INTRODUCTION TO ECONOMICS PORTFOLIO By Location INTRODUCTION TO ECONOMICS PORTFOLIO Week one Define Economics in your own words. Economics is the use of the available limited resources to satisfy the unlimited human wants. The definition is emphatic on scarcity of resources and the unlimited human wants. What is Economics about? Economics is about understanding how consumers maximize utility at lowest possible cost while suppliers maximize revenue. Economics is concerned with how people strive to satisfy their unlimited wants using the limited resources. What do Economists do? Economists are of two types; academic economists and applied economics.
Academic economy involves research and teaching economics while applied economics is application of economic knowledge in the actual field of practice (Demartino 2011, p. 19). Economists study the economic trends in a country or a given economy, production, use of resources and consumption. What do Economists study? Economist study trends in the market. Economist study Flow of goods and services, demand, supply, consumer behavior and government role in the economy to develop trends in the market. Other factors that economist study includes local and international trade, currency strength, costs of production and living in an economy, rate of unemployment among others. Where do Economists work? Economists can work in most sectors of the economy including finance and education sectors.
Economists offer advisory to both private firms and the government. Practice is through employment in the firms and institutions through self employment as economic consultants. Is Economics an art or a science? Economics is both an art and a science. It is a science due to its principles and study but the application of the principles in actual practice of problem solving makes economics an art (Mishra 2008, p. 12).
Research the following economists and in your own words describe their contribution to the study of Economics, their main ideas and the criticism of their ideas: Adam Smith He is known for the inquiry into the causes of wealth of nations. He is the pioneers of odern day capitalist. Criticism against him is that he did not invent any of the idea he wrote about but was just the first person to write about them. John Maynard Keynes Keynes is known for introducing aggregate demand as a sum of aggregate consumption, investment and government spending.
He was opposed at the time due to the practice of balanced budget by the government; later, his theory was accepted. Karl Marx Marx was a strong proponent of communism and saw capitalism as containing seed to its own destruction. He was criticized for handling socialism and communism superficially and failed to speculate how the two systems will function. Thomas Malthus Malthus is known for showing the relationship between food supply and the population.
He said food increase geometrically while population increase naturally thus the need to reduce population growth. He was criticized as a pessimistic predictor of demise of humanity through starvation caused by overpopulation. Article: Britain’s economy: working like never before The rate of unemployment in Britain’s population has decreased significantly from 7.2 to 5.7 over a one year period. The economy has experienced real growth characterized by decrease in unemployment, increased wages and low inflation. Thus, the British economy is at its optimum and is not expected to grow further.
Though the monetary policy committee may want to make adjustments in the interest rates, the current market conditions are conducive for businesses. The increasing wage rate is expected to attract more labor force from Europe leading to increased talent inflow. The result of increased talent inflow is further economic growth of Britain in future. Week two The political and economic systems in Azerbaijan compared to UK Azerbaijan is a democratic, constitutional, secular and unitary government established by the constitution. The president is the head of state elected democratically by the people. The state practices pluralism where it allows multiple political parties in the country.
The political system in both UK and Azerbaijan is similar in the use of the constitution; however, UK is a constitutional monarch while Azerbaijan is a free state. Head of government also differs with UK; the queen is the head of state in UK while the government is headed by the prime minister. The economy of Azerbaijan is mainly communist. Communal ownership of wealth is emphasized especially with the creation of the state oil fund to ensure fair distribution of wealth to all generations (Azerbaijan 2015, p. 1).
On the other hand, UK capitalist are more interested in private ownership of wealth. In the UK, policies have to be devised to deal with financial crisis; in the process affecting the citizen’s income (Gray 2011, p. 1). Article: Norway: is world’s largest sovereign wealth fund too big? Norway has the largest sovereign wealth fund generated from sale of oil and gas. the fund is aimed at continuity of income for the country even after depletion of oil and gas in future. Therefore, the country has invested most of this sovereign fund in companies with expected long term profitability.
Though there are arguments for and against splitting the fund to multiple funds for easier management, whatever the case Norway is far ahead of other nations. However, care should be taken when doing investment decisions since a small error can have a huge impact in the country. (Price 2013, p. 2) Bibliography Azerbaijan 2015, general information on Azerbaijani economy. Accessed from: http: //www. azerbaijan. az/_Economy/_GeneralInfo/_generalInfo_e. html [19 February 2015] Demartino, G., 2011, The economists oath on the need for and content of professional economic ethics.
Oxford, Oxford University Press. Gray J., 3 September 2011, A Point of View: The revolution of capitalism. BBC News. Accessed from: http: //www. bbc. com/news/magazine-14764357 [10 February 2015] Mishra R, 2008, Industrial economics and management principles. New Delhi, Laxmi Publications. Price M, 12 September 2013, Norway: Is world’s largest sovereign wealth fund too big? BBC News. Accessed from: http: //www. bbc. com/news/world-europe-24049876 [10 February 2015] The economist Febuary 18, 2015, Britain’s economy working like never before. Accessed from: http: //www. economist. com/blogs/freeexchange/2015/02/britains-economy [19 February 2015]