoting it. Only intending on his own gain. Without being his intention a person can be lead by the invisible hand to do good for society by pursuing one's own self-interest. Going into equity and efficiency the invisible hand does ensure both equity and efficiency. People work in their selfish ways to maximize profit while also contributing to the economy as a whole. It can also be argued that as the invisible hand wants to ensure efficiency, it cannot guarantee efficiency, because it can fail to produce an efficient allocation of resources, which in turn lead to a market failure. It can also be argued that it can't guarantee equity because not everyone gets a fair price. The way I like to remember efficiency is with a real-life example, like a reduction in the number of workers needed to produce a particular good for a particular amount. Equity refers to the ownership interest in an asset, for example, if a person owns a house with a market value of $800,000 and owes $100,000 on the mortgage leaving a $700,000 equity in the home.

It can be predicted that if the price of beef increases - ceteris paribus-the quantity of beef demanded by buys will decrease. In other words, if the price of beef increases, then the quantity of beef increases, then the quantity of beef demanded will decrease because all things have to be equal. In-class lecture thought me all other things remaining the same. Economists use ceteris paribus to determine the effect of a factor when all other factors have been held the same and helps simplify the study and get a more refined data set.

Economists deal with many issues that pertain to assuring that both a countries domestic output is efficient and that there is an effective trade balance. This means that there are a balance and limit on the amount of imports. Also, this means home production must be able to meet export demands. There are many factors that affect the production of goods and their effect on shifting the production possibilities frontier. This involves evaluating every detail including knowing the products and any close substitutes and compliments. It also involves knowing how an action or other external force will affect demand. This is called price elasticity; Substitutes are products that can replace any given product or service. An example of this would be Coke and Pepsi. The presence of substitutes affects price elasticity because if there are other options, then any change to the price or quality of the product will cause a shift of the demand curve. O course, price is a huge reason why the demand for a product decreases or increases yet it doesn't shift the curve because of the price only. This price change will cause a domino effect that will end with the shifting of the demand curve because it will cause an increase or decrease in demand of the substitute good if the price change is either lower or higher respectively. This price change serves as a catalyst that will change people's desire to spend more money on a more expensive product and that will instead choose to buy the substitute good for cheaper or buy more of the desired product. The change in the price of actual products will not shift the demand curve yet the change of the price of substitutes will because it serves to change people's purchasing behavior. On the other hand, compliments serve to boost demand when there is a decrease in price. The use of complementary goods is dependent upon another product. An example of this would be hot dogs and buns. If the price of hotdogs decreases then, conversely, the demand for hot dog buns will increase because of this change in price. In this scenario, the decrease in price will cause a positive shift in the demand curve because of people's desire and willingness to buy more buns. This is an example of a demand shifter. There are a few other demand shifters. The shifters of the demand curve are changes in expectations, disposable income, price of substitute goods and complements, tastes and preferences, and population size and composition. Changes in income affect the demand curve because if income is lower then people tend to save any extra income instead of wasting it. Disposable income is minimized and spending is lower. This also causes people to see a perceived value of things and distinguishing between what is necessary and what is a relative luxury. The lower the income, the higher the saving and avoidance to spend. An example of this would be if someone needs to buy some medication and it is relatively expensive, that doesn't mean that someone won't buy the medication just because it is expensive. It is necessary. Other factors that contribute to spending and demand are having a price ceiling and price floor. Having a price ceiling is a limit on the price of the product this is a government-imposed idea that is meant to protect consumers from unfair pricing and other conditions that may be malicious or obscure. This affects demand because if there is a price ceiling there is a limit on profit on a unit-to-unit basis. The other factor is the price floor. This price floor was created to encourage competition and affect consumers' willingness to pay because sometimes this new price may be higher than the original price. This causes a negative impact on a product that has a less than wanted perceived value. Many factors contribute to economic prosperity and certainly do help assure that information is analyzed and implemented into an economic and business plan.

limejellyfish231

Part 1.Choose the correct answer of the following:

1.In a market economy, economic activity is guided by

a.Self-interest and prices

b.The government.

c.Corporations.

d. Central planners.

