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Week 1: Reflections on Construction Industry and Circular Economy

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Week 1: Reflections on Construction Industry and Circular Economy

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What is construction economics?
In general economics, there is construction economics.  It includes the application of techniques and the knowledge of economics.

What can you conclude from the video?

From the video I have watched, I found that the construction brings lots of disadvantages to earth. From the video, it is clearly explained that demolition made the construction one of the most damaging human activities as it will cause other environmental damages like deforestation, desertification, acidification and eutrophication, air and water pollution, and others.

Construction activity brings a lot of harm to the earth. For example, construction activity does produce lots of carbon dioxide (CO2) through the installation of outdated and inefficient heating ventilation, lighting, and cooling system. Besides, the construction also produced lots of waste such as aluminum, steel, concrete, brick, ceramic, and wood.

Construction does bring a lot of harm to earth but it can be minimized or reduce by construction economics. How?  Garbology is one of the ways to reduce the harms toward earth. Garbology has led to cheap, durable, and green building materials. For example, rammed-earth tires can be used to build solid and thick walls. Paper and solvent-free glue can be used to create newspaper wood. Old plastic bags can make bricks and can be used as dividing walls inside a house. The video is giving various ways to save our earth from construction such as eco-village concepts, systemic urban planning instruments, and innovative governance, and others.

In a nutshell, construction is important to increase our quality of life but our earth is important too. We need to carry out the construction in an eco-friendly way. So, everyone needs to cooperate to make our earth stay healthy. Let’s us practice “Go- Green” in our daily life.

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Economics is a study on how people use their limited resources to fulfil unlimited wants and involves alternatives or choices. I also learned the factors that will affect the construction economy which are macroeconomics, and microeconomics. I able to differentiate between macroeconomics, and microeconomics. I also learned the basic economic concept which included scarcity, choice and opportunity cost.

| BASIC ECONOMY CONCEPT
| ·       SCARCITY - wants > limited resources - faced by poor and rich nations - To fulfil people needs

FACTORS OF PRODUCTION=BASIC RESOURCES
1.       LABOR - involve mental and physical effort - examples: lecturer, construction workers.  2.       CAPITAL -to produce another goods and services - examples: machinery, raw material, buildings, tools
3.       LAND -natural resources - examples: land, water, forest  4.       ENTREPRENEUR -combine of   labour + capital + land=entrepreneur -to develop production of goods and services

| ·       CHOICE -scarcity existed, then have the choices

| ·       OPPORTUNITY COST -second best alternatives -has to be forgone (decline to take) for another choice -which give more satisfaction

Differences between Microeconomics and Macroeconomics
| Microeconomics (“small”)
| -individual parts
| -Individual income
| -individual prices
| -analyzes the demand/ needs supply of labour

| -economic system as a whole
| -National income
| -overall price level
| -analyzes total employment in economy

Differences between the positive and normative analysis.
1. Positive analysis
| “what is”
| No indication of approval/disapproval
| Facts and cause-n-effect relationship

2. Normative(standard) analysis
| “what ought/should to be”
| Include the value of judgments
| what policy should be used in order to achieve economic goals

I have learned about the phase of business cycle from the class too.
PHASE OF BUSINESS
| Peak or boom |
·       Full employment
·       Max output, lowest unemployment rate

| Recession |
·       GDP / KDNK (Goss domestic product/ Keluaran Dalam Negeri Kasar) decrease
·       Output â, umemployment rate increase
·       DEPRESSION (deep and long recession)

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Unemployment defined as labour force participants being available and willing to work but cannot or unable to find jobs.

Qualification for the labor force

1.       must be at least 16 years old

2.       cannot be a full time student

3.       cannot be active-duty military

4.       cannot be retired

5.       cannot be institutionalized

6.       must be willing and able

There is 3 types of unemployment

1.Frictional unemployment

-UNPREVENTABLE

-temporarily out of work or in between jobs

-could have been fired/ searching a new job/quit their job to change fields.

