There are some buzz words that you must know: PlayStation3, PSP, Xbox, and Wii. Some game consoles that are very popular nowadays. It is reported that there has been several chaotic accidents among the buyer in order to obtain the newly released console Sony PlayStation3. Most people will say that the game companies are making great profits from these enthusiastic gamers. However, the game companies are worrying seriously about their future, because the “enthusiasts” are becoming adults.
The game industry is a special industry that aims at entertaining the young er generations. However, “as so-called Millennials -- a large swath of population born between 1980 and 2000 – mature,” there might be a devastating decrease of gamers, which means a “lapsed” economy. The main reason for the losing-interests-while- growing- into- adult phenomena is said to be that most games are time consuming. It usually takes “tons of hours of playing to complete” and being adults of course cannot devote much time on playing games since they now have more responsibility for work and family. Besides, people are getting bored with the contents or the procedures of completing a game. They are requiring a new way of playing video games. Let’s take the Nintendo Wii for example; gamers finally found a new way of playing games more virtually and with the movement of the body. Playing games are now a new kind of exercise. Moreover, the games consoles are being developed more complicated that before. People are playing video games for relaxation, not to get overwhelmed by the complex usage of joysticks and numerous buttons.
The concern from the game industries is not a meeting the trouble halfway. This can be illustrated by one of the demand shifters we learned about in class, the preferences. People are losing their interests or say their preferences about the game consoles. This will definitely lead to the increase of demand, which means a loss for the game industries. Fortunately, the game industries oversee this coming trouble and are trying their best to arouse the interests of the gamers. One way is to develop new consoles that are exciting and in big differences than the traditional ones, like Wii. Besides, I think they should adjust their game contents to meet the whole family’s needs. Games should be welcomed by everyone, not just the young generation, after all. "You cannot sustain growth just by taking more money from the same people." To sum up, just get rid of the stale and bring forth the fresh!
Tuesday, February 27, 2007
Sunday, February 25, 2007
It’s now official: the three largest
So will this move by all three companies be a long or short term solution? Why do you think these companies have been slow to adapt their auto-lines to the more fuel efficient models that most of the world demands? With the cost of gas prices today, is this the chief reason that these companies are losing business? Or is it because other auto companies manufacture better vehicles?
Posted by Keith Zeigler at 2/25/2007 03:19:00 PM
Wednesday, February 14, 2007
Monday, Feb. 12th, 2007, the White announced it's upcoming "push" and "demands" for a U.S. Global Trade Pact through the Doha Round and will greatly benefit China if it makes it's exchange rates more flexible. "A free and open international trade regime is vital for a stable and growing economy, both here at home and throughout the world," according to an annual report on the U.S. economy prepared by the White House Council of Economic Advisers. How true is this, and would the ultimate outcome definately be worth the United States effort? That is the major question being presented in Washington, D.C. at this time. China seems to be the opposing factor in the make-up of this issue. Their current exchange rates are fixed, and the U.S. are constanly pushing them to "loosen up their ways", so to speak, and allow the trade to take place. Not only will it benefit the U.S., President Bush assures, but China equally as well. On Capital Hill, though, is a a great deal of frustration and annoyance due to the slow, non-productive speed of China. If China were to lower their fixed-exchange rates, it would then allow significant control over domestic inflation. This trade pact brought up Doha round world talks is that if everyone is in agreeance with trade, then it can be put on a quicker track through Congress for approval, cutting the waiting time in half! So is this worthwhile for not only China to invest in, but the U.S. and other countries throughout the world as well? Here's a thought from the article to ponder on.
"Productivity growth is projected to average 2.6 percent per year during the six year span of the budget projection -- roughly equal to the average annual pace during the past decade," the report said.
Posted by Jessi Zinn at 2/14/2007 12:42:00 PM
Tuesday, February 13, 2007
Many men, like Alan Beggerow, have stopped looking for work. Beggerow, of Rock Falls, Illinois, is a 53 year old man who was laid off as a steelworker at 48 and refuses to take any job that is either underpaid or demeaning. This is becoming a larger trend in men between 30-55, in the prime of their lives, who are turning down jobs which they believe to be under them and in which they are overqualified. This may seem startling because the economy is expanding and offers many new opportunities to find work. When asked why he remains jobless, Beggerow replied, "I have come to realize that my free time is worth alot more to me." This is evident in Beggerow's case in that to make ends meet he has mortgaged his house a second time, and is drawing about $7000 out of his family's saving every year. Millions of men, about 13% of men in his age group, are not working and this is up 5% from 1960. Most of the men in this group are laid off blue collar workers with nothing more than a high school education under their belt but there are some exceptions. For example, refugees of the failed Internet businesses have also spent years out of work in their thirties and are just scraping by when before they were making $100,000+ a year. The unemployment rate do not include these "missing men" because they are simply not looking for work.
Posted by Emily Shuba at 2/13/2007 08:05:00 AM
The debate on global warming has been taking place for decades and has basically gotten nowhere during that entire timespan. Every new piece of evidence is debunked by critics who claim that the crazy liberal environmentalists don't know what they are talking about and/or the facts aren't facts they are only hypotheses. My favorite one is that the sensationalist scientists don't understand the economic ramifications of the drastic measures that our current problem is asking for. Well, maybe they don't. But what they do know is science and the environment. Last week, the worlds most prominent group of climatologists announced that the Earth is undeniably becoming warmer and at an alarming rate no doubt. If that's not enough for ya then try this on. The U.N. Intragovernmental Panel on Climate Change has taken this to heart and give over a 90% chance that it is our fault. Still not enough? Fine, use your own common sense. We are burning fossil fuels (which no one can deny are heavy pollutants) at higher and higher rates every day and beyond that are the greenhouse gases emitted from other sources. These toxins can all be measured and the measurements show that there are significanly higher amounts now than ever before. So putting two-and-two together, we have dangerous pollutants being pumped into the air in higher quantities than ever before in the history of the world and we can measure them so we know it's not just the "crazy environmentalists" blowing smoke; how then can anyone claim that there will be no ramifications of this. Here are just a few: mass extinctions, ever increasing severe weather, sea level rise, temperature rise, ect. All of this is due to our own selfish ambitions (mine as well) and an inability to balance the need to protect our planet from the want of our daily lives.
So what are we to do about this? Nothing? Then we will bring into reality every science fiction movie that shows how we destroyed our own planet. It sounds silly, I know, but it is still a possibility. For my own humble opinion we, the people of Earth as a whole, need to start listening to those that understand the complex systems that are being destroyed by our pollution and come to the aid of our Mother Earth. I won't claim that I am an expert or that I can even begin to fathom a plan to follow, but I will say we need to listen. The scientists that have the proof of our destruction should finally be heeded and given the resources to find a way (if there is one) to fix the problem. This would be much easier if it was that simple but it isn't. There are more factors than just the global warming that is occurring, and as much as I hate to admit it, those that claim the economy is too fragile for drastic change are right. Oh, wait, but what's this word that is coming to mind...........cooperation. We need to stop fighting amongst ourselves and work together for a solution. It may be a long and bumpy road but the sooner we realize that the environment is in danger and work together the sooner we can construct a plan to heal our world with as little adverse effect on the economy as possible; remember boys and girls, if we have no planet then we can have no economy of any kind. Think about that.
Posted by Sam Dahler at 2/13/2007 07:51:00 AM
In a recent article published by USA Today, the makers of a new five-calorie-a-can, called Enviga, claim that their product actually burns calories rather than give the consumer added calories. When the makers, Coca-Cola and Nestlé, began to market the product they heavily promoted it as "scientifically proven to burn calories" based upon a Swiss "research" project wherein 31 lean, young adults drank 3 cans of the miracle beverage a day for 3 days. It was proven that this small sample burned on average 106 calories (the equivalent of 2 regular--not double-stuffed--Oreo cookies). Although reps from Coca-Cola state they are "[N]ot positioning Enviga as a weight-loss product," yet they fail to mention that this aspect of the beverage is their main advertising promotion to their potential consumers.
Pardon me for seeming overly skeptical of this drink, but they Coca-Cola/Nestlé company is attempting to deceive their consumers, and attempt to "unofficially" trick those persons on a weight-loss track to purchase their product when it would actually have an adverse affect or none at all. The point is they are using the perception of weight-loss and low-calories to entice their consumers to purchase Enviga.
