Micro Econ AP 2nd Semester 2019

Econ Blog Post 1 “Made in China”: A Glimpse of Chinese Economy Yongxin Shi, Period 1 After viewing the documentary, “The New Rules of the Game,” in class, I pondered on free-trade policies and free-market capitalism which started to develop throughout the world at the beginning of the 1990s. As a Chinese national, however, I grew up in a world where the government intervened and controlled the market and explicitly planned and managed the economy.  In contrast to American capitalist market economy, the Chinese socialist market economy—although China no longer remained as pure socialist—collected the private property freedom under the control of the state. To me, this seemed like there was not much of economic freedom in the country I lived for thirteen years and its idea was the exact opposite to the concept of a free market, which I learned here in the United States. Would this prevent the economic growth of China since there may be less competition that was being en...

While trying to motivate someone to do something by giving them incentives can sometimes work in the short term, it can cause negative effects in the long term. Extrinsic motivation can lead to a desired response to only be given when there is something of value given to the respondent. This means that when the incentive is taken away, the desired behavior stops. For example, when training dogs to go to the bathroom outside, it is recommended that you decrease the amount of treats you give them over time as opposed to just after a long time. If you stop completely and there isn’t an apparent reason why, then you’re dog could stop going outside. Extrinsic motivation can work well, as long as whatever is motivating the subject is sustainable. However, this method could also lead to a less desirable outcome, like in the Freakonomics example. The man gave his daughter candy when she went to the bathroom. This worked for a while, but eventually she found a loophole in which she was able...

Impending Recession In recent years, the US economy has soared to record highs, with the average US household having a net worth of $692,100, about $150,000 more than 10 years ago in 2009. However, market expert Raul Elizalde states that this upward trend will soon change to a downward one, as another recession seems imminent and inevitable. The onset of this recession has been shown through the tech market bubble crash where companies like Apple lost almost 40% of their net worth, and it seems that the rest of the market will follow. Economist Elizalde states that, “Household wealth has doubled in the last nine years, fueled by the quadrupling of stock prices and the full recovery of home values since the depths of the financial crisis. The problem with this is that wealth depends on the ups and downs of asset prices, and therefore a bear market can deliver a hard blow to household wealth. Since the average household income is not strong enough to soften the impact o...

Stagnating Economy Over the last few decades, the South Korean economy has grown from a small third world country economy to a global powerhouse. With the success of large companies such as Samsung and Hyundai, the South Korean economy has been an a steep upward tend, but recently, this growth is starting to stagnate. Because of this, South Korea has announced a fresh set of measures to boost economic growth and create jobs by offering financial support for smaller companies and a fuel tax cut to spur consumption. Song Jung states that, “The latest measures come as the administration of President Moon Jae-in comes under growing pressure to revitalize a stalled economy and weak jobs market. South Korea’s export-driven economy is threatened by the worsening trade war between the Washington and Beijing as well as China’s slowing economic growth.” These measures were created to help grow the South Korean economy despite trade wars and other worldwide setbacks. However, these me...

Protecting Fuel Lines In President Andrés Manuel López Obrador's search to combat fuel theft from gas pipelines, he also prevented millions from legally buying fuel.  According to the Mexican president,  Huachicoleros , or gangs that steal gasoline from pipelines, stole $3.14 billion worth of fuel last year. Huachicoleros have created an alternate market to the more expensive gas prices in urban areas. Stolen gas might bring up images of a sketchy black market but in reality, sometimes the entire community is involved with, and the majority are aware of, the theft. In states like Puebla or Guanajuato, members of the military/police, normal citizens, and corrupt employees of the gas companies all work to siphon gasoline.  The government crackdown on gasoline has actually increased siphoning. In protest to the new policy, the pipeline running to Mexico City was sabotaged, reducing the amount of gas available to the public via gas stations. Both t...