analysis of the principle of economics and application to result situations related economic

Of course,the scarcest resource is time - all people, rich or poor, have only 24 hours in aday to earn an income to buy goods and services, to entertain or to sleep.There are only a fini

FPT UNIVERSITY – HO CHI MINH CAMPUS

GROUP ASSIGNMENTTOPIC:

ANALYSIS OF THE PRINCIPLE OF ECONOMICS AND

APPLICATION TO RESULT SITUATIONS RELATED ECONOMIC

TP HO CHI MINH - 2023

Table of Contents

1 CONTEXT 3

2 TRADE-OFFS 3

2.1 People face trade-offs: 3

2.2 Example of trade-offs in real the world: 3

I. INTRODUCTION

1 CONTEXT

Income and leisure are two concepts that have a complex and

multidimensional relationship in life Income is the amount of money a person earns from his work or business, while rest is leisure time that a person can use forrelaxation, entertainment, or personal development Income and leisure time are not only dependent on each other, but also affect each other in different ways High income can bring many leisure opportunities but can also cause pressure andstress for employees In contrast, a lot of idleness can create comfort and satisfaction for people, but it can also reduce income if not used properly Therefore, finding the balance between income and leisure is one of the greatest challenges facing people currently.

In this article, I will analyze income and spare time based on two real-life case studies: the USA and Vietnam I will point out the similarities and differences between the two countries in terms of income and leisure time, as well as their causes and consequences I will use figures from reliable sources to illustrate my point.

2.1. People face trade-offs:

To get something you want, you must give up something else Forexample, if you want to buy a new phone, you may have to give up some othergoods or services that you could have bought with the same money Or if youwant to study more, you may have to give up some leisure time.

2.2 Example of trade-offs in real the world:

- Efficiency vs equity: how to allocate resources in a way thatmaximizes output and minimizes waste, while also ensuringfairness and social justice For example, a government may have totrade-off between providing public goods and services to allcitizens, or targeting specific groups that are more in need.

- Income vs leisure: how to balance the amount of time spent workingand earning money, versus the amount of time spent on leisure and

between working overtime and earning extra income or spendingmore time with their family and friends.

- Economic growth vs inflation: how to stimulate the economy andincrease the production and consumption of goods and services,while also keeping the prices stable and avoiding inflation Forexample, a central bank may have to trade-off between loweringinterest rates and boosting economic activity or raising interestrates and controlling inflation.

- Quality vs quantity: how to produce goods and services that meetcertain standards of quality, while also producing enough to satisfythe demand For example, a manufacturer may have to trade-offbetween using high-quality materials and increasing productioncosts or using low-quality materials and reducing production costs.

- Environment vs development: how to protect the naturalenvironment and its resources, while also promoting economicdevelopment and human welfare For example, a country may haveto trade-off between preserving its forests and biodiversity orexploiting its land and minerals for industrialization.

Based on the things of economics which students are learned, they canapply their knowledge into reality to explain and analysis situation issuesrelated to economics in the real world Accordingly, they have experience inresulting aspects of economics.

help your awareness of human behavior and how people, businesses,markets, and governments respond to changes in the world.

The purpose of studying and analyzing economic situations is tounderstand how individuals and societies choose to allocate scarce resources,why they do so, and the consequences of those decisions there Economics isthe science that studies how people make decisions in the face of deprivation.These can be personal, family, business or social decisions If you look aroundcarefully, you will see that deprivation is a fact of life Shortage means thatpeople's demand for goods, services, and resources exceeds their supply.Resources, such as labor, tools, land and raw materials are needed to producethe goods and services we want but they exist in limited quantities Of course,the scarcest resource is time - all people, rich or poor, have only 24 hours in aday to earn an income to buy goods and services, to entertain or to sleep.There are only a finite number of resources available at any given time.

According to a recent study by Attanasio et al, income inequality in the US hasincreased dramatically over the past three decades, and this has led to anincrease in consumption inequality and leisure inequality Consumption inequalityis the difference in spending on goods and services between different families,while leisure inequality is the difference in leisure time between differentindividuals This study shows that consumption inequality and leisure inequality in

income and gender groups.

Specifically, this study finds that consumption inequality in the US hasincreased from 0.28 in 1980 to 0.43 in 2010, and leisure inequality in the US hasincreased from 0.08 in 1985 to 0.11 in 2010 In addition, this study also shows thatconsumption inequality and leisure inequality in the US have disparities betweenincome and gender groups For example, consumption inequality is higher in thehigher income group than in the low-income group, and leisure inequality is higherin the lower income group than in the high income group This means that the richcan spend more on luxury goods and services, but also must work more tomaintain their income, while the poor can spend less on basic goods and services,but also have more free time due to not having a job or working part-time.

In addition, consumption inequality and leisure inequality in the US also differbetween men and women According to this study, consumption inequality ishigher among men than women, while leisure inequality is higher among womenthan men This can be explained by the fact that men have higher income thanwomen, but also have to work more than women, while women have lower incomethan men, but also have more leisure than men However, women's leisure is not ahigh-quality leisure, but a leisure that is forced due to not having a job or having totake care of the family.

Thus, the US case study shows that income and leisure in the US have acomplex and multidimensional relationship and are influenced by income inequalityand differences between income groups and genders High income does notnecessarily bring high leisure, and conversely, high leisure does not necessarilybring high income A person's income and leisure depend on one's social position,gender, and choices.

