Vietnam's Economy

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Allocating Resources

Vietnam allocates its' resources to different areas inside of the country depending on the conditions. The criteria on how they distribute their resources is as follows: "(i) the number of population, with a weighting of 35% (ii) the poverty rate, with 30% (iii) the extent territory, with 20%, and (iv) factors affecting the ability to collect revenue public with 15%" (Matusse 21). The areas that have higher ratings for certain areas of the criteria will get more resources as needed to keep the region functioning. This could relate to the first principle of economics because there are probably some regions in the country that don't get to obtain higher amounts of resources so they will choose to move to areas with more resources that they could need such as more farming land. It's like apple picking, people don't want to live in areas with not a lot of resources so they move to the regions with more, just like how people pick from the trees with more apples.

Vietnam's Economic System

Vietnam's economy is mainly a command economy. The reason for this it seems is because of their weak judiciary section of government. Because the laws are weak there, there is corruption left and right, and political influence make Vietnam vulnerable to changing its' laws. The command economy does seem appropriate in this case because there has to be restriction in the market to avoid the already high levels of corruption there. But, these high levels of crime in the country could be due to the lack of freedom, so people could be constantly trying to find their way around the laws to do what they want getting themselves in trouble. Maybe adapting more market economy attributes could make people happier with the laws. This applies to the third principle of economics. If Vietnam were to start offer more of a free market then people would start making more businesses. Vietnam could also work towards making its' judiciary section of government stronger, so they can move towards more of a market economy sooner, and it would help them get rid of their widespread corruption.

Vietnam's Specialization and PPC Graphs

Vietnam specializes in producing broadcasting equipment and crude petroleum.

Sorry it's not a digitally made graph

Vietnam and South Korea both have the absolute advantage in producing broadcasting equipment. Vietnam has the absolute advantage in producing crude petroleum. South Korea has the comparative advantage in producing broadcasting equipment. Vietnam has the comparative advantage in producing crude petroleum. Vietnam would import crude petroleum, so their line on the graph could move outside of where it lies now making it more efficient. South Korea would import crude petroleum for the same reason. They would both export broadcasting equipment because the opportunity cost to make it is low. This relates to the second principle of economics because in order to produce more of one thing you must give up producing some of another thing.

Vietnam and Trading

The top three countries that Vietnam trades with is the United States, China and Japan. Vietnam trades with these countries to make money and get resources they need to produce more. One reason Vietnam trades with the United States is because they need refined petroleum in order to use oil because they produce a lot of crude oil, but it can't be used. Vietnam also imports a lot of electrical devices besides the ones that they make, and these countries, especially Japan, makes the ones that Vietnam doesn't produce. Vietnam also trades with these countries because of agricultural purposes. Vietnam grows a ton of different plants and fruit etc., so they trade with these countries who can't grow what they do.

Vietnam and Voluntary Trade

The fifth principle of economics states that "Voluntary trade creates wealth". This applies to Vietnam and every other country in the world. Relating back to the PPC graph and the trading, Vietnam imports crude petroleum because it creates wealth. When they import crude petroleum their line on the graph moves further out making their numbers rise. This makes the country more efficient, for they can produce more and make more money with trading. When the trading happens Vietnam values their broadcasting equipment less because they make a ton of it and so does the United States who produces crude petroleum. The crude petroleum is then a cheaper price there so Vietnam buys it for less and uses it to become more efficient for a lower price. This is like if you were to have eight of the same comic book, you would sell them for less because you want to get rid of them. But, if you were to have one, you would charge a lot of money because you'd want to keep it more than to get rid of it.

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