Sunday 16 November 2014

Other Academic Essay


Overview

Physics and economics are two different disciplines that have no apparent connection with one another in terms of their distinctive study and application. Physics is the natural science that involves the study of matter and energy through space and time to understand how the universe behaves under the laws of nature that cannot be controlled by mankind (Wikipedia, n.d.a). In contrast, economics is the social science that involves the study of supply and demand of goods and services in an economy to understand how the market behaves under the laws that are influenced by human behaviour (Wikipedia, n.d.b). Despite the difference, there is an implicit connection between Physics and Economics. Several principles of economics are analogous to the theories and laws of physics.

Principles of Diminishing Returns vs Ohm’s Law

In economics, diminishing returns is the decrease in the output yield by each additional unit of input while holding all other factors and inputs constant (Wikipedia, n.d.c). A common sort of example is adding more labourers to a job, such as harvesting crops in a farm. At some point, adding more labourers would cause some problems such as labourers getting in each other's way. As a result, the amount of crops harvested by one additional labourer reduces due to the ineffective and inefficiency among the labourers.

In physics, diminishing returns can be described by Ohm’s law. Ohm's law states that the current through a conductor between two points is directly proportional to the potential difference across the two points, and inversely proportional to the resistance (Wikipedia, n.d.d). For example, in a simple circuit connected by a battery, a resistor and a led, if the voltage of the battery is 1V and the resistor is 1Ω, the current flowing through in the circuit would be 1A. If the resistor is changed to 2Ω, the flow of current would decrease to 0.5A.


Economic principle of diminishing returns is parallel to physics theory of Ohm’s law. In a steady state firm, the larger the workforce, the lesser the marginal product. Likewise, in a circuit, the greater the resistance, the lesser the current flow for any applied voltage.

Principles of Trade-off vs Law of Conservation of Energy

In economics the term trade-off is expressed as an opportunity cost, referring to the most preferred alternative to give up in order to obtain a desired product, service or experience (Wikipedia, n.d.e). For example, the opportunity cost of investing in a greater payoff stock is the greater risk exposure as compared with the alternative of investing in a lower payoff bond that has a lower risk of investment. Another example of a trade-off is whether to spend more time on revising Physics and achieve a better grade in Physics test and spend less time on revising Economics and obtain an average grade in Economics test or vice versa.

In physics, trade-off can be described by the law of energy conservation. The law of conservation of energy states that the total energy of an isolated system is fixed and conserved over time; the energy can be neither created nor destroyed, but can change from one form to another (Wikipedia, n.d.f). During a free fall for instance, the potential energy of the object is converted to the kinetic energy, and the sum of potential energy and kinetic energy remains constant throughout the process (i.e. kinetic energy and potential energy is increasing and decreasing at the same rate respectively). Taking another example, in order for a car to move, the car fuel must gain mechanical energy by losing its chemical energy. Since total energy must be conserved throughout, if the gain of mechanical energy is occurring at a faster rate than the loss of chemical energy, the difference in their change must be represented by other form of energy such as heat energy that could be dissipated due to friction.


Economic principle of trade-off corresponds to physics theory of law of conservation of energy. If an individual were to increase his or her consumption in a particular goods by spending additional $100, he or she would have to $100 less to spend on other goods. Similarly, if the magnitude of a form of energy in a system were to increase by 100kJ, the magnitude of other forms of energy in the system must be reduced by 100kJ.

Principles of Trade vs Chemical Bonding

In economics, trade refers to the exchange of goods or services between one entity and another; trade exists between regions because different regions may have comparative disadvantages in producing certain type of goods due to factors such as unfavourable climate environment and unskilled labour force (Wikipedia, n.d.g). For instance, China might has a comparative advantage in producing agricultural goods given its habitant geography and comparative disadvantage in producing machinery goods likely because of its poor infrastructure. If Japan on the other hand has a comparative advantage in producing machinery goods but not agricultural goods, both China and Japan could obtain those goods that they are disadvantage in producing through trading.  

In physics, trade can be described by the chemical bonding. A chemical bond is an attraction between atoms that allows the formation of chemical substances that contain two or more atoms (Wikipedia, n.d.h). For example, in the element of carbon, a carbon atom has an instable electronic structure with only 4 electrons in its outermost shell. To achieve stability, the carbon atom can either share its 4 outermost electrons with other atoms (forming a covalent bonding between the atoms) or transfer its 4 outermost electrons to other atoms or receive additional 4 electrons from other atoms (forming an ionic bonding between the atoms). One such example is every carbon atoms sharing its 4 outermost electrons with 4 other carbon atoms. Through covalent bonds among themselves, carbon atoms form a very strong and powerful crystal structure known as diamond.

