Archive for 1. Introduction to Economics

Lehman Brothers’ Collapse

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“Lehman Brothers Holdings is closing its doors with more than $600 billion of debt — the biggest bankruptcy in U.S. history.” – Market Watch.

Lehman Brothers was one of the biggest global financial-services firms. The collaspe and its bankruptcy has shocked invester from around the world, provoking fluctuating stock market.

How has Lehman Brothers owed debt of $600 billion in the first place?

“This crisis is clearly deeper than anybody had imagined only a short time ago,” says Peter Stein, an associate editor at the Wall Street Journal in a CNN article.

During the attacks in September 11, 2001, it had its offices destroyed leaving them with great loss. Also, Lehman brothers were exposed to unsecured mortgages, and they had terrible debt caused by credit-crunch.

So these critical problems piled on until there was an economic crisis in 2008 to 2009 which exploded Lehman Brothers. So Lehman Brothers had problems that pervaded so deeply it eventually collapsed when there was an economic crisis which had ‘exploded’ Lehman Brothers.

Resources:

Watch Market: Lehman folds with record $613 billion debt

CNN: Lehman Brothers collapse stuns global markets

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1:1 Computing

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My parents thought that 1:1 Computing was an exciting way to interact fully with the subject Economics. However, my parents were concerned with distraction you might get from laptops just like any other parents.

I think that if you reach Junior year, I think that most of the students get responsible of their academics. So there will be less of distraction. If we only set our laptops fully optimized for studying economcs, there would be no worrys. For example, you can register the class blog, moodle, and other economcis websites to bookmark to prevent going to irrelevant websites. Also, I think that our teacher is having full control of what students are doing on their laptops.

In short, I think that the distraction you get from laptops are neglegible.

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Human Development Index

Human Development Index is an alternative statistical data to GDP for indicating human development in each country.

It looks at 3 big categories: 1) long, healthy life, 2) knowledge, and 3) a decent standard of living. Specifically, they look at life expectancy, literacy rate, education, and GDP per capita.

I have researched China about its HDI. It ranked 94th country, and its HDI was 0.762 (out of 1). From this data, I have realized that even though China has the GDP of ranking top 3 in the world and economic growth rate of 9% every year, they were irrelevant. GDP and economic growth were not quite related to human development of countries.

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Production Possibility Curve

Summary:

  1. Resources are limited
  2. Shows how efficient an economy is
  3. Choices between alternatives -> trade offs
  4. Opportunity Cost increases
  5. Shifts outwards -> better technology & new resources

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Economics News Site: BBC News Business

Click here: BBC NEWS: Business

This website is BBC’s news page on economics. This website has an international reputation as an authentic news article page. This particular page is devoted for articles about economics.

The following link is my page for economics news articles: Sang’s Economics News Articles

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Mind Map of Resources

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Resources: Land, Labor, Capital, and Entrepreneurship.

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The Right to Life – Germany

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a) The opportunity cost of treating the leukemia patient is that you cannot treat other patients who would have high chance of surviving.

b) The opportunity cost of not treating him would be you could treat other patients who have high chance of survive.

c) It can be justified in an economic point of view. The opportunity cost is way more beneficial than treating the patient.

d) This is a typical case in a sense that you have to make choices that has best utility.

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Opportunity Cost

  1. Reservation price is what the price in your mind you are willing to pay for making some decision.
  2. Economists use cost benefit analysis to make decisions.
  3. Utility is enjoyment or satisfaction you get from making economic decisions.
  4. Opportunity cost is a potential cost that is caused by making a decision. It is the next best alternative decision.
  5. People tries to maximize their utility.

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Opinion: Japan Recruits Foreign Nurses to Care for Elderly

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Click Here: News Article

Just like U.K., Japan is recruiting foreign nurses to solve the problem of scarcity of nursing workforce. This is a typical problem for many developed countries with large old population.

In my opinion,  Japanese government’s decision was somewhat hasty. Although there are influx of international population in Japan, Japan is still considered to be ‘xenophobic.’ The recruitment of foreign nurses would surely stir some problems such as discrimination. Even the response of Japan Nursing Association was somewhat xenophobic. This problem would not be apparent initially, however, it could be aggravated to diplomatic problem between Japan and the foreign country.

Other than problems of Japanese’ detest of foreign nurses, there is another problem with this decision. Most of the recruitment of foreign nurses were made in developing countries. If Japan recruits all these medical workforce, developing countries might have shortage of medical resource. It would be snatching away doctors and nurses from developing countries which would need the most medical support.

About developing robots to nurse the old population, I think that it is somewhat inhumane. I think that old people should be nursed through social interaction, not with mechanical interaction.

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Why I enrolled for Economics

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I have always thought of economics as a great study of how the world works. There is one and the most important reason why I chose this class.

The  reason is that economics is easy compared to other social studies subjects such as history and geography. When some subject is ‘easy’ to study, it should not be recognized as bad or inferior  subject. In fact, economics is comparably easy to study because of its feature of relevance to everyday life unlike history or geography.

In short, because economics is an easy and relevant study of our daily life, I enrolled for economics.

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