留學生經濟學理論的相關essay

經濟學理論和不同類型
 

任務一
 

經濟學是對個人和社會選擇使用自然界和前代所提供的稀缺資源的研究。在此定義中的關鍵字是選擇。經濟學是一門行為或社會科學。
 

創業是人的再次努力過程，企業家是風險承擔者。雖然他們使用管理能力，但他們比經理更重要。創業者獲得利潤或承擔其事業的損失。創業是集生產土地，勞動力和資本及其他因素于一體，并轉換成所需的輸出組織力量。輸出成為資本品或消費品，但也通過消費品生產，以滿足欲望。
 

稀缺意味著人們想超過他們本身期望的那部分。稀缺性使得個人或社會受到限制。至于個人，有限的時間，有限的收入，有能力使我們做的和我們可能會喜歡做的。作為一個社會，用有限的資源，如自然資源，機械和人力用在可以生產的貨物和服務的最高金額。

 

Various types and theories of Economics

 

Task 1

 

Economics is the study of how much individual and societies choose to use the scarce resources that nature and previous generation have provided. The key word in this definition is choosing. Economics is a behavioural or social science.

 

Entrepreneurship is human effort again. Entrepreneurs are the risk takers. They are more than managers, although they use managerial ability. Entrepreneurs reap the Profit or bear the losses of their undertakings. Entrepreneurship is the organizational force that combines the other factors of production like land, labour, and capital and transforms them into the desired output. The output become capital or consumer goods, but alternatively consumer goods are produced to satisfy wants.

 

Scarcity means that people want more than they desired. Scarcity makes limitation both as individual or as society. As with individuals, limited time, limited income and ability keeps us doing and done with that we might like. As a society, with limited resources such as natural resources, machinery and manpower used a maximum amount on the goods and services that can be produced. People choose which their desires they will satisfy are and which they will not satisfied. Either as society or as individual chooses more of something else. Sometimes economics is called the study of scarcity because if scarcity did not force people to make choices, economics activity could not exit.

 

When there is scarcity and choice, there are costs. The cost of any choices is the option or options that a person gets some. For example: if you were given an option of playing a computer game by reading this text, the cost of reading this text, you would have received playing the game. Mostly economics is based on the simple idea that people makes choices by comparing the benefits of option B (and all of other option that are available) choosing with highest benefits. Alternatively, one can view the cost of choosing option A as the sacrifice involved in rejecting option B, and then say that one chooses option A when the benefits of A outweigh the costs of choosing A (which are the benefits one loses when one rejects option B).#p#分頁標題#e#

 

The Opportunity cost of a good is the quantity of other goods which must be sacrificed to obtain another unit of that good. Benefit, profit or value of something that must be given up to acquire or achieve something else. Every action, choice or decision has an associated opportunity cost.

 

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Opportunity cost measures the cost of any choice in terms of the next best alternative forgone. We make decision in our daily life, by making decision for our daily desires, it is often helpful to bring front the opportunity cost. Should I go to the party or not? First, it costs the price of a ticket to get in. when I pay money for something, I could give up the other things which I have bought with that money. Secondly, it cost two to three hours. Time is valuable for a student. I have examination next week and I need to study. I could go to watch a movie, instead of the party. I could join another party. I could sleep. Just with David, he must weigh the value of sun bath instead for more food or better housing, so I must weigh the value of fun, I may have fun at the party against everything else, otherwise, I might do with time and money.

 

Microeconomics is generally the study of individuals and business decisions and macro-economic looks at higher up country and government decisions.

 

Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by government. Microeconomics focuses on supply and demand and other forces that determine could maximize its production and capacity, so it could lower prices and better compete in its industry. For example, we might study why individual households prefer to bicycles and how producers decide whether to produce cars or bicycles. We can then aggregate the behaviour of all households and all firms to discuss total car purchases and total car production. Within a market economy we can discuss the market for cars. Comparing this with the market for bicycles, we may be able to explain the relative price of cars and bicycles and the relative output of these two goods.

