What we learned this week

So this week, we learned how to measure economic activity. This includes GDP, Inflation, Standard of living, and Business cycle etc. We also did the chart that compare GDP, unemployment rate, debt, inflation rate, population under poverty line etc, of 10 countries. The chart helped very much to understand how well countries do in economy. It's surprised me that GDP and unemployment rate and population under poverty line are not proportional. I used to think that if GDP of a country is high, then unemployment rate and population under poverty line are low. But this is not what I thought. For example, U.S. has the highest GDP among Canada, Australia, German, France, Italy, China, Japan, Vietnam, and South Korea. However, U.S. unemployment rate and population under poverty line are also third highest among these countries. 
This week's lessons were kinda hard for me to understand all, but I hope I can get all before a test on Friday! 

Competition

Finally, midterm exams are over! 

Good Job You Guys :D

This week we covered fun topic which is competition!

When we hear about a competition, we usually think of bad thing happening. However, competition in market economy gives us the best possible product at the best possible price. So, we definitely need a competition in our market economy! 

There are four types of competition.

Perfect Competition: ex) agriculture  

• Standardized products
• Numerous buyers & sellers
• Freedom to enter & exit the market
• Independent buyer & sellers
• Well-informed buyers & sellers

Monopoly: ex) cable company 

• Least competitive of all market structures
• Characteristics of Monopoly
• only one seller
• Restricted, Regulated Market by government
• sellers control prices

Monopolistic Competition: ex) cheeseburger 

• Many sellers and many buyers
• Similar but differentiated products
• Limited control of price (sellers control the price): most of prices are the same.
• Freedom to enter and exit market

Oligopoly: ex) cereal company 

• Few sellers and many buyers
• Standardized or differentiated products
• More control of prices
• Little free to enter or exit market

In our economy, I think Monopolistic Competition is the most fit-able. I think so because it's competitive but not as competitive as the Perfect Competition, there is a freedom to enter and exit the market, and there are many sellers and many buyers. I believe that competition is important to keep up our economy better and better. Therefore, I don't think monopoly and oligopoly are good idea. Even though the Perfect Competition is the ideal model of a market economy, I think this is not good idea either, because all products are standardized which means we all have to have the same goods and services. Therefore, in my opinion, the Monopolistic Competition is what our economy need.