You may think "well good for them," this is where you are wrong, click the link that is the header and actually read the article first, the Coca-Cola/ Nestlé company are under investigation under the Connecticut Attorney General Richard Blumenthal, which is actually looking into the drink's alleged calorie-burning claims. The non-profit Center for Science in the Public Interest filed suit against the companies, accusing fraudulent marketing and labeling of Enviga, calling it a "highly caffeinated and overpriced diet soda." If the study done under CT Attorney Gen. does not find that there is any validity to the claims of the companies, they will ultimately lose a small amount of monies in court costs and fines imposed upon them, but they will also be losing some of their consumer base due to their deceptions. This will ultimately affect the consumer base that will be looking for Enviga for weight-loss rather than their normal consumers who drink their sodas and eat their high-calorie products.
Posted by Matt Kundmueller at 2/13/2007 12:19:00 AM
Monday, February 12, 2007
So, this cold weather is probably making you anticipate spring break already! But before you start signing up for those Caribbean cruises maybe you should take a look at the environmental impacts the ships have. The vision of all that crystal clear water may make you think that there is very little impact from cruise liners but you are sorely mistaken. There are very few water pollution laws created and those that are in place are very difficult to enforce. On an average day a cruise ship creates over 30,000 gallons of sewage, which is legally allowed to be dumped into oceans. This pollution kills plants, animals and eventually washes up on beaches. Much of the pollution that is dumped could easily be kept on board until it can be treated and disposed of properly, but this would create a greater cost for the cruise ship companies, which they are obviously not willing to pay. Occasionally, a cruise company is sued for breaking pollution laws, but dumping is hard to regulate and companies are rarely prosecuted.
So, next time your friends ask you about a cruise for spring break, take a minute to do a cost-benefit analysis and consider if environmental degradation is worth a nice tan.
Posted by Sotiria Anagnostou at 2/12/2007 11:26:00 PM
The state of Ohio has just passed its law regarding the increase of minimum wage, but for New York minimum wage increase is still an ongoing debate. Everyone likes the idea of putting more money in their pockets, but raising minimum wage may effect low-skilled workers. Research done by Michigan State University states that with minimum wage increase encourages more teens to drop out of high school and enter the workforce replacing lower-skilled workers. Jobs will not be available to lower-skilled workers if the price of labor is higher than its real value.
There is also an impact on small businesses with increasing the minimum wage. Obviously small businesses will have more expenses in paying employees, but also with costs of workers compensation insurance, umemployment insurance, Social Security, etc. Small businesses will have to either lay off workers, increase prices, or both because they simply don't have extra money lying around to pay for these expenses.
To increase or not to increase the minimum wage, that is the question.
Posted by Melissa at 2/12/2007 10:19:00 PM
I spend a lot of time checking several "news" sites each and every day. I am often quite surprised by the news of the day and today was no exception. The headline for the article caught my attention so I read on. Basically the Telegraph a Brittan newspaper is warning its readers to reconsider giving their special someone a bunch of flowers because the distance that the flowers have to travel to get to Britain is about 33,800 miles. The environmentalists, the article warns, are worried about the effects of the "flower miles" on global climate change from the carbon dioxide emitted from the airplanes that the flowers are shipped on. The article includes several quotes from people representing different organizations and interests. The article reports that the average Briton spends, on average, £39 (which converts to about $76). One of the quotes in response to that estimation is from a spokesman for the Flowers and Plant Association who said, "That's very little when you think what we spend on CDs, coffee and even lipstick." That got me thinking about the thoughts of A.C. Pigou. Pigou would more than likely disagree with the Flowers and Plant Association spokesman by suggesting that the average Briton spends far more on flowers than $76 which does not include the costs of the effects on the environment such as the CO2 airplane emissions that were mentioned in this article. Just a thought that the Telegraph brought up to show that even the simplest of traditions could "cost" far more than the price tags.
Posted by Joshua S. Walker at 2/12/2007 09:10:00 PM
On January 10, 2007 the House overwhelmingly approved the first federal minimum wage increase in close to 10 years. The new wage will proceed from $5.15 to $7.25 / hr over the next two years.
The increase of minimum wage has posed a considerable amount of opposition from many economists. With a standard labor/leisure diagram, economists can show that raising the minimum wage could cause employees to want to work less due to the income effect.
Whether this will actually happen is unknown. In my opinion, I believe the wage increase will not effect the amount of hours worked. If anything, the wage increase will act as a substitution effect causing the labor force to work more hours.
Posted by Eric Dowler at 2/12/2007 09:02:00 PM
Winter Weather ADVISORY: Tuesday: 1 am until 1 pm
The hour is upon us. As students of economics, tonight, we are faced with a decision that touches both on positive and normative economics. Our decision is whether or not to listen to what our local news resources are telling us about tomorrow’s weather forecast. In listening to our news sources we might reluctantly have to miss the exam in Economics 350, which would be a trade off that included multiple different points of identity.
As can be read on the WTAP website (http://www.wtap.com/breakingnews/5745461.html) the city of Marietta is, indeed, no longer within a state of winter weather watch, but winter weather advisory. This means that tomorrow our city will be seeing snow, sleet and freezing rain all before the early afternoon hours. The Red Cross website (http://www.redcross-cleveland.org/fileshare/pdf/2006%20Winter%20Release.pdf) warns us to “stay indoors, except in absolute emergencies.” They also have a “to do” task list of things that one should have in case of different emergency situations: water, food, first aid, clothing, bedding, tools, emergency supplies, etc. This one phenomenon, winter weather preparedness, is an important topic of positive and normative economics.
People act differently in states of emergency than they would otherwise, and because of this known discrepancy in the behavioral norm a new market opens up. So here we have profit motives incorporated with these weather advisories that actually help to bring something that perhaps without the field of economics was once a nonmarket issue very much into the focus of our global and domestic marketplace.
The question still remains: shall we as students take the risk of attending class on Tuesday morning at 9:30 am which will be right around the middle section of this snow and sleet storm we will be in? One trade off that immediately comes to my mind is the value of my car and if the 15 minute commute to school and the test I will take when I arrive will be worth the downside of what could become my winter weather fate.
Federal Reserve Chairman Ben Bernanke addressed the issue of growing income inequality in a speech to the Greater Omaha Chamber of Commerce on February 6. The increase of inequality can be attributed to the technological advances that are raising the demand for more skilled workers and, consequently, decreasing the demand for the unskilled laborers. It is no surprise then, that education is the answer to the income inequality dilemma.
Bernanke also makes a point to say that the U.S. economy is the most productive and has the largest rewards for skilled workers, but economic insecurity is a result of this. In conclusion, Bernanke suggests to limit the risks to individuals by restricting trade or using taxes to redistribute the incomes.
Posted by Bethany Blackhurst at 2/12/2007 07:25:00 PM
From an Environmental Economics standpoint, is giant rabbit breeding going to have any harsh effects on the environment in North Korea? This shouldn’t be the case. Karl says that the rice, potatoes, and grass that are abundant in the Northern state are sufficient in being able to raise these rabbits that consume over 2 pounds of food per day.
Will these rabbits affect the market of livestock in North Korea? This is actually a trick question. North Korea is a communist state with a command economy, opposite of the free market that we enjoy in the United States, meaning that the economy is ran by the government.
So are bunny rabbits the magic solution to eliminating hunger in North Korea? It is likely that this will not be the “magic” solution, but a good beginning to solving the problem at hand. These giant bunnies will definitely bring a new perspective to the livestock industry.
Posted by JP Clift at 2/12/2007 04:09:00 PM
Big Lots is getting ready for a leadership position in the closeout industry. To do this they launched a 27 million dollar television campaing nationally. This was to reinforce that closeout shopping is really smart shopping to its customers. Big Lots made some commercials with some famous people that everyone would know. They made these commercials for another reason also. That reason was because "They were the leaders in what they do but they need to act like the leaders". That was a statement from the CEO Mike Potter. The campaing introduce Big Lot name brand items into more households. Thirty-seven percent more household to be exact! Don't always let the commercial get to you and then go out and buy the product... This is not always a good thing.
