More corn to be grown this year then in the past 100 years.

On Friday, the US Department of Agriculture said that US farmers plan to increase their corn-growing by the greatest amount seen in the last 100 years! Why? Currently a high increase in demand for ethanol exists, which can be produced from corn. Effected sectors of the increase corn production include soybean and cotton. For all the corn-lovers out there, this could be great for your wallet. The greater the availability of corn, we know from econ that the cheaper the prices should be. This comes at a cost though.

If soybeans and cotton are affected, this naturally would mean increased prices to buy these goods. Should we expect to pay more for soybeans (I don’t, I don’t consume soybeans, but some other people must…) and pay more cotton, something that the majority of Americans do use? If so, will we see a large jump in prices for cotton?

Car guide ranks models by chemical makeup

How do you evaluate a car when you want to buy one? Frankly speaking, price must be one but not the only one chief aspect. Additionally, the quality of the car, how comfortable it is, and even whether it is safe enough are some other common concerns. Recently, Ecology Center “rated more than 200 models based on interior parts — from steering wheels to armrests — whose chemical components could break down over time.”

They announced that because people are actually spending about 1.5 hours in their cars per day, it is a very important issue that how will the chemical toxics in the car affect the drivers’ health. Ecology Center’s did experiments on 2006 and 2007 vehicle models. "The findings demonstrated that the air in the cabin of these cars was contaminated by high concentrations of a large variety of organic compound diffusing from the interior materials," the researchers said in the study, published in the journal Indoor and Built Environment.

However, American Chemistry Council disagreed with this result. "Scientists know that the mere presence of a chemical doesn't automatically make it a public health issue," Marian Stanley, who headed a council panel reviewing the report, said in a statement at the time.

It is still unclear whether those chemicals are truly harmful to human beings so far. But what I wonder is that when buyers know such fact, would they change their ideas and how much would this result affect their decision?

Sleep Boomers Fluff up mattress sales

A question that this article askes is "Can you put a price on a good night's rest?" I want to ask you this same question. How much would you pay for a guarenteed good night sleep. Would you pay 50,000 dollars? Some would a Swedish made bed called Vividus is being retailed in the US for 49,500. It has been stated that since the year 2000 the market value for a mattress has increased by 40 percent. It is the producers who are behind this growing trend, other manufactures are making cheaper models of but are they really that much cheaper. When an average queen size bed is now priced at 700 dollars and people will stay pay more for that good night's sleep.

Americans Keeping Whats Theirs

The IRS has put out information of the continuing tax problem in America. America has a "tax gap", or difference in the amount of revenue that should be gained and that which is actually gained. This gap in 2007 is approximately 300billion dollars, the article asks the reader to think about what could be achieved from this extra money that the government should be receiving. It could go to pay for Katrina damages, the war, or many other federally funded programs. The question arises why do we have this "tax gap"?

The main reason for the gap is that Americans want to keep their money. On average the majority of the gap is a result of the individual American under reporting on the taxes. So is this a black market for taxes? I would say yes because people are benefiting from illegal activity. Is this a moral issue or an economic one? The article argues toward moral, but I think it is an economic issue. People are reacting economically to a government regualtion, and creating the best benefits for themselves by under reporting on their tax forms.

Unemployment Rate Drops

According to an article in the finance section of Yahoo!'s homepage, the unemployment rate dropped to 4.5% even though the wage rate is still on the rise. The biggest loss of jobs came from the construction and factory industries. This most recent drop in jobs in the construction industry came during the cold winter months, and has been reportedly the biggest job loss since 1991. The highest job increases came in the health care providing and financial firm industries.

Despite the job losses, the wage rates have continued to rise through the winter months. This high wage rate contributes to the United States' economic health as it helps increase consumer spending. Economists expect the unemployment rate to slowly creep back up as the economy's growth slows.

The King of Coffe---Howard Schultz

Howard Schultz started his own business in 1986. Actually, the first store that Schultz opened was “Il Giornale”, Il Giornale was located in skyscraper in Seattle; it was a café which was totally following Italian-style, there were only served coffee made by traditional ways, such as espresso and whole bean. At the beginning the profit of Il Giornale was not bad; however, in order to meet the market supplies, Schultz thought it was necessary served the American-style also, such as vanilla or hazelnut flavored coffee. In 1987, the founders of Starbucks wanted to sell the company, and Schultz thought it was an opportunity for him. He would like to hold two companies in the same time to expand his concept. After discussion, Schultz and his colleagues decided to buy the company and rename the new organization---Starbucks Corporation.
After taking control of Starbucks, Schultz noticed that there were few consumers knew about espresso or whole bean coffee very well, and there were few Italian–style café in the United States also; therefore, let more consumers know what is espresso or whole bean coffee become very important, because Starbucks need more supplies to push running. In order to let Starbucks has a well-known fame and better profit, Schultz and his colleagues started to pursue an aggressive expansion plan. In 1988, there were 15 stores opened; in1989, the first Starbucks in Portland was opened, and the total number of stores was 50. In the year 1990, which was also the first year of profitability, the total stores were increased to 78, Schultz wanted to control more market in café area very much; however, he preached to himself not to be overconfidence. In 1991, there were 112 stores, and people could find Starbucks in the most of mega polis in the United States. In 1993, the first store which was not located in the U.S. was opened in Tokyo, Japan. Up to now, Starbucks is spreading with an amazing speed in the entire world. There are 5 stores are opened every day in the world, people even can see one store from another. The total profit in 2005 was $6.369 billion, compared with the first year’s $4.5 million in 1990, the profit increased almost 1415 times in the past 15 years.

Windows Vista or XP?

Microsoft launched a new operating system-- Microsoft Vista-- in 2007. Since the sales of PC is increased constantly, Microsoft expected that it is "embarking on a significant multiyear cycle that should drive accelerating revenues and even better earnings growth". What I am concerned is that which operating system consumer would choose, Vista of XP? Windows XP system has been a main and popular operating system since 2000. Windows Vista, as a substitute of XP, would absolutely decrease the sales of XP. Besides, it will push some consumer to update their operating system, which means to charge another $199. Also, Microsoft Vista brings along a large number of other related software used in XP system to be updating. Even though some of updates are free. Others might charge a lot. It's estimated that if a consumer spend one dollar on Vista system, he might spend 16 dollars on other related industry, including software and hardware. Moreover, for some of company and personal PC user, windows XP is enough for their daily use. Whether the consumer will choose Vista or still want to use XP is not clear. Therefore, whether Microsoft can "drive accelerating revenues" is still questionable.

Nintendo to focus on "Happy Games"?

When you ask most of the gaming world what one key aspect of Nintendo's video game console, the Gamecube was, odds are the majority of the people will respond with something to the effect of "to many kids games", and while it is true that the Nintendo Gamecube hosted a slew of games aimed for the younger audiences, that was not Nintendo's goal. Nintendo hotshot Shigeru Miyamoto, who has worked for Nintendo for over twenty years and has had a hand in creating every single Nintendo console, has stated recently that to get the full impact of video games, one must leave the game with a feeling of happiness and joy, and that gamers should shy away from games that contain horror and violence. Miyamoto, who had a hand in creating epic Nintendo series such as "Donkey Kong" and "The Legend Of Zelda, which combined have sold over 288 million copies, is sure to have politicians and psychologists support, as they have been trying to reduce the number of violent games for the past decade. This may seem like a good idea to some, but to others, it could lead to a decrease in sales. Part of the reason the Gamecube sold so poorly is that it hosted numerous games aimed at children twelve and under, and to a recreational/hardcore gamer, the Gamecube was not a good choice for them. If Nintendo is to take the same step that it did with the Gamecube with their newest console: the Wii, could it mean a decline in sales? As the years progress, more and more gamers have turned to games with a violent and realistic tint, such games as "Resident Evil", and "Grand Theft Auto", games which certainly are not on the friendly side, and have strayed from the innocent games like "Mario", or "Sonic the Hedgehog". With an ever growing populous demanding realistic-violent games, would it be a smart move for Nintendo to produce games that stray away from this violence?

