European Union, is not only fighting against Intel and Microsoft, but also Apple, over the pricing of their iTune songs. Online shoppers in Europe must download songs in the country that they live in, and prices are different in the European Union's member countries. The commission believes that the arrangement between Apple and record companies put "territorial restrictions" on the sale of music. An example in the article is that one song purchased by a British shopper was 1.17 euros while another shopper was able to buy it for .99 euros. This is a great example of price discrimination in which I believe would be an example of first degree.
Monday, April 30, 2007
A newly release requirement of “manufactured diesel trucks spew out less soot” commenced this year is arousing a paradox for truck fleets: “These new-generation trucks are cleaner than older-generation vehicles, but they get worse mileage.” Driving by the stricter regulations of emissions, diesel truck manufactures are suffering from developing new kinds of engines that exhausts less soot such as nitrogen oxides and carbonic oxides. To meet with the new standards, “diesel trucks manufactured after January must produce 50% less nitrous oxide and 90% less particulate matter than emitted by previous-generation trucks”. However, the problem is that with less exhausting, means more fuel burning. The average mileage of previous-generation trucks is about 9 or 10 miles to each gallon of diesel fuel while new engines designed to meet the more-stringent federal mandate on truck exhaust get about one mile less to the gallon. “That may not seem like much, but it all adds up for large fleet owners that operate trucks crisscrossing the country”. To tackle the paradox, the spokesman of EPA (Environment Protect Agency) has commented that “the agency had anticipated some fuel-mileage loss with the new engines. At the same time, companies are telling us that these new, clean engine systems have maintained or improved fuel efficiency through all sorts of innovations”. However, whether the improved fuel efficiency is going to offset the impact of the loss in mileage has been doubted.
Here we are encountering various kinds of externalities, and when this happens, there may be some conflicts among these externalities. To meet the social benefits, we have to develop an engine that is friendly to the environment. At the same time, it means a loss on mileage of the engine, which affects another externality, the scarce petroleum. If the mileage of all American autos was reduced one mile, how much more oil would be in need? The only way to balance between these externalities is to compare the benefit and cost of fewer exhausts and reduced mileage. Anyway, when dealing with various externalities, we certainly do want to attend one thing to lose another.
Posted by SHANE B at 4/30/2007 12:01:00 AM
Sunday, April 29, 2007
“Gov. Arnold Schwarzenegger threatened to sue the federal Environmental Protection Agency for moving too slowly on
Why carbon dioxide is not regulated by the EPA? We may find an answer from an economic point of view. Under the current industry development pattern, huge amount of energy is from the combustion of carbon dioxide, and if it is regulated and reduced to a lower level, many industries would be affected and might lead to a decrease in economic growth. But we should also see the other side of this carbon dioxide emission. The greenhouse effect has been a serious global problem and a lot of people believe the emission from human society is one of the major causes. Then, what we should do is trying to maintain the economic growth while pollute as less as we can, and I think the task of EPA now is to find the appropriate regulation standards.
Posted by yangdi at 4/29/2007 02:42:00 PM
Saturday, April 28, 2007
Posted by JP Clift at 4/28/2007 11:39:00 AM
Thursday, April 26, 2007
It may seem strange at first, but if you really think about it, the government has a monopoly over marijuana, more specifically marijuana research. The government has a partnership with the University of Mississippi, whom is the only legal producer of marijuana for research purposes. This monopoly over marijuana growing rights for the purpose of medical research has casused much controversy. A group dedicated to researching medicinal uses from currently illegal drugs, such as marijuana and psychedelics (LSD and mushrooms), headed by Lyle Cracker from the University of Massachusettes, has been trying to obtain a DEA license in order to grow marijuana for medinical research purposes only. Cracker feels that the limited supply of marijuana grown at the University of Mississippi is low in quality and potency and feels that his growing methods may perhaps yeild greater outcomes in medicinal research. Cracker also believes that because there is only one government approved source of marijuana for research purposes, recearch is limited and is not progressing in a manner that it could be if others were permitted DEA growing licenses. Cracker's goals are the same as the government's; he and his team desperately want to find uses for natural plants that could potentially cure diseases. Research has shown that THC, the active ingredient in marijuana can relieve nausea and vomiting associated with chemotherapy and can help with appetite loss in AIDS patients. Does the government have a right to a monopoly over marijuana and if so, is it really justified? Afterall, there are many more people like Cracker dedicated to finding medicinal purposes for plants such as marijuana. Should Cracker be granted a DEA license to further medical research?
Posted by emmy farnham at 4/26/2007 08:13:00 PM
Wednesday, April 25, 2007
Wendy's, (the No. 3) fast food restaurant in the world has finally dicided to change the frosty flavor to vanilla. At first, Dave Thomas never wanted to change the original flavor because he thought it would slow down operartions behind the counter. However, since Wendy's needed something to boost it's image & sales they began trying a variety of new things like: a frosty float, a breakfast menu, and call in ordering. By doing this they are trying to target a much younger target market, but also trying to keep their older customers. If they can keep the Dave Thomas drvie & spirit combined with new & fresh marketing Wendy's will surely succeed.
Posted by tyler morando at 4/25/2007 03:16:00 PM
Monday, April 23, 2007
A recent study by the
What this could possibly suggest for companies is that they might want to think about investing in human capital. That is, more companies should implement heath programs into their companies. Idealistically, with a health program readily available for their employees, employees in turn will use the program and become healthier on the whole. A healthier workforce implies a more productive work force. Additionally, if a company is concerned about too many people taking off for sick days or due to an injury, the company could maybe offer an incentive in the form of a monetary bonus at the end of the year if a person takes a certain number of personal days or less.
What do you think about this study and this article? Should more companies begin to invest in human capital and create health programs. Or will the costs outweigh the benefits; or said another way, will the program cost more to the company then the benefits of recouping the productivity lost from when people take sick days?
Posted by Keith Zeigler at 4/23/2007 04:38:00 PM
Sunday, April 22, 2007
Album sales have continued to decrease this year as a result of online buying and the consumer's want for different forms of entertainment such as video games. Entertainment companies in the business are beginning to fret over the decline in sales. Only 135.8 million albums were sold at the end of last week in comparison to the 163.3 million sold during the same time period last year.
Entertainment companies also blame the decline in sales on the lack of big-name records being released this year. Currently Nora Jones and Tim McGraw are the two biggest artists to release albums into the market. When well-know artists release a new CD, most people will buy the actual album rather than shopping online.
Obviously entertainment companies need to start looking at new options to bring in profit. What do you think should be done? And, why do you think there has been a decline in the quantity of albums demanded other than the fact that buying online is easier? Are companies such as Apple taking over too much of the market for music?
Posted by Stephanie Gelo at 4/22/2007 06:12:00 PM
Wednesday, April 18, 2007
Gasoline prices are often in the news with fluctuations. However, the outlook seems to show that prices will be falling soon. The reason being more than a few refineries getting back to full production. With refineries such as Valero and McKee coming back online national production will increase and if the demand stays relatively the same we should see a drop in gasoline prices. Even though Forcados oilfields in Nigeria are still questionable if it comes back into full production again it will also take the strain off of demands. Gasoline is still showing the pattern of hitting an equilibrium. Fluctuations are inevitable, they are going to happen, but we are still maintaining a decent equilibrium price.
Posted by JoshOffy at 4/18/2007 02:23:00 PM
Tuesday, April 17, 2007
Did you know that a diesel engine can run off of used cooking grease? There is no conversion necessary, no expensive gadget, just cheese cloth. If you strain the excess particles out of the grease then it can be poured straight into the gas tank as fuel. It runs just as well and is almost completely devoid of harmful emissions. Well, two kayaking buddies drove their diesel truck from Alaska to Tierra del Fuego on nothing but this alternative energy source. This is an amazing accomplishment not only for the two crazy guys that pulled it off, but for the entire environmental community; it shows just how viable alternative sources of energy are in todays world. If something of this caliber is possible by a couple of hippie kayaking adventurers (hell yeah!) then imagine what is possible if more that a few people are behind it. Once industry begins really looking at cleaner and more renewable energy sources the possibilities could be endless. With the technology of today we have the capacity to make great strides towards living a more eco-friendly lifestyle, all it will take are more people like Seth Warren and Tyler Bradt to literally make the world a better place.
Posted by Sam Dahler at 4/17/2007 06:01:00 AM
The corrected version of 2007 Green Leaders states that businesses such as Bank of America, Google, Inc., and Dell are making moves to promote a healthy environment - in economically friendly ways. By reducing packaging, as well as packaging cost, and reducing oil dependent use of energy, and building super efficient skyscrapers, these businesses are combining the pressures of moral suasion with practical economic benefit, increasing the total social pie. By reducing their own costs (savings in packaging, high energy bills, and overall energy use) these businesses are also reducing pressures on the environment. Although some of these investments may not pay off in the short-run, these companies are certain the long-run benefits will far outweigh the present cost. So, congratulations to the Green Leaders (named by Forward Management and Sierra Club Mutual Funds, complete with a nod at your own future investment opportunities), for making everyone a little bit happier.
