Economics

Scarcity and opportunity cost are the economic decisions that are very crucial in any entity. Scarcity is defined as a situation when people inside the economy would demand or need more than what is available in the environment or economy as a whole. Economics always assume that people will always have unlimited wants. However, resources are not enough to respond to what people demands. Scarcity, in essence, is the reason for being of economics. Economics studies how these resources will be distributed so that people can be satisfied. Underlying the concept of scarcity, is opportunity cost. People may have unlimited demands, but they give up something in the expense of another good. This is the essence of opportunity cost. These two concepts are important in managerial decision. It is assumed the people will continue to strive for something in their lifetime, but since resources are not available for all, they will have to sacrifice something in settle for another thing. The crucial decision lies on how to acquire these needs given the limited resources and what to give up, in case the resource is not available and what are the consequences of not getting such resource.

Should the company makes its own spare part or buy them from an outside vendor  This is how do we produce question.

Should the company continue to service the equipment that it sells or ask customers to use independent repair companies  This is a what do we produce question.

Should a company expand its business to international markets or concentrate on the domestic market  This is a for whom do we produce question.

Should the company replace its own communications network with a virtual private network that is owned and operated by another company  This a how do we produce question.

Should the company buy or release the fleet of trucks that it uses to transport its products to market.  This is a how do we produce question.

Running a successful business does not only rely on the external condition of the business environment, but also on how this business is managed from within. Recently, economics have been tied-up strategically with management as so respond to the different challenges that most organizations face. Managerial skills encompass the different aspects of production, marketing, finance and human resource in a business. A manager should be adept in decision making related on various business concerns as these involve resources and demands sustainability on the part of the business. A combination of technical skills and people-relationship abilities should be possessed by the manager in order to make sound business decisions and drive the company to success. However, according to Peter Drucker (1993), having business knowledge is not enough. In the world where things get competitive, a manager should also possess the qualities of an entrepreneur. An entrepreneur is a person who thinks strategically and always put innovations and change in mind. A business organization must continue to explore new products and technologies in order to keep their organization at par with competition. The business must be ready to face the different challenges in the economy, and as an entrepreneur, he must be able to take risks and respond uncertainty with strategic decisions. With managerial skills coupled with entrepreneurial mindset, the business sustains itself to deliver necessary goods and services which are of importance to the economy.

Managerial economics is a merger of the economic theories and the science of managing organizations (Maurice and Thomas, 2007). In a business firm, it is not sufficient that a manager has only the expertise on handling people and technical knowledge in the business. Economics, as an influential factor on the business environment has to be considered. Managerial economics branched from the theoretical groundings of microeconomics and was designed to be more effective when it was matched with management science. A firm operates based on the condition of the economy. It takes part in the whole business model thus in order to manage it well, managerial skills has also been incorporated ensure the success of the business. Managerial economics can be linked to the discipline of management and industrial economics.

Allocation of scarce resources remains to be a major challenge to most business organizations. These organizations employ different resources, from human to product inputs in order to deliver services to the consumers. Economics assumes that these resources are only limited, thus, efficient managerial decisions have to be made to sustain the business and its operations. For a manager, he can use two major decision making methods on dealing with the allocation of resources. First, strategic planning serves a blueprint of the business organizations goals and plans and how much resources will be used to attain these goals. In this way, an organization an foresee how much resources are available and needed and that the capacities of the existing resources are fully utilized. The second management decision is resource leveling. Like strategic planning, the manager has to make sure that the demands of the goals are balanced as to what resources that the organization has. These resources therefore should be used efficiently in order to produce maximum output.

Most of the business companies have evolved through economic changes. These economic changes have placed emphasis on how businesses were run in the economy. Thus, there is a four stage model of economic changes which most businesses, even the established ones, often undergo. In the first stage, most companies enjoy high profits out of their services. Especially those who are offering new services, these companies high profit margins in order to cover up investment costs. The next stage tells us that companies experience cost restructuring in their lifespan. Because of economic changes, these businesses adapt through reducing or downsizing the firm to cope up. Third phase is the structuring of prices of the goods. Due to the previous stage, businesses cope by changing the prices of their services in order to maintain sustainability. Lastly, as their progress being market leaders, they proceed in the stage where they have steady revenues can continue to expand their economic base.

