Topic 14: My Future as an Economist

Personally for me, this semester taking economics has been pretty useful for me. Ever since the first chapter, I've felt that this class is a way of summarizing the way in which money and resources flow around us. In regards to the material, I've always thought economics is something you learn subconsciously while living on earth and part of the ever-flowing market, so taking the class is basically just a way of defining the terms and giving each phenomenon a name. The parts on supply and demand were really interesting, but like mentioned above, it is something which one can infer. For example, the fact that technology affects supply is something which is quite obvious. The textbook is just summarizing the different factors for us. Nevertheless, this material has broadened my view of economics and the factors affecting supply and demand. I believe this is important because part of the process of critical thinking is having a wide spectrum of cause and effects.

I do believe this material is interesting, apart from the parts of the book where it is only focusing on the United States. However, the parts on taxation, as well as speculation on the economy in regards to changes as a result of the factors which alter supply and demand, will come in very useful for me. If I were to follow on with economics, I would definitely take macroeconomics. As a person who will most likely major in political science, I believe that the study of the economy is extremely vital, as money is perhaps one of the biggest motivators of political actions. I like looking at the big picture of the world as a whole, and not study individual financing. I can compare this course with psychology, because psychology is also something which people are familiar with, but are just unaware of the terminology. For example, the confirmation bias learned in psychology, is a common way for people to be biased, but we are just unaware we are doing so. So like psychology, economics is a way for us to better teach us both our conscious and subconscious actions and giving them names. 

Topic 13: Supply or Demand?

Demand-side policies are those which aim to provide incentives to increase aggregate demand. This may include tax reductions, decrease in interest rates, etc. which either increase consumers’ disposable incomes or encourage spending rather than saving. Supply-side policies are those which aim to provide incentives to increase aggregate supply. This includes deregulation, tax reductions for companies, etc. I believe that demand-side policies are more effective. These policies directly impact the buyers, who are keeping the economy flowing. Supply-side economies, although supplying a lot of goods and services, would ultimately be useless if the consumers don’t have the purchase power. Moreover, supply-side policies, which may grant more deregulation, would sometimes cause wage inequality, monopolies, or job insecurity. These are bad for the economy. Also, arguably, for both types of policies, this decreases government revenue as taxes are cut. However, many may also argue that supply-side policies which encourage production actually generates economic growth, or even an actual increase in government revenue as production rates increase. It also allows for more efficient and non-interference style of market. For demand-side policies, it includes a lot of government intervention and specific allocation of government resources to benefit the society. The decrease of taxes, though “taxing” on the government, is beneficial to people as it allows them to be able to spend more money, allowing suppliers to provide more, and therefore stimulate the economy. The same could be said with decreased interest rates which urges people to spend, and therefore, again, stimulate the economy. Therefore, this benefits both the demand and supply side. However, many also argue that this cannot help with long term aggregate demand, and can only help for a short while. This also costs a lot of money for the government. 

Topic 12: Role of the Government

I think the government should be allowed to interfere with the free market. However, although this may seem idealistic, I believe that the governments should of course try to be   manipulating the economies for the sake of putting the people’s best interest in mind. An example of this may be the government’s use of taxation on harmful items such as cigarettes, in an effort to keep the people healthy. However, the everlasting presence of corruption has many times undermined the many of the good intents of taxation. Many other factors also complicate the issue. 

Margaret Thatcher is a prominent politician in the United Kingdom’s history. However, her role has been a controversial one. She had advocated for less governmental influence, which strongly contrasted the previous notion of collectivism which gave form to UK’s post-WWII economy. Her ideology was that there was a natural rate of unemployment which shouldn’t be tampered with. Under her term, inflation and taxation went down. However, homelessness and unemployment went up. This is also an important argument for the government’s role in the economy. Many times, by relying too much on the government, we end up with negative impacts in the economy, and giving way to too much economic liberalization also leads to problems, as demonstrated in Thatcher’s term.

In conclusion, I believe that the government should be able to interfere, but only with a limited amount of jurisdiction.

