Real-World Policy Application of Economics: Critical Analysis

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PRINCIPLE OF ECONOMICS
REAL-WORLD POLICY APPLICATION NO 2, BUS5POE

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Table of contents
Part 1..........................................................................................................................................3
Part 2..........................................................................................................................................3
Connecting economic theories to policy....................................................................................5
Critical thinking and reflection..................................................................................................5
Reference....................................................................................................................................6

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Part 1
1)
All these terms are a form of unit that that goes in to the production in economy. However,
while, the human capital refers to the knowledge and the skills of the workforce as a whole,
the labours are the human effort that goes in to the production (Afolabi, Bakar & Aziz, 2016).
Physical capital is a totally different input which is mainly in the form of machineries.
2)
The main issue of the climate change is the reduction in the productivity of the agricultural
sector. Apart from that, the life of the animals in the earth is also influenced due to the change
in the climate.
3)
Free market has the capability to change the price as per the demand and the supply of the
wood in the market. More delectation rate would reduce the supply and the price would go up
leading to a decrease in demand and hence a low rate of depletion. However, in the real
world, the price for wood does not reduce compared to the demand and hence resource is
depleted.
4) The diminishing returns to capital are the reduction in the productivity of the capital as the
amount of capital is increased (Baumol & Blinder, 2015). This is also the reason behind the
fast growth rate of the poor economies compared to the developed once. For example the
growth rate of India is more than the growth rate of the USA. The economy of the USA has
reached a high level of GDP and hence the growth rate is low.
Part 2
5)
a) The reduction in the infant mortality rate for Singapore is steeper than that of Sweden.
However in the case of Venezuela the reduction in the infant mortality rate has been
haphazard as the reduction has been more after the year 1979. In the case of the Brazil, the
reduction was slow at first and after the year 1980 the reduction accelerated.