 

Macroeconomics is the field of economics which studies about the behaviour of economy as a whole and just not specific firms or industries but entire industries or firms. It deliberately simplifies the individual building blocks of analysis in order to retain a manageable analysis of the complete interaction of the economy. It’s a wider phenomenon of an economy, such as GDP (Gross Domestic Product) and how it is affected by changes in unemployment, NI (national income) rate of the growth and price levels. For example, macroeconomics typically does not worry about the breakdown of consumer’s goods into cars, bicycles, televisions, and calculators. They prefer to treat them all as a single bundle called consumer goods. Because they are more interested in studying the interaction between houses hold purchases of consumer goods and firms decision about the purchases of machinery and buildings, because these macro-economic concepts refer to the economy as a whole.#p#分頁標題#e#

 

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While these two branches of economics appeared to be different, they are actually interdependent and complement one another. Since, there are many overlapping issues raise between these two major fields of economics. For example increasing inflation would cause the price of raw materials to increases for companies and in turn affects the price of the product would be charged to the public. The bottom line between these two fields of economics is that microeconomics takes up the bottom approach to analysing the economy while macroeconomics takes a top-down approach.

 

Regardless, both micro- and macroeconomics provide fundamental tools for any finance professional and should be studied together in order to fully understand how companies operate and earn revenues and thus, how an entire economy is managed and sustained. 

 

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Task 2

 

Demand is the quantity of buyer’s wishes to purchase at conceivable price.

 

Quantity demand is the amount of a product that a household would buy in a given period if it could buy all it wanted at the current market price.

 

Demand schedule a table showing how much of a given product a household would be willing to buy at different prices.

 

Demand curve in the economics the demand curve depicts the relationship between price and quantity demanded holds the other things constant and the amount of certain commodity is that consumers are desire to purchase at given price. Demand curve is the graphic representation of a demand schedule. Every individual consumer follows from the demand curve for all consumers. The individual demand of each prices are added together.

 

The demand curve shows the relation between price and quantity demanded, holding the other thing constant. In figure 2.1

 

Price(￡/biscuit)

 

DEMAND

 

0

 

200

 

0.1

 

160

 

0.2

 

120

 

0.3

 

60

 

0.4

 

80

 

0.5

 

40

 

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In figure 2.1 we measure on vertical axis prices of biscuit corresponding quantities demanded are measured on the horizontal axis. The demand curve plots the data and graph represents. The point A shows that 160 bars are demanded at lower prices of ￡0.10. The point B shows that 120 bars are demanded at a price of ￡0.20. By plotting all the point and joining them, we obtain the demand curve. In our example, this curve happens to be a straight line. It has a negative slope. Larger quantities are demanded at lower prices.#p#分頁標題#e#

 

Market demand curve is the horizontal sum of individual demand curves, since total quantity demand at any price is the sum of any quantity demanded at that price plus your quantity demand at that price.

 

The market demand curve is the sum of demand curves of all individuals in that market.

 

It is obtained by asking at each price, how much each person demands. By adding the quantities demand by all consumers at that price we obtain the total quantity demanded at each price, the market demand curve. Since, as price is reduced, each person increases the quantity demanded, the total quantity demanded must also increases as price falls. The market demand curve also slopes downwards.

 

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Firm is an organization that transforms resources (inputs) into products (outputs). Firms are the primary producing units in a market economy.

 

Long-run is the period long enough for the firm to adjust all the inputs to a change in conditions. In the long run the firm can vary its factory size, switch techniques of production, hire new workers and negotiates new contracts with suppliers of raw materials.

 

Short-run is the period in which the firms can make only partial adjustment of its inputs to a change in conditions.