-worker are qualified n skilled(transferable)

-directly tied to SEASONAL UNEMPLOYMENT

2. Structural unemployment

- lost their jobs because they are skilled to become obsolete

-skills are not transferrable > cannot work in other fields until they learn a new skill

-JOBS NEVER COME BACK (remain unemployed until they learn something new)

Structural unemployment can related to TECHNOLOGICAL UNEMPLOYMENT

-human replaced by machinery (do better)

-making human jobs obsolete

-this phenomenon called CREATIVE DESTRUCTION

3. Cyclical unemployment

-UNPREVENTABLE

-because of a downturn of the business cycle

-workers are fired and no of unemployment increase

- consumer demand decrease, level of production decrease, worker are mostly fired so that can reduce the costs

-entirely preventable.

Reasons why economics criticizing the unemployment rate

1.       It does not include disgruntled workers

-give up looking for work (withdraw from labour force)

-cause the unemployment rate decrease

-leading us to believe more workers have bee hired

2.it does not consider under-employment

-UNDEREMPLOYMENT defined as an individual who works part-time or who are in jobs below their capability, but who are seeking full-time employment

-overqualified or they work part-time for smaller salary than they are capable of earning

-underemployment occurs because frictional unemployment worker need income.

3. it does not reflect workplace inequality.

- because of age, gender, race, major and minor ethnicity

Inflation defined as a continuous increase in the general price level of goods and services in the economy

Why so harmful?

-prices increase, consumer purchasing power decrease, goods and services more expansive.

-VALUE OF MONEY DECREASING

IF THE INFLATION RATE IS 2%, IT CONSIDRED HEALTHY/OPTIMAL (NORMAL)

DEFLATION defined as a decrease in the general rice level of goods and services in the economy.

-consumer purchasing power increase, less expensive

Hurt by inflation

-saver, lenders, consumer who with fixes income

Help by inflation

1.debtors or borrowers

-inflation occur, money loses value

-pay less then borrowed

-easier to pay it back

2. Firms with Revenue> costs

-profit increase for firm across the market

Causes of inflaction/inflationary pressure

1.       Quantity theory inflation

2.       Demand pull

3.       Cost push

Consumer price index (CPI) and GDP Deflector is use to measure inflation rate and deflection rate.

CPI  equation
[Current MB/ Base MB] x 100%
MB (market basket)- total prices of daily goods (summed up)

GDP deflactor
- GDP Deflator = [nominal GDP/ real GDP] X 100%
Norminal GDP-price multiply quantity
Real GDP- price (first year) multiply quantity (second year)

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Types of Budges

·       Balanced Budget

Total Expenditure= Total Revenue

·       Surplus Budget

Total Expenditure < Total Revenue

·       Deficit Budget

Total Expenditure > Total Revenue

Types of Tax structure

1.       Proportional Tax

tax same as all income level

2.       Progressive Tax

Tax increasing rate all income level

3.       Regressive Tax

Tax decreasing rate all income levels

MONETARY
-A policy which employs the central bank’s (Bank Negara Malaysia -BNM) control of the supply of money as an instrument for achieving the objectives of the general economic policy.

| Expansionary
-Money supply ↑
-control unemployment /recession
- encourage spending (↓interest rate)

| Contractionary
-money supply ↓
-control inflation
-encourage savings
(↑ interest rate)

FISCAL
| Expansionary
- public spending ↑
-control unemployment/ recession
-↓ taxes

| Contractionary
-public spending ↓
-control inflation
-↑ taxes

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what is demand?
Demand is defined as the various quantities of goods and services that consumer willing and have ability to buy in a given period of time at a particular price. Only consumer demand product.

what is supply?
Supply is when consumers are able and willing to sell or produce a particular product and services in a given period of time at particular price, ceteris paribus.