On the country level, the perspective on what, how and for whom takes on a macroeconomic standpoint. A country usually produces goods and services that can be beneficial to the population and other clients internationally. These are embodied on the forms of export, where it could be a product or a human resource. The economy facilitates on how these outputs will be acquired, usually by other economies in another country. For example, professionals in one certain country get to work abroad, whatever they would earn would be accounted on the gross national product of their home country. Business-wise, it works in the same way. Businesses provide products and services that are consumed by the market. These are made through labor and capital, directed to the consumers, and these consumers pay the company for the product that they have received.

The research question examined was  Is employee s annual wage influenced by their years of education  The hypotheses tested were
H0   0 (Annual wage is not influenced by years of education.)
H1   0 (Annual wage is influenced by years of education.)

The selected level of significance,  is 0.5. The selected test is hypothesis test for zero slope.

Table 1 shows the data for employees annual wage and years of education. Both years of education and annual wage are interval (ratio) scale variables. Figure 1, shows the scatter plot of employees current annual wage against their years of education. Since, an ellipse can be visualized therefore, assumption of linearity is met. There appears a positive linear relationship between years of education and annual wage.

Table 2 shows the results of regression analysis for employees annual wage against their numbers of years of education. The p-value (.001) is less than the selected level of significance of 0.05, thus, null hypothesis H0 is rejected.

Years of education significantly influences annual wage,  .41,t(98)  4.43,p .001.Years of education also explains a significant proportion of variance in annual wage,R2 .17,F(1, 98) 19.58,p .001. The effect as measured by coefficient of determination (R2) is small.

The regression equation is given by
Wage (in Dollars)  -699.95  2477.09(Years of Education)

The slope coefficient suggests that every years of education increases employees wage by about 2,477. The intercept coefficient is not relevant in this context.

In conclusion, employees years of education significantly influences their annual wages, however, there is a small effect of years of education on annual wage.

A few decades ago, the developing countries were producing primary products more than the manufactured products. A new trend has been observed that indicates an increase in production of manufactured products. The effects of globalization can be said to have resulted in this phenomenon along other causes. Developing countries are exporting more manufactured products than primary products today.

Globalization has caused the rapid technological progress in the world. New technologies have been researched on and new products and production methods are being developed each day. The developing countries have rapidly absorbed these new technologies. This has led to establishment of new industries which are focused on the manufactured products rather than the primary products. Globalization has increased communication between developed and developing countries. Technology can be transferred to different parts of the world more easily today. More investors from the developed countries can invest in the markets of developing countries. This has transformed the developing nations from primary producers to manufacturers.

Trade has increased between the developed and developing countries. There are many trade agreements being formed between countries to improve trade in the international markets. The developing countries have increased their bargaining power in the international market in the trade of goods and services. The expanded market has created opportunities for developing countries to shift from producing primary products to manufacturing. The developing countries have been able to access markets which were inaccessible and this has increased the capacity to produce manufactured products. Regulations in the international markets have been enacted to prevent exploitation of the developing nations by the advanced countries. Such regulations have reduced competition from established industries in the world.

Integration of financial markets creates the opportunity for faster long-term growth of the developing countries. Business activities can be conducted all over the world due to the ease in access to the financial markets. Exchange rates are being developed to enable the smooth operation of the international market activities. Some countries have developed common currencies to be used across the borders. This has enabled the developing countries access markets for their manufactured products hence, shifting from production of primary products.

The increasing climate change is not favoring agricultural production. Most developing countries rely on natural resources to produce agricultural products and raw materials. This has reduced over reliance on these resources since they are becoming scarce. The scarcity of resources to produce primary products has caused these countries to result into producing manufactured products.

The theoretical foundations of the international trade analysis indicate that the developing nations produce more primary products than the manufactured products. The reverse has been explained to happen for the developed countries. These theories have been disapproved by the recent trade patterns in the international scene. More manufactured products than primary products are being exported by the developing countries.

Conclusion
The theories about developed countries that were developed some decades ago should be changed to include the current trends in the international market. Developing countries are rapidly shifting from production of primary products to manufacturing products.

