Questions and Answers

Questionsand Answers

Questionsand Answers

Q1).

Theconcept of ‘the tragedy of comments

Thetragedy of the commons is a theory which states that personal actionsinterdependent and rationally in relation with each others interestsbehave different to the good interest of the whole group by usingsame materials. This word is from an article of 1960s that waswritten by a man called Hardin, those bases on the essay by aneconomist called Victorian (Baden and Noonan, 2008).

Common:in this way it means that all environmental resources except that ofland that is in use for agricultural.

Thetragedy of the commons concept is often cited in connection withsustainable development, meshing economic growth and environmentalprotection.

Thecommonsis the cultural and natural resources accessible to all members of asociety, natural materials such that are with in the environment. Areheld in common, not owned privately.

Theterm &quotcommons&quot got from an English word of common land,known colloquially as &quotCommons&quot. However, while common landmight have been owned collectively, a single person, it was subjectto different forms of regulated usage, such as grazing of livestock,hunting, lopping of foliage, or collecting resins. When resources areheld by every body, there are held with care and there existsstewardship or accountability which will lead to proper usage ofresources under Tragedy of the common (Baden and Noonan, 2008).

Qn2).

a)Frictional unemployment

Thisis a type of Unemployment that is always present in the economy,resulting from temporary transitions made by workers and employers orfrom workers and employers having inconsistent or incompleteinformation.

Forinstance, a job seeker may not have resources for getting the companythat have the convenient for him. At the end this individual refusesto take any other work temporarily holding out for the better-payingjob.

Anotherrelated example is when a company abstains from hiring because itbelieves there are not enough qualified individuals available for thejob, when in real sense there is.

b).

Thisis one kind of long lasting kind of employment caused by fundamentalchanges in an economy. Structural unemployment occurs because may beworkers lack the request job skills, live in a region with out jobsand have refused to move and look for jobs in different places. Maybe their unwilling to work because their paid little wage. Structuralunemployment is exacerbated by extraneous factors such as technology,competition, and government policy (Brue,McConnell and Flynn, 2014).

Forinstance, hundreds and hundreds of well-paying manufacturing jobshave been lost in the United States of America. Over the past threedecades as production jobs have moved to lower-cost areas in Chinaand elsewhere in Africa.

c).

Cyclicalunemployment

Thisis a type of unemployment that occurs as the result of businesses nothaving enough demand for labor to employ all job seekers. The lack ofemployer demand comes from a lack of spending and consumption in theoverall economy.

Cyclicalunemployment has (5) five categories of unemployment which are asfollows: structural, frictional, classical, and Marxian. Severalcategories of unemployment exist at the same time. With the exceptionof cyclical unemployment, the other classes can be occurring even atthe peak ranges of business cycles.

3).

a).U1: means the percentage of work force unemployed for 15 weeks orlonger in an economy of a give country. This can be determined aftercharring on statistics.

b).

U2:this is the percentage of worker force that lost their jobs orcompleted temporary work in a given kind of economy or a country.

c).

U3: this refers to the official unemployment rate that happen whenpeople don’t have jobs and they have actively looked for workwithin the past four weeks and have failed to get employed either ina given country or economy.&nbsp

d).

U4:these official unemployment rate that happen when people don’t have jobs and they have actively looked for work within the past fourweeks and have failed to get employed and those who have stoppedlooking for work because current economic conditions make them thinkthat no work is available for them.

e).

U5: these official unemployment rate that happen when people don’thave jobs and they have actively looked for work within the pastfour weeks and have failed to get employed and those who have stoppedlooking for work because current economic conditions make them thinkthat no work is available for them and all those who &quotwouldlike&quot and are able to work, but have not looked for workrecently.

f).

U6:the individuals described these official unemployment rate thathappen when people don’t have jobs and they have actively lookedfor work within the past four weeks and have failed to get employedand those who have stopped looking for work because current economicconditions make them think that no work is available for themed in U5plus part-time workers who want to work full-time, but cannot due toeconomic reasons, primarily underemployment.

Q4).

Discouragedworkers – people who are looking for jobs but have given up do notfall in the definition of the labor force. Such individual tend tomake the reported unemployment rate lower than it otherwise would be.

Becausethe measures tend to Collect benefits but not job seeking – while astate unemployment office may require an individual too active at theplace of work in order to get unemployment insurance benefits. Due tothis effect, the reported unemployment rate is higher than itotherwise might be.