There are 2 categories in determinants of demand which are internal and external factors.
Internal factors
1. Price of goods
-price of goods depend on the cost of production
-cost of production increase, price of goods increase
2. Service policies or terms of payments
-payments by credit instead of using cash will increase the sales
3. Profit margin
-profit margin increase, price increase, purchasing power increase, demand increase and vice versa
External factors
1. Price of related goods
-substitute goods
-complementary goods
2. Consumer income
-income increase, consumer demand increase
-goods that increase in demand=normal goods (cars)
-goods that decrease in demand=inferior goods (low graded rice, second hand cars)
3.tease and fashion
-product become fashionable, demand increase
-product outdated, demand decrease
Example: iphone12 and iphone 4s
4. Population
-population high, demand of goods and services high
5. Expectation about future prices
- Expectation about future prices high, current demand high vice versa
Example: tomorrow the prices of petroleum increase, today many people go to Shell and fill up a car with petrol.
6. Advertisement
-advertised goods, demand high, because will attract people
7 festive seasons and climate
-during festive seasons, diff products diff demand.
Christmas-Christmas tree
CNY- mandarin orange
Raya- Ketupat
8. Level of taxation
-tax high, demand low, because purchasing power low (vice versa)
9. Supply of money in circulation
-money supplies increase, demand increase, because purchasing power increase (more money to spend)

The determinants of supply are
1) price of related goods - substitute and complementary goods
2) cost of production- COP increase quantity supplied decrease(vice versa)
3) expected future prices-future price high, current supply of product low
4) technological advancement- high tech, COP low, supply increase
5) number of sellers- supplier  increase quantity supplied increase Vice versa
6) government policies

-taxes = decrease the supply of goods, discourage producer from producing extra (COP increase)

- Subsidies =increase supply, encourage producers to produce more
7) improvements in infrastructures- facilitate easier and faster movement of goods and services, supply of product increase

Exceptional demand is opposite to law of demand =which is if prices increase, demand increase

*Law of demand- price increase, demand decrease

For example,

1.      giffen goods- usually consumed by lower income group (used car)

2.       speculation,- future prices increase, current demand high (even at higher price)

3.      Emergencies- war/natural disasters= example: lockdown because of covid-19, people will go supermarket to restock goods such as flour, salt, sugar, rice

4.      status symbol goods- luxury goods, purchased by high income people,price is not important

5.      highly-priced goods- consumer considers quality or superior if the goods are highly-priced (adidas vs fipper)

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WEEK 12: THE PROMISES AND THE PERLIS OF GIG ECONOMY

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WEEK 12: THE PROMISES AND THE PERLIS OF GIG ECONOMY

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| APP-BASED | GLOBAL
| FLEXIBILITY | FREEDOM
| INFRASTRUCTURE
| PASSION
| VARIETY | REMOTE
| CLIENTS | FREELANCER

•what is that?
•fragmented work

•(given a task for certain amount of time
•nearly always through a digital platform
•prevalence of short-term contracts or freelance work
•examples:

•uber,

•grab,

•foodpanda

•GIG ECONOMY
•Independents workers

•Contract for short-term engagements
•SHARING ECONOMY
•Generating money

•By sharing or rentinf out assets
•PLATFORM ECONOMY

•Using IT systems

•Facilate/connet opportunities for gig/sharing

MONOPSONY
Deadweight loss will occur when supply and demand are out of equilibrium. It is a cost to society that created by market inefficiency.

How to calculate DWL?

Using the area of triangle.

Formula= ½ x horizontal dimension x vertical dimension

(E1, W1)-MARKET EQUILIBRIUM

(E2, W2)-WHAT THEY SHOULD GET

(E2, W3)- WHAT WORKERS GOT

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WEEK 10/11: COMPANIES THAT THRIVE UNDER DIGITAL ECONOMY

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WEEK 10/11: COMPANIES THAT THRIVE UNDER DIGITAL ECONOMY

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From the presentation, I learnt some companies that thrive uder digital economy. For example

Grab, Uber, Amazon, Tmall, Taobao, Tiktok, YouTube, Huawei, apple and others

For example, Grab

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WEEK 10 11 COMPANIES THAT THRIVE UNDER DIGITAL ECONOMY

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MARKET EQUILIBRIUM is a situation where the quantity supplied = quantity demanded & there is no tendency for price & quantity to change. Qss=Qdd

·         Determined by the intersection of both demand & supply curve.

