Achieving Goals with Available Resources - Essay Example

ASSIGNMENT ECONOMOCS PAPER 2 INTRODUCTION Economics is achieving goals with the available resources. Following are few tips to start thinking economically: One should be a critical thinker and should not get usurped by ones emotions, desires and personal life. One should be objective. Avoid being dogmatic in approach .One should go to the root of the subject to get sound reasons and only then believe it. Incentive oriented Everybody wants to be duly rewarded. The more one is acknowledged by giving incentives the more one wants to work hard. A person’s decision mostly depends on the incentives he is getting. Every situation has different layers. One should try to get away from the obvious and think differently. CHAPTER 3 DISPEL MYTHS AND DETECT BOLOGNA:COMMON FALLACIES THAT NEED DEBUNKING Economics is about money: Economics is not just about money but it’s a way of life. About fulfilling your dreams within given resources. It is about channelising your resources in a particular manner to achieve success. No Poverty in U.S: Poverty is a very relative concept. What is considered poor in the U.S may be considered rich in developing or underdeveloped countries. War is good for Economy: The war which is supposed to generate employment during the World War II in production of Arms and Ammunition also put U.S in debts and reduced the standard of living as the sectors like Health, Education and infrastructure were ignored. Immigration costs U.S jobs: More the immigrants more will be their medical demands to be fulfilled and more will be job opportunities fulfilling them. International Trade costs U.S job: International trade benefits both the countries. Standard of living of both countries increase, the countries can utilize their labor in something that is surplus and create boom in that product. Outsourcing costs U.S jobs: Outsourcing gives cheap labour..So the company profits in business more investment increases. National debt will burden the future: It is not always that national debts that burden the country. If the Government utilizes the funds in development of the future generation ; Even though the future generation will have to pay a little more tax but they will be duly benefited. Sweat Shops exploit workers: In poor countries getting a sweat shop job is better than not getting any job at all. By improving the work place amenities the cost of production will increase and the manufacturer will try and balance out their expenditure by reducing employment. This will lead to the employees losing their job. Trade Deficits means weak economy: In a booming economy there is more money to buy. Hence the Trade Deficits are seen. Also when people invest in a booming economy the money flow is outwards.So the money appreciates making it expensive for the foreign buyers. So Trade Deficit is not a sign of weak economy Monopolies charge any price:: It is not always that monopoly companies charge the highest. To make their products sell they may even charge low. The consumer may also benefit by the monopoly as it gives them a specialized market of that particular good in a competitive price. Manufacturers make products that wear out so that they can sell more: Even if the companies increase the price of products lasting longer, competition will make them reduce their price, thus benefiting the consumer. Money is backed with Gold: Money can no longer be converted into gold but is valued for its exchange with goods and services Money comes out of printing press: Most of the money in US economy is not in hard cash but in a/c in banks. When they lend out loans and in turn gets more checques.That way it increases its money making. But if they want to reduce their money supply they sell bonds to make process reverse. Criminals are Irrational: Criminals are not irrational. They think of consequence before committing a crime. If they feel that the punishment would cost more than their crime, they will not do it. Oil companies gouge consumers: Demand and supply of raw material causes increase and decrease of prices of commodities. It is not the Oil company executive but the situation of the product that makes the price rise or fall. Stock brokers help you become rich: Nobody can predict the market indices. If anybody cud they are thorough knowledge about the stocks legally or illegally We are running out of Natural resources : Even if we run out of oil we would have introduced many alternative then with the help of new technologies Recycling paper saves trees: Being an incentive centric market, if there is no demand for new wood product then there will be no incentive to the farmers or landowners to plant trees. Saving One life is worth any cost: Risk is inevitable. One cannot sit back without taking risk. As there is certain risk in everyday life and to avoid them completely will in turn reduce opportunities and hamper standard of living. It is fairer to Tax corporations than people: It is always the low income group that suffers the burden of tax payment. When business pay taxes they retrieve