Soccer, is there really a wealthy side????

Going off of the David Beckham article by Matt Sleyzak. I think that soccer will have higher salary caps now that the fact that oversea players are coming. According to socceramerica.com 7 players are getting higher salaries including Freddie Adu who only got $500,000 last year. This is what is should be like if football, baseball, and basketball players can all get over millions and millions of dollars. Also Beckham is not getting 250,000,000 in one year. He is getting it over 5 years which is still a lot of money but think about it no one person is a good as him and no one cant compete with his skills in the USA. So you see soccer is getting what it finally deserves which is a higher budget because it has always been rundown by other sports. So all in all soccer is going to produce more money and is going to produce more spectators in general!!!

Take My Emissions, Please

This article speaks on the move our society is making towards taking care of our environment, slowing global warming, and companies that allow us to offset our carbon emissions. I considered myself a bit of an environmentalist until I read this article and realized there is so much more I can do. We as economists should really invest in our future by buying such things as "green tags" and "Eco-options." I know that a popular excuse these days in not going towards environmentally friendly products is the price, but in the long run we're saving ourselves money and other costs down the road. I would rather buy an energy-saving light bulb now for $10 a bulb (that mind you, lasts around 7 years) than suffer from lung ailments in the future when we have polluted our environment so much. This article reminded me that we must keep looking for ways to fix what damage we've already done. Wind Turbines [in New Zealand] like the ones pictured at the beginning of this article can also be found in Cleveland. Why aren't we using wind and water power more to offset the burning of coal [a non-renewable resource]? This is the first that I've heard of options like the "green tags." I hope that these tactics become more popular among commuters, air-travelers, etc.

Jobs are decreasing in 2007

The amount of jobs is decreasing this year compared to last year. The amount of jobs is even worse than it was in the year 2001. Last year there was an average of 187,000 new jobs each month. This year there is an average of 100,000 jobs each month. Right now the economy is running at a very slow pace. "Low inventory levels suggest the shelves and showrooms and warehouses are going to have to be replenished. They'll have to pick up the pace of hiring and refill those depleted inventories."
What will happen to the economy if it keeps going down? What will happen to economy if the there are less jobs in America?

Burst vs. Apple

The article above discusses how the company Burst is having their patents infringed upon by Apple Computers with products such as iPods, iTunes, and Quicktime. This is leaving Burst to file a lawsuit on Apple Computers. If the lawsuit does in fact go into Bursts favor, then we may see a hefty increase in the price of Apple products. A reason for this will be because Apple would have to pay royalties to Burst for using their innovative technology that is licensed to them. As the prices increase for Apple products, there may be a lesser demand as individuals may not want to pay such a high cost. Another reason for the rise in costs for Apple products, not only because they have to pay royalties to Burst, but because they are also trying to make a profit themselves.

La-Z-Boy to slash 500 jobs

This article states that La-Z-Boy is going to have to close two of its production plants and lay off 500 of its workers stateing that it was due to a drop in sales and tough industrywide environement. It also states that consumers have had stopped spending on "bigger ticket" items. This has made me wonder what could have cause such a drop in a univeral drop in consumer spending and if this is only the first round in a series of layoffs that La-Z-Boy is going to be forced to make, should the economy continue to sink.

Forbes: Billionaires are richer; Russia, India on rise

Steve Forbes says, "this is the richest year ever in human history." Forbes magazine's 2007 billionaires list possessed younger, richer, and more Russians and Indians than ever before. The richest man for the 13th consecutive year was obviously Bill Gates. The United States is still the number 1 richest country, followed by Germany, then surprisingly, Russia was the 3rd ranked. The total worth of the Russians surpassed the Germans and the average age of the Russian billionaires was 46. In Asia, India had more billionaires than Japan, knocking Japan out of its 2 decade regional top spot. 178 billionaires and 53 nations made the list. Of those 178 billionaires, 83 were women.

China's economy to grow 8% annually from 2006 to 2010

China is over-acheiving it's goal of quadrupling it's gross domestic product by 2020. China's economy has been on an upward trend and seems to be staying that way. This can be seen in strong market forces as well as in the importance of it's own companies.
China, perhaps, has greaer growth portential than any economy the world's seen so far. This could be true because of the factors that play into this growing economy. There is a high investment rate and "rapid" productivity growth throughout China. It is believed that this country can stay at an 8 percent growth for the next five to ten years.
The rising economy benefits from the growth of fixed asset investment, high savings rates, and immense amounts of foreign direct investment. China's economy has also benefitted from recent political and social stability, improved labor productivity, and technological advances.
For the past two decades China's flourished in an over 9 percent annual rate of growth. This happens because of increased urbanization. Another large part of China's rising economy is due to their move on the consumption structure. Instead of smaller items like televisions and microwaves, China's moved on to houses and cars. China will hold up this economic growth thanks to local governments support and industrialization.
This once pre-industrial country is earning a few bragging rights. China is home to the world's second-largest fareign exchange reserve. With this China has become an ideal place to invest. It's industrial structure alone has made impressive impovements. It's manufacturing industrial has been growing at 10.3 percent a year. This is mostly thanks to technological improvements.
The people of China are reaping the benefits as well. Incomes have risen exponentially. These increased incomes lead to more money for healthcare, transportation, entertainment, etc. People have money to spend outside of just food and clothing. This in turn feeds back into the industrial revolution and the growing economy continues to rise.
It's not easy for China to have come to this however. The increased industrialization will lead to the consumption of an unusually large amount of resources. Furture growth will face poor growth quality and factors that can't be predicted yet. It's growing, but the quality of the growth is in question. The geography of China presents it's own challenges for the industry as well.
The future is looking good for China's economy. The industry has flourished, is improving, and will continue to grow.

Vonage Loses Verizon Patent Case

This article in the Wall Street Journal talks about Vonage and how much it is losing its place in the internet calling industry. Vonage was sued by Verizon for breaking Verizon's patent laws. Vonage was found guilty and ordered to pay $58 million. The courts are deciding if they are going to put laws on Vonage to keep them from continuing these infringement laws. This article makes me wonder if patents result in monopolies. Verizon is in the midst of also suing other smaller companies for certain features that they have patents for. When should patents be issued? What should they be issued for? These questions are being examined a lot lately because smaller companies or, in this example, large companies, don't stand a chance.

Global Market Of Chips Demanded 9.2% In January

After Vista has been around for a while, In January, the Global Market Of Chips Demanded 9.2%. It's about $3.6 billion which is a really big deal. " From $19.66 billion a year earlier. On a regional basis, chip sales in the Americas fell 0.1% to $3.71 billion. The rest of the world saw increases, led by a 15% jump in the Asia-Pacific region to $10.49 billion. Sales in Japan climbed 3.8% to $3.79 billion, and European sales rose 9.4% to $3.48 billion .Global chip sales totaled $21.47 billion."
Obiously, Microsoft Corp.'s Vista operating system require higher configuration and current compulter can't meet the challenge, in general. Chips is one of the complements for Vista and form the chip market we can see how big influence does Bill Gates and his windows has.