Markets theory has been in existence for centuries and is basically concerned with the determination of outputs and prices of services and goods as well as the usage and prices of factors employed in production of various services and goods. This theory illustrates the different structures of the market and market strategies that exist in an economy. There are basically two chief markets, these are monopoly and competition. The dispute of which of the two markets is better than the other is one of the major discussions in the field of economics between governments and economists. Monopoly has been described as an individual company that maintains its market under stocked so as to raise demand and hence sells such stocks at prices that are above normal. On the other hand, in competition markets, the individual traders have no significant control over prices they charge to the consumers of their services and goods. In fact, the prices of the services and goods they offer to the market are largely determined by forces of demand and supply.

Monopolies have been considered to be bad as far as the economy is concerned and this is a very correct position. The position is correct because the characteristics of this market usually lead to consumer exploitation by the monopolistic organizations. These characteristics include one major trader selling services and goods to a very large number of buyers who are independent. There are usually no substitutes that are close to the products being offered by the monopolistic supplier and hence the consumers have no alternative but to purchase the products being supplied by the monopolistic supplier. This type of market leads to the creation of barriers by the monopolistic company, and thus no new companies can join the market. Since the monopolistic companies operate on the basis of these characteristics, the position held that they are not ideal market structures is correct since they end controlling the market and can therefore increase the prices of their products and hence exploit the consumers.

Competition markets are better than the monopoly ones because the existence of monopolistic markets is largely as a result of greed emanating from these traders. Due to the fact that they are the only competitors in a market, they are in a position of increasing their wealth drastically by exploiting consumers through unnecessary price increments. This particular behaviour that is usually demonstrated by these traders does not benefit the economy as a whole in the long run. The accumulated wealth as a result of such trade practices enhances the powers of these traders both socially and politically and thus influence most economic decisions in such a manner as to favour them as opposed to the entire economy.

Monopolistic markets lead to increased levels of technical inefficiencies since there no competitors posing any threats to the monopolistic sellers. In a market that is monopolised, the suppliers can comfortably afford being inefficient since they will not incur any costs as a result of their inefficiencies. In such a case, this type of market structure will lead to under exploitation of the available resources within the economy and hence the rate of economic growth and development will be low. Monopolistic markets are worse as compared to the competition markets since they can easily exploit profits through the practice of price discrimination, whereby the monopoly charges dissimilar prices for the same products but to different consumers, and these difference in prices is not as a result of production or transport costs.

There are several indicators showing that monopolistic have the tendency of raising prices and at the same time produce less and therefore will not satisfy growing public interest and economy. Furthermore, they lead to the introduction of unjust strategies of marketing like price discrimination. In addition, with cartels introduction, several of them will and can take advantage of the various markets in the economy. In order to prevent such from taking place, there is dire need to create anti trust laws aimed at combating such practices. Monopolies can effectively be curbed by these laws and thus shield the entire economy from the negative effects of monopolistic markets.

Competition which is the effort of several independent parties acting in order to shield a third partys business by offering the third party favourable terms. In this type of market, the term favourable is of great essence, since it is used to determine the price of the differentiated products being offered in the market. This type of market structure is better than monopolistic one since it is characterised by factors that enhance competition and hence lead to better products being offered to consumers at more favourable terms in respect to price and quality. Some of these characteristics include many buyers and firms with none of them having substantial influence in the market. There is also freedom of exit and entry since there are no exit or entry barriers. There is usually perfect knowledge concerning the market by both the sellers and the buyers and hence none of them can take advantage of the other.

One of the greatest advantages of competition in a market is the existence of several suppliers in the market and therefore cannot be in a position of controlling the price of various services and goods they offer to the market. This therefore means that unlike in the case of monopolistic markets where the sole traders can increase prices as they wish, in this market structure, the consumers are well shielded against any form of exploitation. The presence of several suppliers can be as a result of low entry sunk costs which can attract entrants to join the market and thus make the market to be contestable perfectly.

