In Units 1 through 6 you were given a scenario, which included a mini lesson and 4 questions at the end. You were asked to complete these scenarios as a part of your coursework. Now, you need to use your responses to these scenarios to compose a reflection paper.
Introduction
When thinking about the 6 scenarios, write a 1000-word to 1,200-word paper answering the following 4-part prompt.
- From your perspective, identify the most important of the 6 scenarios that you have encountered in this course.
- State which of the 6 scenarios is the most important in your view.
- Elaborate on why you feel that the chosen scenario is the most important.
- Here are some questions and statements to get you started in this part of the paper:
- What makes this scenario the most important in your view?
- What did you learned in the scenario you selected vs what you learned in others?
- Define important concepts you applied while answering the scenario questions.
- Provide several statements that support your choice.
- How did answering the scenario questions helped you realize that this scenario was important?
- Here are some questions and statements to get you started in this part of the paper:
- Give two examples that can help validate the reasons you provide for the importance.
- Here are some questions and statements to get you started in this part of the paper:
- When answering the scenario questions, you were asked to produce answers and make calculations. How can you use these answers and calculations to demonstrate via examples why the scenario you have chosen is important in your view?
- Why are the metrics, data and information you used (or calculated) when answering the scenario questions important?
- How do these metrics help you see this scenario as important?
- Here are some questions and statements to get you started in this part of the paper:
- Illustrate the most important concept or idea you have learned by completing this scenario by using it in an analogy or metaphor.
- Here are some questions and statements to get you started in this part of the paper:
- An analogy is a comparison made between two things that helps explain or clarify an abstract idea, concept, or process by showing similarities with a more familiar object or situation. Using analogies when describing complex topics can be an effective explanation tool because they act as a cognitive bridge between new concepts that people may find challenging or difficult to grasp onto, and ideas from their existing knowledge that they already understand concretely.
- What is a simple, everyday example that shares similarities with the economic principle you are discussing?
- If you had to describe the cause-and-effect relationships in this economic concept to someone without an econ background, what metaphor could you use that might capture the essence more clearly?
- What natural flow, or social dynamic reminds you of this economic model? Thinking of a fitting physical or social phenomenon that exhibits a parallel progression to the abstract economic framework can serve as an illuminative comparison for analysis. Does it behave like an assembly line? Migration pattern? A beehive? Law of gravity? The waves in the ocean?
- Here are some questions and statements to get you started in this part of the paper:
Your response must include:
- Clear definitions of important concepts encountered in scenario selected.
- Explanations of how these concepts or ideas make this scenario important in your view.
- Examples that support your explanations.
- Calculations, metrics, data, and facts from the scenario supporting your reasons.
- An analogy, metaphor or comparison of economic concepts encountered in scenario selected.
I have uploaded two of the previous scenarios for you to use while writing the reflection paper
2
sCalculating GDP
|
(Table 1) National Income Acounting 1st year data |
|
|
Consumption of durational goods |
1250000 |
|
Consumption of non-durable goods |
889000 |
|
Compensation of employees |
865000 |
|
Consumption of service |
2350000 |
|
Fixed residential investments |
645000 |
|
Corporate profits |
1150000 |
|
Fixed nonresidential investments |
730000 |
|
Consumption of fixed capital |
90400 |
|
Change of inventories |
125000 |
|
Government purchase of goods and services |
940000 |
|
Exports |
250000 |
|
Imports |
360000 |
|
(Table 2) National Income Acounting 2nd year data |
|
|
Consumption of durational goods |
1437500 |
|
Consumption of non-durable goods |
1022350 |
|
Compensation of employees |
994750 |
|
Consumption of service |
2702500 |
|
Fixed residential investments |
748200 |
|
Corporate profits |
1322500 |
|
Fixed nonresidential investments |
854100 |
|
Consumption of fixed capital |
103960 |
|
Change of inventories |
143750 |
|
Government purchase of goods and services |
977600 |
|
Exports |
262000 |
|
Imports |
378000 |
Q1. Calculating GDP Using the Expenditure Approach
Year 1:
(a) Personal Consumption Expenditure (C):
Consumption of durable goods + Consumption of non-durable goods + Consumption of services
C=1250000+889000+2350000= 4489000
(b) Gross Private Domestic Investment (Ig):
Fixed residential investments + Fixed nonresidential investments + Change of inventories
Ig=645000+730000+125000= 1505000
(c). Government Purchase of Goods and Services (G):
G=940000
Net Exports (X – M):
Exports – Imports
X – M = 250000 – 360000 = -110000 (since imports exceed exports)
GDP:
Using the expenditure approach: GDP=C+ Ig +G+(X−M)
GDP= 4489000+1505000+940000−110000=6846000
Year 2:
Personal Consumption Expenditure (C):
C=1437500+1022350+2702500=5162350
Gross Private Domestic Investment (Ig):
Ig=748200+854100+143750=1748050
Government Purchase of Goods and Services (G):
G=977600G = 977600G= 977600
Net Exports (X – M):
X−M=262000−378000= −116000
GDP:
GDP=decimal+(X−M) GDP = C + Ig + G + (X – M) GDP=decimal+(X−M)
GDP=5162350+1748050+977600−116000=7624000
Q2. Percentage Change in Expenditure Categories
To find out which category experienced the highest percentage change from year 1 to year 2:
Personal Consumption Expenditure (C):
Percentage Change=5162350−4489000 /4489000×100≈15.01%
Gross Private Domestic Investment (Ig):
Percentage Change=1748050−1505000/1505000×100≈16.14%
Government Purchase of Goods and Services (G):
Percentage Change=977600−940000940000×100≈4.00%
Net Exports (X – M):
Percentage Change=−116000−(−110000) /−110000×100≈−5.45%
The category with the highest percentage change from year 1 to year 2 is Gross Private Domestic Investment (Ig) with an increase of approximately 16.14%.