Topic 11: Unemployment

Unemployment encompasses many consequences. Some jobs are affected more than others. Jobs that are more resistant to unemployment would be jobs which are necessary to the survival of a society. This includes farmers part of a non-basic, local economy, who produce the food needed to the local people. Without these people, there would be no food. Another example could be doctors with degrees. These people still need to be present in the society. Thus, people working on the necessities would be least likely to get fired. Also, people in government-provided programs would also be protected. For example, people working on infrastructural projects. These people are employed by the government to get the economy circulating. Thus, instead of firing people from this field, the government would be employing more, to combat economic downturns. People in the army also probably wouldn’t get fired. They are necessary to the defense of a country (unless you are Costa Rica), and is also government-sponsored in most countries.

Jobs that are less resistant include jobs that are for leisurely purposes. For example, less people would be willing to go to spas or massages if the economy was bad. Thus, these people would most likely get laid-off. This is due to people trying to cut expenses. Luxury goods production and production of more high-end products are therefore also affected. For example, people would be less likely to buy cars, and would be more willing to want to fix a car instead of buy a new one. Also, people in the service sector would be affected to. People would rather tend to themselves to save costs, than have other people do it for them, and pay that extra expense.

I have two career paths. The first is a psychologist. Although one may assume that psychology consulting sessions are a luxury, because they are quite expensive, this may not be the case. Clinical psychologists are probably especially important during this economic downturn. People get depressed from the bad economy, and many may require professional help. My second career choice is to work in the government. I’d like to work in the international government. The flow and functioning of the international community is quite essential to world leaders, so the presence of such important officials are probably quite stable. When picking these two career paths, I did not think much about the problem of unemployment. Mainly, I thought about the salary I would earn. But mostly, I’d choose these two paths because I enjoy studying the two subjects. 

Topic 10: How to Boost My "GDP"

Productivity can be altered in order to achieve better results, through several factors: quality of labor, technology, energy costs, and financial markets. In terms of using productivity in school and with academics, the factors would be altered to better fit the description and needs of a school environment.
First, quality of labor would be changed to the efficiency and the quality of homework and studying we put in to our learning. The more efforts and better quality the work, the more likely that the knowledge was imparted into your brain. This then increases the product.
Second, technology can be adapted as tools of learning. This may include textbooks, the internet, or even human resources, such as teachers. The better the technology and our access to it, the more likely that we can learn more. For example, if a school was to be able to put in an online library for students, it would be more likely for students to get accurate information from credible sources.
Third, energy costs can be the costs in knowledge. Using the example above, online libraries would greatly reduce the costs, because students wouldn't have to buy books. If e-textbooks were more available, students and parents would be more willing to pay the lesser amount to have the same material, and thus, learn.
Lastly, financial markets refer to how the school or such learning systems works. If a school is able to run smoothly, this will greatly increase the efficiency of learning. For example, if a school didn't have a staff to be in charge of textbooks, most likely, the school would work really slowly, because teachers and other staff would have to deal with this problem. How well the school facilitates determines how well a student can learn.

Topic 9: Financial Markets

As a starter, I'd like to put money into pension accounts, to ensure that I would have money after I retire. I think Certificates of Deposit are the safest, risk less, and basically guaranteed-money investment. In the future, this is probably he type of investment I'd use regularly, as a means of safely and surely earning money. Also, I would have to be aware of the financial stance of the bank I was investing in, because I would not want it to default. Bonds would also be preferable, because the government is basically guaranteeing an insurance on such investments. However, these types of financial asset does not hold as much value as would be desired. As a result, I'd also rely on stock exchange as a means of investment. Seeing as I'd probably be majoring in political science in university, I'd have a pretty good knowledge about what is going on in the world, which could be a great advantage for me in terms of buying and selling stocks, and the best time for it.
In general, most of my money would go to the safer investments, to make sure I will get returns for them, but around 20 percent may go the stocks.

Topic 8: Money

For me, money is just a medium of exchange for me. Money is used as a medium of exchange and a store of value. I don’t have the capability of investing with it, nor can I actually earn it yet, but I do save it. Normally, I have my money in a bank account, instead of in cash. I get my money from my parents, who give it to me on a set allowance each year. Generally, I do not receive money other than from this source. For example, on the popular holiday of Chinese New Year, I do not get to keep the money, but instead, my parents save it to an account for it to be used during college. In a sense, that would also be for me, but not for me to use immediately. Money for me is important because I understand its value. I do not generally spend that much of it, except for necessary times like buying for my own supplies, or gifts for others. I set a specific amount of money that I can spend each month, and save up the rest. The money I extract each month does come in cash because it is more handy this way. I believe that I can live by less than I receive now, but obviously, I would want more. There may be times when I spend more than the monthly amount I allow myself to spend, but that is only for special occasions. I am willing to work for money, because I feel that that would only be fair. I would be willing to do work that is within my capacity, and maybe a little more. I would not be willing to do anything harmful to myself for money, because I believe that is not a good trade-off.