Atomic Structure of Diamond: a polymorph of Carbon.

Economic principle of trade is related to the physics theory of chemical bonding. If countries experience comparative disadvantage in producing certain goods, they can obtain them through exchange of goods with other countries. Similarly, if atoms have unsteady electronic structure, they can become stable by cooperating with other atoms through either electron sharing or electron transfer.

Principles of Market Equilibrium vs Heat Transfer

In economics, market equilibrium is a state where market forces such as supply and demand are balanced (i.e. quantity of demand equals to quantity of supply) and market price is established (i.e. the price that seller willing to sell equals to the price that buyer willing to buy) through competition among the sellers and buyers in the market (Wikipedia, n.d.i). For example, if there is a shortage of supply of eggs in the market, the market price of one egg, says 30 cents, would increase until says $3, driving off some buyers to reach an equilibrium price where quantity of demand and quantity of supply are equal.

In physics, market equilibrium can be described by laws of thermodynamics, the concept of heat transfer in particular. In thermodynamics, heat energy will move from a region with high temperature to another region with low temperature until the temperature at both regions are equal (Wikipedia, n.d.j). For example, when a red-hot piece is dipped into a beaker of water at room temperature, the metal molecules having higher temperature than water molecules will vibrate faster and collide with less energized water molecules, and transfer part of their heat energy to the water molecules. During the heat transfer, the temperature of the hot metal piece drops and the temperature of the beaker of water rises. The process of heat transfer continues until the point where both the temperatures of the metal piece and the beaker of water are equivalent. Another example of heat transfer is heating up water on a stove.

http://arenahanna.files.wordpress.com/2012/04/03-08-heat-energy-xfer.jpg

Economic principle of market equilibrium is analogous to physics theory of laws of thermodynamics. If the market demand is higher or lower than the market supply, the market price will adjust until both demand and supply are equal. Similarly, if the temperature of a system is higher or lower than the other system, heat will pass from the hotter system to the colder system until both temperature of the systems are equal.

Hyperinflation vs Entropy

In economics, hyperinflation occurs when a country experiences very high and usually accelerating rates of inflation, rapidly depreciating the real value of the local currency, commonly due to the increasing printing /supply of money (Wikipedia, n.d.k). This phenomenon generally destroy the purchasing power of individuals, distorts the national economy, and causes population to flee and investment to be withdrawn from the country. One such example is the hyperinflation in Zimbabwe in which the inflation in the country continuously rising from year 2004 to 2008 to as high as 89,7×10²°% (Wikipedia, n.d.l). Such hyperinflation is irreversible because no slight change can cause deflation while decreasing printing of money. The hyperinflation in Zimbabwe eventually ended in 2009 when the Zimbabwe dollar actually denominated.

In physics, hyperinflation can be described by second law of thermodynamics, the concept of entropy in particular. Entropy is a measure of the number of specific ways in which a thermodynamic system may be arranged, commonly understood as a measure of disorder (Wikipedia, n.d.m). According to the second law of thermodynamics, the entropy of an isolated system which is not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium. For example, when an ice cube is placed on a hot stove, the entropy of the ice cube increases while it is melting, and such a process is irreversible because no possible change can actually cause the melted water to transform back into ice cube while the stove becomes hotter.


Economic principles of hyperinflation is similar to physics theory of entropy. If government keep on printing currency, the inflation in the country would continuously rise as shown by the case of Zimbabwe, and the phenomenon would not be reversible while keeping the supply of money lower. Likewise, if the molecules in an isolated system becomes disorder, the entropy of the system would continuously increase to a maximum value at equilibrium, and the outcome would not be reversible while altering the direction of the process.

References

Wikipedia. (n.d.a). Physics. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Physics

Wikipedia. (n.d.b). Economics. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Economics

Wikipedia. (n.d.c). Diminishing returns. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Diminishing_returns

Wikipedia. (n.d.d). Ohm’s law. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Ohm%27s_law

Wikipedia. (n.d.e). Trade-off. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Trade-off

Wikipedia. (n.d.f). Conservation of energy. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Conservation_of_energy

Wikipedia. (n.d.g). Trade. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Trade

Wikipedia. (n.d.h). Chemical bond. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Chemical_bond

Wikipedia. (n.d.i). Economic equilibrium. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Economic_equilibrium

Wikipedia. (n.d.j). Heat transfer. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Heat_transfer

Wikipedia. (n.d.k). Hyperinflation. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Hyperinflation

Wikipedia. (n.d.l). Hyperinflation in Zimbabwe. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

Wikipedia. (n.d.m). Entropy. Retrieved November 1, 2014, from http://en.wikipedia.org/wiki/Entropy

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