A Winner for Coca-Cola

Coca-Cola has developed a new hit soft drink in China. While most developed parts of the world are counting calories and drinking Diet Coke, those in developing parts of the world stick to the original drink. People in China's poor sections prefer drinking clear Sprite so they can see that there are no impurities in the drink, unlike their sediment filled drinking water. Coke developed "fruit pulp orange," a mixture of water, orange juice, and vitamins, which is cheap and is quickly becoming the most popular beverage. The success has upped Coke's volume of sales, and it plans to launch the new beverage in Thailand and India.

Coca-Cola developed the new beverage in response to the preferences of its consumers. The people of China wanted a beverage that was clear and cheaper than regular Coke. The orange drink could be considered an inferior good when compared with Coke; the demand for cheaper products increases as income decreases. The orange drink also serves as a substitute for pure orange juice which is often too expensive for the people of inner China. With the price of orange juice too high, the demand for the orange drink as a substitute increases. Coca-Cola has realized its success and will be increasing supply because they expect the orange drink to have as much success in Thailand and India as it has had in China.

Less Jail Time for Organ Donors

The State of South Carolina is mulling over a possible legislation that would allow inmates to donate organs and bone marrow in exchange for time off of their jail sentence. There is a large need for organs and marrow in South Carolina, and an incentive for becoming a donor is up to 180 days off of an inmate's sentence. This legislation is still being debated, considering that it is illegal to 'sell' organs. I am not sure if I would want my loved ones to receive organs from those that are serving jail time for drug use, alcohol use, or DUI's. Granted, there is still a large portion of inmates in jail for other reasons, but this would make me wonder if a person is receiving organs that are not as healthy as they could be. That may sound naive, considering the shortage of organ donors and organs in the United States, but the same goes for someone who needs a lung transplant and taking the lungs from a smoker. Also, do we really want convicted felons out on the streets 6 months before their sentence is up? On the other hand, there are hundreds of thousands of inmates in the U.S., and the amount of organ donors would surely rise if this law were to pass. There are many benefits and costs to this situation, and I am not sure that the risk of infected disease or convicted felons on the loose is increase in organ donors.

Sony hopes to add to demand of PS3

In hopes to add to the expirience that the Playstation 3 provides Sony is now coming out with new online experiences like player records and virtual rewards for the best players. Although the price of the system and lack of games have taken away from the demand for this new toy, Sony executives hope to use this to boost its ego. After the shortage which was put in place in the beginning causing for the systems to sell at high prices now the demand seems to be falling as supply goes up. Two main reasons could be the cause that the Playstation 3 is losing interest to the public and it is the steep prices and the range of games that is being provided at the current time. One thing that is certain is the fact that in the future as the price goes down and more games enter the market the demand for the system is bound to go sky high if the timing is right.

Toyoto Taking Over Market

Toyota is taking over the US automobile market by making better quality cars for less expensive prices. The Cars are also more reasonable and more energy efficient. For example look at the GM Hummer which is getting ripped apart by critics then compare it to the Toyota prius which is, if not the best one of the best hybrid vehicles on the market. Toyota is also making a huge push for factories and facilities for manufacturing to be in the US. Originally a foreign manufacturer, Toyota is giving US Based companies such as Ford, Daimler Chrysler, and GM a run for there money as US manufacturers. By Toyota building their newest plant in Mississippi they are now making lives easier for the consumer. Will this cause the price of Toyota's to decrease? What would the new low price of a solid car do to the demand curve? Will people begin to buy the more cost and energy efficient vehicles? What will that do to other U.S. manufacturers? What will that do to the automotive economy? You can already see the growth of this car and the Toyota industry by looking at there presence in February’s Daytona 500. NASCAR has been running Chevy and Fords cars forever and just this season Toyota has a race car on the circuit that didn't do half bad at Daytona for the first time ever racing. Look out Ford and GM, Toyota gets the award for best new artist.

Partnership to Produce Ethanol

The United States declared that they will be joining with Brazil to form a global ethanol market. Expanding the world ethanol markets would help the USA and other nations reduce their dependence on foreign oil. The USA and Brazil produce more than 70% of the world's ethanol; the U.S. supply comes mainly from corn, while Brazil taps its abundant sugar cane crop. Undersecretary of State, Nicholas Burns, said that one of the motivations is Bush's goal of reducing U.S. gas consumption by 20% over the next decade. Bush has touted ethanol as a way to wean the USA off ,what he refers to as, its "addiction" to oil. Do you think this partnership would be beneficial to both countries and would succeed in decreasing America's dependence on foreign oil?

Government to improve crash test program

The US government has decided to re-assess the New Car Assessment Program which began in 1979. Meeting were held with suppliers, automakers, and safety regulators. If the decision of putting in place new test programs is approved by the government then this will impact all suppliers, automakers and even consumers.
One effect that will be noticed is electronic stability control, which the government has proposed requiring on all new vehicles beginning in 2012. This decision will be very welcomed by the saftey advocates but what will it do to the price of new vehicles. If all standards must be met then it may affect the cost for suppliers and automakers to produce new vehicles.
This is when the question arises do Americans demand better quality cars or cheaper cars. In the long run it would be beneficial to demand the better quality car at a more expensive price but that is not how all consumers think.
In the article it states “We do know the program works and it’s clear that safety sells,” said NHTSA administrator Nicole Nason.

In the future demand for vehicles will be for the car with the best safety quality since standards are going up. What will this do for Americans that do not necessarily care for safety but rather the look and reputation of a car.

Mountain Pine Beetle Messes With Supply

The mountain pine beetle has severley impacted the lumber business in British Columbia. These mountain pine beetles are attracted to pine trees and have spread across the forest. According to the article, "the little critter has now infested an estimated 7 million hectares of timberlands (roughly the size of West Virginia) and may kill off 80 percent of the province's pine forests by 2013". Although this has killed off the trees the economist quoted on the page seems to think that this will increase supply. But, you might say that it doesn't make since that the supply would go up when these beetles are damaging the trees. Well, the wood can still be used for some things and since the British Columbia Ministry of Forests has authorized an increase in the amount of annual trees to cut, landowners are cutting the affected trees down in order to avoid a forest fire that would kill of the healthy pine trees still remaining. This will have a really sharp increase in supply of the pine trees which they will try to get the most money out of them that they can. But, as for the future, once the affected pine trees go bad, there will be a shortage in the supply of pine trees in British Columubia.

ID cards

Since 9/11, the government has decided to make the country more "secure" and harder to forge ID cards to get into places such as airports and obtain a license. Their solution is a RealID card, which will make a chip be inserted into our license cards containing digital versions of our birth certificate, social security card, visas, passports, and other similar documents. It may also go as far as containing fingerprints and iris scans. These cards will be scanned to get into important places, and it will be hard for a terrorist to come up with one that is legitimate. On the other hand, every time someone needs to scan the card, they will be shown this information about you. The government is doing a "test run" beginning soon in federal buildings called a PIV or Personal Identity Verification cards. This whole ordeal is going to turn into a huge invasion of privacy, and it will be incredibly costly to make all of the equipment. Is it worth it to have our privacy invaded to prevent another terrorist attack?