Topic 7: Change and the Future

I've been through several changes in my life. However, I believe that because I've been in this system of education, it’s made my changes significantly different then what other people would have faced. For example, the school I’ve been in has a small population, and doesn’t change much, meaning that actually moving up from one grade to the next doesn’t really change my life so much. The people in my class are the same, the teachers are pretty much the same, and the only thing changing is the level of difficulty of the material that I’m learning. Perhaps the biggest change I went through in my entire life was my move to Belgium. When I moved to Belgium, everything changed. My family there only consisted of my parents and my brother. The system of schooling was also different, because my school followed a British curriculum whereas my previous schools have followed an American System. Another big change was the scale of the school, in which the school in Belgium was much bigger, consisting of people from over 70 different nationalities.

The second biggest change that is yet to come is in regards to moving up to college. That will be very different because I will have to learn to live by myself without the support and guidance of my parents.

I think the most important skills needed in future job fields include: technological skills and problem-solving skills. In the future, due to an essential dependency on technology, everyone will be expected to know how to deal with computers and basic telecommunication. However, the negative implications of technology and development is various challenges posed in our futures such as with environmental degradation. We will need to learn how to deal with those problems if we are to be able to continue living. I think the more important job fields in the future will be having to deal with these kind of imminent threats as well as long-term sustainable development.

Topic 6: Who's Running the Show?

In my opinion, I believe that PAS has aspects of various different organizations. First of all, in terms of sole proprietorship, our school does show a unique quality not unlike that of more controlled systems, whereby the sole proprietor is making basically all of the decisions. This school is not really a partnership seeing as no one else was really part of the setting up of the school, other than the headmistress herself. I find that there are a lot of parallelisms in terms of our school and corporations, partially due to the nature of the education system. First of all, it is not easy to open or close schools; there are too many people and futures involved in the process. It requires a lot of paperwork and licensing to open a school, and requires even more paperwork for the closing. The staff and teachers, who are part of the running of the school, also need qualifications. Moreover, perhaps the biggest burden to the running of a school is resources. It is extremely difficult and money-consuming to start a school. Right now, the funding mainly comes from the tuition fees from the students. In the past, the funding came from the sole proprietor, who had started the school on her own, with the help of others. In terms of liability, in my opinion, most of the liability is more unlimited, and lies with the decision-maker, as most parents complain and directly react to the decision-maker, partially due to the fact that all outputs are seen as direct results of the decisions that were actually being made. The life of the school is unlimited, seeing as the decision-maker can be replaced. However, given the fact that the decision-maker provides a very special asset to the school in terms of her specialization in college application and such, the school would not be the same without her.The profits of the system are probably saved in a fund for future use, or to pay off previous payments, etc. I believe this method of organization is chosen because the decision-maker had believed that it is the most effective means of achieving the purpose of the school. The advantages would include an actual product and successful result. However, the disadvantage would include a lot of conflict with many people. If I were to start a school, I’d probably run a similar system, except with more inputs from other people as well. 

Topic 5: A Different Phone?

*What caused Nokia to develop mobile TV?

• Nokia had wanted to develop the mobile TV due to its wish to stay "on top of the game" and in front of their competitors, by designing uses of cellphones that people would find useful. With other services such as internet connection, photo-sharing, etc. becoming ubiquitous among most phones now, Nokia had hoped that its development of the mobile TV is new and attractive to consumers.

*Why do cell phone producers include so many features in their phones?

• Cell phone producers want to develop phones that will satisfy the needs of the consumers, in order to gain more sales. As a result, the producers choose to pack a lot of different apps and features in, to widen their market and attract more users.

*Are manufacturers more likely to offer differentiated products in new markets or old markets? Why do you think so?

