AFRICA & THE ELASTICITY OF SUBSTITUTION
AFRICA
The evolution of the world can be traced back 40,000 to what we are calling today the continent of Africa. It is the oldest and the most contradictory continent. It is probably the most environmentally preserved and beautiful place in the world, but it is also a continent dominated by hunger, civil wars, AIDS, and corruption. It is a continent where the majority of the population uses the word "survival" on a regular base. Survival and a way of living became synonyms in countries like South Africa and Sierra Leone without even mentioning Somalia and Ethiopia.
Africa is a continent that has strict rules and laws for its citizens. However, these are not rules imposed by governments; the kings and the presidents change at a rate that is too high to make it possible to emit any rules that would enforce at least an apparent order in the society. These are rules made by the cruel reality of the worse three things existing in Africa: the economical situation that has only one meaning-poverty, the rapid growth of AIDS that is accompanied by a disastrous death rate, and the political situation that is best known in that part of the world as corruption.
These three factors can answer the multitude of the questions that the international community is struggling to answer for a long time as "why is it that in Africa people are always fighting and dying?" or "why don't the governments stop it? These characteristics of the African society are also posing some questions that cannot be answered as fast as the previous ones: "when is the present situation going to stop? "who should stop it? and even "is it worth trying to change anything?" These questions are complicated on the outside and scary in essence, but someday somebody should take the initiative and answer them. Hopefully it will be soon, otherwise the situation will become even worse than it is now, but hope is not the most suitable word in this case, and this is why .
Part I: Dealing With Hunger
However, in the last couple of years, the FDI has decreased from $32 per head in 1990 to $19 per head in 1998, according to the World Bank studies. Why did this happen? The reason is quite simple; the foreign direct investors tend to favor countries with lucrative mining and oil industries because from my point of view aid is most effective within a sound economic and political framework. That is why companies prefer do invest in Egypt, where there is some established order in business and politics, and move away from countries like Nigeria and Uganda, where there is total chaos.
In this situation, the poor countries are becoming even poorer, while the wealthier ones continue their way up to civilization and market economy. Still, the World bank and the International Monetary Fund (IMF) cannot leave the sinking countries to survive on their own, that is why international organizations are subsidizing the governments and the economic activities of the poorest countries in the world. In this context, it is clear why the foreign aid is still present in Africa, somebody is still providing it, but it is not as much as it would be necessary to actually help the countries in need of it.
Part II: Contemporary idea of Africa
What is the idea of Africa? Perceptions of contemporary Africa are conceived notions of one individuals beliefs, passed on to many misinformed individuals. If a person were asked to depict the main points that stand out among African society, they would most likely begin by speaking of its poverty because it's well known. Then the individual might enlighten us with the purpose of poverty, being the government. If the government can not organize themselves, how can they organize the countries within Africa, let alone the continent itself to rise above its downfalls? Therefore the continents" individual countries have civil war. Subsequently, the individual will inform us on the lack of education within the continent, being the reason for a disorganized government. Among many other misconceptions of Africa, the education, government and poverty are mostly talked about. Therefore, giving those trying to understand the African society, and those trying to survive in it two different ideas of African culture.
In fact, Africa is not an uneducated country; they are oral literate, not written educated. The government and poverty within Africa, is due to their ancestry and what they have to rise from. Many of their ancestors were slaves, taken captive having to survive the only way they knew how. Thus when a government was formed, many Africans had an input and there were no consensus among a proportion whereas they could establish a suitable guideline to live by. Therefore, in so many words, Africans are not uneducated, poor, or have an underdeveloped government among any other misjudged ideas, they are learning to live according to what they can.
Part III: Culture of Africa
1) Modern humans originated in Africa after millions of years of biological evolution. One important component for the success of the human species has been its capacity to create and use culture. Africa, therefore, has witnessed tremendous cultural diversity and cultural innovation over the very long period people have inhabited this continent.
Focus on the similarities and differences among the African cultures. Fist, define the culture concept. Then, using your definition of culture, compare and contrast cultural features that illustrate the existence of widely shared aspects of African culture throughout the continent, as well as differences in socio-cultural features that illustrate the diversity of African cultures on the continent.
Question # 1 Response.
Culture is a system of shared beliefs, values, customs, behaviors, and artifacts which members of society (in this instance Africa) use to cope with the world and with one another. Culture is transmitted from generation to generation through learning. There are a variety of cultural differences and similarities amongst African traditions. .
