Recruitment. The letter of application. CV
Economic environment. Economic goods and services.
Today’s world is very complex. A knowledge of economics, the study of how people and countries use their resources to produce, distribute, and consume goods and services, is important to everyone now. Your understanding of economics will influence how you earn a living and help you make better economic decisions.
Even before people start school, they make two very important economic discoveries. They find that there are lots of things in the world they want. They also find that they cannot have them all. There is a big gap between what they want and what they can have.
Later, young people learn another lesson. When they watch television commercials, they discover that there are thousands of things they or their parents could buy. Gradually, they settle into two major economic roles: consumer and producer. In the role of the consumer, a person buys goods and services for personal use, not for resale.
Consumer goods are products, such as food, clothing, and cars, that satisfy people’s economic needs or wants. Some consumer goods, such as food, do not last a long time. Other goods, such as furniture, cars or computers, last longer. Sooner or later, though, consumer goods are used up. Bananas are a typical example of perishable goods, by “perishable” we mean goods which cannot be stored for any length of time without going bad. Most foodstuffs are in the perishable category.
Services are actions, such as haircutting, cleaning of teaching. Services are used up at the time they are provided.
A producer makes the goods or provides the services that consumers use. A person who makes lemonade and then sells it is producing goods. Students working after school or during the summer earn money to buy some of the things they want – records, books, or a car. They are learning about the role of the producer.
In order to produce something, however, a person must first have right resources. Resources are the materials from which goods and services are made. There are three kinds of resources: human (people), natural (raw materials), and capital resources (capital, or the money or property). If either of these resources is missing, production will stop.
The economy as a whole, like an individual, can produce only products for which it has the right kind of resources. No economy can produce the things people want if it doesn’t have enough of the right kind of resources. In other words, there is a scarcity of resources. Scarcity is the situation that exists when demand for a good, service, or resource is greater than supply. Human wants tend to be unlimited, but human, natural and capital resources are, unfortunately, limited.
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Every group of people, individuals and nations must solve basic economic problems of daily living: What goods and services will be produced? How will they be produced? Who will get them? How much will be produced for now and how much for the future? The answers to the questions depend on a country’s human, natural and capital resources, and also on its customs and values. Each country will answer these questions in a different way.
Costs of production. Opportunity costs. Tradeoffs.
Opportunities are chances to improve your situation. Opportunities, however, may cost you something. If you spend time watching television, you cannot spend the same time at the library.
All production involves a cost. This cost is not counted simply in terms of money but also in terms of resources used. The various resources used in producing a good or a service are the real costs of that product. In building a bridge, for example, the real costs of the bridge are the human, capital and natural resources in consumes. To build a bridge requires the labour of many people, including engineers and construction workers. The capital resources these people use include a variety of tools and machines. Building a bridge also requires natural resources, such as iron ore and coal. These natural resources are used to make the steel that is used in constructing the bridge.
Since resources are limited and human wants are unlimited, people and societies must make choices about what they want most. Each choice involves costs. The value of time, money, goods and services given up in making a choice is called opportunity cost.
When people make a choice between two possible uses of their resources, they are making a tradeoff between them.
To make choices that best satisfy human wants, people must be aware of all the tradeoffs. Then, society will understand the true costs of making one decision rather than another, and can make the decision that best fits its values and goals.
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One of the most important choices a society makes is between producing capital goods and producing consumer goods. If a nation increases its production of consumer goods, its people will better lives today. However, if a nation increases its production of capital goods, its people may live better in the future.
Choosing between home computers and industrial robots is an example of a choice a society must make. Society must decide what it wants and what it is willing to give to get it. The same applies to you individually. Since every economic decision requires a choice, economics is a study of tradeoffs. When you analyze each side of a tradeoff, you can make better decisions.
Utility and prices.
According to our basic needs and additional individual wants we require different kinds of commodities. Our basic needs are simple, but our additional individual wants are often very complex. Commodities of different kinds satisfy our wants in different ways. A cake, a bottle of medicine and a textbook satisfy very different wants. This characteristic of satisfying a want is known in economics as “utility”. It is related to the number of factors and a utility change is concerned with the consumer’s relation to a commodity.
Utility, however, should not be confused with usefulness. For example, a submarine may or may not be useful in time of peace, but it satisfies a want. Economists say that utility determines “the relationship between a consumer and a commodity”.
Utility varies between different people and between different nations. A vegetarian does not want meat, but may rate the utility of bananas very highly, while a meat-eater may prefer steak.
Utility varies not only in relation to individual tastes and to geography, but also in relation to time. In wartime the utility of bombs is high, and the utility of the pianos is low.
The utility of a commodity is also related to the quantity, which is available to the consumer. If paper is freely available, people will not be so much interested in buying too much of it. If there is an excess of paper, the relative demand for paper will go down.