• I think manufacturers would most likely want to try to differentiate their products in new markets. Now as more markets for cellphones are developing, competitors would like to try to differentiate their products from others. Recently, although most cellphone producers try to jam pack their products with features in order to attract consumers, they have realized that most consumers is aware of such features, and therefore look for products that can offer them a different experience in using a cellphone.

The features I find most useful in a cellphone are calling, text-messaging, internet connection, cameras, and games! Although personally, my phone is packed with apps that I "think" I would use in the future (and don't delete just IN CASE they might come into use), I never actually touch a great part of the applications. I would like for my cellphone to have all the features I mentioned above. A feature that I would like to have on a phone that has not been developed is a function of a fingerprint scanner. I think it would be really cool to have this function to protect my phone. I don't ask much of a cellphone, because I believe that it's purpose is really just to take and make calls and send text messages. However, I do depend on my phone quite often for quick internet searches. The most important thing about a phone for me is speed. My phone lags a lot, so I think speed and storage capacity is the most important.

Topic 4: Ripple Effects and Elasticity

Oil is one of the most important resources on earth. With its scarcity, it is more valuable than ever, powering most of our technology and life. As a result, any change in oil prices affects basically ever part of our life. The most obvious change it would have on our lives and the general economy is the transportation sector. Our cars depend on oil to run, so obviously, with the rise of oil and gas prices, it would cost us more. Another aspect of oil which affects us profoundly is the production of plastic. Plastic is essentially made of petrochemicals and other such resources. As we all know, plastic is basically everywhere now: in our mechanical pencils, pipes, bottles, etc. Without plastic, it is hard to find a similarly durable material which could replace plastic. With just these two factors, oil affects everything. For example, without the oil to help transport every single product in the world, trade would be dramatically decreased. Without plastic as well, there will not be such packaging on products and supplements to certain other products. The change in price of oil affects us on a larger scale (i.e. through the use of oil in cars) and also on a smaller scale (the relatively smaller changes of price in plastic products). Another way oil affects us is its position in global politics. As oil is an important resource, it is often used by countries as a way of getting what they want. For example, because of Iran’s heavy dependence on oil exports, US or other such countries could place sanctions to cancel buys in order to get them to stop their nuclear programs. Although this does not seem to affect us immediately, in fact, this would cause a rise in oil prices. So now we can see that the changes in prices for oil is an extremely delicate and crucial part of our lives. As a result, organizations such as OPEC attempt to regulate oil prices in the oil-exporting countries to prevent too much fluctuations. Another example of resources which affects us very profoundly is rare earth metals. Living in the technological age, we are very dependent of the rare earth metals in our products, such as cars. However, due to China’s monopoly on the possession of rare earth metals (up to 95%), China could easily use it as a way to force countries to do what they want. For example, China had withheld exporting such metals to Japan do to island disputes, which had hurt Japan’s economy badly seeing as they produced a lot of technological products.

Topic 3: Where Choices Lead

In regards to being in PAS, it was not entirely my choice. The opportunity costs of getting me to PAS mainly apply to my parents. Of course, the obvious cost was the actual price of the tuition fee. However, other costs include time and effort. My parents have worked very hard and very long to get me to this school, and also, it took a lot of effort to raise me. However, I believe that they saw this school, or any other such schools, as a means for me to succeed in future, which may in turn be an investment, because my success determines how much I can support them in the future. Moreover, they probably wanted the best for their children because parents like to see their efforts come to best results. If I had control over whether or not I would have came to this school at all, I would say that it was a good idea. Although PAS is not the best of schools, it is undeniable that by being here, I have a lot more opportunities and gain a lot more globalized knowledge compared to where I would be if I had gone to a Taiwanese local school. Moreover, although this is not a perfect school, I can always take a lesson out of everything that goes wrong, or right, in our school. I believe that the most obvious result is my ability in english and critical reading. As opposed to the Taiwanese system,  which emphasizes a lot on memorization, the American system is more ‘liberal’ in the sense that it is not necessary to memorize everything, but that the most important thing is to apply concepts and develop individual thinking capacity. However, comparing PAS to other similar international or american schools, perhaps other schools can provide with the same benefits. Nevertheless, I believe that PAS was a good option for me, because I learn how to deal with people and events in a very limited environment, and in a school so abundant on academics and extracurricular activities, I believe that this provides me with more opportunities. Even so, I must admit that even with such benefits, there are also future problems and the growing competition in the “real world,” so like most investments, a profit is not guaranteed.

