http://hbswk.hbs.edu/item/5645.html
summary
Healthcare is becoming a big issue in US. US. Healthcare currently costs approximately $2 trillion each year. However, the amount that the government receives does not entirely all go towards healthcare. 31% of that amount goes towards administration instead of going towards people who need healthcare. On top of that, the healthcare leaves over 40 million Americans without insurance either because they are not employed or have very low incomes. More than half of 98$ billion administrative costs goes for insurance companies but doesn’t include cost of doctors and hospitals. If there are no changes made to fix these problems, US could have economic impact.
Connections
According to the chapter, a connection would be excise tax. If the excise tax increases the price of healthcare such as medicine, it would shift the supply curve upwards but not necessarily shift the demand curve down. The demand would still remain high since healthcare is an important issue. Another connection would be third party effects. Illness will be less likely to spread if people in the neighbour are guaranteed at least a level of care. A negative effect would mean the producers of healthcare would be losing their profit as the people among the population will be gaining a benefit such as less paying for medicine.
Reflections
i think there needs to be changes made for Healthcare because it costs 2 trillion a year but 31% doesn’t go towards it. This could make a difference for those people who really need to see doctors or afford paying for medicine. There is a major concern for those people who have low income. They will not be able to afford adequate health care. The government should place an appropriate price ceiling which can help those individuals who can not pay adequate treatment. Moreover, I think the excise tax should be lowered, because healthcare is such an important part of everyone’s lives. It is not like alcohol or cigarettes, so it’s only fitting to low the tax so that people would not have to worry about the income.
Sunday, November 23, 2008
Monday, October 27, 2008
Chapter 2 Supply & Demand
Article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/26/BUHH10S61B.DTL
Summary
The article I read is about how oil production is being overused. Since 2004, the oil prices have increased from $33 per barrel to $132. Production has increased by 1.8%, to 84.6 million barrels per day. These prices of oil will only continue to grow because the world population demands so much and it cannot keep up with our human desires. Due to the rising demand, oil companies would like to sell as much crude as they can. The Organization of the Petroleum Exporting Countries believes there is already enough oil in the market and states there is no need to pump more oil.
Connections
Connections from this article are supply and demand. As price increases, demand will decrease. If the price of a product raises, fewer people who want to buy it; therefore, the demand of the product will decrease. In the article above, the demand for oil was so high, the price had to increase because everyone needed it. When the supply of a product has a short amount, the price will increase because people would want to obtain the goods, but it would be difficult to obtain it since it is so limited. I believe the oil prices will only continue to increase, because we need oil for our daily lives. An example would be transportation. We need oil to help us get through our daily lives.
Reflections:
I believe that with the increase in oil, it will eventually cause people to stop demanding so much . In the future, if our demand for oil decreases, we are safe to say that the price will also decrease. The price will drop because there will not be a high desire and therefore the profit would not be as great. I believe the only way to reduce the price of demand is to find another alternative resource to depend on. We can then focus on the new resources and the demand and price of oil will decrease because no one will be interested in it anymore.
Summary
The article I read is about how oil production is being overused. Since 2004, the oil prices have increased from $33 per barrel to $132. Production has increased by 1.8%, to 84.6 million barrels per day. These prices of oil will only continue to grow because the world population demands so much and it cannot keep up with our human desires. Due to the rising demand, oil companies would like to sell as much crude as they can. The Organization of the Petroleum Exporting Countries believes there is already enough oil in the market and states there is no need to pump more oil.
Connections
Connections from this article are supply and demand. As price increases, demand will decrease. If the price of a product raises, fewer people who want to buy it; therefore, the demand of the product will decrease. In the article above, the demand for oil was so high, the price had to increase because everyone needed it. When the supply of a product has a short amount, the price will increase because people would want to obtain the goods, but it would be difficult to obtain it since it is so limited. I believe the oil prices will only continue to increase, because we need oil for our daily lives. An example would be transportation. We need oil to help us get through our daily lives.
Reflections:
I believe that with the increase in oil, it will eventually cause people to stop demanding so much . In the future, if our demand for oil decreases, we are safe to say that the price will also decrease. The price will drop because there will not be a high desire and therefore the profit would not be as great. I believe the only way to reduce the price of demand is to find another alternative resource to depend on. We can then focus on the new resources and the demand and price of oil will decrease because no one will be interested in it anymore.
Thursday, September 25, 2008
Chapter One
Article: "Waste must end, forest minister says" from The vancouver Sun, Section D Wednesday, September 17, 2008
Summary:
This newspaper article “Waste must end, forest minister says” from The Vancouver Sun discusses the issues in B.C concerning the industry and how logging companies plan to eliminate valuable tree resources. This article comments on Minister Pat Bell who plans to develop new bio-energy industry that will transform the way wood is used. Decision making is required for new regulations in order to remove barriers efficiently and effectively. Although logging companies are chopping down trees to use production of energy and goods, there are limits to the number of trees available to cut down. Right now in the economy, industry of bio-energy is not doing well as revenues and “[is] expected to plunge 36% this year”. Bell is aiming to give incentives to the loggers in the hopes that less waste can be left behind.
Connections:
An obvious connection in the article to the principles of Economics is scarcity. Economics is the study of scarcity because without it, the study of economics would not exist. In this article, trees are scarce resources available for loggers to cut down and use. In addition, decision making also links with chapter one such that the logging company has to make choices, form new regulations and economic policies that strengthen our economy. The opportunity cost of producing bio-energy in the industry can be the time and money spent on developing another efficient method of obtaining energy.
Reflections:
Economics seems to be a complex topic for one to fully understand. Although some of the key aspects and ideas may seem like common sense to me, there are complicated concepts that require deep thinking. After reading the article and the chapter, I realize that often times opportunity cost is not easy to identify. In this article, it is important for loggers to know the limited amount of resources that are available for them to use. Since trees are scarce goods, we, as rational persons, need to apply effective decision making and strategies that give us the lowest opportunity cost.
Summary:
This newspaper article “Waste must end, forest minister says” from The Vancouver Sun discusses the issues in B.C concerning the industry and how logging companies plan to eliminate valuable tree resources. This article comments on Minister Pat Bell who plans to develop new bio-energy industry that will transform the way wood is used. Decision making is required for new regulations in order to remove barriers efficiently and effectively. Although logging companies are chopping down trees to use production of energy and goods, there are limits to the number of trees available to cut down. Right now in the economy, industry of bio-energy is not doing well as revenues and “[is] expected to plunge 36% this year”. Bell is aiming to give incentives to the loggers in the hopes that less waste can be left behind.
Connections:
An obvious connection in the article to the principles of Economics is scarcity. Economics is the study of scarcity because without it, the study of economics would not exist. In this article, trees are scarce resources available for loggers to cut down and use. In addition, decision making also links with chapter one such that the logging company has to make choices, form new regulations and economic policies that strengthen our economy. The opportunity cost of producing bio-energy in the industry can be the time and money spent on developing another efficient method of obtaining energy.
Reflections:
Economics seems to be a complex topic for one to fully understand. Although some of the key aspects and ideas may seem like common sense to me, there are complicated concepts that require deep thinking. After reading the article and the chapter, I realize that often times opportunity cost is not easy to identify. In this article, it is important for loggers to know the limited amount of resources that are available for them to use. Since trees are scarce goods, we, as rational persons, need to apply effective decision making and strategies that give us the lowest opportunity cost.
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