Since firms operating in a perfect competition are not in a position of controlling the prices of various products they offer to the market, the only way of ensuring that they maximise their profits is by increasing their output at low costs of production. In order for a firm to achieve such, it must acquire technology that is more advanced so as to lower the cost of production and increase production efficiency in the long run. This implies that average cost of producing a product will lower and hence the firm can be in a position of lowering the prices it charges to its customers. Since the products produced in this market structure are homogenous, consumers will be able to buy the cheapest products in the market. This will make the other firms operating in the same market to discover the new improved technology of producing products more efficiently and they will therefore be in a position to compete effectively with the firm that first discovered the technology. This form of competition is not only beneficial to the consumers but also to the firms themselves and the entire economy in which the firms are operating in. The firms will be able to produce more effectively and efficiently and thus lower their costs of production and earn more profits, while the available resources are exploited more effectively by the modern technology and hence the maximum possible value is added to various products and services leading to a higher gross domestic product. Competition in an economy is therefore much better as compared to a case of a market with a single player.

Conclusion
Monopolistic markets are usually associated with several disadvantages that affect the consumers and the entire market adversely in the long run and therefore, where possible, it is advisable to avoid this type of market structure. It leads to consumer exploitation the consumers are charged high prices for products of less quality. At the same time, it results to a slow in economic growth and development since the available resources in an economy are less exploited with less value being added on them. On the other hand, a competitive market is better than a monopolistic one since the consumers are less exploited. They are able to obtain quality products from the market at competitive prices and hence they get real value for their money. In addition, the gross domestic value is greatly enhanced since, the increased competition leads to increased real value of various services and products offered in the market. Therefore, a market in which competition is allowed is better than one without competition.

I am aware of the fact that Dan Browns The Da Vinci Code has several negative reviews and criticisms from conservatives, especially from the Catholic Church. However, despite this fact and all the issues that have sprung from this volume, I still believe Brown made an excellent job in this piece of literature.

I decided to read The Da Vinci Code even before people began talking about it. At first, I thought it was just some plain revelation of the artist, Da Vincis styles, genres and personal life. I knew the book would be very puzzling and interesting however, what I did not expect was for it to be so provocative and spiritually challenging, in the sense that it displaced great questions to my spiritual beliefs. I was not able to finish reading the book in one sitting however, between breaks, ever pieces revelation that come out from it really made me think whether or not the beliefs I have hold the truth. It posted several question in my mind about Christs individuality and his human side. I believe these are the main reasons why people became so agitated and distraught after reading it. Seldom do authors manifest bravery when it comes to questioning one of the greatest and largest belief humankind ever had. And seldom do authors really debunk beliefs and teachings from the Catholic Church. This book is what made Brown stood among all the authors of his generation. Brown took the chance and exploited his own imagination, cunning, wit and above all else, his courage to challenge one of the most consecrated beliefs of the world.

The book was especially marked by the challenge it posts upon the readers spiritual strength. Because of all the revelations it says about Christs human side   which are all fictitious as what the author claims   it is understandable that people easily get swayed and tend to question whether or not all those revelations are true, considering all the proofs and seemingly coincidental events and phenomena that contribute to strengthening the authors claims. Aside from several seemingly factual proofs, Browns arguments and claims also appeared very believable because of how it coincided with several historic events and phenomena, which easily made people think that Brown might really have credible basis for his claims. Because of this, this work has also provoke lots of negative and even violent reactions from conservatives and strict Catholics. Seldom does the world encounter such a strong reaction from readers, especially from the Catholic Community. This is also one aspect which made this work by Dan Brown something which stands out from all the other works of fiction. The author himself continuously claims that every event and situation in his work are pure works of fiction, except for Da Vincis masterpieces that were also featured in the book. However, although the author kept insisting this, doubt and questions kept springing from peoples minds, since Browns writing ability was also on a top notch quality. Every word appeared very strong and implicative which easily made people believe that the author knows and understands every claim and argument he is making.

Personally, I liked this book a lot and it has honestly made me inspired. I liked it because it made me think. I knew in myself that my spiritual beliefs are strong however, because of Browns writing and imaginative prowess, this book got me thinking at some points. Aside from this, this book also inspired me in the sense that, I realized how advantageous it is for a person to really have a strong faith on his or her spirituality. From the beginning, I knew everything in this book is pure work of fiction. But in at some point I also considered the possibility that these revelations might have some considerable root from the authors personal experience or knowledge. These are the main reasons why I basically liked this work. Also, these are the main bases that made me consider Dan Brown a genius and one of the worlds most brave, cunning and intelligent writers.

