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1. What is Scarcity, Choice and Opportunity Cost?

Basically, scarcity is the fundamental problems of economic where human wants are unlimited but the resources are limited. As for choice, it refers to deciding between different uses of scarce resources. Next is opportunity cost. Opportunity cost is the benefit lost in making a choice between two competing users of scarce resources. All of this economic problems exist because of scarcity.

2. Identify the problems faced by government in giving sugar subsidies Undoubtedly, the government was worried about this subsidy and trying to decide whether to continue to subside the price of sugar and other important items or otherwise. While fighting out the irresponsible smugglers, in fact the government has to pay the sugar producers in order to subsidize the price of sugar in the domestic market. More often, the shortage hit the subsidize sugar whereby this sugar is actually produced for the domestic consumers and not for traders like the hawkers and delicacies sellers, what more for the operators of the small and medium-scale enterprises (SMEs). Without the government subsidy, the price of sugar will be much higher.

3. Based on the article, it is said The Government hopes producers and retailers will not raise prices with the subsidy cut. In your opinion, what will happen if price of sugar increase? Explain your answer and illustrate using an appropriate diagram.

If government reduced the subsidies given, it is possible for the price of sugar to increase. This is because production cost will increase and supply is reduced. As a result, producer is less motivated to provide more supply of sugar. Based on the diagram, the supply curve shift to the left from S0 to S1. As a result, equilibrium price increase from P0 to P1 and the equilibrium quantity decrease from Q0 to Q1. For equilibrium point, it moves from E0 to E1. 4. Explain the price elasticity of demand for sugar in Malaysia. Provide your answer with a suitable diagrams. Even-though the price had increase, but the sugar's consumption will never decrease. This was because sugar is a necessities product with no close substitute and sugar was used in many foods and drinks in Malaysia. Then, price elasticity of demand for sugar was applied. Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good to change when its price changed. Sugar is inelastic under this situation. The quantity demanded remain constant regardless of the price which mean that the demand remain the same no matter the price increase or decrease. If sugar would say so the perfectly inelastic product and the foreign currency exchange will be the perfectly elastic product as the small change in price and there will be a huge in quantity demanded.

5. Explain basic economic problem occur in the article In the article, it is said Sugar is bad for our health.. One of problems that occur is how much of sugar to produce. It refers to amount of the product to be produced. As sugar consumption will lead to diseases such as diabetes and risk for gaining weight, production of sugar must be reduced to educate societies on practising a healthy lifestyle. Other than that, subsidies on sugar must be considered by government either to stop or continue in giving the subsidies.

Sugar subsidy reduced Saturday September 29, 2012

CONSUMER groups welcome the move to reduce the sugar subsidy but at the same time call for a relook of the subsidy scheme for all sectors. FOMCA chief executive officer Datuk Paul Selvaraj said there was a need to relook at the overall subsidy scheme because it would not be sustainable in the long run. We need to create a society that understands that we need to let market forces determine the prices of goods. Subsidies distort market perception and reduce competitiveness, he said. In Budget 2013, the Government proposed to reduce sugar subsidy by 20 sen per kilo effective today in a move to create a healthier Malaysia. Essential item: Shop assistant Syed Sadiq arranging packets of sugar at a supermarket in Shah Alam. The Government hopes producers and retailers will not raise prices with the subsidy cut. Bernama He said consumers should be smart and not patronise shops that took advantage of the subsidy reduction by hiking up the prices of their products. Penang Consumers Protection Association president Korisatan Karuppiah said there was a need to educate people to reduce their sugar and oil consumption as many were suffering from lifestylerelated diseases due to over-consumption of sweet and oily food. Sugar is bad for our health. We should not have any sugar and oil subsidies, he said. Muslim Consumers Association of Malaysia secretary-general Datuk Dr Maamor Osman said the reduction of the sugar subsidy would encourage Malaysians to practise a healthier lifestyle. He hoped the RM1.5bil allocation to stabilise the prices of cooking oil in the market would result in more competitive prices of goods between peninsular Malaysia and Sabah and Sarawak. Petaling Jaya Coffee Shop Association president Keu Kok Meng described the sugar subsidy reduction as not a big deal because it would translate to about RM80 extra costs per month for members. We can absorb the cost for the short term, he said. However, he warned that the association could no longer prevent members from raising prices because of the Competition Act. Logically, shops will try to match the prices of those around them to remain competitive, he said.