 

The firm’s output decision in the long-run is

 

A strategy of a short-run profit maximizing for a perfectly competitive firm is a complete understanding nature of different types of costs. A profit-maximizing firm will produce at the quantity where MR (marginal revenue) is equal to the MC (marginal cost). At that quantity, firm will make as profit as possible and give the market price and its technologies of production. The firm with positive profits level earns above the normal rate of returns and in the long run, new firms are likely to be attracted into industry.

 

Sometimes, the best firm can give the market price and might still cause the firms to lose money. A firm which suffers a loss is earning a rate of returns that is below normal and investors are not going to attract the industry. The firms may also be breaking even, meaning that its profit level become zero. But since profit TR (total revenue) minus TC (total cost) and TC includes a normal rate of returns, the firms that is breaking even is still earning exactly a normal rate of return. By all this new investors may not be attracted but those current ones are not running away.

 

However, if the firm will not supply anything and the price is below the AVC (Average variable cost) curve, then the supply curve for the firm is actually the MC curve when it is above the AVC curve.

 

The supply curves for each firm in the industry and add them all together; an industry supply curve can be constructed. For each price, how much each firm is wills to supply, and then add the quantities. That total is the quantity that the industry would supply given the price, and hence, it creates a point on the market supply curve.#p#分頁標題#e#

 

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The firm’s output decision in the short-run is

 

In a perfect competitive firm, this has a limited numbers of an action that it can intake to maximize profits. While it cannot set price of product that it is on selling and decision can be made that how much product to produce.

 

In perfectly competitive firm a strategy that how firm makes choices to maximize short-run profits. The profit of the firm is the TR less the TC. Costs are relation to choice of inputs used for production. Through definition the short-run is made up of two kinds of costs that are cost-fixed and variable cost. A fixed cost is that which does not changed with amount of output produced. For example, if the firm/ industries is paying monthly rent for office space, that monthly rent does not change with the production of firm either producing one units or 1,000 units. It does not make changes in the monthly rent of the office space. A variable cost is that cost that does change with amount produced by the firms/ industries. For many firms or industries labour is a variable cost. In generally scenario the more you produce the more labour is use for the production.

 

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Task 3

 

Equilibrium: the condition exists when quantity demanded and quantities supplied are equal. At equilibrium, there is no tendency or inclination for a price to change at quantity demanded or quantity supplied.

 

Market equilibrium: The market is in equilibrium, when the price equates the quantity supplied and the quantity demanded. At a point where supply and demand intersect. Once achieved a market equilibrium persuading unless or until it is disturbs by an outside force, especially by supply and demand determinants. Market equilibrium is point out by equilibrium price and equilibrium quantity. In market equilibrium, the opposing forces are demand and supply.

 

To represent market equilibrium, the best example is a tug-of-war. Tug-of-war is a game between two equally matched teams of abacus consulting team such as those are employed by the abacus communication company. On one end of rope is a group of ten abacuses consulting in red polo shirts. On the other end of rope ten blue polo shirts. As the red consulting team tugs and pulls as they are matched tug for tug and pull for pull by the blue consulting team. The yellow flag marking the centre of the rope budges nary inches. The two opposing forces of red and blue is balance out. The result is equilibrium.

 

Market equilibrium is the balance between buyers and sellers. In this buyers try to move the price down and sellers trying to move the price up. As in tug-of-war, when the two forces are in balance, the yellow tag is in balance and a price does not budge. The unmoving price is not representing yellow tags but it is in equilibrium.#p#分頁標題#e#

 

Equilibrium price is the price that occurred when the market is in equilibrium state. The equilibrium price is equal to the supply price and demand quantity. Paired with equilibrium price, is the equilibrium quantity, when quantity exchanged between sellers and buyers when the market is in equilibrium. Moreover the equilibrium quantity is equal to both the QD (quantity demanded) and QS (quantity supply).

 

Price and quantity equilibrium is the result of when demand and supply are equal and the demanded & supplied quantities are equal. Market equilibrium obtained when DC and SC intersect at one point between price and quantity.