Topic 2: Scarcity in School

Scarcity can be found everywhere in our school, especially in terms of time. High school students get homework and have activities to do, so for them, they lack time, while they still want to do what they want. Students give up their free time to do school work. In return, they get good grades and more knowledge. This then leads to going to good colleges. Similarly, teachers also give up free time in order to help students and teach them. In return, they get their salary. The office staff also gives up their time in order to keep the school running. Another important and interesting factor which I think can be applied to student is ‘memory.’ Students are constantly under harassment to do well on tests and memorize everything. However, just like most things, we only have a finite memory, so therefore, we must pick the most appropriate things to memorize.

Personally for me, I have a lot of extracurricular activities as well as my academics to manage. This means I make trade-offs all the time. Since last year joining the basketball team and this year being captain, I’ve been spending a lot of time on basketball. The trade-off of this is time and energy. Personally, due to a strong commitment to the sport, I put it as my priority, and nearly never make excuses for absence. In terms of homework, I am giving up free time and sleep. This is an important factor for a lot of high school students, too. Sleep is one of the most valuable and loved resources for us high schoolers. I am also involved with student council, and since it involves more than just me, I tend to place more emphasis on it as well. This goes for MUN as well, whereby going on trips make me miss a lot of school work. However, all this work and management is for the purpose of me going to a good college, in which case the whole situation itself can be demonstrated as a trade-off.

Chapter 1 Questions

–Section 1, p. 11, #5

        The owner of the computer repair shop would first of all, need the land for the shop, and also resources used to produce the tools and spare parts. Also, the owner would need to employ people for labor to run the shop and help. He or she would also need capital, or the actual tools and parts that are required to repair computers. Lastly, the owner should probably develop good entrepreneurship to run a successful and profitable business.

–Section 2, p. 17, #3

        I would spend time doing homework. This is to keep up my grades and learn the material taught in class. The opportunity cost is that perhaps I would have lost time that could have been used for leisure and rest. Also, basketball practices entail opportunity costs such as loss of time for homework and study.

–Section 3, p. 23, # 3

        The PPC takes into account the limited resources and the number of goods and services that can be produced given a certain amount of efficiency.

–Section 4, p. 31, #7

        Politicians often cannot produce full credible and reliable statements and promises, so they express what they want to see happen, not necessarily what actually happens. 

Topic 1: Big Questions

 The study of economics is based in two big questions. The first is “How do choices end up determining what, how, and for whom goods and services get produced?” If you think about PAS as an economy, and everyone at PAS as both a producer and consumer, this question can be answered in twofolds. Firstly, the faculty are the ones who produce the "knowledge" which are produced for the students. Hence, the knowledge is the what, the faculty is the who, and the students are the for whom. The products are produced by the teaching and the passing on of knowledge. Another way to look at this, it can be seen that the students are the one producing the "results" and it can either be for themselves, or for the faculty or adults or administration, or whoever cares about their grades. Thus, the "results," either in the form of SAT results, GPA, college admission, etc., are the what, the students are the who, and the person who supervises the grades are the for whom. The products are produced by the students taking in the knowledge and producing results. If you look at it in terms of its relationship with each other, you may find that they are actually a circle. Teachers effectively passing on knowledge to students causes the students to produce good results, which in turn allows the teacher to keep on teaching, and its like a happy cycle. It resembles a market in that in the "real world," companies produce products which the customers purchase, the things enable the customers to do certain actions, i.e. make money, which in turn is used again in the purchasing, which then gives the company money. So it's a happy cycle!

The second big question is “When do choices made in the pursuit of self-interest also promote the social interest?” The social interest basically is what is good for the society as a whole. In my opinion, I feel that as mentioned above, the self-interest in the promotion of one's own future and knowledge benefits the teachers, and in turn makes a circle. So, again, answering this questions in two parts: in the pursuit of self-interest by the purchasing items, you benefit all those working for the company producing the items and the immediately affected ones. On the other hand, the producing of products helps the people in between the production, as well as the customer.

2UCK5QBBYFSN