Caffeine Labels

Will Caffeine Labels on soda increase the sale of Coco-Cola Classic (the lowest caffeine content listed in the article) or increase the sale of coffee, Full Throttle, and Tab Energy (the highest caffeine contents listed in the article)? Yes, caffeine effects people differently depending on their age, weight, metabolism, etc., but I think we should know by now whether it is actually good or bad for us. I consider it bad for me. I actually more consider soda bad for me because it makes me feel sick and sluggish. Others, such as my boyfriend, can't eat a meal without a Mountain Dew or can't wake up in the morning without a caffeinated drink. I guess the labels will change sales depending on the customers. Are there more people that consider caffeine good or bad?

Miles To Go

In this article, Texans are upset at the possibility of many of the highways in the state being tolled. Experts believe that by 2030, Texas' population will increase 40%. Since the demand to live there will grow, Texas needs to tax more to allow the state to stay at an equilibrium financially. The best way to tax for them is by taxing roads. They will bring in money for every person that drives on the road and will therefor make money that will eventually be redistributed into the economy. While citizens might not be happy with it, it's probably a good long term idea.

Is Overtime Really Worth it?

We all would agree that getting paid time-and-a-half is worth the extra hours we have to work. But aren't there also costs to working extra hours? In this article, the author mentions how her husband works overtime every Saturday in order to provide a higher net income for the family. After all the calculations of taxes, he is only making an extra $185 a week, rather than the $500 he thought he was making. Does this take into account the time lost with family and friends? Is he missing out on memories that the rest of the family will remember for ever? Is his health going to suffer from the extra strain and stress on his body? An extra $185 seems like a lot to us, but missing out on our children's childhood or major health problems does not account for the extra money. I would rather have weekends to myself and my family than working in an office. Sure, it is okay to work overtime every once in awhile, but when it becomes a weekly priority, it puts a damper on family and home life. Overtime is all about opportunity costs; what are you willing to give up for a little extra cash in your pocket?

Tide products worth price?

In the article, several different detergents were used to wash swatches with tough to get out stains. The ones with visible stains left were the not so good detergents and the swatches without visible stains left were obviously the good detergents.
Best performers were three Tide products: Tide with Bleach, Tide Coldwater, and Tide HE for frontloaders. Yet there are detergents that cost half the price with similar results. Wouldn't that put pressure on Tide to lower their prices? Are you really saving money if you are using the Tide versus the other detergents?

Gasoline Prices on the Rise

In California and Hawaii, gasoline prices have risen to over three dollars a gallon. I have noticed that local gas prices have also been on the rise, but Ohio's gas tax is not as high as California's and Hawaii's and therefore their prices are always higher. Our prices are currently hovering around the 2.55 dollar mark. These high gas prices are a result of the market equilibrium prices. Many people blame the oil companies for the high prices. This may or may not be an accurate statement, but the problem is that there is little that can be done about it. If the government were to try to manage the prices of gasoline with a price ceiling or increased excise tax, it would create a market inefficiency and therefore would would create a large amount of dead weight loss. With this being said, one question comes to mind: What can be done to keep gas prices manageable without creating large market inefficiencies?

National Debt Clock

I found this interesting site that explains the national debt and how it has been growing. It is almost up to 9 trillion dollars. That seems like a ton of money. I wonder what the continued rise in the national debt will result in. What will be the consequences if this trend continues? I can't answer these questions but the number and the rising trend concerns me. I can't imagine how continually increasing the national debt could be good.

Retailers Report Weak Results As Cold Weather Chills Sales

As the author mentioned, “Retailers reported weak, weather-beaten results for February, although some chains said they expect warmer temperatures will soon lift demand for spring clothing.” There is a downturn for American spring business market owing to the weather problem. However, I think it is just the beginning.

Of course, at this stage, every retailer is worried about the situation of surplus. The weather problem resulted in a decrease in quantity demanded at each price; namely, the demand curve shifted left. As a result, both the market price and equilibrium quantity of spring goods went down as the movement of the equilibrium point. Retailers lost benefits by this move.

However, what if the weather is getting warmer soon? All retailers will fetch out all their cumulate goods to retrieve their benefits, and then the quantity supplied will rise more than the quantity demanded. Besides, owing to a similar level of willingness to purchase (after the increase in quantity demanded when the weather gets better), the demand curve will maintain close to the situation last year. At last, retailers will also get a market price lower than the price in the same term last year, and they will gain less per unit in this situation too. Hence, although the market will gain more in total, retailers have to prepare a new round of competitions to sell more goods to keep their expected profits.

All in all, I think there will be another potential problem behind this wintry weather. A big challenge faced by retailers is how to attract more customers to gain from less benefit transactions in the future.

Beckham will be Profitable

Even though David Beckham is getting paid 250 millions dollars he will still bring much more than that to America. The highest paid player right now in the MLS (Major League Soccer) is Freddie Adu who is 17 and he is getting half a million dollars. David Beckham is coming to America and he is going to make soccer well known in America. By Beckham coming other international superstars will follow in the next years. So you see we will gain spectators and host more tournaments which will bring high profits for soccer clubs in America. So not only does Beckham cost a lot but he will bring a lot more into America otherwise we wouldnt have signed him for 250 million dollars!

Paper or Plastic?

According to the article "The Nickel-Bag Offense," by Brian Braiker of Newsweek, when asked the question, "Paper or plastic?" some consumers in the United States might have a second thought about which they choose. IKEA, a Swedish assemble-it-yourself furniture chain, is launching a new idea, Beginning March 15th, all of its U.S. stores will begin to charge five cents for the once free plastic bag. The aspiration is to decrease litter in the United States. Braiker continues in his article to make the comment that "what was once free to the customer did not necessarily come without a greater cost." This comment is a strong example of TANSTAAFL, "There ain't no such thing as a free lunch." Braiker is stating that even though the bags appeared free to the consumers, there was still a cost - the littering from the bags that were thrown out and the pollution from producing the plastic bags. America, according the article, throws away nearly one billion plastic bags a year with less that one percent being recycled. On the other end, these bags are made from either petroleum, coal or natural gas. Braiker strongly points out that it is a waste of "valuable raw material," especially since so many are thrown out. The production also causes lethal gases to be distributed into our atmosphere. So IKEA's plan is to charge consumers for choosing plastic in hope that they will start and trend. A trend that will spread all over the nation and decrease the plastic bag usage by nearly half. But I wonder if this is really wise. Sure, it will help reduce some pollution and littering, but there will still be other markets that produce prodcuts that cause both of those things. How much will getting rid of plastic bags actually help? Is the opportunity cost of losing a market, where people are employed and consumers are served, less than the opportunity cost of pollution and littering?

Uncle Sam Stealing Cows?

Right now there is a large disparity in how much money the government is owed, and how much it actually collects. In this country we seemd to have a lot of people who think that they don't need to pay the taxes that they owe. This is the place that the Democrats are hoping to start in their plans to increase the amount of money coming into the government from the people. Now, going after tax cheats doesn't sound like a bad idea at all, I mean, who could argue with the government getting the people who are avoiding taxes? The problem in all of this is that the people who are currently avoiding those taxes aren't people just trying to scam the government by not reporting or by hiding things. It is the middle class people like plumbers and small family owned businesses who don't report a tip here or there. These are the people who are going to be burdened with codes and paperwork and who will be giving up more of their income in order to help a government who has been all too loose with their spending. The money will be coming from places which we may all consider too close to home. So it would seem that instead of going after big corporations who, albeit legally, find every tax break available and abuse them in order to save a buck. we are going to go after people who are barely struggling to hold on as it is. So consider yourself warned, it would seem the government is going to squeeze another penny out of the hard-working middle class, and again leave the big-wigs alone.