2. Which of the following decisions must be made by all economies?

a.How much to produce? When to produce? How much does it cost?

b.What to produce? How to produce? For whom to produce?

c.What is the price? Who will produce it? Who will consume it?

d. None of the above

3.Since the resources used in the production of goods and services are limited, society must:

a.Reduce the use of those resources

b.Try to get more resources

c.Make choices about how to use resources

d.Focus on their most abundant resource

4.Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?

a.Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.

b.There is no such thing as a free lunch.

c.People buy more when prices are low than when prices are high.

d. No matter how much people earn, they tend to spend more than they earn.

5.If real GDP increased by 2 percent, then

a.Government spending increased by 2 percent

b.The price level has increased by 2 percent

c.Real output/production has increased by 2 percent

d. The increase might have been caused by an increase in the price level or output, but we cannot tell for sure

6. Which of the following would show an efficient economy?

a.Uses the least costly amount of resources available

b.Has a small amount of people who do not work

c.Resources are used to make the most goods and services possible

d.None of the above

7.What is the type of unemployment that occurs when people take time to find a job?

a.cyclical

b.frictional

c.Disguised

d.structural

emeraldoyster872

Comments on this, i need a paragrapgh on comments abaout this...

Abortion keeps being a controversy because both sides of the spectrum have valid points. The side that is prolife it right about abortion being the termination of an organism. Their believe system states that murdering human being is wrong and since an unborn child is still a human child, then by default this should be condemned as a wrong thing. They also say they are helping the woman themselves because abortion can have âthe risk of breast cancer in those who had experienced an induced abortion was 50% higher than among other womenâ however the same study states âthe results across all epidemiologic studies of this premise are inconsistentâboth overall and within specific subgroups. The risk of breast cancer should be re-examinedâ. This means we should not jump in to conclusion because more studies need to be done before accepting something as fact. The side for pro-choice states that a woman should have the choice to make her own decision no matter if it is a good or bad decision. A decision that will change her live completely and most of the time make it harder for a woman to get ahead in life.

I am pro-choice, not because I like terminating live, I am actually pro-live of any type of organisms not just humans, but because woman who phase this problem should have their reason or really are not prepare to have a baby in a modern society, and as Mack T Brown said âThe value of a self-represented future resides within the person herself, as a feature of a richly complex mental life". Both sides of the argument go to the extreme to explain their case pro-choice and give the example of a raped woman. Pro-live give the example of that a baby is always a good thing. Both acceptable, however most woman are not in this spectrums, an example that is more relevant is a woman who does not have the emotionally and or financial maturity to make the choice that is to have a child. Physically a girl is ready to have a child when her menstrual cycle begins that is usually around 13. Most people would agree that a girl of that age will not have any type of maturity to take care of even herself less a child. Letâs not go far letâs say a girl of eighteen years old getting out of high school, she may have a rare emotional maturity at that age to have the child but in todayâs society impossible without any help from family members to take care of that child. How many hours will she work? How will she take care of the child? How will she go to school to better herself for the future to come? These girls that are asking themselves if they should have an abortion is not because it is something they would like to do, it is a hard decision to postpone taking that live changing decision before they are ready to do it and not be a burden in society.

The current abortion law is strict, so abuse of the law will be very hard to do. In the third trimester a woman would need 2 signatures of two physicians to be able to do an abortion. I personally think that this is great this way we can assure that there is no negligence from any party. The part of the law I do not agree with is that the law says that if during the abortion the baby is born alive they need to offer emergency services. This defeats the purpose of an abortion that as harsh as it sounds it is to terminate the pregnancy cycle before time.

LABRST 1C03 Lecture Notes - Lecture 2: Informal Sector

Document Summary

Get access

Related Documents

LABRST 1C03 Lecture Notes - Lecture 1: Absenteeism, Blue-Collar Worker, Protestant Work Ethic

LABRST 1C03 Lecture Notes - Lecture 9: Kabbalah, Antonio Gramsci, Wage Labour

LABRST 1C03 Study Guide - Midterm Guide: International Labour Organization, Informal Sector, Labour Power

Related Questions