Essay on Economics of Information

Submitted By steventang2010
Words: 1007
Pages: 5
Open Document
There have been discussions among scholars in developed countries regarding economics of information. Developed countries includes Australia, New Zealand, United States, Ireland, Germany, Japan, Canada and many more are countries that have a high level of development according to some criteria. The criterion is income per capita; countries with high gross domestic product (GDP) per capita would thus be described as developed countries. Another economic criterion is industrialization; countries in which the tertiary and quaternary sectors of industry dominate would thus be described as developed. More recently another measure, the Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating.

Birchler and Butler (2007) stated that there are many reasons to know in depth about economics of information, which are information is an interesting economic good, economics is about information, information is of strategic importance and information economics is a young field with practical relevance in many context.

According to Sloman (2003), many people think that economics is about money. Well, to some extent this is true. Economics has a lot to do with money: with how much money people are paid; how much they spend; what is costs to buy various items; how much money firms earn; how much money there is in total in the economy. But despite the large number of areas in which our lives are concerned with money, economics is more than just the study of money. It is concerned with the production of goods and services and the consumption of goods and services. Economics is a social science whereas it examines how individuals or groups behave and interact in markets and involved with mathematical models in order to help the forecast markets and also enable managers and policymakers to make economically efficient decisions. Moreover, economics is also the study of human behavior where the economic models of human behavior is related to assumption that individuals behave rationally in ways they believe give the most net benefit. For example, individual will think and choose either he or she should become a librarian or a doctor? Should he or she purchases a new motorbike or fix the old one? This shows that economics is used to explain human behavior based on the rational choices of individuals acting in their own self-interest.

Economics is defined as the study of the allocation of scarce resources. Economists always assuming that the resources are limited or inadequate but must be allocated to satisfy insatiable wants. Scare resources usually will include library budget, personal income, office space, number of employees, books, digital storage space and also shelf space. Allocating these resources means determining on how to spend the library budget, allocate the office space, divide shelf space among collections of books and so on. Choice must be made about the best use of limited resources. According to Kingma (2001), economics examines how decisions are made and which alternatives provide the greatest benefits to the various stakeholders, people or group with an interest in the decision. Furthermore, economics provides a set of tools to measure costs and benefits, thus enabling managers to come out with better decisions to organization. The tools including demand, supply, costs and also benefits.

Economics of information goods and services are different from other types of goods and services. Managers and policymakers need to have a clear understanding of their differences. For example, information may affect individuals other than who directly consume and manufacture it. Print, digital or broadcast information over radio or television can be shared by many individuals or anyone without decreasing any value of it. The
Show More

Related Documents: Essay on Economics of Information

Industrial Revolution

Throughout history a country’s economic development has depended on technology. For example, Eli Whitney invented the cotton gin in 1974 which to the increased production of cotton in the southern United States. In turn, new technology, such as steam powered boats and railroads, was invented to move the cash crop. Additionally, telecommunications, such as the telegraph, improved the way shipments were organized and tracked. Ultimately, this fusion of raw materials and technology led to the Industrial…

Words 1179 - Pages 5

Ellis And Stimson Analysis

likelihood of being “conflicted.” They argue that conflicted conservatives are the natural result of non-ideologues who follow the media. The media tend to report on the positive results of government action (which results in the group’s liberal economic and social policy preferences), while also trumpeting the worth of the conservative label (in a non-political sense, such as by defining it as hard-work, honesty, law-abidingness, etc.) As a result, patriotically motivated Americans will tend to…

Words 1283 - Pages 6

Essay on Gambling and Following Characteristics

St. Joseph’s College Gregory Terrace ECONOMICS YEAR 11 Research assessment – Extended written response NAME: ___________________________________ SEMESTER 2, 2014. LENGTH: 800 -1000 words. DUE DATE: September INSTRUCTIONS: 1. Assignments must be handed personally to the subject teacher involved and must be marked off against the class roll. 2. This topic sheet must be returned with your assignment. 3. An assignment submitted…

Words 2832 - Pages 12

Macroeconomics and Rational Expectations Hypothesis Essay

phenomena of severe unemployment and low economic activity. Although Keynes was successful in introducting the concept of demand – driven responses to correct problems associated with economic crisis undertaken by a more active role of Government to tackle the excesses of the free market, Keynesianism failed in explaining the periods of stagflation experienced in the Industrialised economies of the world, such as the US and UK and as a result New Classical Economics emerged in 1970. The first phase of…

Words 861 - Pages 4

AASB Framework Essay

204, Collins Street West, Victoria 8007. All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org. ISSN 1035-3631 AASB CF 2013-1 2 COPYRIGHT CONTENTS PREFACE ACCOUNTING FRAMEWORK AASB CF 2013-1…

Words 8637 - Pages 35

Principles Of Financial Statement Paper

August 17, 2011 Sandra Brown Financial Statement Paper Accounting is a service activity. The function of accounting is to provide quantitative information, dealing with finance, about economic entities that is intended to be used in making economic decision. Accounting is a systemic recognition, and a representation of financial information to assist in decision making. Every business generates profit and solvent. It is important to be able to track and monitor the gain or increase…

Words 750 - Pages 3

Team A Economic Forecasting Paper

Economic Forecasting Team A: Daniel Urena, Rafael Aguilera, Sean Patrick Caudill, Kevin Bennett January 19th, 2015 ECO/372 Economic Forcasting In any subject searching for viable and valid research sites is of utter importance to the success of any study or paper that needs to be written. In the specifies of the economic world it is important to find valid sources and make sure to vet them carefully as often times some of the same subjects are argued on both sides and it is important…

Words 801 - Pages 4

financial accounting Essay

Thesis statement 2. Principles and standards of financial accounting (1) Consists of financial accounting (2) Principles of financial accounting (2) Standards of financial accounting 3. Financial accounting perform useful information to make decision (1) Introduction of users in financial accounting (2) Roles in business management (3) Importance of financial accounting for managers 4. Financial accounting assists business in analysing past events and in planning…

Words 2250 - Pages 9

Brs Mdm3 Tif Ch12 Essays

Control Models 12.1 Chapter Questions Use this information to answer the following questions. A bakery buys sugar in 15-pound bags. The bakery uses 5000 bags of sugar each year. Carrying costs are $20 per bag per year. Ordering costs are estimated at $5 per order. Assume that the bakery is open 250 days a year and its daily demand is estimated at 20 bags. It takes 5 days for each order of sugar to be filled. 1) Refer to the information above. What is the optimal EOQ? A) 200 bags B) 5000…

Words 1702 - Pages 7

Balance Sheet and Accounting Principles Essay

Exercise 1.1 Accounting principles a |Accounting principle |Entity | |Explanation |The owner and the business are considered to be separate accounting entities, and their records should be| | |kept on this basis. The orthodontist’s fees are an expense of the owner, not an expense of the business…

Words 1467 - Pages 6