Small Towns Mean Small Costs

This article suggests moving from a more populated more expensive area into a small town where the cost of living is much less. So would moving to West Virginia be the best thing for everyone to do, since the cost of living is much less there than most other places in the United States. I say no, sure it is good for some people to move from the big city into a small town, because they are starting a family and need the extra space or are changing jobs and won't have as much income. If everyone follows this trend though the cost of living in these areas will eventually go up and everyone will be stuck in the same situation and this moving in and out of low cost of living areas will become cyclical. A few factors deterring people from this are you are farther away from shopping malls, major cities, and entertainment options. Do these three factors effect everyone the same or will they eventually become disgarded because benefits from a lower gas price and cost of living outweigh the entertainment benefits?

Should College Be Considered a Monopoly?

As I'm sure we all know college can cost a lot of money; however, it most likely costs a different amount for each of us. Why is it that a college is able to make one person pay a higher price than another person? Because one person is good at a sport, or gets good grades, or wouldn't have enough money to come if it weren't for the grants/scholarships he/she receives from the college? Could a college be considered a monopoly because it charges customers different prices for the same service?

http://www.consumeraffairs.com/news04/2007/02/college_costs.html

Sugar Cane: Worth the Energy?

With Brazil turning itself into the planet's renewable energy leader, it comes with it a slew of problems. Sugar cane provides Brazil with ethanol, which 8 out of every 10 Brazilian cars run on. The fields where sugar cane grows stretches for hundreds of miles, and that's where the problem begins. Ethanol is growing faster as a renewable energy resource and Brazil is taking advantage of the benefits. Environmentalists fear that with the growing usage of sugar cane ethanol that the fields in which they grow will expand into the Amazon rain forest. Achim Steiner, head of the U.N. Environment Program worries that the protection of the rain forest is "a question of whether the Amazon is sufficiently protected and whether the expansion of the ethanol production happens in the context of government policies that try and direct that growth potential in a sustainable base." While the development of sustainable resources is great for the environment and the economy, there will always be debate on which resource of promote. Sugar cane is helping the world in the growing energy crisis while protecting the rain forest could provide us with much greater benefits in the future.

States Undercharge Polluters

A report was released today saying that many states across the United States have been undercharging major polluters and has shortchanged efforts to fight air pollution up to $50 million dollars. According to the report, it was found that states have either been charging emission fees lower than the mandated federal minimum or set a limit on how much businesses could pay in such fees. Environmental Integrity Project's Eric Schaeffer stated "Only the polluters come out ahead of the game under an arrangement where states let them off the hook rather than doing what they are supposed to do under federal law." The reason for this failure is because the implementation of the policy was far from ideal. The lack of regulation could be seen in the eyes of many as a lack of funding and I agree. Without proper federal funding to carefully regulate such polluters, this policy will never be fully effective.

An Instance of Global Warming

Is global warming pseudoscience? Not according to Angel Oliveros Zafra, a Spanish farmer. He said that he is starting to notice differences in the behavior of the different seasons. For example, a stream nearby Angel’s farm usually dries up during the summer, but is already dry and summer has yet to come. The changes in weather are affecting the yields of his crops. According to the article, Angel’s annual yield of vegetables and olives has dropped by a tenth in recent years. Mr. Zafra says that man-made global warming is the primary adversary for these odd occurrences. Unseasonable frosts and winds are destroying his crops.

Is global warming a real threat? Recently it seems that there are unnatural occurrences like melting ice caps, higher temperatures, and a decline in annual crop yields. If global warming is indeed scientific fact, then the world is not, and has not been polluting at a socially beneficial level. Theoretically, the world will not last forever. Do the current economic models completely prevent the degradation of the environment? Or do they only suggest the appropriate amount of emissions or residuals in relation to human willingness to pay or accept these emissions?

Blast in China

Longxin Chemical Plant in Longquan city has had an explosion which emitted toxic gases into the atmosphere. The explosion left two missing and has sparked fear into the hearts of many. Officals are trying to stop the spread of the toxicans from entering into a nearby river, which could carry the waste down stream to heavily populated neighboring cities. Hopefully, officals can come up with the right solution, to prevent the spread of these chemiclas.

Should or shoud not

Nuclear power, when it is under control, it is a very powerful and clear energy in the world, but if people use it in the war it will be a most horrible thing for the world.
So what do you think about should let more country to develope nuclear power or not.Iran is developing nuclear power but other country think iran will use it in for the war.
In my opinion, Iran shoud develpo nuclear power, it good for that country, it can help save other resource in the entire world.What do think about it?? Should or Should not??

Gas Prices Soar To 3 Dollars In California.

Recently, gas prices have risen to 3 dollars a gallon in California. Crude oil is selling for more than 60 dollars a barrel, and there is currently a higher demand for gas, which has increased by 3.3 percent in the last year. There is also the cost of refinery maintenance and the fear of a possible spring-time gasoline shortage which are contributing to the increase in gas prices. A result of this price increase is that drivers are coming up with several different alternatives, such as: taking the bus, buying smaller cars, not filling the gas tank completely, car pooling, and working more hours to compensate for the the cost of a trip to the gas pump. What do you think the increase of gas prices will do to the economy in general and for the car companies that produce larger vehicles such as SUVs?

Fishing hurt!!!!11

When you search fishing on google, you will found about 129,000,000 result. And you will found a lot information about overfishing.
After read article "Too many people chase too few fish" http://seawifs.gsfc.nasa.gov/OCEAN_PLANET/HTML/peril_overfishing.html
You will found how overfishing hurt fishing industry, becasue overfishing cause too many fishes' life it made not enough fishes to multiply. So catches have gradually become smaller, if we do not stop overfishing or limit fishing, maybe one day human will not have fish to eat!!!!!

Is Groundwater Cleanup Appropriate

Authorities at the Beale Air Force Base in California have an on-going project to clean up groundwater pollutants at sites 32/1 & 17 as seen in the image to the left. This project is part of a larger effort to clean up an estimated 39 sites around the base over the next several decades; the total projected cost of these remediation projects is estimated to be a staggering $200 Million.

You may ask what they will be doing to these specific sites that will end up costing such a great amount of federal tax-payers money. At Site 17, the Yuba County Environmental Health Department and the California Department of Toxic Substances Control will be overseeing the construction of a "slurry wall around a plume of contaminated groundwater to keep it from migrating off base. The slurry wall will be made of soil, bentonite, water, cement and other materials, which are mixed into the ground to form a barrier that water will not pass through." Which will be built next to a previously installed wall of the same character. While at Site 32/1 "experts propose to oxidize the contaminated soil. This is done by drilling a well near the site and using a vacuum to pull out and then treat vaporized gases from groundwater."

Now you may ask why the Yuba County Environmental Health Department and the California Department of Toxic Substances Control propose such costly projects for the Beale Air Force Base. An economic Damage Assessment would have been conducted wherein the authorities estimate the value of damages done onto the injured resource (groundwater) so those costs can be recovered in court, or use said amount for the mandated remediation projects to correct the damages done onto said resource.

Is it fair to impose such expensive mandates onto the Beale Air Force Base? I certainly think so, any organization must be held responsible for damages done onto a public resource such as groundwater, the effects of their damages reach a much greater community than that of the base itself; therefore, remediation is absolutely necessary do to the greater effects it has beyond the monetary costs the organization will incur.