During the past few weeks Major League Baseball has announced that it intends to sell the rights of several out-of-market games (Games that cannot be seen in your area) to DirecTV. DirecTV plans to offer the games for $179 games a year. However, Senator John Kerry has publicly criticized the pending deal, and is going to try and put a stop to it. Kerry says that Major League Baseball and DirecTV are, "marshalling their forces to go out and make money while cutting out fans." He continued to say, "There's a whole movement towards fans being screwed by consolidation which raises prices and lowers options. John Kerry plans to probe the deal, but in the article he expressed doubts on whether or not he would be successful. This story, is also similar to another story I heard a while back. Most people believe that in the very near future, in order to watch a particular sporting event you will have to buy it through pay-per view. Is this fair to the public or does that even matter any more?
Posted by Jordan Gottke at 2/12/2007 09:58:00 AM
General Motors has discovered new technology that uses electricity to drive the wheels and uses different types of the propulsion system. It is powered by a 110 volt battery that can drive for 40 miles and then switch to gasoline when the battery dies. This type of car is not expected to be on the market for another three to five years. This new technology will change the way cars are made and driven.
Posted by Brian H at 2/12/2007 02:42:00 AM
Al Gore and Richard Branson are providing a huge incentive for factories that produce pollution. Whoever can stop producing the most harmful gasses will recieve a prize of $25 million. Along with the prize money, factories are not allowed to just stop producing gasses for a short time then boost their production back up. If this is not an incentive for factories to give up harmful gasses then I don't know what is.
Posted by Danny Cawley at 2/12/2007 02:15:00 AM
It would seem to me that as a result of Intel, the Unites States will soon be moving their PPF a little further out than it currently is. The reason, Intel has just come out with a new processor that will house 80 processing engines that will have the ability to be on or off at different times. In addition to this feature, the plan is that these processors will be widely available for use in laptops and PC's, that are going to sold commercially. With such a large market to sell in, the progess in this technology should result in a sizeable shift in the country's PPF according to computer sales. In addition to this progress, these new processors will allow for computers to be even smaller, which will directly impact the amount of resources necessary to build one computer, which will then allow for more computers to be made with the same amount of resources. This technology is allowing for an overall shift in the PPF, not just on one axis. The speed of this new technology will have other impacts as well, including speeding up any business done via the computer, which will hopefull have a positive impact on many other things, as time, a valuable resource, will now be more readily available. Congratulations to Intel on an intelligent move.
Posted by Nick Aylward at 2/12/2007 02:14:00 AM
Little known electronics producer "Syntax" may be causing major electronic companies headaches. During the holiday rush, what is commonly known as "Black Friday", electronics stores sold millions and millions of high-end televisions at what would seem low prices. However, Syntax has taken the term "low prices" to... well an all time low. During Black Friday, when families were rushing to get their very own thirty, forty, or even fifty inch LCD (Liquid Crystal Display) TV from their favorite companies: Sony, Phillips, Toshiba, etc..., Syntax put their very own LCD TV on the market. This may not seem out of the ordinary, however, Syntax was selling their thirty-two inch LCD TV's at $475. This may not seem cheap to anyone else, but when other companies are selling their TV's at $1,000-$1,500, Syntax seems like the obvious choice. But why are they doing this? The company is obviously losing money on every television that they sell, and to top it all off, they aren't even a big-name brand. But that is just it. In selling their Televisions at an insanely low price, Syntax hopes to become a household name. However, in doing so, Syntax may be directing consumers away from the LCD market. When consumers start to see extremely low prices on normally high-priced TV's, they are going to expect that all companies do the same, which they are certainly not going to do. Thus, by selling televisions at an abnormally low price, the market for LCD TV's will shrink, and in this case, opens up the floor for the HDTV (High Definition TV) and its producers. In a certain aspect, it seems like a lose-lose situation for Syntax: If they sell their TV's at normal price, no one will buy them, and they will continue to have little share in the TV market, however, if they do sell their TV's at a low price, their recognition will go up, but future sales of all LCD TV's will go down, because consumers will start to expect low prices from every company. It is quite the debacle indeed.
Posted by Cody at 2/12/2007 02:11:00 AM
According to an article on CNNMoney.com, gas prices have rose steadily over the past three weeks and might continue to rise. The average price was $2.22 per gallon on February 9, 2007, nearly four cents higher since January. This rise is due to the rise in price of crude oils, a $7.90 increase. Unfortunately, the demand for gasoline during this winter has been low causing big marginal losses in the retail level. This is going to cause a big problem should prices continue to rise and demand does not pick back up. Also, as prices begin to rise, people are going to start to drive less. They will begin to drive only when necessary, or only fill up with the prices dip down. This will hurt the oil industry and only push the prices higher. If the demand for a product decreases, it is only natural for the price to rise. It's a never ending cycle. Do you think that we will find a stop to the money eating cycle? Or will gas prices continue to rise?
Posted by VoiceItLoud at 2/12/2007 01:08:00 AM
Video games are no longer a small thing that teenagers play on a friday night in their basement or dorm room, it's big business. In a multi billion dollar business many people try to get their hands in on the fortune. A new company is trying to put some fun back in the business and allow creators of games to keep their characters and rights to their own creations. Now creators that create the games have their rights and practically all aspects of the games taken from them from their publishers. The new business called Gamecook is taking a new direction, keeping the money and rights where they belong. If you made something wouldn't you want to keep ownership of it?
Posted by Ashton Preston at 2/12/2007 12:44:00 AM
How many cell phones did you ever have? Many people have more than one cell phone. In the websites such as CellForCash.com, SellYourOldCellPhone.com, GreenPhone.com and CashOldPhone.com you can sell your old cell phones that you are no longer using. Instead of saving your old cell phones at home, I think to sell your old stuffs which are no longer using should be advocate. The old stuffs you save at home could not make value any more. On the contrary, I think to resale your old cell phone is a good way to get the value back, because trade can make profit to the vender and buyer.
Posted by wen lu at 2/12/2007 12:20:00 AM
Resources are scarce. The totally money of employees of Ohio are resources. The number of employees and employee’s wages are two of opportunity costs. Ohio raised the wage from $5.15 to $6.85 per hour starting January 1, 2007, and the minimum wage will increase every year if the cost of living rises. But when the wage had risen, the also means the number of unemployment rate will rise; because the resources are scarce. Unless the totally money of employees of Ohio rise more.
In this semester, I want find a work in Marietta; but when I went to physical plant department, the officer told me: this change in the minimum wage will not change the total amount of your student employment award. So I didn’t get any job; although the wage got raise, the number of employee reduced.
Posted by Jiang at 2/12/2007 12:13:00 AM
Sunday, February 11, 2007
The sales this year in retail stores have been a lot lower then last years. If you ever worked in retail stores around the holiday season anyone can say its not an eaisy job. Myself included has worked in retail around the holiday season for the last two years.
Its a proven fact that the colder the weather is the higher in percent retail stores are going up . Since the early warm weather in the month of January, this has caused much deficit to the sales. Recently the cold weather has improved sales darmastically. Sales has risen Wal Mart 2.2%, JCPenny 3.6%, and kohls 8.7%. So you can see change in tempature can play a major role in retail stores.
Posted by Greg at 2/11/2007 11:35:00 PM
With the effects of HURRICANE KATRINA many businesses in the South have been economically deprived. With the loss of natural resources and people who are able to purchase things, the economy suffered. With trying to start over, businesses are trying to become more efficient. With specialization, the economy will begin to reshape and get back to normal. Mardi Gras is one thing that can help a city like New Orleans achieve their goal.
With the employers expecying to hire more recent college graduates and give them better starting offers this could mean a big rise in college and university enrollment and graduation rates for students. With the average starting offer for college students to average close to $47,000 many students may choose to stay in school instead of getting that nice paying job right after high school. The implicit cost of going to college and recieving a degree will be much higher and the benefits will seem greater when they graduate with a college degree. The majors that seeem to be having the most luck creating the most benefits after graduation are mechanical engineering, chemical engineering, management, civil engineering, electrical engineering, computer science, and accounting. These are starting to become the attractive majors for students who want to recieve a hefty paycheck when they recieve that diploma. However, there are some majors that may begin to lose some appeal as their starting salaries have decreased over the past few years. This majors are primarily the liberal arts, such as pschology, english, political science, and history. This information may lead students to avoid such majors and go to the direction of bigger incentives and major in the engineering fields.