Underemployed – a person is counted as employed if she is workingpart-time however, that person nonetheless may be seeking full-timework.

Discouragedworkers and ones collecting unemployment benefits without looking for a job make it hard to differentiate between those who are unemployedand those who are not in the labor force. These effects work in mixeddirections unemployment may be overstated by the unemployment rate.

5).

Thefollowing are the four sectors in the circular flow of economicactivity diagram.

– Production. This is the whole process of which all products aremade. In the economy without production stage, there is no economytheymay also refer specifically to the primary factors, which are stocksincluding land, labor, and capital goods applied to production (Brue,McConnell and Flynn, 2014).

-Income. This is all about determining the income value or funds thatcan be used in running the whole economy.

-Expenditure. Actof spending or paying out

6.a).

MarketDemand Curve for Bill

MarketDemand Curve for CJ

Qn7

HaganDaz Supply curve

BriersSupply Curve

Qn8

Theequilibrium quantity demanded for Bill is 3.5 units and theequilibrium quantity demanded for CJ 2.5 units. And the equilibriumprice for Bill is 3.5 dollars and the equilibrium price for CJ is 2.5dollars.

Billbuys 3.5 units at the equilibrium price and CJ buys 2.5 units at theequilibrium price.

HagganDaze sells 5 buckets per the price and Briers sells 5 buckets also asper the price.

Qn9

Demandpull inflation Keynesian theory is referred to as events that occurwhen price level rises due to imbalance in aggregate supply anddemand. When the aggregate demand in an economy strongly outweighsthe aggregate supply, prices increase. Economists will often say thatdemand-pull inflation is a result of too many dollars chasing too fewgoods.

Demand-pullinflation results when the economy bumps against, and tries to gobeyond, the production possibilities frontier. The result isinflation.

Demand-pullinflation results when aggregate demand increases beyond aggregatesupply creating economy-wide shortages. As with market shortages, theresult is inflation.

Interms of the production possibilities analysis, this means that theproduction possibilities frontier is shrinking closer to the origin,causing it to bump down against the aggregate demand. The result isinflation.

Inthe aggregate, market analysis, aggregate supply decreases to lessthan aggregate demand creating economy-wide shortages. As with anymarket shortage, the result is inflation.

Ifthe government prints more money in order to control demand pullinflation, instead money will loses value hence causing another typeof inflation.

Qn10.

Costpush inflation is inflation caused by an increase in prices of inputslike labor, raw material. The increased price of the factors ofproduction leads to a decreased supply of these goods. While thedemand remains constant, the prices of commodities increase causing arise in the overall price level, which is in essence cost pushinflation (Brue,McConnell and Flynn, 2014).

Forexample, when prices are falling, consumers are encouraged to delaypurchasing.

Ifthere is deflation, the real value of debt increases leading to asqueeze on disposable incomes.

Amoderate rate of inflation allows prices to adjust.

Witheconomic growth, we usually get a degree of inflation.

Ifthe government responds to this type of inflation, it would causemore harm than good

Yessuch kind of state has ever occurred in Uganda.

Qn11

a).

Fiscalpolicy is the means by which a government adjusts its spending levelsand tax rates to monitor and influence a nation`s economy. Whereasexpansionary money policy isthe process by which the government seeks to increase the size of themoneysupply.

Fiscalpolicyoperates while basing on theories of John Maynard Keynes. Also knownas Keynesian theory, this theory states that governments caninfluence macroeconomic productivity levels by increasing ordecreasing tax levels and public spending

Expansionarymoney policy aims at the following:

Increasingaggregate demand and economic growth in the economy

Increasingthe money supply to boost economic activity

b).

ContractionaryPolicy`is a policythat is used as a large economic item used by the country`s centralbank or finance ministry to slow down an economy. These are enactedby a government to reduce the money supply and ultimately thespending in a country. Whereasexpansionary money policy isthe process by which the government seeks to increase the size of themoneysupply (Brue,McConnell and Flynn, 2014).

Expansionarymonetary policy aims at the following:

  • Increasing aggregate demand and economic growth in the economy

  • Increasing the money supply to boost economic activity

Reference

Baden,J., &amp Noonan, D. S. (2008). Managingthe commons.Bloomington: Indiana University Press.

Brue,S. L., McConnell, C. R., &amp Flynn, S. M. (2014). Essentialsof economics.New York: McGraw-Hill Irwin.