Worker productivity rises as wages soar

As the wages soar, so does the worker productivity. As stated in the article, this could be a huge alarm for increased inflation. Is this really what our Nation needs right now, knowing that the poverty level has slightly increased. Yes, rising the wages for each person sounds like a great idea, but is it going to benefit the American people in the long run? We hope that it does, but much of the numbers that the government expected them to be at, rose very dramatically. With less output and the number of hours worked remaining the same, productivity for the quarter looked worse. The drop in output also meant that unit labor costs were higher. What do you guys think about this issue.

Walmart a monopsony?

Wal-mart is one of the best examples of pricing power. According to Barry Lyn here are a few facts: One in every five retail sales in America is recorded at Wal-Mart's cash registers, that the firm's revenue nearly equal that of the next six retailers combined, that for many goods, Wal-Mart accounts for upward of 30% of U.S. sales, and plans to more than double its sales with the next five years. Most people would state that Wal-Mart's rise had been good for the nation, but the issue is how Wal-Mart is going to use its power in the future. Wal-Mart is like any other monopsonist in that they do not participate in the market so much as to use its power to manage the market. Also, according to Barry Lyn, author of this article, Wal-Mart has grown so powerful that it can turn even its largest suppliers, and entire oliogopolized industries, into extensions of itself. The effects of this practice are most obvious in Wal-Mart’s horizontal competition against other retailers. Many businesses today are being affected by how Wal-Mart has grown. What do you think will happen in the next five years?

Labor Costs and Productivity!

According to CNNmoney.com productivity growth has declined while the cost of labor has risen from the third to the fourth quarter of 2006. This has several worried that the rate of inflation will increase. We have learned from our economic classes that a competitive firm will hire until the Value of Marginal Product equals the Wage.
VMP or ( Value of Marginal Product ) is measured by Price * (Change in quantity divided by change in Labor) or MR. If the productivity of labor decreases most likely the firms MR will decrease causing VMP to decrease.
Wages are determined by the change in total costs divided by the change in labor. If Labor costs increase or productivity decreases can we really be sure as to what will happen to wages? Firms might just use their money on capital. Perhaps they will loose workers due to their higher costs.
After reading this article what do you think will happen to the quantity of labor if we look at solely competitive firms in our markets for the months after the decline of productivity and the rise in labor costs? What will happen to the wage rate? Will this really cause an increase in the rate of inflation?

Productivity gains slow, labor costs up

In this article it mentions how the increase in the productivity has had its slowest increase since 1997. The slow increase has casued the labor cost to increase drasticly and is a warning for inflation. Labor cost have gone up for the year to 3.2 percent which is the biggest gain since 2000 when it was 4.2 percent. Analysts think that this could cause a wage inflation, and are worrying. My question is after reading this article, I am not worried about an inflation, but do you think that this increase could cause an inflation??

The Employee Free Choice Act and Labor Unions

The US House of Representatives voted this past week to approve a measure known as the Employee Free Choice Act, which will possibly have a major impact on the way workers deal with their employers in the coming years and possibly reenergize one of the past bastions of the American job market: the Labor Union.

The Act, which still has to go through the Senate and already has drawn some ire from the President, would alter the way employees of a business would be able to organize themselves into labor unions. Currently, workers at a business conduct a card check, in which employees sign off on a card denoting their interest in unionizing and then hold a secret-ballot election to vote on unionizing without fear of intimidation. The new legislation allows for workers to bypass the secret ballot method, which could raise the level of union participation, but at the same time allow for more intimidation of holdouts - something that would be punished harshly by the new law.

The major impact of this legislation would be in the wages and benefits that workers would receive. Currently, non-union workers earn only about 3/4ths of the hourly wages of a union worker, and often do not get the same benefits or benefits at the same level that union workers do. As a result of this legislation, many businesses, particularly small ones, would be under pressure to raise the wages they pay their workers and invest in more benefits to match union demands, lest the workers decide to strike. The increase in wages could push employers to utilize less labor in return for the higher wages, which could raise unemployment levels should unionization boom as a result of the legislation. In addition, the amount of benefits and wages paid would shift the isoprofit curve of the employees to the right, and lower the profit of the businesses, creating less incentive to even remain in business.

Would a boom in unionizing have that adverse of an effect on the economy in the US, should this legislation be passed into law?

NBA in 3-D

The NBA is trying to to expand profits by showing games in movie theaters in 3-D. Arenas are sold out every night in 30 cities across the US. So the NBA has decided to show playoff & finals games in 3-D in movie theaters. By doing this, it doesnt only help the NBA but the movie theaters. It helps them in their ongoing struggle with the DVD & On Demand companies. This isnt the sport to try this. International soccer games have been shown like 3-D in movie theaters. I think this is a great way for more people to view these games & the 3-D gives a new way to experience an already wonderful attraction. Two totally different companies will both benefit from this consolidation.

The Sin Tax

Minnesota, like many other states in the nation, has had a sin tax on tobacco products for some time now. This article admits that Minnesota knows the tax on cigarettes is a sin tax. The state has been using the extra tax revenue to do wonderful things like fund education and health care. And the tax has been working exactly as expected, as fewer people are smoking every year. However, one man, David Tomassoni, is unhappy with the results. With fewer and fewer smokers, the tax revenue from cigarette sales is rapidly declining. Tomassoni is against a state-wide smoking ban, like the one Ohio installed in January, because he doesn’t want to lose any more tax revenue. There is an obvious trade-off at work here. If people continue to smoke, extra tax revenue can be produced from their purchases and education and health care can continue to improve… there’s only one problem: people are still smoking. The officials of the state now have to decide which is more important to them, creating a more smoke-free state with healthier inhabitants, or making money off of their bad habits to increase funding. The sin tax placed on cigarettes produced the result that was expected, but Minnesota had gotten very attached to the extra revenue—now they have to make a choice with tradeoffs.

'Old' Radio Outperforming XM & Sirius Radio

A few years back XM and Sirius Radio were touted as the companies that would put old radio out of business. People were scrambling to jump on the new products and Howard Stern signed a huge million dollar deal with Sirius. To most, it appeared within a few years most Americans would jump on the satellite radio boat, and FM and AM radio would be a thing of the past.

However, according to the article, the complete opposite has happened. XM and Sirius are desperately trying to keep their heads above water by a last ditch effort of the two competitors merging companies. Shares of both comapanies are down 30% from the last year, while smaller terrestial radio companies stocks are rising (Cox Radio-5%, Saga Communications-9%). Furthermore, the nation's largest radio station owner, Clear Channel Communications, is up 22.5%.

It appears that consumers have considered the opportunity costs of having XM and Sirius, and concluded that no commericals and more music choices are not worth the $10 per month.

Tournament Pay and Nascar Racing

Tournament pay refers to pay being based on relative rank order performance. One of the major downfalls to this type of pay scheme is too much competition. Employees may get so concerned with the need to be first they may forfeit the needs of the company. This article about Nascar racing is a perfect example.
Juan Pablo Montoya spun teammate Scott Pruett to take the lead with eight laps left for a NASCAR Busch Series victory.
Since tournament pay lead to such aggressive competition among teammates in nascar racing, what other options do they have?

Is the Cuban Embargo causing US oil companies to miss out on economic opportunities?