Posted by Luke Haumesser at 2/11/2007 11:29:00 PM
U.S. oil major ConocoPhillips (COP) has asked for arbitration in a dispute with China National Offshore Oil Corp. over costs incurred due to Beijing's windfall tax on oil sales, according to people familiar with the situation.
The move and its outcome will be closely watched by other foreign energy companies whose production contracts with China's largest offshore oil producer state that any new government-imposed rule which causes a material change in their returns can be challenged outside China.
The windfall tax has cost the energy industry billions of dollars since it was introduced in March last year, and has prompted U.S. firms to cite it as an example of the difficulties of doing business in China.
We always have to make choices in the markets. Markets usually lead to efficiency. When markets don't achieve efficiency, government intervention can improve societ's welfare.
Posted by Lucy Lin at 2/11/2007 11:12:00 PM
In an attempt to produce small cars, Toyota is building a new plant in India. Their goal is to get a jump on the growing automobile industry of newly developing countries. With new and improved technology and low production costs, the plant will be able to produce these small cars for relatively low, reasonable prices. Toyota will be in stiff competition with Suzuki, which now owns roughly 50% of the automobile industry in India. In turn this competition should even further lower the retail price of the small family sedans.
The marginal benefits of production should outweigh the marignal costs considerably because they are entering a market which is in high demand for cars. The invisible hand is evident in this scenario because the people are who will ultimatley control if the business will succeed or fail in this developing country. The country should experience slight economic growth because of the new products and high demand.
In conclusion, the country will ultimatley benefit economically from the production of these cars, and would cause a PPF to shift outward because of the new technology and resources that will be available.
Posted by Shawntae at 2/11/2007 10:29:00 PM
Apple's newest gadget, the Apple iPhone, is about to face some serious competition in Europe this spring. Twenty-three mobile phone operators with a collective subscriber base of nearly 690 million people are ready to jump on the bandwagon and introduce a new low priced flat rate service for its customers. MusicStation will give its subscribers the opportunity to have unlimited access to music downloads via their cellular phones for a flat fee of about $3.88 American dollars a week. Along with the cheap fee, the companies will also offer the services on cheaper phones. This puts Apple in a predicament since their new phone runs about $499 and charges $.99 per download. The companies in Europe realize that they can help attract a larger amount of customers simply by outdoing the more popular businesses. While Apple might be hurting themselves, they're actually helping the other small companies by bringing the idea of Mobile music downloads to the public. Other companies have had the idea but just not the ability to advertise quite like Apple. In the end, this could really benefit the smaller companies by using larger companies resources.
Posted by Kyle Thauvette at 2/11/2007 10:22:00 PM
A key point in President Bush’s nuclear policy has strong ties to the French government. Areva, a French government owned, atomic energy company, will be a company that benefits from
Posted by Mark Briggs at 2/11/2007 10:15:00 PM
Its February and of course that means valentines day is right around the corner. For some of us this means nothing other then a day that we must attend classes and enjoy the money that we've saved by not having a significant other. For the rest of us who are attached, valentines day means we must find a gift for our significant other. Here lies the first problem, what to get? We could get the stereotypical gifts such as flowers, candies and chocolates, oh and don't forget the card. The second problem to arise with this task is how much to spend and where to get the money. Valentines day can be a pricey situation for broke college students. Looking at some statistics provided by BIGresearch, Americans spent a large chunk of change on this so called "holiday." The average valentines day consumer will spend $100.89 on their significant other, which has risen from last year's average, $97.27. The average male plans to spend approximately $135.67 and the average female plans to spend about $68.64. So what does valentines day mean to you? This "holiday" seems a little forced and has lost all of its original meaning. Isn't valentines day supposed to be about showing that special someone you care and not by spending an obscene amount of money to do so? So for all of you that are attached, don't forget that valentines day is this Wednesday so get your wallets ready.
Are the benefits from celebrating Valentine's Day worth $120? The average person is expected to pay this on their Valentine this year. Men are expected to pay $154 on their ladies, but the girls are only shelling out $85 for the guys. Does this mean that the men put a higher value on love that the girls do? Economically, yes the numbers don't lie, men place a higher cost on love.
Big companies such as 1-800 Flowers, Hershey, and any jewelry store make a killing on this "greeting card holiday". 1-800-Flowers gets 10 percent of its business because of February 14th, and they are expected to fill 100,000 orders for the big day. It is clear to see from these few figures that Americans put a high price on Valentine's Day. Economically this day doesn't make much sense, what are we getting in return for our money, is the benefit of love worth the 16.9 billion that is being spent this year?
Posted by DL at 2/11/2007 09:49:00 PM
During this past off-season in the MLB, General managers of the 32 baseball teams remained quiet with their off-season transactions."Thirty-five trades have been made since the end of the season compared with 56 in the corresponding period last off-season. This off-season, 19 trades have been made involving 25 recognizable major league players; last off-season, 37 trades were made involving 52 recognizable". Teams this off-season were more worried about free agents then they were big name players. Because of this, teams saved more money by not reallocating their resources and keeping the sources they have to make more money by filling seats then by filling up the pay roll. Although teams are holding on to their young players, in baseball it takes a few years to develop an every day major league player. Teams now are taking better care of their younger players because of scarce number of them. By keeping these players and not reallocating their resources they are being better productive. What do you think was the reason for MLB General Managers to make no moves this off-season???
The debate on whether global warming is really being caused by human activity is beginning to lean towards a resounding yes. As technology has gotten better scientists have been able to watch sources of global warming more closely, and as the technology gets better it gets more and more likely that human activity is the cause of rising global temperatures.
Due to the fact that it is looking clear now that we are harming our environment and will most likely have to pay the consequences in the not so distant future it brings up the question: Are we really polluting at the optimum level? The optimum level of pollution should be the level at which the benefits outweigh the costs, but is that really the case? Are we only thinking in the short term, and not about what is to come in the future? Should we start making stricter restrictions on harmful emissions now, or deal with global warming when the oceans begin to rise?
Last wednesday the European Commission proposed rules that require automakers to cut carbon dioxide emissions for new cars. These new laws recieved criticism from both European automakers and environmentalists, neither of which were satisfied with the regulations. I dont think that this new plan will work as well as the commission had hoped. It will work in the sense that pollution from automobiles will be reduced but the toll on the European economy will be greater than anticipated. I think that the new regulations will push car prices up and therefore force the automakers to be more reliant on overseas sales. If the European carmakers plan on boosting overseas sales they will most likely have to take such actions as lowering the price of the cars which means they will be losing money which will then lead to the possibility of laying off workers.
Posted by Colby at 2/11/2007 09:16:00 PM
The bank of America announced on February 2nd that they would offer an incentive to fuel efficient employees. They stated that 185,000 eligible workers, could earn a 3,000 dollar rebate for buying a hybrid vehicle. So far in the areas that the rebate has been implemented the amount of hybrids being bought by workers has almost quadrupled. This comes in a great time while United States is looking to increase the full efficiency standard. This will in hopes reduce the needs of Americans on fuel.
This is a great incentive and a great way to help people merge into new standards. Most people are more likely to do something when there is an incentive or reward offered. This company is doing a great job of helping employees and the government. Employees now have more of a resource, meaning money, to help them buy the more expensive hybrid. This is a win-win situation, both the employee and the government, not to mention the auto maker itself. This system of buying hybrids at a lower rate could be one way, if the new standards are implemented, for people to help the government and automakers make a smooth transition.
Posted by emily_sheets at 2/11/2007 09:14:00 PM
Some families in this day and age have a fairly difficult time saving money so that there children will be able to attend college and hopefully therefore in turn make more money to provide for there own children. The new 529 plans allow people to set aside money for there children and as long as it is still in the plan it cannot be taxed until withdrawn. These plans are becoming a better , more effective, and cheaper way to set aside money to gain interest without being taxed. The money if not used can be passed down from one child to another with no penalty unless withdrawn. These plans can also be set up by family members for grandchildren and even niece's and nephew's. This plan should be a great way to get a hard start on paying for college with the average tuition raising twenty percent each year. Do you think this would be a good thing to invest your money in as a parent? Because for me it is sort of stupid question. It is definately a step in the right direction in helping middle class families.