Posted by Heidi Malaise at 4/17/2007 12:14:00 AM
Monday, April 16, 2007
“Volvo now believes it is responsible not only for ensuring that its products are a functional means of transport, but also for ensuring that they function in a wider context – in our environment,” says Pehr G. Gyllenhammar, the CEO of Volvo. According to the article “Quality, safety and the environment-Volvo cornerstones for 80 years,” the engines used by Volvo “have become increasingly clean over the years in terms of emissions.” In fact, Volvo often has fewer emissions than legislation requires.
Posted by JP Clift at 4/16/2007 11:16:00 PM
California has just passed legislation that will preserve an amount of ocean space from human activity, including fishing. At this point the area, which I believe is not one continuous area but is broken up into sections, totals about 200 miles, the project is expected to be complete in 2011 which at that point will include more than just 200 miles. For this total area, there will be portions that completely restrict human activity to a 0 level and some portions will allow a limited amount of activity to take place, such as sport and commercial fishing.
The fishing industry argues that they are not the only perpetrators of ocean degredation that should be targeted, there are a lot of other sources and industries that degrade ocean quality that will not be effected by this new legislation. From an economic standpoint it seems that the fishing industry is arguing that the abatement costs are being mostly felt by them and that other companies are getting away with the damages they are causing. The fishing industry is arguing that the equimarginal principle is not being met. The abatement cost should be set at a number where it will be equal for all polluters...
From a Sam Dahler point of view, it's good in the long run because at least an aspect of the damages are being taken care of, in the end the ocean will be a little better off, and that is better than issues not being addressed at all. The Marine Life community seems to be pleased by this legislation; however, thats not to say that they wouldn't be pleased with stricter legislation.
Perhaps the question is whether or not the optimum level of ocean quality and ocean exploitation is being met. If the fishing industry is the easiest and cheapest industry to regulate, then maybe, from sociaty's point of view, they are the ones to regulate.
Posted by Anna at 4/16/2007 07:24:00 PM
As many of us know, the ice caps and floating ice platforms are beginning to melt and this is effecting polar bears in many ways. One important way is that they are having increased trouble hunting food and are beginning to die of starvation, malnutrition and drowning, amongst other reasons.
Russia is a country that is experiencing close to home problems with this because the polar bears are starting to come to the shores where people live to look for food. At the moment hunting these animals is illegal, but we know that does not always stop people. The Russian government has decided that is they allow for a limited amount of hunting that that might cut down on the amount of illegal poaching taking place. If we let the hunters have a little maybe they won't take so much.
This seems like a principle that we have covered in our Econ350 class.
There is obviously an optimal amount of hunting and 0 is not it, sorry Sam! At 0 people are overhunting, so the government has decided to address this by setting some sort of cap, which is still being decided, which will maybe bring the damages to society closer to the damages being felt by the industry. The industry at this point has to pay a high fine if they are caught, maybe it will be incentive to reduce the amount of killing in exchange for a decrease in the amount of potential fines.
Posted by Anna at 4/16/2007 07:04:00 PM
In the Earth, human demand resource. We use a lot kind resource to make our life better. We eating food, drinking water, use metals, and use oil, the population growth quickly, so there are more and more people need resource. But the problem is the resource is not growth as population, it reducing very quickly. As the article by JULI ANN WEBER wrote for New York Time. "reduce population" said poverty, hunger, water shortages, global warming, immune system breakdowns are overwhelmed the earth. More and more poeple demand goods, that will use a lot of resource, and let price goes up, but there are a capacity of the goods that people can produced, so we need limited population, if not the price will growth, but still have peole hunger.
Posted by Chengkai Zhao at 4/16/2007 06:06:00 PM
On Monday April 16th, a man shot and killed 30 students at a Virginia Tech. The shooting began around 7:00 in morning. Where the man started the shooting was in a dorm building. Then about two hours later, he continues the craze and shot more people in another building. This time it was a class room. I am not sure how many classrooms he shot in. No details have been released nor have the answer to whether or not he shot himself or if police shot him. So, what is it that makes people do this? What is the incentive to killing people? How angry do you have to be to take 30 peoples' lives and injure more? What has become of the human race that we are savages to one another? Well, some people do not think about the consequences of their actions. I guess this guy had his reasons... but that does not justify him going out and taking all those lives.
Posted by Kim Riddlesworth at 4/16/2007 03:14:00 PM
Going "Green" is not just an attitude anymore. It's a financial venture. The Sundance Channel is making it's largest investment in a particular initiative to promote the necessity of environmental awareness. The regular prime-time show will educate the watchers of current environmental issues as well as instruct individuals on the small actions they can personally do to reduce their impact on the environment. The program will have a positive spin by stating that there is something we can do about global warming. We have options and there are things we can do to stop the destruction and reverse what we have already done.
The "Green" Movement doesn't necessarily have to only be about protecting the environment. American's are arguably economically-driven. Plus, most do care about the environment. Therefore, there is a growing market for economically feasible solutions to pollution. With the advancement of technologies and a growing environmental consulting field a lot of money can be made by introducing money saving options that have reduced impacts on the environment.
Whether a persons focus is on environmental protection or the economy, the importance is that people are being educated about the Earth and that education is the basis for action.
Posted by Sotiria Anagnostou at 4/16/2007 03:00:00 PM
Wednesday, April 11, 2007
A chance of oil price rise, sudden drops in the dollar, sell-offs in stock and bond markets, etc., are negative forecasts that may have a harsh effect on the global economy. Many people feel that the International Monetary Fund are just being too optimistic and the likely hood of this rash of econony growth is highly unlikely. "It's a no-brainer to say the risks are on the downside. As we move through 2007, I wouldn't be surprised to see the number slip below 4%." said Stephen Roach, chief economist at Morgan Stanley.
IMF states that the U.S. slowdown will quickly regain momentum, but the IMF reports it also depicts the plethora of factors can bring this to a quick halt. "A further cooling of the U.S. economy that increasingly spreads to weakness in consumption and business investment in 2007 would be challenging, particularly since the euro-area economy is likely to be slowing," IMF warned. So is Mr. Roach, an economist, says, "that the fast-growing economies of Asia might not be enough to compensate for a profound slowdown in the U.S. Slower U.S. growth means less appetite for imports, a sequence of events that could roll through China, Taiwan, Korea and even Japan."
Posted by Jessi Zinn at 4/11/2007 02:55:00 PM
Just recently Abercrombie and Fitch opened it’s first store outside of North America, in
Posted by emmy farnham at 4/11/2007 11:10:00 AM
This aricle is about China has advantages in exporting good to the US. It also mentioned the connection with the value of Chinese Currency. In the history, China was always a country of exporting, but during the period of Cultural Revolution, China completely closed the door to outside. That made China's economy undeveloped. Now the situation has changed. According to the article, "The gap swelled to $20 billion from $11.2 billion a year earlier", and "The US trade deficit with China jumped to a record $232.5 billion last year."
The export also has connection with Chinese Currency. The Yuan has been increasing its value, and it is not good for exporting. Because when the currency has a higher value, China will has less advantages in exporting and as the author noted that "China has limited yuan gains because a faster appreciation could put companies out of business and result in job losses in the world’s most populous country." Furthermore, "the industry would lose 8.8 billion yuan worth of exports this year if the Chinese currency gained 5%. "
Posted by Lucy Lin at 4/11/2007 08:27:00 AM
Real estate investors in America's large metropolitan cities are seeing a new boom in condo sales. Retail condo sales were up to 560,000 square feet last year, in contrast to 2003, when only 28,000 square feet of retail condo space was sold.
Many real estate investors are finding renting retail condo space more appealing than office or residential space. Many investors can often escape paying capital gains taxes on large properties sold for a profit by quickly investing the money into other real estate.
Patrick Cooney, for example sold four residential brownstone apartments which he purchased in the late 1970's for $350,000 for $12 million in 2001.
By reinvesting most of his profit into retail condo space, he was able to avoid a capital gains tax.
Cooney is not alone. Eric Anton, an executive director at Eastern Consolidated estimated that half of the retail condo sales in his office are to buyers with money that they are eager to apply to 1031 exchanges which diminish the capital gains tax.
Another reason the retail condo market is booming could be because retail space looks more attractive than office space, said David LaPierre, a senior vice president at CB Richard Ellis.
Having the ability to go in and out of stores can make a location seem more tangible than office space, LaPierre said.
There is a drawback to the boom, the increase in interest in retail condos has caused prices to increase, however capitalization rates have decreased. Cooney received a 7 percent capitalization rate from his retail condo purchase in 2002, but said if he sold it again he would only receive about a five percent capitalization rate.
Posted by Mark Briggs at 4/11/2007 07:18:00 AM
"Music company EMI Group PLC is reportedly talking with several online retailers about possibly selling its entire digital music catalog in MP3 format without copy protection.The pure MP3 format can be freely copied and played on virtually any device. It would enable the users to purchase song from their choice of store to play on their choice of a digital music player."This was reported by the media group Wall Street Journal.With out copy protection EMI Group can easily develop a huge pertancial market, but they should be ready for those free dowloading web site pirate copy right. That is exactly what the compeny wants which is expansing the market. I believe that illustrated People usually exploit opportunities to make themselves better off.
