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

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GROUP ASSIGNMENT TOPIC:

ANALYSIS OF THE PRINCIPLE OF ECONOMICS AND

APPLICATION TO RESULT SITUATIONS RELATED ECONOMIC

Student:

Ha Nhat Minh (SS181053)

Pham Le Thanh Binh (SS181377)

Pham Chung (SS181258)

Dang Viet An (SS150252)

Contribute:

100%

100%

100%

0%

TP HO CHI MINH - 2023

Table of Contents

I INTRODUCTION 3

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

3 PURPOSE 4

II DISCUSSION 5

1 INDENTIFICATION OF ISSUES AND PROBLEMS 5

2 SOLUTION 7

III CONCLUSION & RECOMMANDATIONS 8

IV REFERENCES 8

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 for relaxation, 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 and stress 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 TRADE-OFFS

2.1. People face trade-offs:

To get something you want, you must give up something else For example, if you want to buy a new phone, you may have to give up some other goods or services that you could have bought with the same money Or if you want 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 that maximizes output and minimizes waste, while also ensuring fairness and social justice For example, a government may have to trade-off between providing public goods and services to all citizens, or targeting specific groups that are more in need

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

between working overtime and earning extra income or spending more time with their family and friends

- Economic growth vs inflation: how to stimulate the economy and increase the production and consumption of goods and services, while also keeping the prices stable and avoiding inflation For example, a central bank may have to trade-off between lowering interest rates and boosting economic activity or raising interest rates and controlling inflation

- Quality vs quantity: how to produce goods and services that meet certain standards of quality, while also producing enough to satisfy the demand For example, a manufacturer may have to trade-off between using high-quality materials and increasing production costs or using low-quality materials and reducing production costs

- Environment vs development: how to protect the natural environment and its resources, while also promoting economic development and human welfare For example, a country may have

to trade-off between preserving its forests and biodiversity or exploiting its land and minerals for industrialization

3 PURPOSE

Based on the things of economics which students are learned, they can apply their knowledge into reality to explain and analysis situation issues related to economics in the real world Accordingly, they have experience in resulting 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 to understand how individuals and societies choose to allocate scarce resources, why they do so, and the consequences of those decisions there Economics is the science that studies how people make decisions in the face of deprivation These can be personal, family, business or social decisions If you look around carefully, you will see that deprivation is a fact of life Shortage means that people's demand for goods, services, and resources exceeds their supply Resources, such as labor, tools, land and raw materials are needed to produce the 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 a day 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

II DISCUSSION

1. INDENTIFICATION OF ISSUES AND PROBLEMS

CASE STUDY 1:

The US is one of the wealthiest countries in the world, with a high GDP per capita ($65,297 in 20201) However, the US is also one of the countries with the highest income inequality in the world, with a Gini index of 0.41 in 2019 Income inequality in the US not only affects people's income, but also affects people's income affect their leisure

According to a recent study by Attanasio et al, income inequality in the US has increased dramatically over the past three decades, and this has led to an increase in consumption inequality and leisure inequality Consumption inequality

is the difference in spending on goods and services between different families, while leisure inequality is the difference in leisure time between different individuals This study shows that consumption inequality and leisure inequality in

income and gender groups.

Specifically, this study finds that consumption inequality in the US has increased from 0.28 in 1980 to 0.43 in 2010, and leisure inequality in the US has increased from 0.08 in 1985 to 0.11 in 2010 In addition, this study also shows that consumption inequality and leisure inequality in the US have disparities between income and gender groups For example, consumption inequality is higher in the higher income group than in the low-income group, and leisure inequality is higher

in the lower income group than in the high income group This means that the rich can spend more on luxury goods and services, but also must work more to maintain 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 differ between men and women According to this study, consumption inequality is higher among men than women, while leisure inequality is higher among women than men This can be explained by the fact that men have higher income than women, but also have to work more than women, while women have lower income than men, but also have more leisure than men However, women's leisure is not a high-quality leisure, but a leisure that is forced due to not having a job or having to take care of the family

Thus, the US case study shows that income and leisure in the US have a complex and multidimensional relationship and are influenced by income inequality and differences between income groups and genders 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

CASE STUDY 2:

Vietnam is one of the fastest developing countries in the world, with GDP per capita increasing from $1,310 in 2010 to $2,715 in 2020 However, Vietnam is also facing problems of grievances income equality, informal employment, and low leisure

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

Income inequality in Vietnam not only affects people's income, but also affects their leisure According to a study by Nguyen Thi Thu Phuong and Nguyen Thi Hong Tham, leisure of Vietnamese people has differences between income groups and gender This study shows that leisure of Vietnamese people tends to decrease

as 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 to lack of leisure activities and personal development

One of the main causes of the low level of leisure in Vietnam is informal employment Informal workers are those who work without a labor contract, without social insurance, and without labor benefits According to the International Labor Organization (ILO), the rate of informal workers in Vietnam was 56% in

2019, higher than the East Asia and Pacific average of 49% Informal workers in Vietnam have lower income, work more, and have less leisure than formal workers

Thus, the case study on Vietnam shows that income and leisure in Vietnam also have a complex and multidimensional relationship, and are affected by income inequality, informal employment, and the difference between income and leisure regions and population groups 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

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, but also has higher working pressure

3 less leisure for men than women

4 leisure for women in the USA has a higher quality

2. SOLUTION

Some solutions to the above case studies on income and leisure inequality could be:

Strengthen policies to redistribute income and assets, such as consumption taxes, property taxes, inheritance taxes, and social benefits This can help reduce income inequality, increase rights and opportunities for the poor and left behind, and finance public services

Promote formal labor, ensure labor rights, and improve labor capacity This can help 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 US has 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 workers than 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

IV REFERENCES

1 Projects, C to W (2023) 10 principles of Economics Wikiversity Available at: , https://en.wikiversity.org/wiki/10_Principles_of_Economics (Accessed: 13 July 2023)

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)

7 Are there solutions to income inequality? (no date) Nobel Perspectives Available at: https://www.ubs.com/microsites/nobel-perspectives/en/latest-economic-questions/economics-society/articles/solutions-income-inequality.html (Accessed:

13 July 2023)

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

9 Georgieva, K (2020) Reduce inequality to create opportunity, IMF Available at: https://www.imf.org/en/Blogs/Articles/2020/01/07/blog-reduce-inequality-to-create-opportunity (Accessed: 13 July 2023)