Posted by Nathan Eschbaugh at 2/11/2007 09:11:00 PM
In the last three weeks the average price of gas has risen and could become even higher because the rise in price of crude oil has not yet been passed onto consumers. According to the nationwide Lundberg survey of about 9,000 gas stations, the national average of self serve gas stations was $2.2209 per gallon on Feb. 9, and increase of 3.63 cents from Jan 19th. Lundberg said this was the first price rise in several weeks but was definitely not a spike, or huge increase like we can expect soon. For West Texas Intermediate there was a $7.90 rise in the price for a barrel of crude oil from Jan 19th ($51.99) to Feb 9th (59.89). At the price of price of $59.89 New York closed their contract with them. This rise equvilent to 19 cents per gallon. Lunberg also commented saying the highest average price in the nation for gasoline was $2.76 in Honolulu, and the lowest price was $2.01 in Billings, Montana.
From this article we can speculate that in a few weeks we will begin to see the gas prices rise up. The seasonal demand is also currently low and it makes it harder passing on the high prices to retail consumers. With that said so far we haven't seen the worst of gas prices considering the demand is only beginning to rise for the summer. So I would suggest to start saving up some money because gas is going to put a much larger hole in our pockets this year compared to last year.
Posted by Chris Hughes at 2/11/2007 08:46:00 PM
Why are books consistantly so expensive but the return on them so low? I have had it with the book store at MC i wont even use it, i buy my books online and I love the fact that you can have an online copy of your econ book for half the price of what the book store sells it for. I wish more books were available like that.
Posted by Rob Phillips at 2/11/2007 08:42:00 PM
This article reveals that toy companies are selling toys for big bucks and consumers are taking the bait. At first, this observation might seem to go against the economical belief that markets move toward equilibrium. Why would a consumer spend $300 on Hasbro Inc.’s robotic Butterscotch pony when they could purchase a similar product at Wal*Mart for a fraction of the cost? Wouldn’t they be better off buying from Wal*Mart? Maybe not. Toy consumers must be taking opportunity costs into account. Yes, they could buy an off-brand robotic pony for less, but that saved money comes at a price. That price is value. In the article, Boire understands this when he states “This game is about better quality.” Consumers believe a more reliable, long-lasting product will be produced by stores that specialize. High-quality toys, therefore, come from toy stores, not super stores. In this way, buyers of toys are considering not just the explicit, but the implicit cost of purchasing from the toy store at a higher price. The toy might cost more now, but if one of lesser quality is bought, breaks, and must be replaced before the toy store product wears out, the Wal*Mart version could end up costing just as much if not more. Through consumers’ willingness to splurge on toys, it is evident that the choice has been made. The value of quality outweighs the extra cost of high class toys.
European and U.S. automobile produces are having issues with Japan and its weak currency...the yen. Since Japan has its weak yen, they have a 15% to 20% cost advantage over the U.S. The yen has reached record lows against the euro and is also very low compared to the U.S. Dollar. The U.S. has such problems with this because they can barely keep up with Japanese quality and cost so this extra competitive advantage makes it really hard on these auto makers. The cause of the low yen is said to be the difference in interest rates between these countries. In Japan, interest rates are really low compared to the U.S. and Europe and no one sees Japan going through inflation anytime soon. This means the yen should not change in value anytime soon.
Exporting and Importing is hard enough between countries. The point of trading is so both countries end up happy or at least content. It seems like the European and U.S. auto makers are not happy nor content. Japan holds the competitive advantage in this situation because it costs them far less to make cars simply because their currency is weaker than that in the other nations. Should the Japanese be held responsible for an advantage that is out of their control and should they be penalized?
Senator Joseph Lieberman suggested that a tax to fund the War on Terrorism must set in place in the near future. Because this is a costly war, it is draining the budgets of various sectors on Capitol Hill. The article, which was in the Finance section of Yahoo!, sums up the situation by leaving the reader with three things to consider when trying to decide whether or not this tax should be imposed upon the people of the United States. These include: 1. Yes, we are fighting a costly war, but the U.S. is also raking in a good amount of money. 2. This was suggested by Sen. Lieberman because it would keep domestic budgets from being cut in the future. 3. Is it fair to inact defecit spending in order to fund a war and pass the financial burden onto future generations? I believe that the current marginal cost of the war is not outweighing the marginal benefit, therefore we should end it immediately. Instead of continuing the fighting of a war that is considered very long term, let's get out and save the money.
As far as income maintenance programs go in the state of Ohio, the most widely utilized is the Food Stamp Assistance Program, a supplemental program used to help families in low income households cover their food costs. The state of Ohio itself classifies Food Stamps as a nutritional program, rather than a welfare program, but the structure of the program is largely as supplemental. The program itself is based on income requirements, and the thresholds for income are seemingly accommodating to residents: An average family of four can gross up to approximately $26,000 per year and be eligible for assistance, although the levels of assistance provided are not proportional to the amount a family is below the threshold.
Despite the eligibility thresholds remaining relatively stable for the last three years, there has been an explosion in the amount of new recipients of food stamps in the state of Ohio. In particular, there has been a 71 percent increase in recipients statewide, and in some counties the increase has been over 150%. One would think that such a mass growth in the program is unfeasible, but there have been some reasons as to why the program is being used much more now than ever.
The state of Ohio, prior to 2004, used an offline paper-based food stamp system, which required program recipients to retain bound books of notes for use at retailers. As a result, the psychic costs that one receiving the food stamps would have to pay, the stigma of having to submit the notes at the checkout rather indiscreetly as well as the loss of portions of the stamps' face value if sales were not on an exact dollar amount pushed many people to stigmatize the program. Ohio was the second-to-last state in the US (Wyoming being the last) to switch to a newer, card-based system in 2004, utilizing point-of-sale transactions to set up electronic accounts to draw exact dollar transactions from program benefit recipients and reducing the perceived hassle of using food stamps.
In addition to the reduced costs for program users, the state has been publicizing the program heavily and through less traditional means (such as placing fliers on commonly purchased items, such as cartons of eggs,) attempting to outreach to persons who otherwise would not feel they were eligible for the program or would not think to apply. The increased information flow to the consumer has caused a record number of applications to flow into the state for food stamps in the last three years. Even with the increases, there are still an estimated half-million persons in the state who are eligible but not using the program, many due to the fact that they're working persons who believe that they cannot qualify.
Ultimately, the most publicized reason for the increase of the program's use is due to a stagnant economic state in Ohio over the past few years. Wages in the state are not growing at a fast enough rate to cover inflationary costs, and, despite the state's relatively low cost of living, many families are unable to cover their consumption costs. Joblessness is not an issue (unemployment rates are comparable to national numbers) but the quality of the available positions is poor.
Posted by Joshua Busser at 2/11/2007 06:22:00 PM
In New York, law-makers are contemplating putting a law into affect that will make it illegal for people to cross streets while listening to their I-Pods. Why, you ask. Well the reasoning behind the proposed bill is to save lives. It is believed by some that when people listen to their I-Pods, they really "get into" their music do not pay attention to their surroundings. There are many documented reports of people being severely injured and even killed because they were not paying attention while crossing the road due to the presence of their I-Pods.
The proposed way to enforce this possible law is by implementing a $100 fine for a person who gets caught crossing the street while listening to an I-Pod. For many, the opportunity cost of a possible $100 fine is great enough to deter them from listening to their I-Pods while crossing the streets. For others, however, the opportunity cost is not great enough to overcome the benefit they feel they receive from listening to their I-Pods. I think this poses an interesting question: How much is your safety worth to you?
Virgin Mobile chairman Richard Branson, announced Friday that he is offering a 25 million dollar reward to the scientist who can come up with the best way of extracting green house gases from the atmosphere. Global Warming is increasingly becoming a problem, and scientist and global officials were quoted in landmark report saying that global warming will continue for centuries, and in 100 years it will have created a far different planet. So, Branson's offer is on the table, who thinks they have the right solution, who thinks 25 million sounds pretty good, whose the top scientist?