Posted by zhaoyang xu at 4/11/2007 12:46:00 AM
Europe is pushing for more unity among its nations. In this push, electricity is the most current industry being affected. Utility compnies will soon be able to sell in their services in any country within Europe. This is being done in hopes that this competition will encourage other utility companies to emerge. In the end, this competition should decrease prices which is the ultimate goal.
The problem lies in the fact that it it creating mergers to make the large companies even larger. This is just creating a continent wide fight between large companies instead of a state wide fight between large companies. Its doing the opposite of what Europe hoped it would do.
What suggestions would you give to lower prices and open up competition?
Posted by lauren yoder at 4/11/2007 12:26:00 AM
Tuesday, April 10, 2007
Because of a sharp decline in revenue the computer company Advanced Micro Devices, they are being forced to fire employees in order to reduce cost. They are also cutting their spending in order to increase profits. The company reported to make only 1.23 billion dollars in the first Quarter which is much lower then predicted. Many were unsure of why there was such a decline in profit, it may be because there are other substitutes to buy from in the computer industry. A. M. D. gained a large portion of the market share but it's average selling price fell. It seems to me that the company risen too quickly and can't manage itself, it has become too complex and inefficient.
Posted by Ashton Preston at 4/10/2007 11:26:00 PM
ipod only used a third of time that sony used to sold 100M its product. Now it almost control 73.7% of the U.S. market and a lot abroad market as well. "iPod dominates more than half the Japanese market and over 60% in Australia." Ipod can almost monopoly. The more market that been taken the more inelasticity it is and diminish substitutes, so ipod can be able to contrel the price a little bit and make more profit. Since it already had planty of complements, this business will grow biger which means this corp can make a huge money.
Posted by zhaoyang xu at 4/10/2007 11:22:00 PM
Credit cards, almost everyone has them on college campuses. Credit card suppliers are inching their way into back pockets of college students. bribery is a great example of this at Marietta College, "Come on down and get a free pizza" says dominos of Marietta. But what you dont know is that you have to apply for a credit card in order to get that pizza. Credit card suppliers are trying everything in their power to get college students to apply. Fee's, interest rates, and irresponsibility is the way credit card suppliers make their money. Is this the reason the credit card suppliers are hitting up several college campuses? Credit Cards are a waste of money, and a great way to not only spend somebody elses money but a great way to put yourself in debt even more while in college. So the next time you think about signing up for a credit card realize what your doing, which is contributing to unnessecary fee's, and dont do it for a free pizza but do it for the right reasons and the right reasons only.
Posted by Greg at 4/10/2007 11:15:00 PM
Soccer is the most popular sport in every other country, so why not the USA. People say soccer is for wussies, or people who are afraid to get hit. But infact soccer is right behind football in the list for most dangerous sports. I dont get why soccer isnt popular here, I mean i like football dont get me wrong but it gets boring seeing the same scores being in the higher 20's. SO why dont people like soccer? Statistics show that most people dont like soccer because they dont take the time to understand the game. If you really think about it soccer is a game of timing and strategy just like football. Yes most people say football is a better sport, it is more fun to watch, its more exciting because more happens, and lastly because theres harder hits. I disagree with these becasue of the fact that in soccer is entertaining which is why its the most watched sport every where else, more doesnt happen there is still hard hitting and lots of pain and suffering, and lastly hits happen any where from slide tackles, to elbows, to shoulder to shoulder tackles. So why isnt soccer liked in America? It is a great sport with lots excitement, rivalry, and lots of pride. Another reason I feel it is like so much is because all of the athletes who play soccer dont do it for the money, hinting that the highest payed player in the US is a 16 year old boy making half a million dollars. This is why I feel Futbol (soccer) should be just as popular if not more popular than the sports in the United States. What do you guys think???
Posted by Matt Sleyzak at 4/10/2007 11:05:00 PM
Some people especially in big cities are often faced with the question about whether to rent or buy a home. Each aspect has its ups and downs, and costs and benefits. If you were to rent then you wouldn't have to worry about the upkeep because someone would do it for you. Another benefit is the convinceince of mobility, when renting it is easy to relocate because the landlord does all the work trying to find a renter, If one owns a house you have to sell the house in order to relocate which often takes time and even more money. Through renting though you pay all that money for something that will ultimately never be yours. When buying a house on the other hand the monthly payments go towards paying back the bank for the loan that you took out to purchase the house. But everything about the house is now yours and it costs more money than if you were in a apartment. Unless you plan to stay in a home for many years then it is more benefitial to be a renter because it pays more in the long run scheme of things.
Posted by Nathan Eschbaugh at 4/10/2007 11:03:00 PM
Domestic passenger air traffic has been on the rise in Mexico. In 2006 it grew by 12 percent. This exciting new development is due to five newly introduced airlines. These companies are low cost. They have expanded exponentially. In 2005 they carried 62,000 passengers compared to the almost 3 million passengers in 2006.
The airline businesses that once transported 60 percent of the market, such as Mexican and Aeromexico, now fly 44 percent. While the low-cost new airlines have basked in their expansion, these original tycoons are suffering. As more choices enter the market Mexicana and Aeromexico have flown almost 40,00 less people in 2006.
These discount airlines began in fall of 2005 with Avolar. These lower priced airlines force ticket prices and labor costs down. The competition in the Mexican domestic flight niche has increased, luckily enough for the customer.
The market is expected to keep expanding as well. Regulators have predicted as much as 10 percent. This could continue into the next three years.
Posted by Katie O. at 4/10/2007 10:49:00 PM
Americans are putting too much pressure on the auto industry to fix our gasoline problems. Really, we need to help more with this problem. We need to cut down on our gasoline and conserve it. We take it for granted and we need to understand that gasoline shortages may arise. This relates to the pressure put on the auto industry- better mileage! The astonishing fact is in the year 2000, gas mileage was the 29th listed reason for buying a car. Now, gas mileage has only moved up to the 28th reason. President Bush says something must be done. Americans don't seem to care about the gas price inflation when buying a new car. Thus, Bush promotes the idea of blending gasoline with more ethanol or increasing taxes on gas even more so it'll get our attention. The wasting of gas has a lot to do with Americans ignoring gas mileage.
The Hoover Company's new owner said it would close its main plant in North Canton, Ohio, by this fall, resulting in 750 job losses. The company has been located in this northeast Ohio city for nearly 100 years. Union leaders tried unsuccessfully last year to form a coalition to buy out the plant.
The closings will result in 650 union job losses and 100 salaried positions. Other plant operations in El Paso, Texas and Juarez, Mexico will remain open. Hong-Kong based Techtronics bought the Hoover company from Whirlpool last year.
Surely, the job losses will affect the North Canton area, as will the vacant buildings. The current plant is more than a million square feet. Filling that space will prove to be a daunting task. The loss of jobs and the vacant space will take a lot of time to overcome.
These cutbacks could be due to increasing operating costs in the local area. The Texas and Mexico plants could be more efficient.
Now that we are getting oh so close to the NBA Draft, one question keeps being brought up over and over again, especially by my fellow Ohio State fans. Of course, I am talking about Greg Oden and his entry/non-entry into the NBA Draft. While some say he needs one more year, while others are saying Greg Oden would be stupid to not go pro.
I tend to say that Greg Oden should consider the economics of his decision. If he does indeed go pro, he will most likely be the number 1 or 2 pick and thus making himself a millionaire. Furthermore, if he goes pro, you can almost guarantee that Oden will probably get a shoe deal which will also make himself quite rich (along with the other endorsements Oden will pick up).
As a college athlete Oden is not eligible to pick up any of these benefits, should he decide to stay. Furthermore if he stays, he will pick up another year of classes and will get to continue to live the college life. Most of the benefits of Oden staying in school cannot be measured in dollars and cents terms. He frequently says he loves the college life. Which is not a bad thing.
So, by looking at Oden's situation we can see the various opportunity costs facing Greg Oden. On one hand there is millions of dollars and on the other is the continuation of friendship and education. As a side note Oden, may want to consider what happened to Matt Leinart in the NFL draft. At one point Leinart was projected to be the #1 pick in the upcoming draft as a Junior. However, he decided that he should indeed return to school and return for his senior year. The result, Leinart ended up being the #10 pick, a far cry from #1 overall. While, Oden is in all likelihood never going to be drafted any lower than #3 overall, he must consider the possibility of an injury.
So, in conclusion, the economics of the decision clearly point to Oden entering the draft now and becoming a multi-millionaire, and not passing up on so many great opportunities (A Buckeye fan, may disagree with that last point).
Posted by Jordan Gottke at 4/10/2007 09:53:00 PM
LONDON (Reuters) -- Oil prices rose Tuesday after six straight losing sessions as markets turned attention to Iran's nuclear activities and dwindling gasoline stocks in the United States, which is the top consumer.
Price falls that began on March 30 had gathered pace last week, when Iran released 15 British sailors and marines it had captured, wiping more than $4 off a barrel of U.S. crude.
