When should someone start saving for retirement and how much money should go towards retirement? Why?
Personal finance generally states that the earlier one starts saving for retirement the better. Ideally, someone would begin saving for retirement as soon as they landed their first "real" job with a relatively consistent and stable salary. For most people, this situation occurs in their early to late 20s. The reason personal finance recommends that people begin saving in their 20s is because of the power of compounded interest. All this really means is that when you start saving in your 20s, you have a lot of time before you need the money you are putting in. Over time, this money builds interest (and provided the interest is reinvested in the same account) the interest also builds more interest. Thus, one ends up with substantially more money then if one had waited until later and invested the same, or even larger, amounts of money. The amount that is generally recommended to be put away for retirement is 10-20% of the monthly take-home-pay (take-home-pay is just the amount of money one has left after paying taxes, ect. It is the amount of money from one's paycheck that can actually be spent). This percentage was chosen because it should allow the saver to maintain the same level of economic status or lifestyle of their working lives through their retirement. Also, this small percentage does not seriously inhibit most people from being able to live the lifestyle they wish; but still achieves the necessary goal of making sure one is able to retire, and be financially sound in retirement.
What are the basics of international trade and why is international trade widely considered to benefit both countries engaging in the trade?
International trade works on the principle that different countries have different geological, labor, and technical resources that effect the individual country's ability to produce certain goods. For example, it is much easier to grow and harvest shrimp off the coast of Vietnam (where the coastal water is warm most of the year) than it would be to grow and harvest shrimp off the coast of Maine (where the coastal waters are very cold much of the year). Because the climate is better for growing and harvesting shrimp in Vietnam, Vietnam has something called a comparative advantage in growing and harvesting shrimp against Maine. All comparative advantage means is that a certain country or business is more efficient at providing a product or service in comparison to another country or business. Comparative advantage is the key to why international trade is generally considered a positive benefit to both countries engaged in the trade. In the previous example, it is more efficient for Vietnam to trade shrimp to Maine (in exchange for some other product like oysters; which grow much better in Maine's cold water) than for Maine to try to grow and harvest shrimp. In turn, it is much more efficient for Maine to trade oysters to Vietnam than to try and grow and harvest oysters in the warm water in Vietnam. International trade works and is a benefit to both countries because both countries end up with both shrimp and oysters if they engage in trade, instead of just shrimp OR oysters if they do not engage in trade.
What are opportunity costs and how do opportunity costs relate to microeconomics?
Opportunity costs are simply the opportunities that are forgone in order to pursue the chosen course of action. For instance, suppose you have $3 and are trying to decide whether or not to buy a candy bar or a pack of gum at the check out line of a grocery store. Because you only have $3, you have to chose either the candy bar or the pack of gum; you can't have both. By choosing to buy the candy bar, you give up any benefits (positive or negative) associated with buying the pack of gum. In turn, if you choose to purchase the pack of gum, you give up any benefits (positive or negative) of buying the candy bar. So, the opportunity cost of buying the candy bar is the pack of gum you have to forgo to get the candy bar. In turn, the opportunity costs of buying the pack of gum is the candy bar you have to give up in order to get the pack of gum. In microeconomics, opportunity costs help individual businesses make decisions on what and how much of products need to be produced to help maximize profit.