it by either increasing the price of products, reducing the wages of workers or cutting dividends of shareholders or even closing business. Thus the consumers of the product suffer the most than the industry that makes the product. Contributors to social security will eventually get their money back: You do not get back the same money you contribute It depends on how much you live. President should get the blame or credit for economy:.U.S President has very little influence on the current economy .The money is controlled by Federal Chairman. The current state of economy depends more on the policies made the previous President. Inflation is bad: Inflation is not always bad. It increases more jobs and income .So the situation remains the same. CHAPTER 4 SOLVE RIDDLES AND MISTERIES; WHY THE WORLD IS AS IT IS Critical thinking helps us to understand the economics of a particular issue. Following are some of the issues that will provide a valuable insight in critical thinking: Americans getting heavier:Due to the advancement in Agricultural technologies, the cost of agro produce has increased thus decreasing the selling price .So people can buy more food. People do not have enough time to cook food, so they give in to the quick meals, processed food packets which is high in calorific value and which also lusts their taste buds. There is less of physical activity as labor saving technologies have invaded the market where we can do many things at the same time at the press of a button. Ignorance is sometimes bliss: Knowledge costs lot of money, and if not exploited enough then it’s a waste of time, money and effort. So it’s better to be Ignorant sometimes where it dose not pay to be knowledgeable. Minimum voters: We see a declining rate in the people who vote as they feel it’s a waste of time and effort to go for voting and when they are not sure if their voted candidate is going to be elected. Celebrity Divorce: Celebs are use to having more opportunities and when married they have to forego many of them. Their options as opposed to staying with their spouse are many and come with attractive packages. So most of the times they fall for temptations. Small families: Today the families are getting smaller and smaller as the cost of living has increased considerably as compared to the past. Today the women is also an earning member of a family who faces interruption in her career due to babies. Like in the past they used to produce more children as they were required to work in the farms , to day that is not required. White men –more money: It is not the company but the consumer that is prejudiced as it wants only men for a particular type of job, say an auto mechanic. Hence the company which has to see to its profits has to employ men. Secondly majority of whites are more educated hence more productive than the minority groups. Hence we see that white men make more money than women or minorities. Democracy-Best policy? Democracy is of the people, for the people and by the people. So when people vote a ‘no’ for a policy that is beneficial, it cannot be implemented hence doesn’t lead to the best of people’s interest. Hyperinflation: When there is Hyperinflation, Government wants to spend the money. So it collects taxes, borrows or creates new money. Mostly the third option is opted. But when too much is distributed the goods and services become costly. Good to live today: With the technological boom, easy access to any part of the world, its gets better to live in today’s life than to have lived hundred years ago with nothing to do enjoy the riches. Tragedy of the commons: Cows are owned privately where as buffaloes are wild animals’ and are common properties. Such valuable property which is commonly owned is therefore killed. Rare Diamonds: The rarer a thing is, the more costly it becomes. Diamonds are rarer than water, and one unit of diamond will yield more money than one unit of water. Stars are high: Demand and supply determine the price of a commodity. Superstars are less in number and high in demand. Hence Superstars get paid much money than the others and the Comparative Advantage: A person will have more advantage in doing a thing that he is good at and should not do what he is not good at. Hence even if a person fulfils the criteria for a particular work he should not do it as that work is not his area of expertise, where as in that time he can do his own work and profit . Don’t want good weather: Good weather results in increase in food supply so farmers have to lower the prices of their produce thus getting lower profits. But the people purchase the same amount as they use to earlier, resulting in the same amount of sale by the farmers. So the farmers hate years with good weather. Not to grow crops: By providing incentive to farmers to reduce the land they farm, the supply becomes limited, hence prices increases the farmers will get richer. So more and more people want to become farmers. But since the supply of agro land is fixed these programs make the farmer rich through bribes and high selling price of the crops. Read More