U.S. crude settled up 38 cents to $61.89 a barrel, after tumbling $2.77, or 4.3 percent on the New York Mercantile Exchange.
London Brent crude was up 83 cents at $67.42, after a $1.65 loss in Monday trade, which was subdued by the Easter holiday.
Iranian President Mahmoud Ahmadinejad said Monday that his country had begun industrial-scale uranium enrichment, which the West fears could be used to make nuclear weapons.
Iran says it wants the fuel for generating electricity, so it can export more of its oil and gas.
Posted by Racy at 4/10/2007 09:50:00 PM
The government predicted that there will be increase in the price of gasoline in May 2007. In May gas prices should peak about $2.87 and gas prices are predicted to be higher in the summer. Gasoline prices are continuing to rise no matter what people seem to think. Are gasoline prices rising because there is more demand or gasoline prices rising because of the decrease in the oil industry.
Posted by Brian H at 4/10/2007 09:40:00 PM
Today (April 10) oil prices rose again, but this is after they had fallen $3 a barrel the previous day. The fall was due to a speculated over supply at an important place of import for the US. Heating oil prices have risen because the demand has risen giving me the idea that the demand for heating oil is elastic. The demand has gone up beacause of the cold temperatures the Northeast has been receivng lately. Also the price of Natural gas has gone up because of the cold temps which leads me to beleive natural gas and heating oil are compliments. If this weather continues for a little while and the middle east crisis also continues I do not see the major oil companies or the small ones for that matter complaining about profits this quarter.
Posted by msowko at 4/10/2007 08:53:00 PM
According to the article in linked, more small businesses are outsourcing their jobs to keep a little more cash in their own pockets. The problem is that less people are finding jobs because they are wanting something more permanent. Basically, the firm is increasing their profit, keeping the price the same, but paying less to workers. The workers are brought on to work for as long as the business needs them then let go at the drop of a hat. It doesn't stop there. Businesses are outsourcing to other countries. This also helps keep profits in their pockets because it is cheaper to pay workers in other countries. The problem with that is that fewer jobs exist for Americans when businesses make that decision.
According to the article 4.2% of compensations payments went to outside contractors in 2002 as opposed to 4.7% in 2003. There is a serious problem on our hands.
Posted by Trisha Dennis at 4/10/2007 08:53:00 PM
Circuit City, the nation's number 2 consumer electronic retailer behind Best Buy recently laid off 3,500 employees. The reason for this was that many of these employees were considered entry level workers. They company plans to hire new workers at lower costs or rehire the laid off workers back at a lower salary. This might not seem like a good idea but it actually helped Circuit City boost its stock by 3 points the day after it occurred. "We are taking a number of aggressive actions to improve our cost and expense structure, which will better position us for improved and sustainable returns in today's marketplace," Philip J. Schoonover, Circuit City's chief executive, said in a statement. While this might seem a little risky, it may be starting a trend. Other companies have seen how Circuit City was able to cut back on workers, maintain product output and even benefit more from it. Will this style of laying off long time loyal employees for young cheaper labor rub off on other companies?
Posted by Kyle Thauvette at 4/10/2007 08:42:00 PM
In an attempt to restructure their business and increase falling profit margins the firm Citigroup is planning on cutting 26,000 jobs. This would be about 12.5% of CitiGroups workforce of 327,000. This has come after investors have pressured CEO Charles Prince to restructure the company after only a 15% in the company stock. However many analysts believe that this new cost cutting campaign will not solve Citigroups problems, they will only provide a quick short term solution. Citigroup is taking two major risks with this new plan. As Craig Woker, an analyst for Morningstar said: "If you cut too deeply, you end up potentially sacrificing more revenue than you're saving. The other risk is that growth just naturally starts accelerating on its own, in which case you end up flat-footed, and you end up hiring back employees that you just offered six months of severance pay to."
Posted by stevelittle at 4/10/2007 08:36:00 PM
In an attempt to restructure their business and increase falling profit margins the firm Citigroup is planning on cutting 26,000 jobs. This would be about 12.5% of CitiGroups workforce of 327,000. This has come after investors have pressured CEO Charles Prince to restructure the company after only a 15% in the company stock. However many analysts believe that this new cost cutting campaign will not solve Citigroups problems, they will only provide a quick short term solution. Citigroup is taking two major risks with this new plan. As Craig Woker, an analyst for Morningstar said: "If you cut too deeply, you end up potentially sacrificing more revenue than you're saving. The other risk is that growth just naturally starts accelerating on its own, in which case you end up flat-footed, and you end up hiring back employees that you just offered six months of severance pay to."
Posted by stevelittle at 4/10/2007 08:36:00 PM
Many of us own a watch or two. They may range in price anywhere from $10 to $500, well at least for us college students. In a report recently released by Msn.com, watch prices on select makes and models are skyrocketing. The Martin Braun Eos model, which made its debut in 2000, sells for approximately $36,000, and the value of the watch is continuing to increase. Many watch connoisseurs are likely to spend anywhere upwards of $3000 to $500,000 for a watch. An antique model of a Patek watch recently pulled in more then four million dollars at an auction. Four million dollars for a watch! To some, wearing a nice shinny watch is a statement of ones class, but are watches really that important of a measure of ones class that they may pay into the hundreds of thousands of dollars for it?
Posted by Mike Braun at 4/10/2007 08:26:00 PM
We have all witnessed the sudden change in whether from mid-80's to mid-30's in a matter of days; it didn't affect us in Marietta, Ohio drastically, other than the onset of a cold or a bad mood. In southern states, such as South Carolina and Alabama, this cold front has hit them hard. Most of the land in these states is dedicated to farming, South Carolina with its peaches and Alabama with its plums and pecans. Three days of freezing temperatures have nearly destroyed most of the crops from these two countries. Almost 60 acres of peaches in South Carolina have been killed due to frost and ice. One farmer, Raymond Cook, claims that this damage is "the worst he's ever seen." Other states, such as West Virginia and Georgia, have also suffered tremendous losses because of the cold front that occured in early April.
Because so many crops have been destroyed, prices of these fruits and vegetables may be driven up. The demand may stay the same, but because their is less supply, the price will rise. Will consumers still purchase these goods even if the prices rise tremendously?
Posted by krysten12 at 4/10/2007 08:07:00 PM
This article discusses how sports economies should consider the complements of tickets sold and concessions. The author claims that owners can maximize profits because there is an inelastic relation between the tickets sold and the demand for concessions. The author has found that sports teams price admissions in the inelastic range of demand. This causes the marginal revenue to be negative. The article attempts to explain inelastic ticket pricing by considering the relation between tickets sold and concessions. If you think about these complements then I think the author is correct in his claim where the more tickets that are sold for a game then the demand for more concessions will increase.
Posted by Stephen Gruenberg at 4/10/2007 08:04:00 PM
Sony, the Japanese electronic giant has just announced that they will cut Playstation 3 prices by $100. It currently costs about $700, but with the cut will bring it closer to what a PS2 normally is sold for. A reason for the cut is to be able to better compete with such gaming systems as the Nintendo Wii and the X box 360, both released around the holiday season. I feel this is a smart move by the Sony company. This price cut will attract more buyers to the PS3 and possibly away from the other gaming systems out there. The PS3 is a product that I feel could be deemed elastic. A reason for this is because that it is not a necessity and instead of buying a PS3, you can easily choose another popular gaming system. Also, when something is elastic, the greater number of substitutes will result in the greater amount of elasticity. Another important aspect that can be discussed in this article is perfect competition. For example, there are a large amount of buyers and sellers in the gaming market with a homogenous prodect (gaming console). These gaming companies have the option of entering or exiting at anytime they like. Hopefully, these price cuts will keep SONY from exiting the market anytime soon.
Posted by Luke Haumesser at 4/10/2007 08:03:00 PM
Did you ever stop to think about just how many college students take out loans to pay their tuition for colleges and universities? A large portion of students take out loans from different lenders each year to satisfy the cost of their education. However, student loan officials from many different universities, including the University of Pennsylvania, are under investigation for steering students into taking loans out from certain company's that inflate the prices of the loan. The officials receive kickbacks and incentives from these companies for telling the students to take a loan out from them. Some schoools have even reimbursed students for this fraud, one school at $3.27 million.
I think that this is absurd. It is hard enough to pay for college tuition at the regular price and with inflated loan prices, the officials are becoming entirely too greedy. I do not think it is rational for someone that calls themself an official to be stealing money from students, mostly teenagers, that are trying to get a good education.
Posted by krysten12 at 4/10/2007 07:51:00 PM
According to what we've learned so far in Economics, it makes perfect sense to get a divorce. This article makes it clear that since 1970 when a law was passed in California to allow a no-fault divorce, they have been on the rise. Society was able to accept divorce because the law allowed it and said it was okay. The change from fault-based to no-fault based divorce laws is equivalent to an upward shift of the supply curve. The Demand Curve for divorce is the number of married couples who want a divorce. As the curves move, the divorce is determined on how low or high the divorces are on the economic model. If the divorce is low on the supply and demand curve, the couple is more likely to follow through with the divorce. The benefits of not being together anymore outweigh the benefits of staying together. Likewise, if the supply and demand curves are high, the couple should stay together. What do you think about the market for divorce being analyzed economically?