Surplus
quantity supplied > quantity demanded in market.
Shortage
quantity demanded > quantity supplied in market.

Government intervention in the market

1.       Maximum price (ceiling price) =prevent price from rising/ lead to shortage)

2.       Minimum price (floor price) =prevents price from falling/ lead to surplus)

3.       Taxes= (direct/ indirect tax)

4.       Subsidies= (supply increase because encourage producers produce more)

Effect of Change in Demand and Supply
WHEN
ASSUME DEMAND CONSTANT
•Supply ↑, Equilibrium price ↓, quantity ↑
•Supply ↓, Equilibrium price ↑, quantity ↓
ASSUME SUPPLY CONSTANT
•Demand ↓, Equilibrium price ↓, quantity ↓
•Demand ↑, Equilibrium price ↑, quantity ↑

Effect of change in BOTH Demand and Supply
supply and demand both  ↑

case 1 : same magnitude

-Equi Price constant, Quantity↑

case2: diff magnitude

-Equi Price↑, quantity ↑

case 3: diff magnitude

-Equi Price ↓,quantity ↑

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WEEK 8: SOFT COSTS ELEMENTS IN GREEN PROJECT (PROFESSIONAL TALK)

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WEEK 8: SOFT COSTS ELEMENTS IN GREEN PROJECT (PROFESSIONAL TALK)

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From the talk given by Associate Professor Dr Nazirah Zainul Abidin, a prolific academician from Universiti Sains Malaysia (USM), has conducted many researches on green projects and sustainability. I realized that actually everyone in this world not only construction site has their own role to participate in the movements towards sustainability. I learned about the term “Green” refer to processes or activities which embed certain principles favorable to the environment during the construction of the said building and spaces. We need to change the past method of operation will little regard for environmental impacts to a new mode that more friendly to our environment. Dr Nazirah also told us the reasons we need green agenda. That is to make sure the sustainability of environmental, social and economic.

From the talk, I learned the green elements in the environment, social and economic sectors.

For example,

In environment: location and land utilization, materials selection, water quality and others

In Social, health, welfare and safety, accessibility, satisfaction and others.

In Economic, the whole life cost, legislation compliance, risk assessment and others.

Inside the soft cost element, there are three components.

1.     Design Influence- refer to the soft element that would influence project decision especially in deciding the project requirements that would set the course of project delivery. (project brief preparation, consultant fees, green certificate)

2.     Authority Requirement

3.     Development Provision -represent element that are necessary but do not directly affect the project design. This element supports the project’s business strategy and serve the administrative purpose for project implementation. (marketing, project overheads, security of funding)

Me, as a Quantity Surveyor in the future, I think I need to gain lots of knowledge to help in minimizing waste and maximizing reuse. I will try my best to think and to implement the concept “Go Green” in everything I do or I participate in.

80% effects come from the 20% causes. Although soft cost constitutes small fractions compared to the hard cost, but they have huge impact on the project decisions which can cause problem throughout the project process.

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•WHAT IS DIGITAL ECONOMY?
•digital-based economy

•also known as internet economy/ new economy/ web economy

•have the terms like VR,AI,AR,MR,IoT,5G,4G,IR 4.0,Digital revolution,Digital Disruption, Interconnectivity, Satellite Internet, Machine Learning

CHARACTERISTIC OF DIGITAL ECONOMY
•knowledge=wealth
•digitalization
•virtualization
•molecularization
•intergation/networking
•disintermediation
•covergence
•innovation
•prosumption
•immediacy
•globalization
•discordance

Advantages of digital economy: save costs, save time, improve productivity

Disadvantages: crime, privacy problem, date security