Economics Essay

Poverty can be measured on different scales through many ways like through a Lorenz curve, a graph of the cumulative distribution function of a probability distribution which is used in representing income distribution. Lorenz curve shows distribution of assets and is considered a measure of social inequality. Gini coefficient can also be used in measuring poverty. Gini coefficient measures statistical dispersion and is usually used in measuring inequality of income distribution. High Gini coefficient means or indicates that there is high unequal distribution observed while a lower Gini coefficient indicates that there is a high equal income distribution. Trade benefits a nation in many ways. In the law of comparative advantage partners are allowed to benefit from specializing in producing services and goods they make best. When producers make goods in which they are comparably skilled or trained at, those goods increase in quality and number. Trade also improves suitability in allocation of resources. It brings goods and services to others who value them. Trade allows consumers to have more efficient production methods. Large productions are good in reducing product costs. Lower production costs may lead to much cheaper services and goods which may increase living standards. Human capital, one of the factors of production which refers to the reserve of technical knowledge and productive skills found in labor. It is one of the factors which influence an economic system like in market economy. An example to this is the market economy in the U. S. in which workers acquire knowledge and skills. Training and education increases human capital which make the worker more precious to their employers. Today, software developers and computer programmers are in demand making them more trained and skilled resulting to a high human capital and this in turn may benefit the economic system that the U. S. has.