Posted by ashley wagner at 4/10/2007 07:48:00 PM
We all want quality items at a cheap price. Unfortunately, if we don't pay, someone has to. The government sets a price that farmers have to sell there food so that we, the consumers, are not paying a lot on food. Well, this hurts the farmers because while there profit stays the same, their fixed cost goes up. The government doesn't set the cost of equipment and machinery at a certain price and they don't set the cost of animal food at a certain price so the while the farmers have to keep paying more for these things that they need to produce food, they are still getting the same amount of profit.
Posted by Jessica Tucker at 4/10/2007 07:43:00 PM
According to an article in the Finance section of Yahoo!, a couple in California has decided to buy a tract of land adjacent to their home as a potential investment. Man and wife, both previously teachers, are heading towards retirement and as they do so, do not feel that they can continue to live in CA on their retirement compensations as the cost of living in this area continues to rise. By purchasing these two acres, the couple could potentially divide up the land, as the sum of the parts would be much greater than the whole. Even though some financial advisors suggest that investing in land is not such a great idea because of the income forgone over the years that the land doesn't sell, some advisors think that this is a worthy investment. If the family did sell the land, it would sure generate a profit that is much greater than any state-compensated retirement; and if worst came to worst, by owning the land across from their property, this couple could forever cherish their great view of the California mountains.
This article gives an interesting argument and technique for determining the future price of oil. The author implies that, “in theory, there is no upward limit on the price of oil.” Now, we might argue that this is simply not case. Regardless of what happens to the demand, even though the short-run price will fluctuate, in the long run, the price of oil should always remain constant. Firms should enter and exit the industry accordingly so that ultimately each oil producers’ marginal profit is equal to his marginal cost. So where does the problem come into play? Producers of oil are using an input of limited supply. According to our text, for these items, even the long-run industry supply curve will be upward sloping.
Another area in which oil sales go against the model is in the assumption of perfect competition. Although there are a large number of small buyers and the product is basically homogeneous, the shared information is far from perfect. Oil is traded globally; information is always changing and kept secret as much as possible. Additionally, as the article goes on to describe, there are several other factors affecting the supply and demand of oil. The circumstances go well beyond our simple model.
Does the result of such a competitive market result in illegal activity? The student loan and student grant industry is growing due to the need for a college degree. It is nearly impossible to find a job, making an income possible to live off of without a college degree. Therefore more students attend college now than ever before and in order to do so students take loans, lots of students with lots of loans. The industry is now an $85 billion enterprise and is very competitive. Each firm is selling the same product, money, and at very similar if not the exact same interest rates. Because students have so many options, each looking to profit, companies have turned to providing kickbacks to colleges that make their company a "preferred lender". This has resulted in great scandal and many companies have indeed profited from it. Is this the result of a perfectly competitive market? Is there another way for these companies to make profit? This scandel provides them with more business There is a great demand, a homogenous product and many suppliers, so how does one profit. The answer is kickbacks. Is this going to be the result of all markets? Would it not be easier and less of a risk to switch to a different industry that is less competitive? Why would that be an advantage?
Posted by BHowell at 4/10/2007 04:01:00 PM
This article is about electricity systems in Turkey. It talks about
their marketing systems and about who controls the market. A main part
of this article is about Marginal Cost equaling Marginal Revenue
(price)."Market boundaries need to be established based on the
potential for substitution. To the extent there is demand or
supply-side substitution (or the potential for such substitution)
between certain goods and services, these related goods and services
should be considered as part of a single market." This is a description of how they say market power is tested. They want to know whether or not it is perfectly competitive. This is significant because they need to know what kind of a market they are in so they can know if they should enter or exit from it.
Posted by Noel Ockuly at 4/10/2007 03:38:00 PM
A recent article on CNNMoney.com, by Rob Kelley, says that Citigroup, the world's largest bank is planning on downsizing. They are planning on cutting their current work force of over 300,000 employees down by at least 5% and at most 14%. This is thousands of full-time employees that will be left unemployed. So why are they downsizing? According to Citigroup's CEO, Charles Prince, "Revenue growth has not kept pace with spending at the company, putting a damper on earnings." This smothered revenue is due to poor decisions of the previous CEO of Citigroup. The company had built up a huge investor base that would generate great returns, but when the decision was made to strip cash from current businesses to buy out other companys' businesses, Citigroup's stripped businesses ended up failing to produce revenue and lost market shares. Now the company is underinvested. Obviously, in turn, the company's total revenue declined and has not be able to pick back up. Prince feels this job cut will help them regenerate the revenue they once had.
On the other hand, analysts of the situation feel that this cut will not help them as much as they would like and possibly hurt them in the longrun. They feel in the shortrun, yes, they will have a revenue boost, but it will not last for long. Citigroup will end up finding themselves back in the same old rut that it was in before the job cut and needing to hire those previously laid off.
As an economist, what would you suggest that Citigroup do? Should they try to lay off thousands of workers, or should they leave it alone and let the company take care of itself?
Posted by VoiceItLoud at 4/10/2007 03:11:00 PM
In this arcticle the author Marc Gunther, a fortune senior writer, talks about the topic of immigrants taking skilled jobs away from Americans. As of now employers are required to attain H-1B visas. H-1B visas allow the employer to higher a foreign worker just as if they were an American citizen. All the foreign worker has to do is get his or her green card and they are good to work. Bill Gates from microsoft is arguing that Americans wouldn't have much of the technology today if it wasn't for foreign workers coming to the United States for work. For example, we wouldn't have such technology as Intel, Yahoo, Ebay, and even Google if it wasn't for these international brains that made them. Bill Gates is now trying to expand the number of H-1B visas allowed per year for foreign workers. He believes that if the act goes through then it will only greaten America's economy. The only problem, as I stated earlier, is that people believe these foreign workers are taking Americans out of the job market. Also if the plan passes then the government will need to find a way to control the job market so that Americans will still have equal oppurtunities compared to foreigners.
I believe that this article proves a great point about American technology. All of our high-tech gadgets aren't just made by American born workers. If Bill Gates can get his H1-B plan passed through congress then mabye it will only help our country in the future. Letting more foreigners to have high skilled jobs in our country has already proven to be a good idea from the past. Economically I believe it would expand technology enough and still make it possible for Americans to have their fair oppurtunity for jobs. My opion would be that more high skilled foreign workers in America would be better than having less. What kinds of problems do you think more H-1B visas would pose to the American economy? If not, what is your insight on how the plan will help America?
Posted by Chris Hughes at 4/10/2007 02:34:00 PM
As many people begin to make their plans for summer vacations, the commute to and from the destination tends to be the biggest issue. Government officials released that gas prices will be slightly lower on average this summer compared to last and the recent hikes in prices will soon come to an end. But on the other had economist do not see how this is going to be possible. One mentioned that the supply of gasoline is down from last year and the demand is greater then it ever has been. He also feels that many things will have to go very right in order for the gas prices to go in the direction the government predicts.
The only question is weather the price of gasoline really effects consumers decision weather or not to buy gasoline. It is said in this article that the price of gasoline has actually had little to no effect on consumption and the demand is steadily on the rise. The actual change occurs when gas prices are very high and consumers choose to by gasoline and tend not to spend their money on other things, which intern hurts the economy. In all reality the price of gas is not affecting the rate of consumption rather the consumption of other goods that boost the economy. In the end if gas prices continue to be high will there continue to be a drag on the economy?
Posted by emily_sheets at 4/10/2007 02:12:00 PM
This article gives several things that are very expensive about going to college and ways to help keep the costs down. In addition to the big obvious expenses of tuition, room, and board there are the other miscellaneous expenses that get forgotten about. The first that is usually a shock to students and parents are books. It's estimated that the average student will pay around $900 a year on books alone. You can always share with friends who have taken the course or there are several websites suggested where you can buy books cheaper or sell yours when you're done with them. They also estimate that other expenses can run around $3,700 per year or about $250 a month. They say that the biggest expense is car upkeep, so students and their families could save a lot of money if the student doesn't need a car on campus. All of these are good things for college students to have in mind.
Posted by Julie Southall at 4/10/2007 01:20:00 PM
Everyone has heard talk about baseball players and their use of performance enhancing drugs. The media constantly covers this topic, and the recent opening day for Major League Baseball is no different. No one can argue that the game of baseball has not changed over the years, but what is the reason? The author of this article claims that it is not because of steroid use like so many people claim, but rather it is a result of expansion. He says “without even bringing steroids into the discussion, it is no surprise that some already fine hitters performed even better after the early 1990s.” He explains how the expansion has increased the likelihood of great achievements. Do you agree with the author’s claim that needles and pills are not to blame, but rather expansion?
Posted by LAURA J. STENNAGER at 4/10/2007 12:19:00 PM
At the end of the week Apr 9th gas was averaged at 2.80 a gallon for regular gas, up 10 cents from the previous week and is currently up a 11 cents compared to a year ago. The biggest jump was in the midwest states. However California has still payed the highest where gas is over 3 dollars a gallon.What has caused this increase to occure months before peak summer travel is the decline in the U.S Gasoline Inventories before the summer season. Prices usually rise in the summer due to the increase in demand for travel. With this sudden increase in gasoline in the past week, how will this effect the peak summer travel season only a few months away.