UNEMPLOYMENT: Graduates seriously lacking skills I have since clarified my position to the Malaysian Insider journalist who then made the correction in a subsequent article that appeared in the Malaysian Insider on Oct 22. The news portal also published my clarification in full on Oct 23. It is regrettable that Shamsul relied on a press report without prior verification of its accuracy. I did not say that Bumiputera were lacking in quality. I have never cast aspersions on the "quality" of any ethnic group. The original interview was about the high level of unemployment of Malaysian graduates. I had said that many of our graduates (not singling out any race) were not only unemployed but more seriously, were "unemployable" due to the drastic decline in the quality of education received. Even the (then) Higher Education Ministry and the Human Resources Ministry highlighted this problem. According to the former, 184,581 students graduated in 2011 and 44,391, or 24 per cent, mostly bachelor's degree holders, were unemployed. Arts and Social Sciences graduates formed the highest number of the unemployed, constituting 45 per cent. In the medical field, about 8,000 nursing graduates had not secured jobs. Then human resources minister Datuk Seri Dr S. Subramaniam said last year this phenomenon was because of "the low quality of nurses, including poor language proficiency, nursing skills and training. Because of this, most of them have been unemployed two years after graduation" (NST, Oct 8, 2012). In November 2011, a Job street poll of human resource managers found that more than 50 per cent of respondents said they were unable to hire the graduates because of "poor communication skills and a notably lack of command of the English language". Dr Lim Mah Hui, Kuala Lumpur New Straits Times, 08 Nov 2013

QUESTION 1 DEFINE UNEMPLOYMENT AND WHAT IS LABOR FORCE Unemployment refers to the number of people who can work but are not working, not having suitable jobs and looking for other job . Labour force are individuals aged between 15-64 years of age who are willing and able to work . those who belong to this age group, but cannot work or do not want to work are not included in the labour force. For example, students, prisoners, and those at the drugs rehabilitation centres. QUESTION 2 IDENTIFY THE TYPE OF UNEMPLOYMENT MENTIONED IN THE ABOVE ARTICLE AND EXPLAIN BRIEFLY OTHER TWO TYPE OF UNEMPLOYMENT. Based on the article, the type of unemployment is structural unemployment. It is due to the lack skills of the necessary jobs that available. Other two types of unemployment is frictional unemployment and cyclical unemployment. Frictional unemployment is short-term unemployment and results from normal turnovers in the economy. There are three main groups of people who belongs to this type of unemployment. First is people who look for job for the first time such as fresh graduates, and school leavers. Second is people who are temporarily between job for example, people who are fired from their jobs or who are voluntary quit but looking for another job. Third is people who quit their job to rest but want to work again. For example, a housewife who quit her job to raise her children and re-joins the labour force again when the children are all grown up. Second unemployment is cyclical unemployment. Some jobless may results from short-term cyclical fluctuations in the economy. this is known as demand-deficiency unemployment. It happens when firm have to retrench some workers in response to a fall in aggregate demand during a recession. QUESTION 3 STATE THE DIRECT MEASURES CAN BE USE TO REDUCE UNEMPLOYMENT. Examples of direct measures to reduce unemployment is first, the government should provide more training or retraining to increase the skills of workers. Second is disseminate information on job vacancies to the unemployed. Third is encourage people to be self-employed. Example, encourage graduates to become entrepreneurs.

ECONOMY ECO 415 ASSIGNMENT Q&A FOR MICROECONOMY AND MACROECONOMY TOPICS

PREPARED FOR: ENCIK ABDUL RAHIM

PREPARED BY: BM 241 1B GROUP

NO 1. 2. 3. 4. 5.

NAME UMMUL KHAIR FATIMAH BT FADZIL RAHMAN SUHERMIZA BT SUGIONO JULIANA BT JAMAL NATASYA BELINDA BT BARINDI PUTERI ALIAH FARHANA BT ANUAR

MATRIC NUMBER 2013220504 2013669016 2013454644 2013463108 2013420704

TABLE OF CONTENT

MICROECONOMY TOPIC : ECONOMIC GROWTH SUGAR SUBSIDY REDUCED

MACROECONOMY TOPIC : UNEMPLOYMENT GRADUATES SERIOUSLY LACKING SKILLS