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In most economic systems, the prices of the majority of goods and services do not change over short periods of time. In general terms the individual cannot change the prices of the commodities he wants. When planning his expenditure, he must therefore accept these fixed prices. He must also pay this same fixed price no matter how many units he buys. A consumer will go on buying bananas for as long as he continues to be satisfied. If he buys more, he shows that his satisfaction is still greater than his dislike of losing money. With each successive purchase, however, his satisfaction compensates less for the loss of money.
A point in time comes when the financial sacrifice is greater than the satisfaction of eating bananas. The consumer will therefore stop buying bananas at the current price. The bananas are unchanged: they are no better or worse than before. Their marginal utility to the consumer has, however, changed. If the price had been higher, he might have bought fewer bananas; if the price had been lower, he might have bought more.
It is clear from this argument that the nature of a commodity remains the same, but its utility changes. This change indicates that a special relationship exists between goods and services on the one hand, and a consumer and his money on the other hand. The consumer’s desire for a commodity tends to diminish as he buys more units of it. Economists call this tendency the Law of Diminishing Marginal Utility.
In a market economy, prices are the result of the needs of both buyers and sellers. The sellers will supply more goods at higher prices than at lower ones. The buyers will buy more goods at lower prices than at higher ones. Some price is satisfactory to both buyers and sellers. At that price the supply – quantity offered for sale – equals the demand – quantity people are willing to buy. Since no surplus or shortage exists, there is no pressure on price to change. This point is called an equilibrium price. At the equilibrium price, the amount producers will supply and the amount consumers will buy are the same.
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Income and spending
People’s incomes determine how many of the economy’s goods and services they can purchase. Income is the money a person receives in exchange for work or property. There are five basic types of income:
· employee compensation is the income earned by working for others. It includes wages and fringe benefits such as health and accident insurance.
· proprietor compensation is the income that self-employed people earn.
· corporation profit is the income corporations have left after paying all the expenses.
· interest is the money received by people and corporations for depositing their money in savings account or lending it to others.
· Rent is income from allowing others to use one’s property temporarily.
The total income is the sum of employee and proprietor compensation, corporation profit, interest and rent. In each category, people receive this income in return for providing goods or services.
One other type of income is a transfer payment – money one person or group gives to another, though the receiver has not provided a specific good or service. Gifts, inheritances, and aid to the poor are three examples of transfer payments.
During the past century, the percentage of people who work for themselves has generally declined. Increasingly, people are employees and not self-employed.
By the type of work people do workers fall into one of four broad categories:
1. White-collar workers are people who do jobs in offices, such as secretaries, teachers.
2. Blue-collar workers are people who do jobs in factories or outdoors. Artisans, such as carpenters and plumbers, are blue-collar workers.
3. Service workers provide services to other individuals or businesses. Janitors, barbers, and police are service workers.
4. Farm workers are people who work on their own farms or those of others.
Income is not the same as wealth. Wealth is any resource that can be used to produce income. A person with many valuable possessions but many debts may have no more wealth than a person with a few possessions but no debts.
People with similar incomes may have very different amounts of wealth. Consider two women who receive an income of $25000 a year. One earns all of her income working at a bank. The other receives her $25000 income from dividends on stock worth $250000. The second woman is much wealthier than the first woman.
When individuals receive any income, whether as allowance, paycheque, or gift, most of that income is spent. Spending becomes income for someone else. The money each individual spends multiplies throughout the economy as others receive and spend parts of it. In addition, the choice you and others make can lead to investment spending. More things are made and more places are built. Thus spending results in changes throughout the economy.
Recruitment. The letter of application. CV.
When a company needs to recruit or employ new people, it may decide to advertise the job or position in the appointing page of a newspaper. People who are interested can then apply for the job by sending in a letter of application and curriculum vitae containing details of their education and experience. The company will then draw up a list of candidates, who are invited to attend an interview.
The letter of applicationnormally contains three or more paragraphs in which you should:
· confirm that you wish to apply where you learned about the job
· say why you are interested in the position and relate your interests to those of the company
· show what you can contribute to the job by highlighting your most relevant skills and experience
· indicate your willingness to attend an interview (and possibly state when you would be free to attend)
To apply for a job you need to write a curriculum vitae (CV).
At first you should give the general information about you: your name, address, telephone, date of birth and marital status. Remember to write your first name in full and to give your work telephone number beside home number. The date of birth should also be written in full.
In graph called “Education” you should list all schools and colleges you graduated from and do not forget to mention the years you were studying there.
The next section should be filled with all the qualifications you have got with mentioning the year of getting each qualification.
The section “Experience” requires listing all the jobs you’d had before applying for this one. You’d better give more details about your last job.
It is also necessary to give other information such as your knowledge of foreign languages and other activities or interests.
One of the important parts of the CV is references from your friends, teachers and former employers – anyone who can tell your prospective employer about your working habits and experience.
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