Posted by Brittany D at 4/10/2007 10:50:00 AM
Roughly about seven years ago, Apple was struggling to stay a float they were trying everything just to stay competitive and now they found their niche. It has been announced that the Apple IPod has sold 100 million devices and over millions of songs have been download. What has made Apple so successful, a few ideas, are that they have a nice clean look and easy to use buttons "the click wheel", their Itunes has the same clean look and is designed to be used with the IPod. Unlike most MP3 players that are difficult to understand and have programs that are by different companies that have to be made compatible for the player. This is also something that has been able to hit ever generation and is allowed for a media shift in how we listen to music. This has made the music industry struggle with this ripple effect. Granted it has helped with piracy laws but the record companies still struggle to sell CD's which are quickly become a thing of the past. And now that we can play movies and tv shows on these devices how do you think it will effect that industry.
Posted by Brittany D at 4/10/2007 10:38:00 AM
In the world, some of countries have not tax; those became the Tax havens of the world, like the Bahamas. “Countries like the Bahamas make tax haven status an integral part of their marketing — relocate to Nassau, and you'll fear no tax man. That's because, for Bahamians and resident aliens there are no taxes on personal income, capital gains, inheritance or gifts.” This is unfair for global tax system, because the break-even price much lower than other countries with taxation, such America. Suppose the costs and quality are same; the local goods will cheaper than goods of import which was from the countries with taxation, because local goods have not tax. Also some rich people move to the tax havens from other countries which are countries with taxation. “For Americans abroad, the only way to fully take advantage of tax havens is to renounce American citizenship, which over 500 people, almost all of very high net worth, did last year.” On the one hand, those people can promote a higher developing economy of the tax havens. On the other hand, those rich people bright much wealth from originally countries. What do you think about this situation? Can you predict whether it can promote the economy or not?
Posted by Jiang at 4/10/2007 12:42:00 AM
Monday, April 09, 2007
On April 2nd, there was a first achieved in the United States, and it was a dubious achievement in the eyes of employers and government officials alike. For the first time ever, the supply of H-1B Visas available to foreigners who wish to work in the United States - all 65,000 of them - were filled in the span of one day. In fact, the number of petitions applying was nearly two and a half times the number of visas on the first day, something the Immigration and Naturalization Service has never experienced before. Though this seems to be somewhat of an achievement in the eyes of the government, the number of applications for these visas, among other factors, may be signaling the need to reform the system to allow more international workers into the country, relieveing what is becoming a pent up supply of international labor in the world market willing to come and work in the United States.
H-1B Visas are special work visas that allow workers of "special skills" to work in the United States. Often, these workers are leading workers in their fields, and often include science and finance professionals in disproportionate numbers. These visas are usually a gateway to allowing these workers to become full citizens after their visas expire, and are often utilized to help further research in many fields in the United States.
However, the standing opinion, at least to employers in the United States, is that the number of visas available to these workers needs to be expanded. Some groups want to see the number permanently increased threefold, others even higher. In the late 1990's the US government allowed for the number of visas to be temporarily increased to allow software companies the ability to hire enough coders for their products, but the increase was rolled back after 2000 to the current standing level of permits.
Most economists and labor analysts believe that the United States is hurt in the world market by not allowing for more of these skilled workers to enhance the American labor market. The belief is that there is much to be gained from adding this expertise to the labor pool and allowing the US to continue to be at the forefront in as many fields as possible. Skilled workers also help to fill gaps in the labor market where our own workers and students are not developing sufficient human capital and are beginning to lag behind or see the lead in certain fields narrowing. Another concern among these experts is the amount of international students (who are often here to study in those fields these skilled workers are brought in to staff) who are leaving the country to return home and use their skills to further their home economies. The combined drain of the human capital when these students return home combined with the limited ability to bring in new workers from outside of the country in those fields is beginning to leave the US at a competitive disadvantage.
I believe that there should be an expansion of the H-1B visa program to allow more international workers to come to the United States. The impact of these workers on the labor market as a whole is negligable in terms of the number of jobs they take from domestic workers, and often, these workers are going into positions where there is a deficit of labor supply in the markets as it stands. As for how many visas should be granted yearly, I cannot make a guess at a number per se. A level around 200,000 workers a year (as was the case in 2000's trial period) seems to be a bit excessive, but the level of 65,000 is much too low.
Do you think that there needs to be an expansion of the Visa program? If so, what would your estimate for the number of visas that would be given out per year be?
Posted by Joshua Busser at 4/09/2007 10:51:00 PM
Over the past year President Bush has been working on ways to decrease the amount of illegal immigration to the United States from Mexico. During this past year two new fences have been erected along the Mexico border over the past year. There are around 12 million illegal Mexican immigrants in the U.S. These people are working for less money than Americans and are also working around 12 million jobs that Americans could be potentially working. This year alone the amount of illegal immigrants working in America is down 68% in the area that the fencing has been built.
Another idea that is being worked on is of "z" visa's. Z visa's are granted to immigrants so that they can work in the USA for up to three years at a time before the must renew their visa. Each time that they renew the visa it will cost them $3,500. If the percent of illegal immigrants could be decreased even more, what would that do to the American economy? What would this do to the prices that Americans pay for goods and what effect would it have on the number of unemployed workers in America? Also, is it economical for America to allow people from other countries to purchase a work visa for three years?
Posted by Kelly Heskett at 4/09/2007 10:45:00 PM
Over the past few months, unemployment rates have dropped, the economy is growing at a steady pace, and labor workers are earning more per hour. Depsite all of these positive incentives for the job force, the American economy could be in danger. Interest rates are higher than ever, and are not believed to be dropping anytime soon. This could be based on the fact that American's are spending at a rapid rate, but placing all the debt on credit cards, increasing the national debt. Let's not forget also, that with the increasing national deficit, most of the money being spent by American consumers is borrowed money.
With increased spending by American's boosting the economy, high inflation rates are posing a real threat to this situation. Economists say that at this constant rate of spending, inflation rates are bound to rise substantially. If inflation rates rise like predicted, the American dollar will be worth less and less in the long run. American's will begin to spend less and less on leisure activities, while inferior goods start to grab the attention of more and more consumers. Income will become less elastic, and in the end the economy will be looking at a recession or maybe even a severe depression.
Posted by Shawntae at 4/09/2007 08:34:00 PM
This article picked a sensitive and permanent topic about piracy in China. As the author mentioned, “the antipiracy complaints will mark the culmination of several years of work within the administration (the Bush administration) to build a case against China over alleged intellectual-property abuses, which hit U.S. exports ranging from auto parts to scientific journals.” Nowadays, piracy is a serious world-wide problem, and obviously, China must be the most stubborn part.
I think it is not the right time for America to accuse Chinese government. As a Chinese person, I saw the efforts from the government and the advancements it made during last several years. Compared with past, the Chinese market is getting better and canonical. Now, the urgent affair is finding out a more efficient way to restrict piracy together but not appealing to protection of own benefits first.
The key advantages of piracy are lower total cost (evasive taxes, low-grade technology). For this reason, the break-even prices of pirated goods are much lower than legal goods. People who take part in these illegal businesses can gain much more benefits by the difference between the market price and break-even price. Now, the whole world tries to solve this problem by stricter punishments to both producers and consumers of pirated goods. Although stricter punishments can shrink the supply of pirated goods, the move will push up the price of black market and make the businesses more profitable as well. By this notion, the efficient way to figure out this problem, in my opinion, should only be to decrease the demand of pirated goods. Owing to the unavoidable higher costs and concomitant higher prices, the government cannot totally eliminate the difference of costs between pirated goods and illegal goods. The advantage of the lower prices exists all the time. Unfortunately, it seems there is nothing that can stop people pursuing incentive but ethics. Do you have any good suggestions?
Posted by Tian Yang at 4/09/2007 04:29:00 PM
According to a press release from the Association of Independent Colleges and Universities of Ohio, the Ohio Student Choice Grant may be eliminated by Governor Strickland's budget proposal to certain students. The grant would then only become available to students who qualify for the Ohio College Oppurtunity Grant, which is an financial need-based grant. The press release indicates that if this proposal were to happen, 75% of all recipients who had family incomes between $50,000 and $60,000 would lose their current Choice Grant. If cut, would the $900 Ohio Choice Grant be enough to sway a student that is at the margin of either attending college or leaving based on price?
Posted by Danny Cawley at 4/09/2007 03:40:00 PM
The United States is filing two trade complaints against China at the World Trade Organization over piracy of American books, music, video, and movies and limited market access for American products in China. Piracy and counterfeiting is extremely high in China in which costs an estimated $ 200 to $250 billion a year for the U.S.
The United States needs to request consultants with China to settle the disputes. CnnMoney.com says that if the matter isn't resolved within 60 days, then the U.S. may refer the matter to a WTO dispute settlement panel. Already under pressure from Congress to reduce the nation's $232.5 billion trade deficit with China, the Bush administration may have to issue a tariff tax on some goods it says are subsidized from China.
