Posts tagged IB

Reflection on Data Response

For this Data Response, I got 20 out 20. I think that diagrams and graphs were crucial in the data response. I have labled the graphs appropriately and had apt explanations for the graphs. I think that is how I got an unusually high score. However, there was one drawback of my data response. My handwritng was too illegible. The IB grader might have been angry when he/she was grading me. So, I thought that I had to improve my handwriting so that it easy to write swiftly, but it is illegible to the grader.

Advertisements

Leave a comment »

Data Response: Trees

What are the external costs/benefits of trees?

(a) (i) Negative externality are the bad effects that are suffered by a third party when a good or service is produced or consumed.

(ii) Positive externalities are beneficial effects that are enjoyed by a third party when a good or service is produced or consumed.

(b) Graph 1: Negative Externality of Tree Branch

Branches falling in a neighbor’s yard could be considered a negative externality looking at several points. If branches from trees fall in a neighbor’s yard, the neighbor would have to take his/her time to clean the branches up. Many business people think of time as money. The time the neighbor has to take to clean up the branches could be converted to a monetary value. Also, the ‘labor’ of cleaning up the branches also could be converted to a monetary value. In addition, if a neighbor suffered psycologically by the constant falling of branches from his/her neighbor tree can be conpensated by money. However, many ‘modest’ or ‘ordinary’ neighbors would not complain about it fearing the relationship with his/her neighbor could get bad. As it is illustrated in the graph, the time, labor, and psycological suffering of falling branches is not reflected in the graph. So this falling of branches from the nieghbor’s tree could be considered a negative externality.

(c) Graph 2: Government Intervention to Stop Negative Externality

Government could intervene if a neighbor complains to the local authorities about this annoying branches. A government could put a tax on a neighbor’s tree for having these ‘significant’ negative externalities and put a curve of MPC up to MSC in the graph 1. Or, the government could persuade the neighbor to cut down trees or clean up the branches him/herself and move the curve of MPB down to MSB in graph 2.

(d) If a government taxes on the neighbor for the falling of branches, it eventually lower the number of branches falling on the poor neighbor’s garden, however there are some drawbacks. The neighbor getting taxed would have monetary loss for his/her tree’s wrongful acts. To explain this graphically, in the graph 1, the number of branches falling decreases, however, cost of branches falling increases. Therefore, it is hurting the neighbor of the wrongful tree. However, if the government persuades the person to either cut down trees or clean up the branches him/herself, it will both let both neighbors to benefit. The owner of the tree can still keep the tree and the neighbor would not have to suffer from the branches falling of the tree. As illustrated in graph 2, it both lowers the cost and quantity of falling branches. So the best way for the government to do is to persuade the owener of the tree to clean up the branches falling off from the trees.

Leave a comment »

Data Response: Clean Coal

(a) (i) Negative externality occurs when the production or the consumption of a product creates external cost to the society. For example, consumption of cigarettes can result in high possibility of cancer and air pollution.

(ii) Welfare loss occurs when there is a negative externality in the market. There is a loss of welfare when this negative externality is not reflected in the price mechanism.

(b) Graph 1:

Coal fired power stations produce negative externalities such as air pollution and acid rain. As you see in the graph, external costs of air pollution and acid rain are not reflected on the price. The production of electricity by usage of coal should be on the curve MSC, which rightfully reflects the negative externalities of the production. Instead, the curve is on MPC, which does not reflect the negative externaltities. Therefore, this engenders the welfare loss which is colored black in the middle of the graph.

(c) Graph 2:

In order to solve this problem, the government must intervene to overcome this market failure. The best solution to overcome this problem is for the demand for such polluting energy to go down. As you see in the graph 2, as demand goes down, the product becomes much cheaper and the consumption lowers down lessening the negative externalities of air pollution. The government could advertise not to excessively use the energy produced by the coal. However, this sometimes this method would not work. If this method does not work, government should use the last method of taxation on the production of the electricity by coal. This method is less-desirable than the first method. Although the consumption goes down, the price for the electricity goes up. So this would hurt the consumers.

(d) If the government taxes on the power stations producing electricity by coal, it will raise the price up from P1 to P* in the graph 1. This method will hurt the consumers. However, if the government tries to persuade the consumers to lower their consumption of electricity by advertisement, it will both lower the price of the electricity and the consumption. The best way for the government is to persuade the consumers not to consume electricity too much. The method of taxation should be considered as a last resort.

Comments (3) »

Reflection on the Seminar

Seminar Question: Is capitalism so deeply flawed that all attempts to ensure the public good are doomed to failure?

I personally thought that I was not ready enough to be able to participate in the discussion. I was prepared with the health care system, however, I found out that the discussion did not carry out as I wanted it to be. So I was speechless for 10 minutes. I barely said some few words when the discussion was somewhat close to what I have been preparing for. I thought that the discussion would surely include health care issue because I thought it was one of the great example for public good (closer to merit good however). But, the discussion went to how capitalism created disparity between poor and rich. So I was completely unprepared.

I think that I should have been prepared for any subject that might be discussed in the seminar. I felt that I was not efficiently participating in the seminar.

Leave a comment »

Reflection on the 2nd Data Response

writing-with-pen

I was quite surprised at my 2nd Data Response grade. Last time I did it, I got below 80% so I had to take a re-test. However, I did really great on this time.

I think that I improved on this Data Response because I managed to spread time well. Last time, I did not have a time to do the 2nd question. So I got a really bad score. However, on  this one, I have managed well in order to save time for the 2nd question.

Another big improvement I think I made is that ‘I have answered all the questions.’ On the first Data Response, I have not been able to complete the answer that they have asked for. For example, I forgot to draw a diagram for some questions. However, on this test, I have been able to draw diagrams and give appropriate explanations for each.

I think I know what to do in Data Response now.

Comments (1) »

What I have Learned about myself as an IB Economics Student

boy_desk_thinking

Through out the first quarter of IB Economics, there were many hardships in understanding what economics really mean. However, now I feel like I am taking off to a journey for enriched science of economics.

I had confusions and complaints throughout the quarter about the laptop program. I thought that it was burdensome and bothering to carry a laptop to school. Also, I thought that I was struggling with the computer school gave to us. However, I now understand the benefits of using laptops in an economics class. By using laptops, not only we were efficient, but we were more involved in the subject called economics. Also, I understood the benefits of laptops for interacting with economic articles. I think that Internet economics articles are key in understanding economics nowadays.

I found myself actually being involved and getting interested in this subject. It was mainly because of the fact that economics is very related to our daily lives. If you look at chemistry or physics, I really did not find relevance in my everyday life, however, I understood the high relevance of economics in my everyday life.

I wish to be a better economics student next quarter.

Comments (2) »

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.

Comments (1) »