Posted by Cameron Cimino at 2/11/2007 03:09:00 PM
Going back to the blog about how car emissions are destroying our o-zone, and Americans should not drive big vehicles because we are the leader in car emissions, I went further and looked at the Economic impact and the death tolls in America and Europe. First off lets discuss the Economic Impact that Motor vehicle crashes have on America. The link to the website were all of this information is pretty long, so i am going to some up some of the key points in it!
The cost of motor vehicle crashes that occurred in 2000 totaled $230.6 billion. This is equal to
approximately $820 for every person living in the United States and 2.3 percent of the U.S. Gross Domestic Product. The lifetime economic cost to society for each fatality is over $977,000. Over 80 percent of this amount is attributable to lost workplace and household productivity. This is saying that the more people that are dieing from motor vehicle accidents is costing the US a bunch of money because we are losing these people that could be working!
Lost workplace productivity costs totaled $61 billion, which equaled 26 percent of the total costs. Lost household productivity totaled $20.2 billion, representing 9 percent of the total costs. This is effecting many different companies because they are having to loss valuable time and trying to replace people that are killed in vehicle accidents. Here now is the exact number of car crashes and deaths in 2000 and I would expect this number to greatly larger in 2006-2007.
5.3 million persons were injured in 16.4 million motor vehicle crashes in 2000, including 41,821 fatalities. Twenty-one percent of these injuries occurred in crashes that were not reported to police. This is just the basic numbers of how much motor vehicle accidents have on our economy. Why so many numbers you ask? I am trying to prove that in America we have much fewer deaths from motor accidents than they do in many other countries including Europe. Europe, by square feet, had almost double of deaths as what the US had. You can view all the info in this link http://www.safecarguide.com/exp/statistics/statistics.htm The main cause of this is from the much smaller cars in Europe. Most of the cars are twice as small as the average vehicle size in America. Indeed they may be saving the environment much more than in the US, but are they really saving with knowing that littler cars are killing more and more people. I guess it is how you feel about environmental issues, death of civilians, and weigh these numbers with the economic impact that car accidents have. As more and more Hybrid vehicles are being made that are as big as most SUV and give the same protection, I feel that we are moving slowly but surely at making vehicles safer and also saving the environment. Hopefully one day both numbers will be on a gradual decrease that helps the economy and the people that drive!
Posted by Derek Thomas at 2/11/2007 03:03:00 PM
There has been a lot of talk about global warming in recent years. Most people think that we should do something now to stop it. Others say it will cost to much to do stop global warming. There are a lot of things we could be doing but what would we be giving up? In other words, what is the opportunity cost of saving the Earth?
To stop the things that cause global warming we would have to make major lifestyle changes. Factories, cars and other high pollution making things we use in our everyday life. Giving these
things up is a cost that needs to be accounted for. We also have to consider who would pay to stop these things from making pollution. The people in charge would be paid for making up the rules and enforcing them. We would also have to consider the cost of alternatives to what
we would be giving up.
This article talks about placing mandatory carbon caps on factories. This will decrease the rate that pollutants enter the air. This will also increase the price of electricity and gasoline. My question, like many others, is are we going to do a little bit to save the environment and pay a lot to do it, or keep going at the current pace and keep the economy in tact?
Economies normally move toward equilibrium in which no individual can make himself or herself better off by taking a different action. Is this Walmart economy equal? Some items cannot be found at any alternative stores and prices are so much lower than the competitors that consumers are in fact better off shopping at Walmart. Think of all the stores who have been put out of business or are not as strong as they used to be since Walmart came into the picture. Hearts, Hills, and many grocery stores are gone now that Walmart is the "one stop shop." Sure, it's more convenient, but what's wrong with supporting all of the local stores equally? As much as I don't like Walmart for killing off it's competitors, I admit I'm still guilty of taking advantage of the convenience. And that's exactly what they are trying to do.
We've all seen the cute little smiling face flying around the Walmart commercials slashing prices all over the store and their incentive of "Always Low Prices." Well, the reason that these prices are slashed is because they are of lower quality. And who do they think they are by setting prices they will pay to their manufacturers for goods? I understand that they are trying to keep low prices, but I can just as easily go to Kmart and pick up that same item for a few dollars more and it will actually be of a higher quality. This is not part of an economy that is making me equally better off no matter what choice I make.
So I ask: Is Walmart helping our economy move toward equilibrium, or further away?
Posted by ashley wagner at 2/11/2007 12:11:00 PM
People respond to incentives, but what kind of incentives? Usaully, the strongest incentives are time and money. McDonald's knows this and so it's these major incentives that they work the most with. McDonald's had cheap food to begin with, which made people happy. Then they got the indoor playground, which made people, especially kids, really happy. And then McDonald's came out with the Dollar Menu, which made people absoloutely ecstatic. But, McDonald's did not stop there. They knew that time was just as precious to people as money, so what better way to bring in more people, but to be open 24/7. Now, when almost every other business is closed, McDonald's is there and happy to serve you cheap food. Now, what could sound any better to the customer than that. Even despite the many health risks proposed and proved by multiple people, customers, for the most part, are on the look out to get more for their money. Some health advocates might say that this is not true. People care more about their health now than these other incentives. Yes, I am aware of this and I, for the most part, am with them. But, I do know the other side to the story of McDonald's. And those of us who like it, have all fell into their trap at one time in our life. I am simply respresenting this side of the population. The side that can't help but to respond to the ruthless incentives to be full for only two dollars at 3 am.
Posted by Jessica Tucker at 2/11/2007 11:48:00 AM
“Helen Jones-Kelley, a longtime advocate for struggling children, was appointed by the governor to oversee the state’s largest agency, the Department of Job and Family Services,” but will her devotion to children impair her ability to manage income maintenance programs? In order for an income maintenance program to be successful, it must reduce poverty while minimizing costs and maintaining work incentives. Jones-Kelley referring to the tragic story of 6-year old Michael makes one suspect she may be too concerned with the objective to reduce poverty, possibly leading to high program costs and low incentives to work.
Posted by Charista Long at 2/11/2007 10:56:00 AM
How can a country only have 5 % world's population, but have nearly half of warld's automotive carbon dioxide emissions? Read this article you will know it.
According from the article "Big Three Cars Emit 230 Million Tons of Greenhouse Gas" from Planet Ark.com the big 3 car company,"General Motors vehicles gave off 99 million metric tons or 31 percent of the total; Ford vehicles emitted 80 million metric tons or 25 percent and DaimlerChrysler vehicles emitted 51 million metric tons or 16 percent, according to the report. By comparison, the largest US electric utility, American Electric Power, had emissions of 41 million metric tons." Then people know how much Greenhouse gas emisions by American cars, but why American cars can emission half of the world's automotive carbon dioxide???
In my opinion there are 2 major reason. First the size of car in US is XXXL. In America you will see truck made by GM,Ford and Toyota everywhere, but in Europe you will never see it. Second the price of car in US is low, maybe somebody always say the car is expensive, but one American family may have more than 2 cars, and second hand car is really cheap
The spending habits of American made this happened. Right now the price of gas is in a high level, it will made people do not like to driver big car, because the car is drinking gas. Driver to class? Why not driver a small car, do not driver truck!!
Greenhouse gas is dangerous, do not let Globe Warming continue!!! Save your money, and it also SVAE OUR PLANET.
Posted by Chengkai Zhao at 2/11/2007 12:32:00 AM
Saturday, February 10, 2007
We’ve all heard the old saying that in life, “Nice people finish last.” But how true is this? This article seemingly proves the old adage false. In fact, a friendly and very personable attitude can be one of the most valuable assets a person can have in the workplace. The ability to connect somewhat on a personal level with coworkers, bosses, and potential clients may be even more important than a person’s competence on certain subject matter.
There is a difference though between being nice and being too nice in the work environment. This article illustrates its point nicely with five examples.
So what do you think? If you believe this article, then you probably also believe that, “It’s not what you know, but it’s who you know.” Is this article accurate or does one have to be ruthless business person to get ahead and advance in the workplace?