This article published in Fortune magazine discusses the recent discovery of large oil reserves in Cuba. The promise of oil production has caused Spanish, Indian and Norwegian companies to begin considering drilling for oil in Cuba. American companies, many of which would be located closer to Cuba than the companies from the other countries, will not be allowed to produce oil due to the Cuban Embargo that was enacted during the 1960's. There has been talk in Congress of allowing US companies to sell oil services and equipment to the foreign companies that are expected to begin drilling in Cuba, however the US companies themselves are not allowed to drill for or produce oil. Is the prohibition of trade with Cuba, enacted during the 1960's following the Cuban Missile Crisis, causing American oil companies to miss out on economic opportunities located relatively close to our mainland?

Food vs. Feed vs. Fuel

This article is about the laws of Supply and Demand and their effect on today's economy. They talk mainly about the Fuel and Food and Feed. Basicaly, the author, John Otte, is saying that we should listen to Adam Smith and let the market control itself. He is also questioning the government's spending on all three things and the choices that they have made. Otte wonders if the world will be able to produce enough food to sustain the world population in a few years if they continue on they way they have been.

U.S. Department of Labor's Employment and Training Administration

The assistant Secretary of Labor for Employment and Training, Emily Stover DeRocco, has recently summarized this years employment and training budget to help workers better contribute to the global economy. To meet these goals, roughly $3.4 billion has been requested for Career Advancement Accounts. The purpose of these accounts is to triple the amount of new, transitioning, or current workers who are already receiving education and training to further their skills. Workers can receive up to $3,000 annually to go to community colleges for education and training. According to DeRocco, "This budget positions the workforce investment system to act as a catalyst for competitiveness in the 21st century. Collaborative efforts underway on regions across the country illustrate the power of the public workforce system to implement talent development strategies that support sustained economic growth and job creation in the global economy."

Income Effect and the Mega Millions Lottery

The Mega Millions Jackpot is up to an estimated $355 million dollars. The article talks about some ideas to think about if you are lucky enough to win the jackpot. You need sound financial planning, including hiring an experienced tax accountant and financial planner. Also, it is a good idea to make solid investments such as bonds, money market and other low risk investments.

The article then begins to go into the idea of not quitting your day job and staying in your "comfort zone." Keeping your day job will help you keep a safety net. I don't think a rational individual will decide to keep their job(s).

Due to the income effect, a person is more likely to work less, if at all, depending on the level of the effect. In the case of the Mega Millions jackpot winner, $355 Million dollars will have a huge impact on a person that has a high income effect. The non-labor income is so high that a person will likely want to have all leisure and no employment.

So, what would you do? Would $355 million dollars cause you to quit your job or do you think you'd keep it just to have a safety net? Keep the income effect in mind with your decision.

NFL Players: America's Newest 'Victims'

Recently in the news it has been made apparent that many former athletes in the NFL have suffered serious, life altering injuries. Many past players have concerns and are calling for reform of the pension and medical-disability system. This includes New England Patriots All Pro linebacker Ted Johnson, who claims he suffered multiple concussions during his 10-year career and is now addicted to amphetamines and former defensive linemen Conrad Dobler who during his 10 year career destroyed his knees and now has to take 150 Vicodin a month to dull the pain.

Because players are and were compensated so well it is hard for many to sympathize with them. Young professional athletes get paid for the amount of talent they have. As their careers progress they get paid for performance. If they perform at a high level comparable to the other highly paid athletes, they will receive a similar salary. Paying for performance is a good way to solve the Principal-Agent Problem. This occurs when workers pursue objectives that conflict with the goals of the firms or employers.

If athletes don't perform at a high level they are compensated less, however they are usually paid less because they aren't as talented or haven't produced, and they are still paid two to three times as much as the average American. Even if they are injured do athletes have an argument? Do they deserve to be compensated more because there jobs are dangerous? Or should they have considered this before making the decision to become a professional athlete?

According to the article, “Further undermining the players' efforts to portray themselves as victims is the fact that they're represented by sophisticated sports agents and a union that hasn't completely ignored the issue. The union pays out about $16 million a year in retirement benefits, and the latest Collective Bargaining Agreement, negotiated in March 2006, included more than $50 million in enhanced medical and pension benefits. In the end, what this comes down to is money. Many of the older players, who made $50,000 a year, are jealous of today's players, who make $5 million. And the worst cases, like Mr. Dobler, are being held up as the norm instead of the exception. "What you don't hear about is the guys we help," Mr. Upshaw said at a press conference during Super Bowl XLI.”

Drugs Wars; Marijuana

"The U.S. drug war, which costs an estimated $35 billion a year, has had a minimal impact on consumption of illicit substances," journalist Dan Eggen tells us. This makes me wonder what preventable problems this large sum of money can be put toward. $4 Billion dollars is put forth in the effort of merely arresting minor offenders, and prosecuting marijuana crimes, for a product where the demand is not decreasing. With a record number of arrests of those selling and in posession of marijuana, is the drug 'war' being lost?
Marijuana is the most widely used drug, steadily increasing still in the past few years. The problem here is not the congestion of jails,or a high crime rate (which is historically low), but the increasing potency of the drug. Amongst teen users, mental health problems have been on the rise. Rather than wasting money to imprison minor offenders, we should offer alternatives like rehabilitation.
If this drug was legalized, the quantity and quality would be controlable, decreasing the health problems associated with marijuana. The government would most likely impose a sort of sin tax on this product as an attempt to discourage consumption and generate revenue. Overall profit would boost the economy, and provide more funding for social programs. Black market effects of the drug like crime, overdosing, and corruption would be significantly reduced, with small opportunity costs, or course. With technology and other resources in this equation, more recreational uses for this drug could be discovered. Remember, deaths attributed to marijuana usage are a rare occurence.

While You're at It, Why Not Generate A Little Electricity

This article I am interested in is about making electricity by human body's energy. A gym in Hong Kong makes use of human's energy when they are working out to make electricity. This gym is just a experienment, and it becomes more and more common recently. In fact, to make electricity by human's energy has a long history and it can trace back to the beginning of the 20 century.
Since the resource is scarce now, more and more manufacturer come up with ideas that can save resource and make the most advantage by spending the same or less cost. These ideas can not only save resources, but they can also make benefits to the area that has scarce resouces. People are also eager to take part in the program because they always feel happy when they devote themselves to make society and economy more efficient.
It is a potential market because people are willing to see that resouces are making by their bodies. The gym in Hong Kong will have more and more customers and so do other markets. At the same time, it saves and produces resources with the same or less cost.

Ohio's New Smoking Ban

This past November election Ohio citizens voted to pass a law banning smoking in “public places” and “places of employment”. The law also said that these places must post “No Smoking” signs and remove all ashtrays.
As we learned in class, there are a number of different demand shifters. In this case it was a change in preference. According to this economic theory, it would be plausible to say that fewer people chose to smoke (change in preference) as a result of this government intervention. A decrease in demand for cigarettes would then create disequilibrium of a surplus.
Would you agree with this claim? Do you think that because of the new law there are actually less people smoking? If so, do you think there are enough people making that choice to have any affect on the demand curve?

China to Lower Ceiling On Foreign Borrowing

China's ceiling on local banks' short-term, foreign-currency debt will be cut by 70% this year compared with 2006, said the State Administration of Foreign Exchange (SAFE). It added China will lower the short-term debt ceiling for nonbank institutions and foreign banks by 40% this year from last year (WSJ).

China's foreign-exchange regulator said it will lower the ceiling on financial companies' short-term, foreign-currency debt overseas, and encourage them to borrow foreign currency in the domestic market (WSJ).

China's huge trade surplus, which surged 74% 2006 to a record $177.47 billion, as well as large capital inflows (WSJ).