Iceland Scholarship Essay

Iceland The Worlds Smallest Currency Area and Its Implications in the Current Financial Crisis

Iceland today is suffering from a prolonged financial crisis due to the collapse of Icelandic currency and banking system, as an after shock of the global recession that began in 2008. Iceland financial problems have far ranging repercussions no only to it fragile economy but also to those developed countries, like the U.S. and UK that invested heavily in the country, . Its three internationally beleaguered Icelandic banks , Glitnir, Landsbanki and Kaupthing , have been on rcceivesrhip and their financial assets have been frozen. According to Asgeir Jonnson, Head of Research and chief economist at Kaupthing Bank , Iceland, last September 20, 2009,  the biggest private bank of Iceland collapsed because of financial bubble burst.

What has led to the collapse of the economy of Iceland Iceland as a country has today the smallest currency rate when pegged against the U.S. dollar.  The value of one krona (Iceland currency) to US dollar as of January 27, 2010, is 0.00824 USD.  This means that for every 100 krona, Iceland only gets 0.82 USD, a fact that is lamentable. Obviously this is very alarming and has serious repercussions to the Icelandic economy, and to the world. If this continues, Iceland might suffer a massive national bankruptcy. Indeed, because of the smallest currency rate of Iceland, this has greatly affected international trade and those countries that have investments in Iceland. The fact that Iceland is the worlds smallest currency area had affected the country prior to and during the current financial crisis. Going into an in-depth study of the factors that led to the downfall of the Icelandic economy is worthy of scholarly research since it can provide concrete and doable actions for Icelandic policy makers and the courses of action to alleviate the impact of this financial debacle.

According to Rao (2006), more recent studies, based on large cross section, that include many small and developing countries, have found strong evidence of an effect of exchange rate variability on trade. It is therefore apparent that in order to find solutions to the financial problems buffeting Icelands economy, a flexible an efficient coordination of monetary and fiscal policy should be put in place and if possible, to seek more foreign funding, like from the IMF and it Nordic neighbor countries. It is also recommended that Iceland should adopt the Euro Area. By seeking entry to Euro area, it will be able to gain full access to the reliable discount window of ECB, eliminate the exchange rate risk and open access to the large euro capital market. As early as July, 2009, it was already apparent that joining a full membership with the European Union, w ill provide a global foreign currency because the Euro Area becomes the foreign currency lender of last resort. Iceland has to decide now to save its economy.

Hence, a research on how these potential solutions can be effectively implemented is urgently called for in order to save the Icelandic economy from further financial collapse.

I agree with your view on the fact that developing countries cannot entirely decouple themselves from developed economies. It is however in my opinion necessary that the developing economies should have measures in place which can help cushion them or reduce the impact of financial crisis in the developed countries. This can be done through implementation of countercyclical policies which are meant to prevent financial contagion which can cripple domestic financial institutions in developing countries in case of a financial crisis because of the high level of interconnection to the international financial sector. It is important to note that these are only counteracting measures which are to be put in place in case of a financial crisis.

By proposing financing through monetary policy, it does not necessarily mean that a government has to print more money but there are some instruments such as reserve requirement, open market operations like sale of bonds, treasury bills and other securities and manipulation of interest rates for desired effects among others. Lowering of interest rates as a monetary stimulus for instance encourages borrowing hence investments in various sectors.

With regard to protectionist measures, the World Bank states that since the financial crisis began over 66 restrictive trade measures have been implemented and 47 are by members of the G20. This is in total contradiction of the Smooth-Hawley Tariff Act of 1930. The protectionist measures are however minor and I were thinking in the line of developing countries focusing subsidies on domestic banks and financial institutions rather than on foreign bank subsidiaries. These are temporary measures which I believe can reduce the impact of financial crises.

Finally with regard to an insurance scheme, with the IMF and World Bank having difficulties in the containment of financial crisis, I am proposing that in future a devolved fund should be created where developing countries can be able to access funds for development. Such a scheme will be used only for extreme cases of financial crisis. All of these measures are only to be implemented in such an event and are not permanent measures.