Individual demand is the demand from any individual in a market, including one’s ownself. This is affected by factors of market including consumer markets, stock markets, commodity markets and capital goods markets. On the other hand, market demand refers to an entire market that consists of hundreds, thousands and possibly millions of individuals. The market demand is determined by the sum of all individual demands for a specific good or service.
Individual and market demand can also be represented on a graph. Each individual’s of 2 variables; price and quantity. Individual demand curves are summer horizontally to obtain the market demand curve. In order to determine the market demand, all the individual’s demand curves must be added. To add the demand curves, the individual demand curves at each price must be added.
Archive for September, 2009
In Geoff Riley’s blog post, ” Q&A: In what type of market does the iPod operate in?”, he discusses Apple’s market for personal digital audio and video media players and what its relationship is to other companies that manufacture similar goods.
In the year of 2001, Apple launched its first MP3 player, the iPod, which was going to lead to a massive success. This success has proved to be true, as today, after several modifications in the iPod and after several more launches, Apple is enjoying great amount of feedback and response from consumers. Apple’s main tactic that led to such a success comes from the marketing and advertising department. Each time Apple released newer iPods, they focused on creating more style, bringing more value to the market, and new ways of interacting with the iPods. Even after other companies such as Microsoft that released the Zune digital media player, and other players produced by Sony, Creative and Samsung, “the Apple iPod continues to enjoy a market share of more than eighty percent”. With this in mind, the product of the iPod probably stands in monopolistic competition in the market. Clearly, the iPod is similar to other digital and video medial players in the market, but Apple has used advertising and branding to differentiate the iPod as superior to the other products. Apple’s techniques and innovations in delivering their products has been the key to making the iPod one of a kind.
Apple has also built up a vertical economy; they designed the iPod in such a way that made it work better on Mac than on a PC to encourage consumers to buy more Apple computers. In this way, both the iPod and Mac computers sales benefit from this scheme. Similarly, they integrated their iPods and iTune’s softwares and the digital rights management system (DRM). The DRM was a barrier to entry in the market as those who purchased songs from iTune’s only had access to it in Apple’s products. Apple offered bundles of purchases, such as purchasing an iPod along with something else, simply to appeal to their consumers.
The iPod has already reached a point of numerous sales and has brought Apple great success. The questions that arises now is, will the success of the iPhone overtake the sales of the iPod? Will the iPod still be around in 10 years from now?
Social Goals in Economies
What we learned:
In class we learned about command and market economies and how it is a challenge for each one to achieve each of the social goals. The social goals include economic efficiency, economic equity, ec0nomic freedom, economic growth, economic security and economic stability. We did an activity where we had to read two different diary entries of a teenager, and distinguish what sort of social goals were involved. For the first entry, the class agreed that it had ideas of economic security, economic stability and economic equity. An example of how this is evident is the fact that the teenager’s father is being paid the same as other men who were less committed to their jobs. We assumed that the teenager writing the diary was probably living in North Korea, which has a centrally planned system. The second entry of another teenager reflected ideas of economic freedom and economic growth. An example of how this is evident is the fact that the teenager’s Mom is involved in entrepreneurship. We reflected on this example and came to the conclusion that it probably represented the United States, which follows a market economy. All individuals are free to produce their own goods and services as well as to distribute them.
Towards the end of class, we were to decide which social goals were implemented in a command economy and which were implemented in a market economy. I think that command economies revolve more around economic equity, economic security and economic stability. Those citizens who live in nations that revolve around market economies enjoy economic efficiency, economic freedom, economic growth and perhaps some economic stability. Not all of these social goals can be achieved by both economies, as there is opportunity cost involved.
economic equity, security, and stability
Hatoyama Sweeps to Power
After a long, nearly 54 years of the Liberal Party of Japan (LPJ) governing Japan, Yukio Hatoyama’s new Democratic Party has defeated the old party and taken over as a new government. One of the main reasons for his sucess in wooing the Japanese electorate is due to the big “promises” that had been made by him during the polls. Attention now turns to whether or not he can actually “deliver on his election promises” (BBC). One of the biggest jobs for him to take on is to bring the world’s second biggest economy back to sustainable growth after the compelling recession, as well as to decrease the record of unemployment.
Some of the improvements Mr. Hatoyama has promised to take on includes, expanding the welfare state, improve relations with Japan’s Asian neighbors, to create a diplomacy less subordinate to the US, and to make ambitious cuts in greenhouse gas emissions. Among these promises on his agenda, he also plans to break taxes for small and medium-sized businesses, to abolish road tolls and high education fees. Whether or not Mr. Hatoyama can accomplish these “big promises” is a big question Japan’s people would like have proven and answered to them.