Q3. Percentage Change in GDP
To calculate the percentage change in GDP:
Percentage Change in GDP=7624000−68460006846000×100≈11.38%
Q4. Importance of GDP and GDP per Capita
Importance of GDP: GDP is important since it represents the summary measure of the national economic activities and performance over time. GDP gives the gross value of goods and services produced within the borders of any country; thus, it indicates the general health and growth of an economy. Policymakers, business people, and investors look toward GDP to determine the trends of the economy, by which they make informed decisions and policy formation for development.
GDP per Capita: GDP per capita is calculated by dividing the country's GDP by the population. It is an average measure of the amount of goods and services produced per person in an economy and helps compare the standard of living and economic welfare of different countries. It measures how much a person can potentially consume or invest from the country's total economic output. A country with a high GDP per head is more likely to have good infrastructure, high levels of income, and more resources available for public services and development.
GDP and GDP per capita describe important measures that give evidence of a relationship between the economic performance of countries and living standards and therefore shape policy implications and investment decisions across the globe.
,
Alexandria Wright
ECO 2013
June 2, 2024
1. First, I would like to explain what an opportunity cost would be from my understanding. To calculate the opportunity cost, we must first see how much of the other goods we would have to let go to get one added on unit of the item that we are primarily focused on. Knowing what a comparative advantage is also helped me while solving answer number one. To obtain the comparative advantage, we would need to compare the tons of sugar and corn. Based on the table we can see that Joem has a comparative advantage while producing sugar and Annia comparative advantage would be in producing corn. Joem can likely produce 1 ton of sugar if he lets go of two tons of corn. On the other hand, Annia would have to let go 4 tons of corn to produce the exact same amount of sugar. This obviously lets us know why Joem can produce sugar at a lower cost. Annia can produce 1 ton of corn by giving up 4 tons of sugar, Joem would have to let go of only two tons of sugar to produce the same amount of corn as Annia. This ultimately results in Annia having a lower opportunity cost.
2. Annia should focus on sugar and Joem should focus on corn. While using the table to find out the comparative advantage I noticed that if we sacrifice sugar, we can produce 4tons of corn in both countries. However, in Annia if we sacrifice corn, we’ll be able produce 16 tons of sugar. We can also practice trading in the method due to both countries having the same comparative advantages with corn.
3.Trade would improve economic efficiency for both countries Annia and Joem because both would benefit from trading their product. Corn and sugar would both be on the market. We would no longer have to use comparative advantage to see who should keep selling their product. Each country would also benefit from trading because you both can now agree to sell the product at a lower price. It has been proven that trading has been beneficial to us economically over the years.
4.I have a comparative advantage over my peers at work because I am studying to become a paralegal. I am the only active student in the office, I am currently a paralegals assistant. This is a comparative advantage for me because I am sacrificing my time now for a larger opportunity. In comparison to the other employees. Due to the other employees not sacrificing their time to be able to grow in the legal profession, they may face the consequences of staying at the same pay grade for years, maybe even decades. I used comparative advantage to help me rationalize my life and take a step back to see what I was actually doing with my time. Now that I am making more cautious decisions with my time as far as staying focused on my career and degree, I’m sure just like a thriving company that’s been through many obstacles, I will thrive too !