Posted by Keith Zeigler at 2/10/2007 02:08:00 PM
Many college students were more than likely looking forward to the increase in minimum wage. But when coming back from winter break and learning that their hours would be cut, was probably not a pleasant thing to hear. Yes, they are earning their money quicker, but more money is what we hand in mind. So how does this have an effect on the economy? Individual employees will be obligated to earn more money, and in response companies would have to cut employees or start cutting hours. However, it is still unsure on what the effect will be, could this have a positive effect on the economy?
Posted by Kelsey Horwell at 2/10/2007 12:00:00 PM
Friday, February 09, 2007
I gathered from this article, concerning money bringing happiness, that there is a comparative advantage to being rich than not being rich. People seem to be happier being relatively wealthy. People who aren't as relatively rich seem to be more worried yet somewhat happy. Money does not give absolute happiness though. The opportunity cost of becoming relatively wealthy is the strain on professional and personal relationships. So does money really bring happiness?
Posted by Trisha Dennis at 2/09/2007 10:59:00 PM
As a poor college student, I often wondered why text books were so ridiculously overpriced. I was shocked to find out that the costs of textbooks were rising at twice the rate of inflation. A main factor contributing to the increased prices is the used textbook market.
As consumers we contribute to the rising prices of textbooks because of the used text book market. For example, textbook companies pay money to print, edit and publish their books. We deny them their profit when we sell our used textbooks to one another when it didn’t cost us anything to produce them. As a result, the textbook companies have to raise their prices in order to receive a high enough profit to keep them in business. I’m sure that a very popular individual choice that most people would make would be to buy a used textbook to receive the greatest benefit. However, is it possible that if everyone started to buy new textbooks rather than used ones that the price of textbooks might eventually decline if companies were making a greater profit?
Posted by sidra at 2/09/2007 11:48:00 AM
Thursday, February 08, 2007
In 2007, Kodak keeps boosting the plan for restructuring and layoffs, stepping into the last step of the whole plan as scheduled. With a high increase in unemployment, Chief Executive Antonio Perez said that “the company would emerge as a smaller company with a profitable business model…. providing Kodak with an additional $500 million a year in cash flow afterwards.”
By this notion, this move reflects the principle—Markets usually lead to efficiency—so well. During the recent years, with a slight increase in economic growth and highly developed technology, many firms are inclined to make less hierarchical but more flexible and efficient organizations by removing layers of management. This general trend forces Kodak to restructure. Furthermore, a better chance to get much money in cash flow also provides an incentive to Kodak. Therefore, Kodak decided to fix attention on job cuts, which behavior relates to another principle of microeconomics. That is “people usually exploit opportunities to make themselves better off.”
Posted by Tian Yang at 2/08/2007 09:25:00 PM
According to a recent article in the Wall Street Journal, the automobile industry in Japan has a definite advantage over the U.S. and European market. The yen has hit a record low against the euro, and still does not compare to the U.S. dollar. This makes cars produced in Japan $4,000 to $10,000 cheaper than cars produced in the U.S. or in Europe. I believe that it is wrong for Japanese automakers to ask their trading partners-the U.S. and Europe- to pay for the difference considering that government subsidies are given to the Japanese. The article states that the Japanese have a 15%-20% cost advantage over American and European rivals. If the yen continues to depreciate, eventually everyone will be purchasing Japanese-made cars and that will be the only profitable automaker.
As we all know, the American automobile industry has been in a faltering state in the past few years. If the price gap between American-made cars and Japanese-made cars continues to grow, all of the automakers in the U.S. will be out of business. Although not everyone in the U.S. drives an American-made car, if the industry fails, millions of workers will be out of jobs. We have already seen the impact of the recent layoffs of Ford and GM. If that happens again, we will see a major downfall in the economy of the United States.
Posted by krysten12 at 2/08/2007 05:39:00 PM
According the news from Reuters, Google, after purchasing the video frequency sharing network You-Tube, announced Wednesday that the internet is anyway not where TV can grow on. Google promulgated a warning saying that to put the TV on to the internet for world wide use is not achievable. Since the ability of building the foundation of internet is limited even for Google. Google didn’t purchased You-Tube for preparing the protrusion of its own internet TV service. The reason is that they wanted to pursue more chances to cooperate with TV service entities so that they can put their search engine of video frequency and pertinent commercials into the high quality video frequency.
It’s a marginal decision to decide whether we’re going to develop more TV service on internet. Since the more we built the more we are going to pay for the construction of internet. We’ve already have You-Tube, Google Video, and Joost. Do we need more? The more we built the heavier the burden is on the internet. There is a possibility that one day the internet would be crushed down by suffering from the heavy flux. That is obvious a not very good deal. So what do you think of the TV service on the internet will be in future and are you a big fun of You-Tube?
Posted by SHANE B at 2/08/2007 05:19:00 PM
“By a vote of 87-10, the Senate ended Republican delaying tactics and cleared the way for passage this week of a bill that both raises the minimum wage to $7.25 an hour and provides small companies with $8.3 billion in tax reductions during the next decade.” Reported by Jack Torry in his article, “Senate advances wage legislation, adds tax relief,” published in THE COLUMBUS DISPATCH Wednesday, on January 31, 2007.
This big jump of minimum wage, from $5.15 to $7.25, is good to everyone?
Possibly, to most students who work on campus, it is awesome because this increase in minimum wage means that they can earn 40.8% more than before for each hour they work. According to what we learnt in class, however, whether the total hours of labor supply in campus will increase, stay the same, or decrease is uncertain. While some students who have larger substitution effect will work longer (from H1 to H2), some others whose income effects are larger will decrease their work hours (from H1 to H3). If we think from the view of employers, Marietta College, increasing minimum wage means that their cost to hire the cheapest labor force, students, rise 40.8%. To this extra cost, what the college will respond depends on its purpose to provide jobs to students. If the college does need these students to work for it, the total hours of labor demand will not change much. But if the college provides these jobs in order to give students some financial help, the college will cut some unnecessary positions and total hours of labor demand will shrink. Will some students lose their jobs? Maybe.
Jump out from the campus, to all people who are working around minimum wage before may also face the same situation. Because of substitution effect, more people who used to be depressed will be ignited for working, but job seekers will probably feel finding a job become more difficult. Although the government gives $8.3 billion in tax reductions to small business, can all small businesses get enough remedy? What about big businesses? Do big businesses pay all their employees more than minimum wage? I am afraid not. To those people who still keep the jobs, they are the winners. But to those who lost jobs because of the shrinking labor demand, they are losers. To those who cannot find a job at new minimum wage and would like to work lower than that, they are losers.
As a result, higher minimum wage will only benefit some part of low-income people and push the rest into unemployment. Take a further look, higher minimum wage will also bring up the labor cost. To those entrepreneurs, the low labor cost in developing countries will be more attractive. They will invest more overseas and will ultimately cause a decrease in the labor demand in the United States and increase in unemployment rate. Besides, having been in trade deficit for many years, America will suffer even more because foreign goods will become cheaper and more dominant in market. Words like “Made in China” will fill more places around people’s lives.
Who will be happier?
Posted by Hang Li at 2/08/2007 05:09:00 AM
The Labor Department reported on Wednesday that productivity and labor costs have climbed in 2006. Productivity rose at a 3 percent annual rate from October through December compared to a .1 percent decline in three previous months. According to the article "For the entire year, productivity edged up by 2.1 percent, the weakest performance since a 1.6 percent rise in 1997." Productivity is helpful to the economy because it can provide a boost to our standard of living. "It allows businesses to pay workers more, because of their increased output, without having to raise the cost of their products." What is causing the slow increase in productivity? Are workers experiencing a diminishing Marginal Rate of Substitution? Have they reached the point where leisure has become more attractive than income?
According to the article, "A gauge of wage pressures tied to productivity jumped by 3.2 percent last year, the biggest annual increase in six years. But over the final three months of 2006, the cost of labor per unit of output did improve. It slowed to an increase of 1.7 percent, compared with a 3.2 percent rise from July through September." Rising wages can be good for workers but it can be tricky because if the wage increase is higher than the gains in productivity, the business will have to counteract by raising the prices of their goods.
