For the past few days in economics class I've learnt about the term "opportunity cost". We all have to make choices in our life and the procedure is to sacrifice a certain thing in order to have the other. Opportunity cost is defined where the next best alternative is forgone. For example, a small spot of land in Shah Alam can be used as a playground or a shopping complex. The advantages of having a shopping complex would really benefit the consumers. This is because they get more entertainment and  more goods and services to satisfy. Where as having a playground will promote healthy lifestyle to the society. The government will have to decide which one of them would give the most benefit to the society and the next best alternative will be forgone. Economics Goods are goods that has an opportunity cost. However, Free Goods are goods that has no opportunity cost. They are so called " Natural resources".

Besides, I've learnt about PPC (Production Possibility Curve).Let me show you some graphs about PPC, to give you a clear image about it. 

This is a similar concept of a PPC. As you can see, the line, what I called the “z”, shows the maximum number of output that can be produced by a given number of inputs (Factors of production). The Y region is the area beyond the line that can’t be fulfilled. Unless, there are more resources found in order to produce. The X region is where the economy goes into recession (slump). This part is when the resources are not utilized into its maximum potential. 

To go beyond or below the line, another graph is shown here to show why there is a shift for the line itself. 

When the line A moves from point A to Point C, the economy is growing. More goods and services are produced than before. What makes an economy grow? The government might impose fiscal policy into the economy in order to increase growth. By reducing the level of taxes and increasing government expenditure. For example, Income tax will be lowered and consumers are able to purchase more goods and services than before due to higher disposable income. A government might subsidy advanced technology to improve the quality of goods and services which attracts more consumers to purchase them. As more consumers buy these goods, more money will be circulating in the economy. Therefore, aggregate demand increases which makes the living standards higher.Well, I hope my explanation is right: P

When the point moves from point A to Point B, the economy is having a Recession (slump).  Goods and services can’t reach its maximum output due to many factors affecting it. One example might be Inflation. The price of goods and services are high which made consumers not to purchase these goods and services. The producers will cut down their production in order to not make any loses if possible.

A PPC is used to Show:

• Economy growth (positive/negative)
• the change in living standards
• efficiency 
• technological progress
• Opportunity cost between two different G&S produced

The three graphs I've learnt about PPC. 

All three of them gives different characteristics. 

  The concave graph: 

• low efficiency
• decreasing economies of scale
• increasing opportunity cost  

  The convex graph:

• increasing returns of scale 
• high efficiency 
• decreasing opportunity cost  

  The indirectly proportional graph: 

• constant return of scale 
• opportunity cost constant.(well not really for this particular graph but just to get the concept of it)
   

My first reflection :)

What do i know about ECONOMICS? Well, I think it all ties to the word "Money". What can we do without money? Find a job of course. But what if some of us don't have those green notes to have a proper education in order to get a job? Will the government really help? Most of us would want to make a business of our own, to be wealthy, and to satisfy our needs and wants. This creates a continuous cycle in the economy, unless scare resources are depleted. Well done humans for wanting endless wants! Can't wait to see the world filled with rust metals all around. 

For my first lesson on econs, I've learnt about the basic economy problem which is "Scarcity". Even the word gives a creepy feeling to it. Scarcity means shortage of a supply. Clean air is a scarcity element. Our vehicles caused clean air to be lesser and creates more problems to our health. I heard Beijing is having scarcity on clean air. Anyway, it's almost everywhere having the same problem. We all need resources in order to produce all the goods and services we want. Many businesses will not go on if our resources are all gone. That's why producers need to reallocate these precious resources into something more pleasant to the world. 

Now, factors of production comes into the topic. I've learnt about the 4 types of factors of production. Which is:
Land(Natural resources): The forest we have in Malaysia is a resource in order to export timber throughout the world. The beautiful land which contains rivers, seas and desserts attracts tourists to visit the country. Our coals and gases are all natural resources in order to make more goods and services we want. 

Labour(human resources): Manufacturing needs labour and without them, a business can't be fulfilled. A cooperation needs labour to produce the goods and services they want. They need the brains and hard work in order to expand the company in the future. Without labours, what's the point of creating your own business. A good bunch of human resources would create an efficient production for the company. Sometimes, labours are hard to control too when they're in a powerful trade union. 

Capital(man-made resources): Machines are a great example to represent capital. Capital in economics means materials that're man-made and needed for production. Why do i say Machines? This is because machines could be more accurate and fast to produce many goods and services. Technology is getting better and machines will give humans more leisure time as well. Some country are capital intensive and some are not. The bad part of having lots of certain capital in the company is that the society will be lacking of jobs. Machines are doing the jobs for us and more problems are developing. 

Enterprise(entrepreneurs): This is one of the most important factor to have a successful business. Not everyone could be a successful business man or woman. These people are the ones who manage the firm and takes risk as well as decisions for most of them time. Their goal is to make as much profit as they can in order to expand the company.  

Finally, i learnt about the 3 main decisions in order to produce goods and services. 

• WHAT TO PRODUCE
• HOW TO PRODUCE
• WHOM TO PRODUCE

Well it's very important to know what you're producing. Most producers produce what consumer wants and some of them manipulated our mind to buy their product. In a free market, producers usually produce what the people want. However, for a planned economy, the government decides to produce what they want. Most company in a free market will produce the product that creates the highest profit and the least cost. TO MAKE MONEYYYYYYYYYYYY...

How to produce? well it depends on how efficient, how productive and how organize the company is. It's either labour intensive or capital intensive. Producers would want to make it as efficient as possible in either of those two. If the same amount of capital could produce twice as much as the labours. The producers will be glad to have more capital in the company  in order to be productive.

The world have either the rich market or the poor market. It's the producer's choice to decide what market they want to produce it to. it depends on the nation's income is distributed as well. The question is who should get the goods and services that's produce. The rich would definitely get the opportunity but how about the poor? They don't have the voice to speak out and producers have to make the decision to make things equal sometimes. 
It's tough to this particular question that's why we need to make a better judgement so that the world will be at peace.  

Well i love economics class. lots of discussions going on and a nice teacher too! :D I hope this reflection is acceptable and i'm glad to learn this subject.