 

Excess demand means shortage exists, when quantity demand is more than quantity supplied at the current price. When excess demand occurs in a non-regulated market, there is an inclination for prices to rises as demanders competes each other for the limited supply. The adjustment may be different but the outcome of it is always the same.

 

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Price tends to rise, when the quantity demanded exceeds quantity supplied. In the market, when the prices rises the quantity demanded falls and quantity supplied rises until and unless equilibrium achieved when the quantity supplied and quantity demanded are equal.

 

Excess supply is that condition, when the quantity supplied exceeds quantity demanded at the current price. When the price tends to fall, quantity supplied would get increased until the equilibrium price is occurred where quantity demanded and quantities supplied are both gets equal.

 

As with the excess demand, the mechanism of price adjust in the face of excess supply would be the different from market to market.

 

If the market prices may not be the equilibrium price and if not, there will be no neither excess supply nor excess demand, depending on whether the price is above or below the equilibrium price.

 

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Task 4

 

Oligopoly is an industry structure (or market organization with a small number of large firms producing products that range from highly differentiated to standardize. In general, entry of new firms into an oligopolistic industry is difficult but possible. 

 

The next form of market organization is called oligopoly. A market is a characterized feature of an oligopoly. The domination of a market by few firms, whose price setting has effects on the market price and market quantity. The occurrence of an oligopoly is when few big companies completely dominate the industry. There are few measures that how big firms are in an industry. These types of measures are called industrial concentration ratios. If there are high concentration ratios, it represents that the fewer firms holds the larger share of the market. The table below provides some data on actual U.S. industries:#p#分頁標題#e#

 

Table 13.4.gif

 

Beer industry is the best example to describe oligopolies. In recent years, even though beers are produced by microbreweries and it became popular. It’s the fourth largest breweries produce approximately 90% of beer sold in U.S. this is referred to as a concentrated industry.

 

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However, the largest firms controls a big share of the market, the attitude of one firm will going to face a strategic effect on other producer, who does not hold the largest share in the market but who smallest share in the market by producing a small amount of commodity. The interdependence usually exists among firm in such industries, create difficulty to analyse oligopoly. The actions of one firms depends on the reactions of all others in its industry. Largest individual firms make so many decisions, strategies of individual are usually difficult to generalize and complex to analyse.

 

Oligopolies are much efficient than monopolies, but generally less efficient than perfectly competitive markets. Profit-maximizing oligopolies’ are to price above MR (marginal costs). Strategic behaviour can lead to outcomes that are not in society’s best interests.

 

Perfect competition: The theory of a firm, which studies the profit-maximizing behaviour, depends on the demand curve the firm faces. A perfect competition is an industry structure in which many small firms each relative to the industry, producing identical products and in which no firm is large enough to have any controls over prices. In perfectly competitive industries, new competitors can freely enter and exits the market.

 

Perfectly competitive industries are made up of many firms, each small relative to the size of the total market. In these industries, individual firms do not distinguish or differentiate their product from those of their competitors. Product prices are determined by the market forces and are virtually unaffected by the decisions of any single firm. Entry and exits from the market are relatively easy.

 

Under perfect competition, the firm faces a horizontal demand curve. It can sell any quantity desired in the market at the market price, but not able to sell anything outside the market price. In figure 4-1

 

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In figure 4-1 a competitive firm can sell as much as it wants at the market price Po. Its demand curve DD is horizontal at this price. Consider agriculture, the classic example of a perfectly competitive industry. A wheat farmer has absolutely no control over the price of wheat. Prices are determined not by the individual farmers but the rather by the interaction of many suppliers and many demanders. The only decision left to the wheat farmers are how much wheat to plant and when and how to produce the crop.#p#分頁標題#e#

 

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Task 5

 

Most economists agree that many of the features of business cycles, high unemployment and low capacity utilization during recessions and high inflation rates during booms are problems for the economy. For the most part, however, the agreement ends there.