In this case, on one hand, China's huge trade surplus has contributed to flush liquidity in the country, driving loan and investment growth (WSJ). In my opinion that is a Market Disequilibrium. In the supply and demand curve, this can be illustrated by less quantity demanded than quantity supplied. It caused surplus, and the market should press on price to fall.

On the other hand, China moved to reduce financial firms' offshore foreign-currency borrowings (WSJ). I think the huge trade and foreign-currency borrowing brought a big pressure to China. Thus, China wanted to make a lower ceiling to reduce quantity demanded (in the other word, it can decrease the foreign currency amount), and then to mitigate the big pressure. The lower ceiling caused quantity demanded more than quantity supplied. This move caused shortage.

Increased Wealth Inequality in United States

This article states that there is an increasing inequality of income between the rich and the poor. The article points out that those more educated groups are experiencing a larger inequality of income compared to less educated groups. The article states, “Furthermore, more-educated groups show greater income inequality than less-educated groups. Uneducated people are more likely to be clustered in a tight range of relatively low incomes.” This makes sense because people who have a higher education are more likely to make more money; however, the scarcity of jobs is creating a shortage of available jobs and increasing the amount of unemployment. Therefore, this creates lower wages for the more educated people because the job market is very competitive and many well educated people have trouble finding a well paying job.

Another factor contributing to the increased wealth inequality is that the United States is growing older and becoming increasingly smarter. This creates a larger spectrum of wages because the smarter entrepreneurs are making much more money than the less intelligent entrepreneurs, contributing to the wealth inequalities between the rich and poor.

Although there is wealth inequality, is it such a bad thing? The article also goes on to state that the less educated are also experiencing more times of leisure in comparison to the higher educated. This suggests that the higher educated people are working harder for their money and therefore, enjoy less time at their leisure.

So, after reviewing all of these factors, what is your opinion on wealth inequality? Is it necessarily bad? Can people do anything about it?

Housing Slump Continues

Recently released numbers for the last quarter of last year indicated that overall the recent housing slump in the United States is still continuing, with a very negligible growth of 1.1%. Overall for the year of 2006 there was a national growth of 6%. Growth often fell faster in the suburbs than in the cities with the largest decline being 5.3%. Growth was much larger in western states such as Utah and Colorado with some cities seeing growth around 20% compared to Michigan and Indiana where their cities saw declines of up to 5%. Most experts in the field are unsure about when the market will see a turn-around. Some say it could be anywhere from 1-3 years. This is being attributed to interest rate increases, inflated prices, and credit problems. People looking to buy homes are even being advised to hold off if at all possible until prices do come down some.

Both Prices and Income on the Rise

In January both consumer’s income and spending rose more than expected. Personal income rose 1%, while consumers spending rose by .5%. This results in a close watch of inflation, meaning a general or progressive increase in prices. “A chief economist with Standard and Poor’s said the rise in the inflation measure isn’t a surprise for the January report.” David Wyss states that, “the month of January is when bonuses get paid, and bonuses have become a bigger part of people’s paychecks.” Wyss also says that “the rise in personal income and consumer spending will not result toward rate hikes as a way of fighting inflation.” Do you have the same opinion…???

Weather and the Demand Shift

According to the Associated Press on March 3, 2007, this year's winter weather (or lack thereof) has resulted in a shift to the left in the demand curve for some products such as snowmobiles, snow blowers, skier lodging, etc. The shift in demand has left many businesses in Bethlehem, New Hampshire in distress as their profits continue to fall. State official Steve Boucher said the average amount of financial loss due to weather reported by different businesses is between 5,000 and 8,000 dollars. However, one business lost 85,000 dollars worth of profits from the lack of winter weather.

In order to combat the loss of profits for businesses, the Department of Resources and Economic Development for the Bethlehem area is distributing surveys to businesses to get a sense of the losses imposed by the weather. After analyzing the surveys, the Department hopes to use the information in the future to help businesses respond to weather effects on demand. Boucher later went on to say that one key factor in helping businesses get back on their feet is innovation. Businesses such as motels that generally appeal to snowmobilers could offer incentives for ATVers.

This article demonstrates the effects of preferences changed by weather on the demand curve. Have you noticed any businesses suffering or prospering in your home town due to the weather? What do you think should be done to help businesses minimize their losses in these types of situations?

Agreements boost Kalamazoo River cleanup

A millions of dollars project to clean up Kalamazoo River is going to carry out with agreements between Environmental Protection Agency (EPA), Michigan State and two companies responsible for PCB contamination.

“One agreement, between EPA, Michigan, Georgia-Pacific and Millennium Holdings, requires the companies to perform a projected $21 million cleanup of the Plainwell Impoundment Area, including removal of a portion of the Plainwell Dam. The other agreement, between EPA and the two companies, requires the companies to perform about $15 million in additional environmental sampling and investigation throughout the Kalamazoo River Superfund site.”

The Kalamazoo River is a 166 miles long river in the state of Michigan. By spending this amount of money, first, it will help improve the quality of water in the river; second, a research of the Kalamazoo River will be made, which is useful to determine how to spend money efficiently; last, it will benefit the future generations. It is a good example of how EPA will cooperate with other institutions and companies.

More Immigrants! Should Native Worry?

In his news, “Immigrants Raise Wages for Some Native-born Californians,” Jessie Mangaliman reported “the influx of immigrants to California raised the wages of some native-born workers in the state, according to a report released Tuesday by the Public Policy Institute of California that refutes common public perception and previous studies on the subject.”

In detail, he said that “some better-educated workers -- with at least a high school diploma -- saw wage increases ranging from 3 to 7 percent between 1990 and 2004, a period when the state experienced record influx of immigrants.” In response to this phenomenon, He gave a reason that “rather than compete with native workers, immigrants ‘complement’ some work sectors -- agriculture and construction for example -- by helping native workers who have the language and local networking skills to ascend to better-paying supervisory and managerial jobs.” In Jessie’s view, more immigrants seem to be a good thing to Native-born Californians…

I cannot agree with his explanation. Based on what we learnt in class, Jessie Mangaliman’s explanation does not sound reasonable. With more immigrants, labor supply would definitely increase. As a result, the labor supply curve in a competitive labor market model would shift to the right (S1 to S2) so that the wage would decrease (W1 to W2). However, because the employers cannot pay workers less than the minimum wage, the wage in completive labor market mode would not go down to W2 but somewhere between W1 and W2. Since the market cannot reach its equilibrium, a larger surplus would appear in the market which means that the unemployment rate should increase.

This theoretical analysis sounds good. However, neither of the predicted wage nor the predicted unemployment rage accounts with what happened in the real world. From these two diagrams I found from economagic, it is easy to see that the unemployment rate in California has been really bumpy and overall decreased; the average wage per job had a continuously increase since 1990.To adjust theoretical analysis, a larger effect of increasing labor demand (D1 to D2) is needed to cancel the effect of increasing labor supply. According to the real data, the RGDP of the United States has increased for 64.2% in last 17 years. During an economic booming, employers were encouraged and hired more workers to increase their profits. With a huge increase in labor demand, the negative effect of increasing labor supply was canceled and the labor market in California experienced an increase in wage and an overall decrease in unemployment rate.

Although the increase of labor demand canceled the effect of increasing labor supply and brought wages up in California, more immigrants would certainly cause an increasing labor supply which can do nothing but decrease wages. Just imagine what if our RGDP stays same since 1990…Should the native worry about more Immigrants? My answer is yes.