The Federal Reserve is keeping a close watch on the situation making sure that there is no relationship between the slowing productivity/rising wage pressures and any adverse impact on inflation. They hope that businesses will meet wage demands by cutting profits instead of making goods more expensive. According to David Wyss, chief economist at Standard & Poor's in New York, "The strong relationship in the fourth quarter is good news for the economy and good news for the Fed. Productivity is what keeps inflation under control. It helps workers get pay increases without price increases." I believe if everyone knew this they would choose to be more productive, spending more hours at work. However maybe these numbers reflect a different story, that when people are at work they don't work as hard because they value their leisure time over income.
Posted by David Bright at 2/08/2007 01:15:00 AM
Meizu's M8? Apple lawyers, start your engines.
We got know Apple's iPhone maybe 6 away from it release, but a Chinese mp3 company just issued their cell phone Meizu M8. It's really looks like Apple's iPhone. So Apple may ready to call their lawyer..........
I don't think it necessary, because M8 is really looks like iPhone, but Meizu cannot copy the technology from Apple. Apple use their own knowledge to made iPhone. I think Apple should better make a good face to Chinese consumer, and I believe Chinese people know which one is good.
But the problem for Apple to sell iPhone to Chinese market is not the copycat. They need make people can write Chinese on the iPhone!
Posted by Chengkai Zhao at 2/08/2007 12:36:00 AM
Wednesday, February 07, 2007
Recently, airlines have failed to partner up as the had previously done, which may result in a rise in airfares. Prices of airline tickets are expected to rise in order to increase profits to compensate for the amount of money needed to operate and maintain airplanes. Major airlines have already tried to increase ticket prices in this year alone, and it is expected that airlines will increase their fares by 8 to 10 percent this year. Do you think higher ticket prices will result in people using other means of transportation to get from one place to another?
Posted by Kelly Heskett at 2/07/2007 11:34:00 PM
U.S. Trade Representative Susan Schwab on Friday announced the filing with the international trade body in Geneva, alleging that China is paying subsidies to manufacturers to boost its exports. "This case is about standing up for America's workers and manufacturers," she said. And "We are seeking to level the playing field to allow U.S. manufacturers to compete fairly with Chinese firms," she added.
In this case, China government intervened in the trade-off between China and other countries. In order to boost its exports, China government is paying subsidies to manufacturers. "When markets don't achieve efficiency, government intervention can improve society's welfare." That is an example of government intervention. And also if the U.S. prevails in that process, the WTO would authorize it to levy retaliatory tariffs on Chinese goods. That is the way to allow U.S. manufactures to compete fairly with Chinese firms. It is also a government intervention to protect American production.
Posted by Yuman Peng at 2/07/2007 11:07:00 PM
Tuesday, February 06, 2007
The most expected console PlayStation 3 has been released for a couple months and it has been estimated by Sony that the target shipments of PS3 would be two million by the end of 2006. However, to Sony’s disappointment and surprise, there has been a “slip behind the schedule”. The main reason for the delay is said to be the sudden release of Wii console, a lot cheaper than PS3, which also from a Japanese rival Nintendo Co. Besides, the lack of game software for PS3 has Despite of this, Sony still shows great confidence in the coming sale of PS3. In this case, the seller is struggling in the situation that is there are not enough purchasers for their products. They must find a way to boost their selling in another words to make them better off. “ An economic situation is in equilibrium when no individual would be better off doing something different”.
Recently, with an international report concerning more about global warming, the Congress is going to debate more about who will pay to confront it rather than what's causing climate change.
I think this issue is just what environment economics deal with. First, figure out what is the demand. This is not difficult, from lots of data and experiment, we can predict roughly what do people need in total, and what it would be like, and by this I mean draw a demand curve. Then, construct the supply aspect. Here comes the problem. How can we compute the marginal cost of producers? From Pigou’s view, social cost has two components, private cost and external cost. It’s relatively easy to get private cost, and we can just find it by adding the value of what producers spend. But about the external cost, it is hard to define and compute. What is the external cost of carbon dioxide emission? What is the external effect of building a waste treatment plant near a big city? These questions are not easy to answer. Therefore, I assume environment economists’ duty is just to look for an appropriate means to calculate them, and give out a better method to evaluate the program, and eventually find a sustainable way for human beings.
Posted by yangdi at 2/06/2007 09:36:00 PM
Monday, February 05, 2007
This past year Exxon Mobil posted profits of $39.5 billion, giving them the largest profit reported by a US company, while topping their record of $36.13 billion from 2005. The influence behind these profits were the high crude oil prices experienced during the past summer (nearly reaching $80 per barrel). Exxon Mobil is not the only oil company to report large profits, ConocoPhillips reported earnings of $15.55 billion, the highest in the company's history. During the last quarter of the year, many companies earnings were down to due to the reduction of oil and natural gas prices. Do you think these high earnings reported by companies such as Exxon Mobil and ConocoPhillips give them an advantage over smaller companies with similar interests in oil exploration?
Posted by Matt Dutko at 2/05/2007 11:23:00 PM
The other day while I was sitting in my room watching television, I saw a commercial that I thought would be worthy of discussing. I think most of us have seen the commercial, or at least heard of the product advertised. I am referring to Tide’s new Coldwater laundry detergent. The product eliminates the use of hot water for doing laundry. The claim of the commercial is “If we all washed in cold with Tide Coldwater, we would save enough energy to light up homes in 1,000 towns.” Now I know it is completely unrealistic to think that everyone would wash with Tide Coldwater, but it is not unrealistic to think that everyone would like to save themselves money. The Tide website says that if you wash with Tide Coldwater, you can save up to 80% of energy per load. I may not be that good at math, but I can understand that saving that much energy on every load would quickly add up. Just think about the money that a family could save by switching over to Tide Coldwater. Cleary if a person uses less hot water, they are going to pay less.
Although the Tide company may be more concerned with selling their product than they are about saving energy, they have done an excellent job of promoting energy conservation. In order to promote energy conservation, as well as their product, the company has created a sweepstakes for people who have pledged to use Coldwater. Prizes for the winners include a variety of energy-saving products, offering further encouragement to use less energy. The Coldwater website gives people suggestions on different ways to save energy. Tide Coldwater is a great way to reduced our use of energy and money.
This supports the idea that people usually exploit opportunities to make themselves better off. The Tide commercial offers an incentive for using it’s product. The incentives are that if a person uses Tide Coldwater then they will be saving money and energy. Other incentives include the chance to win prizes in the sweepstake. In this case simply by using the laundry detergent a person can make themselves better off. According to this economic theory, would it be safe to say that most of the people who saw this commercial will have switched over to using Tide Coldwater?
If anyone is interested in knowing about the international use of energy here is a great website:
Posted by LAURA J. STENNAGER at 2/05/2007 08:59:00 AM
Sunday, February 04, 2007
Hemp is a form of cannabis that is a wonderfully versitile plant. It can be used to produce softer, stronger, and longer lasting cloth than cotton. It can be used to make longer lasting paper with less chemicals than wood. It can be used to make biofuel that burns cleaner than fuel produced from fossil fuels. Hemp is also a renewable resource that is easy and fast to grow. The article claims that hemp could eliminate our need to obtain fuel from foreign countries while eliminating most of the polution and smog produced by burning fossil fuels. In addition to all these benefits, the article claims economical benefits as well by providing more jobs and reducing costs. The article mentions the failures of the drug war too and how we are wasting our resources trying to fight marijuana, another form of cannabis that can be used in theraputic and medicinal capacities better and safer than some pharmaceuticals currently in use. Cannabis is one of the top, if it isn't actually the top, cash crop in the United States. The problem with that is it is all black market money that the government is missing out on. So why is cannabis still illegal when there appears to be a huge number of benefits from its legalization and how would its legalization change the economy? I think the economy would benefit from the legalization of cannabis because it would provide more jobs, reduce our dependence on foreign oil, and reduce government spending on a obviously failing drug war.
There are a lot of get rich quick schemes out there today trying to take people's money and leave them with nothing in return. On msn.com there was a link to an article about 6 businesses that people could start themselves with as little as $100 to start with. They range from reselling garage sale items on e-bay to selling t-shirts online. One of the businesses, digital photo scanning, is even touted as "a no-brainer" by self made millionaire Mark Cuban. It even states how some of these businesses can have excellent odds of making money. It doesn't seem very likely that with such a small investment that there would be very much money to be made in return, but this article explains how it can work.
Posted by Julie Southall at 2/04/2007 02:39:00 PM