 

There are debates about whether the government should intervene in the economy to try to address these problems. In addition, there are debates how the government should act if it does intervene. In this lecture, we will take a look at some of the major points from this debate within macroeconomics.

 

Keynesian Economics

 

Keynes' General Theory was published in 1936 during the midst of the Great Depression. The U.S. economy was in sad shape at the time. Real GDP plummeted over 30% in three years (1930-1932), and unemployment soared to about 25%. Moreover, the economy had been in this sorry state for several years.

 

It is no surprise, then, that Keynes believed the economy's ability to correct itself, as claimed by classical economists, had failed. In Keynes' view, the economy can languish in recession because wages tend not to fall significantly (they are sticky downward), thus impeding the economy's ability to correct itself. Investment spending also falls and does not increase until a recovery begins.

 

Thus, in Keynes' view, the government can initiate a recovery through expansionary demand-side policies. Keynes developed the concept of the multiplier to show that active fiscal policy can have large effects on the economy. More recently, the term "Keynesians" has come to mean economists who advocate active government intervention in the economy. The Keynesian belief in activist governmental economic policies prevailed throughout the 1960s and early 1970s.

 

The stagflation of the 1970s and subsequent recessions cast some doubt on the government's ability to manage the economy. We will now turn our attention to two of the major schools against an active role for government economic intervention: monetarism and new classical economics.

 

Keynes sought to distinguish his theories from and oppose them to "classical economics," by which he meant the economic theories of David Ricardo and his followers, including John Stuart Mill, Alfred Marshall and Arthur Cecil Pigou. A central tenet of the classical view, known as Say's law, states that "supply creates its own demand". Say's Law can be interpreted in two ways. First, the claim that the total value of output is equal to the sum of income earned in production is a result of a national income accounting identity, and is therefore indisputable.

 #p#分頁標題#e#

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A second and stronger claim, however, that the "costs of output are always covered in the aggregate by the sale-proceeds resulting from demand" depends on how consumption and saving are linked to production and investment. In particular, Keynes argued that the second, strong form of Say's Law only holds if increases in individual savings exactly match an increase in aggregate investment.

 

Keynes sought to develop a theory that would explain determinants of saving, consumption, investment and production. In that theory, the interaction of aggregate demand and aggregate supply determines the level of output and employment in the economy.

 

Because of what he considered the failure of the “Classical Theory” in the 1930s, Keynes firmly objects to its main theory—adjustments in prices would automatically make demand tend to the full employment level.

 

Neo-classical theory supports that the two main costs that shift demand and supply are labour and money. Through the distribution of the monetary policy, demand and supply can be adjusted. If there were more labour than demand for it, wages would fall until hiring began again. If there was too much saving, and not enough consumption, then interest rates would fall until people either cut their savings rate or started borrowing.

 

Monetarist economics

 

Monetarism is the view within monetary economics that variation in the money supply has major influences on national output in the short run and the level over longer periods and that objective of monetary policy are best met by targeting the growth rate of the money supply.

 

Most monetarists do not advocate activist monetary stabilization policies. They are against expanding the money supply during bad times and slowing the growth of the money supply.

 

Monetary policy cannot affect income. Most monetarists, including Friedman, blame much of the instability in the economy on government. Friedman has advocated a policy of slow and steady money growth especially that the money supply should grow at a rate equal to the average policy of accommodating real growth but no inflation.

 

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Keynesian and monetarism are at odds with each other. Many Keynesians advocate coordinated monetary and fiscal policy tools to reduce instability in the economy to fight inflation and unemployment. But not all Keynesian advocate an activist government. Some reject the strict monetarist position that only money matters in favour of the view that both monetary and fiscal policies make a difference, but at same time believe at the best possible policy for government to pursue is basically non-interventionist. #p#分頁標題#e#

 

The debate between Keynesian and monetarist was the central controversy in macroeconomics. That controversy still alive in now-s-days economy confronts.