Applicationof the Principle of Economics in Campus Daily Life

Generally,economy is ubiquitous to everyday’s life, just as in Xiada Xiangan campus. Thispaper will illustrate the daily application of the principle of economicsspecifically in this campus.

a. Establishment of Linguistic Partnershipin Xiada Xiangan Campus

In Xiamen University, Chinese students areeager to improve their English fluency and Vise versa, so do foreign studentswant to learn more Chinese.

The Basic principle of economics suggeststhat both parties (Chinese students and foreigners) are subjected to communalinterests and a form of intellectual property exchange can be readilyapplicable.

For example, Chinese students will helptutoring foreigners Chinese with respect to the subjects of difficulties, whileforeigners will do the same in exchange for a tantamount of time.

This plan seems to be easily applicable andreasonable enough. But according to the multiple sources of feedback, themajority who had once attempted to do so did not found such partnership to lastlong. A simplistic explanation of such failure in a microeconomics perspectiveis given below. Why such scheme failed to operate can be categorized into fivemajor factors.

1.   Thenumber of Chinese students far exceeds the number of foreign students;approximately 95% of the students in Xiada Xiangan are Chinese, while only 5%are foreigners.

2.   MostChinese students want to learn English solely, rather than other languages.

3.   Notall the foreign students are English speakers. The nationality of foreignstudents varies. Students came from countries such as Japan, South Korea,France and German may not have a good command of English since English isn'ttheir first language.

4.   Notall English speakers are capable of teaching. General restrictions such as timemanagement, interest of participation (need of improving their Chinese) and theability to teach well.

5.   Theprobability of both parties free of conflicts, personal and time wise may alsobe limiting.

According to the theory of economics, thelack of supply being English-speaking active participator, in contrast to theabundance of Chinese students ‘shifts’ the equilibrium as follow:

Graph 1

“Scarcity” can beinterpreted from the graphical representation above. If this case, the demandfrom Chinese students to have an English learning assistant is exceeding;however, the resources to fulfill these needs and desires are severely limited;therefore, the supply and demand mechanism are highly unparalleled visuallyextending to a scarcity gap.

The limit of supplycreates problems when the demands are high. Goods are not always scarce, but ifpeople want more of a good than there is available or if there is less of agood than people want, the good is scarce. In Xiada Xiangan Campus, thepopulation of English speaking foreign students who are in need for improvingtheir Chinese, having time to participate and capable of teaching English well(short for foreign students) is undoubtedly scarce, unable to meet the need ofChinese students who are in need for improving their English, having time toparticipate and capable of teaching Chinese well (short for c-students);however, on the reverse case, Chinese students are ample to f-students. Such relationship is bi-diretional, bothparties can be the demand or supply. To resolvethis dilemma, several aspects need to be adjusted to re-partition theequilibrium.

From a Microeconomicsperspective, this problem can be solved by improvising a market pricing system,in where the most serious customers are matched with the best suppliers.

Due to scarcity, foreignstudents have the upper hand to mark up their price of return in this casedemanding higher quality of Chinese tutoring. For instance, as initially planned,a foreign student teach a Chinese student English for one hour; in return, theChinese student teach the foreign student Chinese for one hour. Because of theeffect of scarcity, the foreign students have the privilege to demand a longerperiod of tutoring or more serious and systematic tutoring in return withouthaving the fear of losing his/her partners. Such higher revenue offsets theimplied scarcity, rebalancing the scale of supply and demand and theequilibrium can be re-established. This is why my current language partner whois from America baldly asked for a loner tutoring time while I have littleoptions but to comply.

b. monopoly effect of single photocopycentre in Xiada

Another case is that the one and onlyphotcopy centre in Xiada, located at the 2nd floor of firstcafeteria. Base on the theory of economics, we have learned that in most cases,practice of monopoly has bad effects for the economy.

In Economics, monopoly existswhen a specific individual or enterprise has sufficient control over aparticular product or service to determine significantly the terms on which other individuals shall have access toit.
It is often argued that monopolies tend to become less efficient and innovativeover time, becoming "complacent giants", because they do not have tobe efficient or innovative to compete in the marketplace. Sometimes this veryloss of efficiency can raise a potential competitor's value enough to overcomemarket entry barriers, or provide incentive for research and investment intonew alternatives.

To sum up, seller with monopoly power cansell goods and services higher than ordinary market price. In my personalopinion, photocopy services in Xiada photocopy centre is already overpricedi.e.: poor quality of printing, time consuming service (due to a lot of peoplequeuing), moreover, the seller sometimes rounded up and/or marked up the price.The impact is that some buyers/ users have either to take the status quocondition or to cancel using the service. This condition is bad for both sellerand buyers, thus creating deadweight loss.

This is graph of current condition ofphotocopy center (one seller and many buyers)

Graph

Thisis graph of oligopoly market for photocopy center (several sellers and manybuyers)

graph

From that graph, it can be shown that theprice of service can be reduced and quantity of photocopy service can beincreased, which reflects better off condition for the economy.