In the previous LDP of Japan, Aso who had undertaken the role of the Prime Minister could not cope with the crisis. “The LDP vote-gathering machine has collapsed”, said Professor Curtis, America’s doyen of Japanese political studies. ”The further you go from Tokyo and the big cities, the angrier people are … They don’t want roads and dams and expensive community centres. The major community centre in rural Japan has been taken from them – that is the post office. They want doctors, nursing care. They want an economy that will encourage young people not to move to the big cities. And the LDP was not offering these things”, Curtis claims. Clearly, people are now expecting marvelous changes of this newly transformed political landscape. The changes lie in Hatoyama’s hands.
http://www.guardian.co.uk/environment/2009/sep/07/japan-greenhouse-gas-cuts
http://news.bbc.co.uk/2/hi/asia-pacific/8229988.stm
http://www.smh.com.au/world/rural-vote-swings-it-for-japans-new-leader-20090831-f598.html
1:1 Computing
The 1:1 computing program was always an appealing idea to me. Sometimes, I could never cope with taking notes in class and so bringing the laptop was a plus point. I could easily type everything as the class went on. It is a totally new way of learning for me and I hope to get used to it soon.
One of the only concerns that I have is the idea that because everything is being completed on the laptops, we may not have enough class discussions. Sometimes I feel that the class is rushed because we learn about a couple of ideas off the power point presentations, and then most of the time we have to write a blog relating to it. I feel obligated to have a class discussion and I strongly believe that it is needed, because it helps the students learn from not just the teacher, but also other students in class. Perhaps we could dedicate some of our classes to having just discussions.
As for the threat of loss or damage, my parents are quite confident that I can be responsible for my laptop. Because I live quite far from school and have long traveling hours, it is impossible to carry my laptop back and forth daily. For this reason, I have made a compromise to deal with the problem. Most of the time, I bring my laptop on the first day of the week, and leave it in my locker whenever I don’t need it at home. I then usually take it home for the weekend. My parents are still unsure about whether this is a safe idea, but hopefully it can be safely stored.
Distraction in class is not a problem for me. When in class, I stay focused on my work to get the most of class time. Whether or not students want to stay on task is entirely up to them. Each student should by now understand the consequences of not paying attention in class. In addition, the teacher seems to have good monitoring control over the students, so it is unlikely that students will have the chance to wander off on the web.
Human Development Index
Define
A country’s economic growth is measured by the Growth Domestic Product (GDP). An increase in a country’s GDP is considered growth. If for example, a man produces $2billion in the year 2008 and $3billion in 2009, it is considered growth. Economic development on the other hand, is sustainable growth that improves the standard of living. It includes social and technological growth. Sustainable growth refers to the idea that what one produces today, does not affect the outcome of the future. It must remain long lasting. It still relates to the GDP because one will become more effective at production and will produce more and hence, it leads to more GDP. Development differs from economist to economist. For example, American economist Michael Todaro defines development by access. This might include access to education, water, or religious centres. The greatest difference between economic growth and economic development is that growth is the increase in quantity of goods and services, while development is the WAY in which goods and services are produced. In other words, a country must use its resources effectively, while the standard of living improves, without causing harm to the environment.
Apply
The Human Development Index (HDI) of a nation indicates where a country stands in “human development”. Some of the factors that are considered are the life expectancy of the people, knowledge and education, and the standard of living. Thailand, a nation still in the progress of developing has an HDI of 0.781 and stands at 78 out of a total of 177 countries. It’s life expectancy at birth stands at 69.6 years, its adult literacy rate (ages 15 and older) at 92.6%, its gross enrollment ratio at 71.2% and its GDP per capita at 8677US$. Thailand and Albania are very close at the standings of the HDI, however, Thailand’s GDP per capita is tremendously higher than that of Albania’s. This proves that although both of these nations are on similar levels of the HDI, they have significant differences in their levels of income.
Evaluate
Although the HDI is used to measure the annual standards of well-being in a nation, it is not completely accurate when looking at where a nation stands on the whole. It does not take into account all the factors of “human development” and although it may give us an idea of where a country stands, there is a big difference between standing at 76th or 78th. The HDI value of Thailand stands at just 0.2 more than the HDI value of Dominican Republic. Thailand’s life expectancy rate is just 0.2 more than Honduras’ life expectancy. In fact, Thailand’s life expectancy rate and Suriname’s life expectancy rate are the exact same. Thailand and the Philippines have the same literacy rate at 92.6%. Thailand and Honduras have the same gross enrollment ratio at 71.2%. There is hardly any difference between some of the factors of human development in Thailand and some other nations. Had some factor of the human development of Thailand’s been slightly less or more, Thailand could have been standing at 76 or 75 instead of 78.
The Production Possibility Curve
Production Possibility Curve
1) Resources are limited, economists must learn how to allocate scarce resources
2) The PPC shows how efficient an economy is
3) There are often trade offs or alternatives that much be considered
4) Opportunity cost increases
5) When the PPC shift outwards, it indicates that an economy is using better technology or new resources
Kanika's Economic Blog 