Similarities of African culture have to do with the way in which religion was brought to the African continent. In fact, through battles and wars (mainly by English settlers, British settlers, and Arab conquerors) religion was spread throughout Africa, both in Trans and sub-Saharan Africa. Demographically, religion from the furthest western hemisphere (Europe) "brought Christianity, predominantly to West and South African countries. Meanwhile religion from the nearest region (Africa) encountered the Middle East; bringing Islam largely to North Africa, as well as to other countries located throughout Western and Eastern Africa. .
Differences of African cultures include the infiltration of (European and Arabian) religious practices through permeation, which were introduced to Africans; soon, and quick to become a way of everyday African life.
Corner solution "Theory & Models"
Theories and models help explain behavior, as well as suggest how to develop more effective ways to influence and change behavior. (Glanz, n.d.). Here are three reasons why utilizing theory in research is important: .
Corner solution "Theory & Models"
Theories and models help explain behavior, as well as suggest how to develop more effective ways to influence and change behavior. (Glanz, n.d.). Here are three reasons why utilizing theory in research is important: .
(1) Theory provides concepts to name what people observe and to explain relationships between concepts.Theory allows people to explain what they see and to figure out how to bring about change. Theory is a tool that enables people to identify a problem and to plan a means for altering the situation.
(2) Theory is used to justify reimbursement to get funding and support-and it has to explain what is being done and demonstrate that it works via theory and research.
(3) Theory can enhance the growth of the professional area to identify a body of knowledge with theories from both within and without the area of distance learning. That body of knowledge grows with theory and research-because theory guides research.
Elasticity
Price elasticity of demand is important to producers of primary commodities because these commodities often exhibit a downward trend over time and are prone to fluctuations. Many commodities are necessities and have a low income elasticity of demand. As a result when consuming nations experience increases in their incomes, their demand for commodities grows but at a proportionately smaller rate when compared with demand for goods which have a high income elasticity of demand (technology). Fluctuations in the market prices which affect demand for primary commodities are mainly due to changes in exchange rates and changes in foreign government protectionist measures.
Price elasticity of supply is also important to producers of primary commodities. As most primary commodities are agricultural, it is not easy for producers to make more in the short term if there is an increase in demand, this makes supply relatively inelastic. In the long term however it is possible for excess factors of production to be put to work. Due to the largely agricultural nature of primary commodities producer substitutes are difficult to make in the short term. For example if a farmer has planted and harvested potatoes and there is a large increase in the price of carrots he or she is unable to produce carrots in a short amount of time and must wait for the following season.
In conclusion it may be said that the price elasticity of demand and the price elasticity of supply are highly important factors for producers of primary commodities in less developed countries.
Elasticity demand
In a market demand consumers is an important factor that contributes to the changes of the elasticity of demand. Demand means the quantity of goods that the consumers are capable and willing to purchase. Generally consumers prefers to buy goods when its price is lower, with a higher income and when the price of the substitute goods relatively higher and lastly they prefer to by goods with a lower price of complementary goods. This indicates the price is the main concern of the buyers which response to the quantity demanded. Therefore, relating to this concept there is a law of demand that refers to when the price of the goods decreases, then the quantity demanded for the goods will increase or vise versa. ( N. Gregory Mankiw, 2010).
(Patrick, 1966:174). On this view the more rapid the growth of real national income, the.
greater will be the demand by enterprises for external funds (the saving of others) and.
therefore financial intermediation, since in most situations firms will be less able to finance.
expansion from internally generated depreciation allowance and retained profits. For the.
same reason, with a given aggregate growth rate, the greater the variance in the growth rates.
among different sectors or industries, the greater will be the need for financial intermediation.
to transfer saving to fast-growing industries from slow-growing industries and from.
individuals.
In conclusion it may be said that the price elasticity of demand and the price elasticity of supply are highly important factors for producers of primary commodities in less developed countries.
Elasticity demand
In a market demand consumers is an important factor that contributes to the changes of the elasticity of demand. Demand means the quantity of goods that the consumers are capable and willing to purchase. Generally consumers prefers to buy goods when its price is lower, with a higher income and when the price of the substitute goods relatively higher and lastly they prefer to by goods with a lower price of complementary goods. This indicates the price is the main concern of the buyers which response to the quantity demanded. Therefore, relating to this concept there is a law of demand that refers to when the price of the goods decreases, then the quantity demanded for the goods will increase or vise versa. ( N. Gregory Mankiw, 2010).
