Essay in APPLICATION OF MONETARY THEORY

APPLICATION OF ECONOMIC THEORY

п»їCHAPTER THREE

PUTTING ON ECONOMIC THEORY

3. 1CURRENT SENARIO

Goods industry is one of the main contributors to the countrywide economy. Oil palm, rubber and timber industry have been generating career, source of income for smallholders and contributes 16. 9% of total foreign trade earnings. The federal government recognised the value of oil from palm and plastic industries in 2013 among the National Important Economic Location (NKEA) which can be under Economic Transformation Program (ETP). Federal government Transformation Program (GTP) and Economic Modification Programme (ETP) are countrywide transformation to operate a vehicle vision 2020 towards excessive income and advanced overall economy. I had given to figure out the issues and challenges that will be facing by items industry on how towards the year 2020. Go over, economics examination attempts to play its part.

3. 2ISSUES AND CHALLENGES

Economics is the scientific research that deals with the portion of limited resources to fulfill unlimited human wants. Think of human wishes as being all the goods and services that folks desire. However , to produce services and goods, we need solutions, including work, land, business owner, capital and technology. Methods are said to be scarce because their source is limited. Within the next five years, the problems faced by commodities market are not only from the industry on its own but also threat from other industries.

3. 2 . 1Land make use of

Concept of terrain in economic system refers to natural resources on this planet. Land source is frequent. Commodity is known as a land and labour motivation sector. The expansion of commodity plantation will affect other financial activities like the development of household and commercial areas and agriculture. However , the growth of population requires more land for non commercial and business area. Furthermore, the total land area which is suitable for cultivation is attaining its vividness point. To find out issues of land, I am using theory of production which is production probability curve to describe land-use restrictions on growth of item plantation. Development possibility curve is a chart showing the ideal output that can be produced by using the economic elements of development that available.

Production simply by plantation

Chart 1: Within technology, not caring curve go for the right Chart 1 shows combinations of output that can be produced by the country efficiently utilizing the economic solutions available. Terrain available allows country to produces blend between production by planting and residential/commercial area along point (a) to point (c) by IC series. Point (d) is a combo that country cannot create. In long term, IC collection can go for IC” once level of technology changes. To shift correct the IC line, the country must go by r and d (R& D) in order to develop a new technology.

a few. 2 . 2Sustainability issue

Malaysia needs to create a special brand for commodities that demonstrates the quality of quality added goods which are lasting at a competitive price. I am using theory of merchandise differentiation to find out the durability issue. In international market, firms via each country compete against each other simply by produces differentiated products. It is because to guarantees sustainability with their products.

Economists separate two types of product difference: vertical and horizontal. Top to bottom differentiation is all about inferiority or perhaps superiority. Two products will be vertically differentiated when consumers consider one particular product better or worse than the additional. Horizontal difference is a scenario involving two products such that some consumers view one particular as a poor substitute for the other and therefore will purchase the one whether or not its price are higher than the other's. The challenges will be facing in future is horizontal differentiation the industry part of barrier to admittance. Without the quality of high useful product, the country cannot compete in...