Thus, the economic issue here is basic supply and demand. The demand, in China, for U.S. piracy is high creating a large black market. If the piracy fails to stop, then there will begin a tariff tax on incoming products resulting in an increase in prices.
My statement is that if the tax is issued on these products, depending on the total amount, companies in the U.S. may begin to be able to produce these same products cheaper than they can be imported from China. Thus, more jobs and a positive economic impact will occur if the piracy fails to stop and a tariff tax is issued on certain products from China. Will this be positive or negative or maybe just negative in the short run?
Posted by Eric Dowler at 4/09/2007 01:59:00 PM
The producers of Equal have recently accused the producers of Splenda that they are using false advertisement when they say that Splenda is "made from sugar" and is "all natural". A lawsuit was recently brought up by the producers of Equal, against the producers of Splenda, which is going to take place in front of a jury in a Federal District Court in Philadelphia.
The market for artificial sugar sweetener is incredibly competitive now-a-days. Before Splenda was introduced into the market in 1999, Equal dominated the market with over 6,000 consumer products like Diet Coke and Diet Pepsi, two of the largest buyers of sugar sweetener in the world. Now, Splenda is the number one artificial sugar sweetener dominating 62% of the market.
Splenda and Equal are both substitutes of one another. In other words, if the price of Splenda rises the demand for Equal will rise as well, and vise versa. Sugar sweeteners are also relatively inelastic. So, knowing this information, what do you think will be the effect on Equal if the producers of Splenda are sued due to false advertisement? How will this affect the market for artificial sugar sweeteners? Will many consumers switch over to Equal? Why or why not?
Posted by sidra at 4/09/2007 01:12:00 PM
China, as a developing country, is a nation that set exports and investments as the most manufactories.The United States, as a developed country, about one fifth of China's exports go to it and it is also the biggest foreign market for China. Because the U.S. economic slowdown and China rely on exports too much in the recent year, and because Chinese currenct has risen its exchange rate in the past years, many Chinese economist worried that Chinese economic would be effect a lot, just like Premier Wen Jiabao said in March,"Our economic growth relies heavily on investment and exports," Premier Wen Jiabao said last month, citing an example of how China's expansion has become what he called "unstable, unbalanced, uncoordinated and unsustainable." However, Milan Brahmbhatt still thought that Chinese exports would be continue growing becasue the competitiveness of Chinese exports is to high. Furthermore, I think the reason why China set exports as its one of the most important manufactory is because China is a developing country, the low labor price could lead to the low price exports, and this is also the reason Chinese can export to foreign countries so much. However, as a developing country, use its low labor price to make profit is just a interim and it would only be last in a limited period.
Sunday, April 08, 2007
Recently, All China Federation of Trade Union continued researching foreign companies' minimum wage for Chinese workers, such as McDonald's Corp. and Yum Brands Inc. Based on the survey, we found that these foreign companies minimums wage for Chinese workers were lower. For example, the minimum wage for student workers is 7.5 Yuan, or about 97 US cents an hour.
Why did these foreign companies give Chinese workers such a lower wage? On the one hand, Chinese cheap labor lead to a max profit for these foreign companies. Reducing workers' wage equals decreasing the variable cost. Then the total cost will decrease. Finally, the profit will increase, and by this way these companies can make max profit. As we know, many foreign companies like to invest in China just because of Chinese cheap labor; of course, Chinese cheap labor can let them get more profit.
On the other hand, this news makes me think of America wanting China to increase exchange rate. In my opinion, owing to Chinese cheap labor, products that are made in China are cheaper than other counties. As a result, consumers like to buy these products made in China, and then the same products which made in other countries would lose consumers. It leads to imbalance. Therefore, America and many foreign companies want China to increase its exchange rate so that products made in China would increase its price. Eventually, the prices of China's products are the same as others.
Posted by Yuman Peng at 4/08/2007 10:20:00 PM
According to the Associated Press, Venezuelans were forced to celebrate this year's Easter holiday without their favorite beverages. President Hugo Chavez banned consumers and suppliers from selling any acoholic beverages beginning on Good Friday and lasting through Sunday. Chavez claims he was banning alcholic purchases to reduce the high number of accidents that occur every Easter holiday due to alcohol. Venezuela is known throughout Latin America as one of the highest producers of alcohol and one of the biggest consumers of alcohol.
As many of you may have guessed, the ban on alcohol led to tons of people rushing to by enough alcohol on Thursday to last throughout the holiday weekend. Many of the suppliers could not keep up with the demand, and many of the consumers became very angry. When the consumers found out about the ban, the overall demand curve shifted to the right while the supply curve stayed the same. In the very short run, a definite shortage occured as many suppliers said they simply could not account for the high demand. Many Venezuelans argued that instead of limiting their consumption of alcohol, Chavez should have placed an emphasis of improving the law enforcement. Many Venezuelans are allowed to walk around the streets drunk and drive while drinking. What do you think should have been done to curb the deaths and injuries related to alcohol consumption? Do you think Chavez did the right thing by placing human safety over the rules of basic economics concerning supply and demand and maximizing social welfare?
Posted by Stephanie Gelo at 4/08/2007 09:59:00 PM
When a Chinese newspaper reported that fast food chains such as McDonald's and Kentucky Fried Chicken were underpaying their part-time workers by 40 percent or about $1 an hour below minimum wage, an investigation was launched. Currently, China does not permit workers to organize independently, instead, the workers are required to organize under the All-China Federation of Trade Unions, or ACFTU for short. Until recently, the ACFTU has resisted allowing labor organizing; however, the ACFTU is now lobbying for unions in China.
With an implementation of more unions in China, fast food chains will, as a result, increase their wage rate. Also, with unions becoming more common, the union wage differential will increase which will help the union workers obtain a more fair wage rate. But a problem then arises. If the employers cannot afford the pay increase the unions will demand, how will they offset the pay raise? Will less people be employed as a result?
Posted by Bethany Blackhurst at 4/08/2007 09:34:00 PM
With the majority of states issuing a new higher minimum wage, several people feared a decrease in employment. Firms would have to compensate for the increases in wages by cutting production costs. With production costs down these firms would have to cut back on hiring. Several jobs would be lost. It would also be very tough to find a job for all fields.
According to the New York Times’ article titled, “U.S. Job Numbers are Stronger Than Expected,” by Jeremy Peters employment outside the farming sector grew by 180,000 in March and that job growth from January and February has risen higher than planed. Economists predicted 130,000 jobs would open up in March. Along with the rise in jobs unemployment also fell from 4.5% to 4.4% in March reaching a five month low.. Jobs are now paying more too. The average hourly wage rose 4% in March and is continuing to rise.
What do you think is the reason for the increase in jobs and wages? Does the minimum wage really effect employment? Is the Fed responsible for the increase? Or are there other factors to be considered?
Posted by Rita Soworowski at 4/08/2007 09:12:00 PM
Although many people believe that raising the minimum wage rate to $7.25 will hurt job employment, a recent release of information from March contained something a little different. During the month of March, employers created a solid 180,000 jobs and drove down the unemployment to 4.4%, the lowest percentage in five years. A very surprising number knowing that our economy has been slightly sluggish. Not only did employers benefit, the paychecks of these 180,000 jobs also increased. The fresh figures suggested that companies are not feeling a need to dramatically clamp down on hiring in the face of the slower overall economic activity and the deep housing slump. The overall wage rate rose 0.3% at $17.22. So does this mean that a raise in the minimum wage is going to hurt us as much as maybe inflation? Or is there not going to be any harm done and jobs will increase, and unemployment will gradually decrease. I guess these questions will be answered in time, but I feel that the wage raise will not hurt the economy, but actually boost it!
Posted by Derek Thomas at 4/08/2007 08:37:00 PM
This article discusses how many factories are experiencing fewer new orders than what had been expected. The increase has been the slowest experienced by the service sector in about four years. Part of the problem may be contributed by the decline that has been ongoing within the housing industry. Orders for goods that can be expected to last more than three years fell 8.8% in January, but now that the results from February are in, orders have risen by 1.7%. Even though the economy is turning out to be growing slower than analysts have expected, the Federal Reserve is predicted to keep interest rates at their current levels. Do you think that the slowing number of new orders may cause companies to begin considering their short-term and long-term profits in order to decide if they need to leave their current market share in search of more work in other areas of the service sector?
Posted by Matt Dutko at 4/08/2007 08:21:00 PM
In the United States recently, there has been pets dying of food contamination. This is believed to be the result of tainted wheat gluten. If this is true, there is a possibility of the company facing a lengthy future in the legal system. While this occurs, the company's sales quantities will drop due to their shaky record. Since they will not be selling as much goods, their profits will decrease.
With these events occurring, the company will definitely have to make some hard economic decisions. There is a possibility that the company will not produce enough to cover their cost. If this occurs, they will have to decide weather t stay open or to close as well as to decide if these decisions should have long term or short term consequences. As long as the company is making enough total revenue to cover their variable costs, they should continue to stay open. Once they can no longer cover their variable costs they will be forced to close their operation.
