Economics is branch of the social science, that is studies the process of production, place (money) at different point, and the utilization of consumer goods and services. The term of economics are comes from the Greek for oikos (house) and nomos (custom or law), therefore “rules of the house (hold).” A definition that captures much of modern economics is that say by Lionel Robbins in 1932 essays, “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.” Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources. Economics is the study of resources, their scarcity and the unlimited wants of mankind, this makes the economy has created new business opportunities, enhance the economy gradually .Each country has definite resource, they use those resource is factors of production, normally economists generally divide to put in four categorize. The four resources are land, capital, labor and entrepreneur. Lionel Charles Robbins, Baron Robbins, FBA (22 November 1898 – 15 May 1984) was a British economist and head of the economics department at the London School of Economics. Robbins is famous for his definition of economics is “The science which studies human behavior as a relationship between ends and scarce means which have alternative uses.”
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1.2 What, How, Whom We Need To Do?
What is in a Market economy, the decision about what to be producing would be decentralized? Consumers decide what is to be produced and firms will make what consumers want to buy. Consumers will buy a certain goods and services with their preferences. Consumer can decide the goods with high power; they can decide what are the goods or service need to produce. The product we need to produce is what the consumer need. For example DVD player, producer will produce the product with more functionally.
How the producer is will provide the goods and services that consumer want to buy. They will use some way to earn more profit. When the resource is not enough, producer will make a new product with higher price. For example the producer want to produce a product DIY product, the seller sell the produce with RM20 ringgit but the really price is RM10, the producer will earn the profit.
Who are those with the biggest incomes are those who get the biggest share of what is produce. Those who own the resource most valued by the society and the ones with biggest incomes. Hence, government may distribute the income in the forms of taxations and subsidies.
1.3 Land, Capital, Labor, Entrepreneur
In a country this four resource is important, the four resources is land, capital, labor, entrepreneur. If don’t have land we cannot not build house, building, grow all that kind of plant and etcâ€¦our human being are have unlimited wants, but the resource is have limited, when the social become advance the supply and demand will become much bigger.
In an each country, land is limited. Land is the solid dry part of the Earth’s surface. The area of ground that somebody owns, especially when you think of it as property that can be bought or sold. Those resource have a limit, when the resource already finish we cannot do all thing. A country that the shortage of land will be according to social tension, because the state will have no place to build more buildings, which will limit a country’s development. Country roads and houses will become crowded; the house will be more to build higher. States have no place to build more industrial area; the state will not be able to develop more new products. Some country is not enough land to construct more facilities and building such as Singapore. They can save more land.
Capital is the business used the capital for operate a business or refers to the country for the development of the economy of goods or money. Capital of a country and business is very important; we used capital to develop the economics of a country and to operate the business of a country. If we don’t have capital, we can’t process anything. Country will cannot process the product for own country, food also got serious problem. The people of the country will get suffer; the salary of the people will become lower. Currency of our country will be lower, because our economic of our country already down. When a country faces for the capital problem they usually will sell some resource for export. The capital can help us earn more profit.
Labor is for some purposes to do simple or complex work. Have the ability to work and work experience in the production process has the purpose of the expenditure of labor activity. If a people didn’t work, he will not able to live. In Malaysia, people of a country also face some problem. When have foreign worker we can save more money.
Entrepreneur is a person who makes money by starting or running businesses, especially when this involves taking financial risks. For an entrepreneur, they will run a business by own self. They will decision the entire thing in the business. The will starting a new business, to open a new market.
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1.4 Scarcity and Choice
The land is scarcity, because in the earth land is only have certain size only. For example Singapore is an advance country, even they have congenital problem “land”, but they find some way to solve this problem. The country will make an economic decision to solve the certain problem. Their government gives up building the house on a certain land for such as “bungalow”. For example their government from 1965 builds HDB flats; almost 85% Singaporean live in HDB flat. This helps save a lot of space in Singapore, government can use the remaining space build more buildings. HDB flat is very expensive, the reason of the HDB flat expensive because the country is small don’t have enough space, cannot build too much building, when the supply is higher the price will rises. For example a HDB flats with five rooms is about $600000, HDB flat with four rooms is about $400000.This cause many people who earn less salary not enough to buy, the Singaporean will lose bigger space to live, HDB houses space is smaller than another house(e.g. bungalow).
The capital is scarcity for businessmen and government. For example “Malaysia”, Malaysia in any company will have some capital problem. The company is follow the market to earn the money, if their business fail they will have capital problem. They must make a variety of market research, which is to understand customer needs. When we understand what the customer needs, we can reduce the risk of business failure. Capital is from small amount become big amount, they will sell some product to earn profit. We have to choose a right business, because our capital is limited. We have thought carefully what product we want to do. If I want do cake business or cookies business? I will do cake business, because it is a popular business.
The labor is not enough in Malaysia. For example a serious problem, shortage of labor. Our country want to produce more local product, so year by a year our country was continuous construct new factory. But we have the problem with insufficient worker to work. So our government import many foreign worker work in Malaysia, they salary common is lower than local worker. For example in a factory of Malaysia, the general worker is having two kind of worker one is local worker and another one is foreign worker. Their salary is quite different, the local worker the salary is about RM35~40 for twelve hour, but the foreign worker salary is about RM26~30. So most of the factory would like to employ foreign worker, because they salary are cheap than local worker. But if all the employer likes to employ foreign worker, our local worker will be unemployed or hard to find the job. Our economic will break down, because our salary is give to foreign worker, they spend the money in another country. The foreign worker also got serious problem, when they lose the job in our country they don’t want go back to their country. When they lose the job, some of they will be rob, or stole or some evil deed, that will cause public safety problem. Because they are come by a big group, so we will hard to control them. We must set stricter laws to against this problem, set the limit number of foreign workers.
The entrepreneur faces with the market scarcity problem. For example where can I sell the product?ã€€What is that kind of customers? How can I control my profit?ã€€All this decision can determine the success or failure, if an entrepreneur can good manage the company, must can success. All the business is having own risk, that risk is come from different competitors.
All the resource, one day will finish. We have to find the solution to solve the problem. For example, if the people not enough land we have to build the higher building to save the space of the country. If the business not enough with the capital, they have to make a new produce to earn more profit. If the country not enough labor to work in a country, the government need to import more foreign worker. If the entrepreneur not enough market to sell the product, they have to produce a more function product to satisfied the consumer.