CASE STUDY 2:

Vietnam is one of the fastest developing countries in the world, with GDP percapita increasing from $1,310 in 2010 to $2,715 in 2020 However, Vietnam is alsofacing problems of grievances income equality, informal employment, and lowleisure.

from 0.35 in 2010 to 0.38 in 2018, according to the Gini index Income inequality inVietnam is divided between regions and population groups For example, the percapita income of urban areas is two times higher than that of rural areas, and percapita income of the Southeast region is three times higher than that of the CentralHighlands In addition, the per capita income of ethnic minority groups is muchlower than that of Kinh and Hoa ethnic groups.

Income inequality in Vietnam not only affects people's income, but also affectstheir leisure According to a study by Nguyen Thi Thu Phuong and Nguyen ThiHong Tham, leisure of Vietnamese people has differences between income groupsand gender This study shows that leisure of Vietnamese people tends to decreaseas income increases, and leisure of men is less than leisure of women In addition,this study also shows that leisure of Vietnamese people is of low quality, due tolack of leisure activities and personal development.

One of the main causes of the low level of leisure in Vietnam is informalemployment Informal workers are those who work without a labor contract,without social insurance, and without labor benefits According to the InternationalLabor Organization (ILO), the rate of informal workers in Vietnam was 56% in2019, higher than the East Asia and Pacific average of 49% Informal workers inVietnam have lower income, work more, and have less leisure than formalworkers.

Thus, the case study on Vietnam shows that income and leisure in Vietnamalso have a complex and multidimensional relationship, and are affected byincome inequality, informal employment, and the difference between income andleisure regions and population groups High income does not necessarily bringhigh leisure, and conversely, high leisure does not necessarily bring high income.A person's income and leisure depend on one's social position, gender, andchoices.

Similarities 1 Both countries have high income inequality, and this affects people's income and leisure.

2 Both countries have income and leisure disparities across income and gender groups.

relationship between income and leisure, and finding a balance between them is a big challenge.

Difference 1 GDP, Consumption, and leisure inequality lower

2 Has a higher proportion of informal workers.

3 Vietnam has more leisure for women than men.

4 Leisure for women in Vietnam has lower quality

1 GDP, Consumption, and leisure inequality higher

2 has a lower proportion of informal workers, butalso has higher workingpressure.

3 less leisure for men than women4 leisure for women in

the USA has a higher quality

Promote formal labor, ensure labor rights, and improve labor capacity This canhelp increase income, improve working conditions, and create high-quality leisure for workers.

Invest in education, health, culture, sport, and technology This can help improve people's education, health, and skills, expand recreational activities and personal development, and reduce the digital divide.

Promote gender equality, protect the rights of women and children, and encourage their participation in the economic, social, and political spheres This can help realize the potential of half the population, improve the income and leisure of women and children, and create a just and inclusive society.

III.CONCLUSION & RECOMMANDATIONS

High income does not necessarily bring high leisure, and conversely, high leisure does not necessarily bring high income A person's income and leisure depend on one's social position, gender, and choices Therefore, finding the balance between income and leisure is one of the greatest challenges for people today.

countries have similarities and differences Both countries have high income inequality, and this affects people's income and leisure Both countries have income and leisure disparities across income and gender groups However, the UShas a much higher GDP per capita than Vietnam, but also a higher consumption inequality and leisure inequality The US has a lower proportion of informal workersthan Vietnam, but also has higher working pressure America has less leisure for men than women, while Vietnam has more leisure for women than men However, leisure for women in the US has a higher quality than leisure for women in Vietnam.

Some solutions to the problem of income and leisure inequality could be strengthening policies to redistribute income and assets, promote formal labor, guarantee labor rights, and improve labor capacity, invest in education, health, culture, sport, and technology, and promote gender equality and protect the rights of women and children.

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2 Consumer lifestyles in Vietnam (no date) Euromonitor Available at:

https://www.euromonitor.com/consumer-lifestyles-in-vietnam/report (Accessed: 13 July 2023)

3 National Bureau of Economic Research (NBER) working papers Available at: https://www.library.hbs.edu/find/databases/national-bureau-of-economic-research-nber-working-papers (Accessed: 13 July 2023)

4 Attanasio, O., Hurst, E and Pistaferri, L (2012) The evolution of income, consumption, and leisure inequality in the US, 1980-2010, NBER Available at: https://www.nber.org/papers/w17982 (Accessed: 13 July 2023)

5 Nguyen, M.-N (2022) Vietnam: Average monthly income per capita 2021, Statista Available at: https://www.statista.com/statistics/1021888/vietnam-average-monthly-income-per-capita/ (Accessed: 13 July 2023)

6 Income and expenditure: Vietnam (no date) Euromonitor Available at:

https://www.euromonitor.com/income-and-expenditure-vietnam/report (Accessed: 13 July 2023)

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8 Abhinav Chugh, Content and Partnerships Lead and Chugh, A (no date) How can the World Address Inequality? 7 experts explain World Economic Forum, Availableat: https://www.weforum.org/agenda/2021/07/how-can-we-mitigate-inequality-7-experts-explain/ (Accessed: 13 July 2023)

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