The definition of price elasticity of demand is the responsiveness of proportionate changes in quantity demanded to proportionate changes in price. In other words, the percentage change in quantity demanded divided by the percentage change in price. Price elasticity can be classified into 3 types which is elasticity, inelastic, unit elastic. Elasticity is explained as when the percentage changes in the quantity demanded is more than the percentage change in price where the PED is more than 1. (Lipsey, Chrystal, 2010) For example 10% fall of price, increases the quantity demanded to 20%, price elasticity would be = 2. Inelastic means if a proportionate changes in price leads to a smaller proportionate change in in quantity demanded, demand is said to be inelastic where the absolute value of elasticity will exceed zero, where the PED is less than 1. (Lipsey, Chrystal, 2010) For example 20% increase in price, will lead to a fall of 5% in quantity demanded, price elasticity would be = 0.25 (www.tutor2u.net) Lastly, unit elastic means if a proportionate change in price leads to an equal change in quantity demanded, demand is said to be unit elasticity, where the PED = 1.
Institutions
Patrick (1966) identified two possible causal relationships between financial development.
The first - called "demand following" - views the demand for financial.
services as dependent upon the growth of real output and upon the commercialization and.
The first - called "demand following" - views the demand for financial.
services as dependent upon the growth of real output and upon the commercialization and.
modernization of agriculture and other subsistence sectors. Thus the creation of modern.
financial institutions, their financial assets and liabilities and related financial services are a.
response to the demand for these services by investors and savers in the real economy.
financial institutions, their financial assets and liabilities and related financial services are a.
response to the demand for these services by investors and savers in the real economy.
(Patrick, 1966:174). On this view the more rapid the growth of real national income, the.
greater will be the demand by enterprises for external funds (the saving of others) and.
therefore financial intermediation, since in most situations firms will be less able to finance.
expansion from internally generated depreciation allowance and retained profits. For the.
same reason, with a given aggregate growth rate, the greater the variance in the growth rates.
among different sectors or industries, the greater will be the need for financial intermediation.
to transfer saving to fast-growing industries from slow-growing industries and from.
individuals.
The financial system can thus support and sustain the leading sectors in the.
process of growth. In this case an expansion of the financial system is induced as a.
consequence of real economic growth.
process of growth. In this case an expansion of the financial system is induced as a.
consequence of real economic growth.
The second causal relationship between financial development and economic growth is.
termed "supply leading" by Patrick (1966). "Supply leading" has two functions: to transfer.
resources from the traditional, low-growth sectors to the modern high-growth sectors and to.
promote and stimulate an entrepreneurial response in these modern sectors (Patrick,.
1966:75). This implies that the creation of financial institutions and their services occurs in.
advance of demand for them. Thus the availability of financial services stimulates the.
demand for these services by the entrepreneurs in the modern, growth-inducing sectors.
termed "supply leading" by Patrick (1966). "Supply leading" has two functions: to transfer.
resources from the traditional, low-growth sectors to the modern high-growth sectors and to.
promote and stimulate an entrepreneurial response in these modern sectors (Patrick,.
1966:75). This implies that the creation of financial institutions and their services occurs in.
advance of demand for them. Thus the availability of financial services stimulates the.
demand for these services by the entrepreneurs in the modern, growth-inducing sectors.
Duality
Dualism ‐ the division of an object of study into separate, paired elements ‐ is widespread in economic and social theorising: key examples are the divisions between agency and structure, the individual and society, mind and body, values and facts, and knowledge and practice. In recent years, dualism has been criticised as exaggerating conceptual divisions and promoting an oversimplified, reductive outlook. A possible alternative to dualism is the notion of duality, derived from Giddens’s structuration theory, whereby the two elements are interdependent and no longer separate or opposed, although they remain conceptually distinct. This paper argues that duality, if handled carefully, can provide a superior framework to dualism for dealing with the complexity of economic and social institutions. Its main attraction is not its twofold character, which might profitably be relaxed where appropriate, but its ability to envisage a thoroughgoing interdependence of conceptually distinct elements.
Creation of new market
The market can be very beneficial to an economy but sometimes it does not work. Market failure is not an outcome of when prices rise or fall. Market failure may occur when one firm controls the market and restricts the quantity it produces; when producers fail to take into account all the costs of production; or when the good being produced can be consumed by everyone without paying for it. The market does not always work efficiently so sometimes government action is necessary to overcome market failure and lead to a more efficient use of resources.
.
Marginal analysis, which compares the marginal cost of an activity (the added cost from making a small change) to the activity's marginal benefit (the additional benefit from the small change), is how decisions are made. If the marginal benefit exceeds the marginal cost, the activity is undertaken and if it is short of the marginal cost, the activity is not undertaken. Changes in the opportunity cost (the marginal cost), or in the marginal benefit of an activity, change the incentives and change the decision made. Voluntary exchange makes both buyers and sellers better off. This allows markets to practice efficient ways in organizing exchange. .
