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Who is Lionel Robbins and What is Economics?

Introduction

Who is Lionel Robbins? Lionel Robbins full name as Lionel Charles Robbins, Baron Robbins, and his finish study his FBA. He was born on 22 November 1898 and die on 15 May 1984. He was a British economist and head of the economics department at the London School of Economics. He is known for his proposed definition of economics, and for his instrumental efforts in shifting Anglo-Saxon economics from its Marshallian direction. In his Essay on the Nature and Significance of Economic Science, Robbins made his Continental credentials clear. ‘The science which studies human behavior as a relationship between ends and scarce means which have alternative uses’ (Robbins, 1932). Economics is the study of resources, their scarcity and how the rational allocation of limited resources in social science. What is economic? Economic is an activity that people in certain economic relations under the premise of the production, consumption of goods and services, distribution and activity are closely connected with them.160

2)Body

Economics is the study of resources. In economic we classify goods as ‘tangible’. In tangible we include food and drink, cars, television and computers. In economic we also have classified service as ‘intangible’. Example for the resource such as education, hospital, tourism, insurance and other. Each country has their own certain limited resources, there are divide into four categories. In these four categories they have land, capital, labour and entrepreneur.66

2.1) Land

Land is natural resources are the reclaimed land. Resources of land it has a same position and cannot be move. For example; today, the mountain lies in this place, and tomorrow is located in that place, is that possible? We all know that it is impossible. Land resource use is permanency. In this world, land is limited, but the people wanted unlimited wants. Location of land resources, there are differences. Many people they want the land to give their child to stay at their; they want the land to plant vegetable, fruit and other. They also can get natural resources under the land, for example, timber, petroleum, gold and minerals. If things at this world are scarcity, so we need to choice and the things that we did not choice mean that is our opportunity cost can be examined by considering what a country can produce with its. For example; if you have one hundred thousand ringgit, you can use it to build a canteen every month you can make a profit two thousand ringgit, you also can deposit it into the bank every month you will get profit three hundred ringgit and you also can investment in stock every month four thousand, but it have risky. Then u choice to deposit it into the bank, then you opportunity cost is you did not choose the higher profitable investment in stock, so your opportunity cost is four thousand ringgit. 239

2.2) Capital

Capital is productive asset such as factory, equipment, and inventory that is man-made and employed in come into being of income. A company needs a factory to help them process their goods. So, the factory also is a kind of capital from the company. They need to have money to rent or buy the place to become their factory. They need equipment to help their factory operation. They also need money to buy the equipment for the company, so this is also a kind of capital for it. Of course, a factory also needs an inventory. The inventory it also uses company money to build it up, so it is also a capital of a company. The employed is the most important part in a factory, so it is also a kind of capital. In a company, capital is very important for them.143

2.3) Labour

Labour we also call is as human resources, and is divided into two kinds, one is intellectual labour and the other one is physical work capacity. That can promote the economic and social development with a combined population of working ability. Labour is also needed by every company, every company need it to help them to operate every things. If in our country we have too many unemployed people, government can send those people to other country to work. That would be the solution to the country that has excess labour, and many others unemployed worker in that country. For an example Indonesia have to many people be unemployed, so that the people in that country go out of one’s way to work at other country to get more income to their family.133

2.4) Entrepreneur

Entrepreneur or management team is to play an important role in the performance of enterprises, it is the business capital access to the source of excess returns, entrepreneurs how good, and they will make the company how good they can. What type of business entrepreneurs should be to run and now the entrepreneur is the right person or not, what kind of management team should be established, which is to study the organization must understand the problem. So every company or every country they need entrepreneurship, their need a person who can give them idea and give them a great proposal to improve certain economic system especially when it comes to business or trading. The companies need people to give them idea to gain more profit. The government also needs entrepreneurship to give them idea and how they want to uplift their living standard and how they want to develop the economic.152

3) Basic economic issues

Economic also have a basic issues. It has a common problem among different types of economic. In this basic economic issues consist of what goods to produce and in what quantities, how to produce them and for whom to produce them. In a company, that is very important to know what goods that your companies want to produce and in what quantities. For example, you are a company in industry of tin, so you must produce the food inside the tin. Then you must know how many quantities of the produce need in the market. The second types are how to produce them. How should canned food placed in and don’t spoil. For example; before the tin put into the tin, the food should be send to high-temperature sterilization, this is because make sure the food will not being spoil so fast. The last issues are for whom to produce them. This is a canned food so most of the people who lazy to cook, they will choose this kind of food to cook, because this is faster than cook the food one-by-one.183

4) Conclusion

In this economic country, we need everything that is having around us. We cannot waste resources we having now. We should cherish our earth, we’ve got natural soil substances. For a company, we need everything such as land, capital, labour and entrepreneur. If we don’t have enough of capital, what should we use for the factory? If we don’t have land then we cannot build a factory. If we don’t have any of labour, then who help us to work? If we don’t not have entrepreneur, who help us to think an idea, who give us suggest? So, economic resources are very important. Nowadays, economic supplies of land resources are scarce, and because many land already been use for build up houses or factory. The people in this world is the use of each other, this will make economic prosperity.140

Question 2

5) Introduction

Malaysia is a mixed economy attempts to combine the advantage of free enterprise system and the central command system. What is mixed economy? Mixed economy is mixture of free market and government control. Most of the countries are mixed economy. In mixed economy most of the control is at the owner of the company, there is some form of direct intervention and control by the government. Some of the product and the product that we are needed in our daily life the government will also will control it. Why our governments want to interfere the market of necessities? Our government interfere the market, because them take care of their people. If government did not interfere the market of needs, the merchant maybe increase the price as they like. That why, our government control some of the needs and they fix the maximum price for the needs. So, everyone can buy the things that are needed.155