Posted by Eric at 4/08/2007 07:48:00 PM
According to a survey by the National Association of Colleges & Employers, starting salaries for college graduates have risen over the past year. The survey conducted at 81 colleges, has shown an increase in wages for almost all majors. Marketing majors can expect the largest starting increase, in upwards of 10%. As in many previous years, all engineering disciplines have shown dramatic increases, this year averaging 5%. Not only can graduates expect increasing starting salaries but they may also find it less difficult to find a job as the survey suggests the number of expected hires has increased by 17.4%. Do you think that the increasing benefits for attending college will cause people located on the margin of whether or not they will attend college, to reconsider?
Posted by Matt Dutko at 4/08/2007 06:55:00 PM
Saturday, April 07, 2007
An estimated 31 million people in the nation today have some sort of hearing loss, but only 7.3 million take initiative to actually use hearing aids. To find the market penetration for hearing aids, one must calculate the number of hearing users divided by the number of people with hearing loss (7.3/31) – which is about 23.6%. Therefore, every four customers that need hearing aids, only one will actually buy them.
To find a way to expand the hearing aid market, it may seem logical to merely reduce prices. Initially, consumers might use price to simply determine the quality of the product; therefore, when quality is linked with higher prices, price can become an incentive to buy. On the other hand consumers might buy a greater amount of the product at lower prices and less at higher prices, with all others held equal. Therefore, is the demand curve for this market expected to be inelastic or elastic?
Posted by Kelsey Horwell at 4/07/2007 04:14:00 PM
A recent report has found that the accident that occurred in Texas, at a BP PLC refinery, happened because of poor plant conditions and poor safety records due to cost cutting and budgetary constraints. According to a report done by the U.S. Chemical Safety and Hazard Investigation Board, “BP executives failed to heed years of warnings about serious deficiencies at the company's Texas City refinery, including an internal assessment that budget constraints had jeopardized the plant's safety.” The CSB discovered that these budget cuts impaired safety practices at BP’s plant. They have also criticized BP for not providing an “adequate amount of resources to prevent major accidents.”
The accident was the result of an explosion at a gasoline-processing unit on March 23, 2005, killing 15 workers and injuring 180. "Managers received warnings about serious deficiencies regarding the mechanical integrity of aging equipment, process safety, and the negative safety impact of budget cuts and production pressures," the report found. BP has taken responsibility for the blast, agreeing that the plant was in poor condition and had poor safety and management practices.
After accidents such as the one that occurred at the BP PLC refinery plant, do workers in those industries think about asking for a higher wage because of the inherent danger in their field? If they don’t possess perfect information or underestimate their potential risks, they are probably underpaid. The marginal benefit curve for safety will increase after such an accident, causing wages to increase. When workers possess perfect information, such as the conditions of the plant or lackadaisical safety procedures, the wage they accept is socially optimal. If they don’t have this information then they should be paid more because that isn’t the socially optimal wage.
Posted by David Bright at 4/07/2007 03:17:00 PM
In a recent bill proposed to the house for funding in the Iraq war will also include the initiative to increase minimum wages in the U.S. The Speaker of the House, Nancy Pelosi, added to the bill to "to try to pick up liberal support and also put pressure on the Senate to end the logjam over the long promised wage increase."
In January the House overwhelmingly voted to increase the federal minimum wage to $7.25 over the next 2 years. According to the article, "the Senate followed suit but only after adding tax breaks to benefit small employers and the restaurant industry, most impacted by the increase." Since then the house has approved a smaller small tax package to those that will be most impacted. A decision on this still hasn't been made and is currently in a stand still between the House and Senate.
Is raising the minimum wage a good idea? We have recently covered the Competitive Model in Labor Economics. According to this model in a free market where there is no minimum wage, there is also no unemployment. However, when the government imposes a minimum wage, unemployment occurs causing deadweight loss. Employers offset the impact of an increase in minimum wage by reducing hours of work, reducing fringe benefits, raising prices, or even reducing the quality of products/services offered. Also in any uncovered sector, wages will be depressed. I think imposing a minimum wage is a good thing to an extent. I wonder if it is too high. It should be increased to a level where it won't discourage high school graduates from going to college. Technology is improved through an investment in human capital, and if a large number of potential college students are discouraged to attend college that is bad for society. However it is unfortunate that some industries aren't covered by the minimum wage and their employees suffer.
Posted by David Bright at 4/07/2007 02:57:00 PM
Friday, April 06, 2007
A recent poll in Britain found that a tenth of Britons would consider paying to offset the greenhouse gases they generate while flying on holiday. And at least 14 British companies--twice as many such firms as any other country has produced--are busily collecting money from conscientious travellers and other concerned individuals as well as firms. They promise to make the offending carbon dioxide disappear from thin air by, for instance, planting trees that will suck it in or cutting other people's emissions elsewhere. The Carbon Trust, funded by the British government, believes that the market for these offsets is growing by 60% a year in Britain.
Britain's environment department, DEFRA, says one problem is that offset providers use different methods of calculating emissions. This is because there are disagreements over exactly how they should be counted, given that an airplane's emissions per passenger will vary depending on factors ranging from how full it is to the weather.
But the result is that passengers who want to neutralise the impact of identical flights may be given widely differing estimates by different firms of the size of the offset required. Nor do firms use the same plan in calculating just how much carbon planting a tree soaks up. Futhermore, many of the methods used to create offsets are dubious. A study by Stefan Gossling, of Lund University in Sweden, found that three-quarters of firms selling voluntary offsets base them on forestry. Yet this way of sequestering carbon is controversial. Trees may wither and die before absorbing much CO2, and will in time decay, releasing it back into the atmosphere.
Efforts are now being made to clean up this murky market. Industry groups are drawing up voluntary standards, some stricter than others. But a profusion of benchmarks may just confuse consumers. DEFRA reckons a single standard could create offsets and provide transparent pricing. I want to know what you think of this new industry. Would you pay for the pollution you put into the air? Do you think that other countries will follow this same example?
Posted by Kacey Righter at 4/06/2007 09:33:00 PM
Wednesday, April 04, 2007
Crude oil prices dropped after Iran said it was releasing 15 British sailors they had been holding captive. Many felt relieved that there was no block on oil exports. The price drop was small holding crude at $64 a barrel as gasoline prices surge more than 4 percent. U.S. government said that nation's gasoline inventories declined for the eighth straight week and that demand is still strong."There's a lot of inherent strength in the market," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA. Gasoline is now $2.1054 a gallon, which has risen than 30 percent since the beginning of the year. "We'll probably maintain pump prices at the recent highs," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill. Accroding the AAA, U.S. prices have surged an average of $2.70 a gallon up from $2.48 a month ago. Over the last four weeks, gasoline demand has averaged nearly 9.3 million barrels per day, the EIA said, which is 1.7 percent above the same period last year. The U.S. Energy Department said it is passing on an initial bid it received to buy as many as 4 million barrels for the U.S. Strategic Petroleum Reserve. The department said the bid was too high, and that it would solicit more bids later this month.
Posted by Melissa at 4/04/2007 06:34:00 PM
Bangladesh has a huge population of over 140 million people, which is still continuing to grow despite the efforts of population control. Nearly one third of the population, at present, are below the age of fifteen. These young ones are about to enter the job maket which means that about 50 million will be looking for employment. There has been some new employment creation in the country: the present average rage of annual economic growth is about 6 per cent which may not be enough to creat jobs on the needed scale causing unemployment or a surplus of workers.
The government's Youth Development Directorate trained only about 2.7 million of the youth for different vocations during the last twenty five years. This is a rather poor performance against the need. Government needs to expand their funds over to training to train more youth to help with economic growth devjelopment of the country. Many unskilled or untrained workers are paid less and do not succeed well in foreign job markets which means that the government should create facilities for workers to acquire skill training in diverse areas.
What do you think government should do?
Posted by Melissa at 4/04/2007 06:18:00 PM
Tuesday, April 03, 2007
Sand Ridge in Mauston, about 80 miles northwest of Madison, is where a group of sex offenders who have mental disease work. They work as a means of treatment of their mental disease. They are neither inmate nor prisoner. The reason they are here working for no one is that they’ve been convicted of sexual assault. They have been working for $2 per hour for a long time and now, they are claiming their rights to get paid by minimum wage, which is $6.5 per hour in Wisconsin. They claimed that they are being discriminated against because the mental disease (sexual violent person). Since they are neither inmate nor prisoner, they think they should have the equal right to work, to get paid. The director of the program explained, the reason that they do not get paid by the minimum wage is “that patients receive food, housing, and medicine” (Program Director, Steve, Watters). For me, I think they should get paid at least by the minimum wage. There shouldn’t be any discrimination in working; no matter what kind of people is the labor force. Having mental disease has nothing to do with how many their labors worth. As a matter of fact, there are people working below the minimum wage in black marker. Most of them have to work below minimum wage sometimes because they are illegal worker and sometimes because the pressure of job hunting. Put aside the theories of tax law and staff, I think we should give respects to work, no matter who is providing the work.
Posted by SHANE B at 4/03/2007 09:47:00 PM