Creation of new market
The market can be very beneficial to an economy but sometimes it does not work. Market failure is not an outcome of when prices rise or fall. Market failure may occur when one firm controls the market and restricts the quantity it produces; when producers fail to take into account all the costs of production; or when the good being produced can be consumed by everyone without paying for it. The market does not always work efficiently so sometimes government action is necessary to overcome market failure and lead to a more efficient use of resources.
.
Marginal analysis, which compares the marginal cost of an activity (the added cost from making a small change) to the activity's marginal benefit (the additional benefit from the small change), is how decisions are made. If the marginal benefit exceeds the marginal cost, the activity is undertaken and if it is short of the marginal cost, the activity is not undertaken. Changes in the opportunity cost (the marginal cost), or in the marginal benefit of an activity, change the incentives and change the decision made. Voluntary exchange makes both buyers and sellers better off. This allows markets to practice efficient ways in organizing exchange. .
People engage in voluntary exchange only if they expect the exchange to make them better off, so everyone gains from voluntary exchange. Most exchange in our economy takes place in markets. Markets are efficient because they send resources to the place where they are most highly valued; however, sometime the market does not work. Market exchanges should be reciprocal, as both parties should get products of equal value.
In general, the market allocates resources quite effectively, but there are times when a market economy benefits from government activity to prevent it from collapsing. The primary function of government is to protect the individual rights of its citizens. No economy can expect to operate at any more than a subsistence level without the order provided by the protection of these rights.
Market assumptions
There are many assumptions, realistic and unrealistic, inside the general equilibrium framework. Each economy is considered to have a finite number of goods in a finite number of agents. Each agent has a continuous and strictly concave utility function, along with possession of a single pre-existing good (the “production good”). In order to increase his utility, each agent must trade his production good for other goods to be consumed.
There is a specified and limited set of market prices for the goods in this theoretical economy. Each agent relies on these prices to maximize his utility, thereby creating supply and demand for various goods. Like most equilibrium models, markets lack uncertainty, imperfect knowledge or innovation.
The Game Theory
The game theory is a branch of mathematics that analysis decision making in conflict situations. These situations exist when two or more decision makers, who have different objectives, have to act on the same system, or share the same resources. The game theory provides a mathematical process for finding the optimum strategy, against an opponent who has their own strategy. The game theory makes the following assumptions.
There are many assumptions, realistic and unrealistic, inside the general equilibrium framework. Each economy is considered to have a finite number of goods in a finite number of agents. Each agent has a continuous and strictly concave utility function, along with possession of a single pre-existing good (the “production good”). In order to increase his utility, each agent must trade his production good for other goods to be consumed.
There is a specified and limited set of market prices for the goods in this theoretical economy. Each agent relies on these prices to maximize his utility, thereby creating supply and demand for various goods. Like most equilibrium models, markets lack uncertainty, imperfect knowledge or innovation.
The Game Theory
The game theory is a branch of mathematics that analysis decision making in conflict situations. These situations exist when two or more decision makers, who have different objectives, have to act on the same system, or share the same resources. The game theory provides a mathematical process for finding the optimum strategy, against an opponent who has their own strategy. The game theory makes the following assumptions.
"1. Each decision maker ["PLAYER"] has available to him two or more well-specified choices or sequence of choices (called "PLAYS").
2. Every possible combination of plays available to the players leads to a well-defined end-state (win, loss, or draw) that terminates the game.
3. A specified payoff for each player is associated with each end-state (a [ZERO-SUM game] means that the sum of payoffs to all players is zero in each end-state).
4. Each decision maker has perfect knowledge of the game and of his opposition; that is, he knows in full detail the rules of the game as well as the payoffs of all the other players.
5. All decision makers are rational; that is, each player, given two alternatives, will select the one that yields him the greater payoff.
The last two assumptions, in particular, restrict the application of game theory in real-world conflict situations.
2. Every possible combination of plays available to the players leads to a well-defined end-state (win, loss, or draw) that terminates the game.
3. A specified payoff for each player is associated with each end-state (a [ZERO-SUM game] means that the sum of payoffs to all players is zero in each end-state).
4. Each decision maker has perfect knowledge of the game and of his opposition; that is, he knows in full detail the rules of the game as well as the payoffs of all the other players.
5. All decision makers are rational; that is, each player, given two alternatives, will select the one that yields him the greater payoff.
The last two assumptions, in particular, restrict the application of game theory in real-world conflict situations.
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