6) Body http://www.ehow.com/list_6058292_advantages-enterprise.html

http://www.wisegeek.com/what-is-a-command-economy.htm

A mixed economy attempts to combine the advantages of free enterprise system and central command system. Free enterprise is also known as capitalism. Capitalism is an economic system where the individuals in the economy have the freedom to create business and conduct economic activity with little or no government intervention. Capitalism is control economic system of the world economy. The system has several important advantages that make it an efficient way to organize the economy. The decisions are left to the market forces of supply and demand, and the price will be adjust. Some countries that have free enterprise economies are the United States, Germany, and England. Central command system is also known as centrally planned. Central command system is a decision and choices are made by government to allocation resource. The command economy is an economic system that is controlled by a centralized federal government. In most examples of a command economy, the focus of the control is on the industrial goods that are manufactured with the country. Sometime referred to a centrally planned economy, it is not uncommon for the government to maintain a high level of control over companies that are allowed to operate within the country or to own and operate the production facilities producing the goods. Some countries that have central command system are Former China, former Soviet Union, Cuba, and many Eastern European countries.230

7) mixed economy http://en.wikipedia.org/wiki/Resource_allocation

In mixed economy, the government will decides on resource allocation of scarce commodities. In mixed economy there is a mixture of private and government ownership. For example, in a big company they have 50% of ownership, 30 % for the board of director and 20% for the government ownership. So when the company having any problem, our government will help them avoid collapse. In Malaysia, our government also becomes involved in situation especially to implement development policies. For example, I buy a policy from an insurance company, suddenly the company having a cash flow problem, so the government will help the company to turn the corner. The economic efficiency is depends on both sector. For example, Malaysia government need to efficiency cooperate with the private sector to let the economic to be growth. Since, Malaysia is a mixed economic country, the consumer has their own freedom to buy things, but the government also limited something to import to our country. An example, before our government did not let other network to come into Malaysia, this is because our government doesn’t want to let other country to control our network market. So, we have no choice to choose, we have to use the local brand of network. Distribution income of some workers in some sectors is managed by the government. An example; in Malaysia, every private sector need to pay SIRIM, SOCSO, and EPF. And the government sector only need to pay Kumpulan Wang Simpanan Pekerja KWSP. In the KWSP, the current contribution rate is 23% of salary which 11% is deducted from the employee’s monthly salary, while 12% is the contribution by the employer. When the employee’s retired, they can get money from KWSP every month. There are some close example for mixed economy country as India, Thailand, Indonesia and Singapore. In mixed economy, our government also provides support to their people. For example, when flood the government give us shelter to stay. In our country, our government also has animal sanctuary; this animal sanctuary is to give the animals face extinction of land of stay. In Malaysia, our government are giving us subsidize. For an example, they subsidize on petrol. Now our government only subsidizes more on the Ron 95 and Ron 97 our government also have subsidize on it, but they will rise up the price again. In Johor Bahru area, many foreign cars come into our country to fill in petrol, because our price is cheaper than their country. Now our government set a new law says that ‘the foreign car must fill in Ron 97, foreign people cannot fill in Ron 95, because the government more subsidize on it and it is for their only people to have a cheaper price for the petrol.458

8) Market Equilibrium

Figure 1.1 Equilibrium Supply

In this figure show that in 1.1 is equilibrium supply. In equilibrium have four types of equilibrium. The first type is equilibrium. What mean equilibrium? Equilibrium means that the place at which the supply and the demand curves cross. It means the where the quantity demanded is equal to the quantity of supplied. Next is the equilibrium price, it means that the price that is balances from supply and demand. Sometime we also call it as the market-clearing price. At this stage of price, mean that the businessman wants to sell the things at this price and the people was willing to buy the things at the same price. And the third type is equilibrium quantity. It mean that the quantity that balances supply and demand. On a graph it is the quantity at which the supply and demand curves meet point. The last type is market not in equilibrium; we also call it as disequilibrium. In this disequilibrium, there have excess supply, excess demand, and law of supply and demand. Excess supply we can call it as surplus, this is a situation in which quantity of supplied is greater than quantity of demanded. How we want to sell the products that are unable to sell into the market? For example, now our company produce a lot of goods into the market, but the goods are more than demanded, now the things that we can do is to reduce the price to let the demand to buy in a lot of our product. When the price go down then demand will try to buy more. That is why the price tends to fall to achieve balance in the market. The excess demand we also can call it as shortage. A shortage is a situation in which quantity demanded is greater than the quantity of supplied. Consumers are unable to buy all they want at the going price. For example, if one day, one of the supplier of rice suddenly stop supplies, in the market will having a shortage of supplied. The demand is greater than supplied, than the price of the price of rice will goes up very fast. So, some of the consumers are unable to buy what they wants. So, the supplied must rise to achieve balance in the market. The law of supply and demand, this is the claim that the price of any good adjusts to bring the quantity supplied and demanded for that good into balance in a free market. In Malaysia, our government has the price mechanism in some cases. For example, flour, oil, sugar, petrol and rice. Those kind of things the businessman cannot rise up the price as they like, they must follow what the price that government has set it.459

9) Conclusion

A mixed economy is better than other, because the government can intervene to correct the defects. When Malaysian is having any problem, their government will help them. The government also helps their people to save money into the KWSP, when they are old then they can take it out the money ones or by monthly. And Malaysia government also give their people subsidize on petrol. In mixed economic so of the things you cannot rise up the price as you like, something the government has setter up the price then you only can follow the maximum price or lower than that price only.103



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