Monday, October 31, 2011

Bieber Fever is Back

Justin Bieber has been in a bit of a funk. Clearly he is still making muuuch more than a seventeen year old should, but he was huge for a while and now has started kind of mellowing out. To keep his demand up, he not only came out with a Christmas album, he had artists with many different fan bases and had them featured on the album as well, such as, Boys II Men, Usher, Mariah Carey, The Band Perry, and Busta Rhymes. He knew that if he were to increase his supply, he could make more money especially when he basically forced the album to become extremely successful with so many different types of fans he widened the potential realm of the consumers’ self interest. With R&B, Hip Hop, Pop, and so many other genres, basically everyone’s self interest is covered and everyone is able to find something that they like. Also, he released one of the songs from the album earlier than all of the others, giving the consumers a little taste of what was to come. Justin is back and I’m sure he’s gonna be bigger than ever.

Midnight Opening of Black Friday!

Starting this upcoming holiday season, Target and Macy's have decided to pick up a new trend: opening their stores to consumers at midnight on Black Friday. This incentive will have consumers filled up outside the stores waiting to be let in to start their early holiday shopping. Prices this season are also very low: "Macy's Black Friday deals include 50% off Sharper Image iPhone/iPod docking stations, $19.99 rampage boots, a free digital video camera with any $65 fragrance purchase (while supplies last) and $79.99 for a DKNY down coat." These prices and early Black Friday opening give consumers an incentive to get their holiday shopping done before Christmas sneaks up on them. On the other hand, some consumers will completely disregard the early opening. Some will instead shop closer to the holiday based on their trade offs: getting stomped by feverishly frantic shoppers in the early morning or peacefully shopping on their own and maybe having to pay just a little more for their items by waiting. Another incentive these stores are providing is extending their store hours on Christmas Eve. This holiday season will sure be a busy one full of shopping and busy malls!

Government Sues to Block AT&T/T-Mobile Merger

The United States Government sued to stop the AT&T/T-Mobile merger. The government fears that if these two very marketable cellular mobile companies team up together it will cease the competition, therefore raising prices in consumer products. Through the concept of law of demand, this exact situation leads our economy to plummet because it shows that as prices raise, the consumers buy less of the product. This could cause excess supply, leaving the merged companies in disequilibrium. With the point of equilibrium resting above the original balanced point, it will make the company lose money to pay for all the supplies needed in order to sell these products in the first place. With the loss of competition in our free market economic system, it lowers both companies total revenues to greatly decrease in profits which could higher the possibility of these two successful companies to go out of business. Since technology has defined the line of everyone's basic necessity in our everyday lives, the companies to stay apart would be the best for the economy as the Real Gross Domestic Product (GDP) rises every quarter.

Out of Pocket Change

No disposable income? Blame it on the economy. A survey done on Sunday reveals that one-in-three North Americans say that they have no extra spending money. In our current economic situation, times are tough and having a shortage of cash on hand is becoming frequent. The survey also states that consumers' biggest concern is economic outlook surpassing their concern of rising inflation and job security. This concern isn't just local either, India and other nations are suffering the same effects of the recession. Consumer confidence is also extremely low: "Consumer morale in the euro zone remained especially weak, notably in France, as the region’s debt crisis deepened during the summer." Without consumer confidence, people are less likely to be doling out any extra spending cash. 64% of consumers feel that in our current recession, it is not a good time to be spending... nor do some of them even have the ability to do so. In these tough times, it is best to try and save all that you can in order to keep your head above water!

7 Billion and Counting: Should the world adopt a 'one-child' policy?

As this Yahoo! News article states, "the world population has hit a whopping 7 billion, and researchers suggest it could reach 10 billion within the next century." When the everyday person hears of this, one would probably tend to believe our world to be vastly expanding and that it is a great thing. On the other hand, economists may think quite differently of this widespread opinion. Why though? As leading indicators show, the latest GDP growth rate has risen, slowly but surely. It's quite possible, though, that with the larger the population becomes, the more money the U.S. will need to keep the economy in somewhat good hands. This could be foreshadowing a difficult contraction in the growing economy. A future policy discussed in the article, as known to be the 'one-child per family' policy, which I believe to be immensely controversial, says could balance out the growing economy and avoid future repeats of the Great Depression.

Sunday, October 30, 2011

Why Go to Party City?

Party City is known for their wide variety of costumes and decorations. There are currently 700 stores nationwide. During Halloween, the demand for costumes is very high. Prices range from $5 in the clearance section of kids all the way to $60 for a woman’s costumes. That’s not even including the accessories that are necessary for the costume you buy. To me, this price range seems a bit outrageous. However, people still insist on buying a brand new costume for these prices. I don’t see why is it necessary to buy a costume that you will most likely wear once in your life. Why spend these outrageous prices when you can make a fun costume right at your home, using things you can find around the house. Instead of buying a costume at Party City, you can substitute it for a nice homemade costume and save at least half your money. For instance, all you need is some old T-shirts, fabric glue, and a few hours to make an easy owl costume. You could also make a mask for your costume. The mask would only need a couple pieces of construction paper and something to tie it to go around your head. Another creative idea would be a Rubik’s cube. All you need is just a box and some construction paper. Or you could make yourself a superhero! All you need is to wear tights and a graphic felt cape. You can be as creative as you want! Although these might not be your typical and fantastic costumes, these costumes would be fun, creative, unique, and needless to say save you some money.

3 Top Jobs

For some people a job is just a way to earn a living and something that has to be done. Most of the time people dread going to work. However, some people look forward going to work. A few of these people would be Alisa Hensley, Steph Davis, and Dylan Lauren. Alisa Hensley is a stunt woman. Alisa Hensley falls, crashes, dives, rides, kicks and fights as part of her job. Steph Davis is a rock climber. On a typical day, Steph, will climb up a hundred foot high rock, without any ropes, and then parachute down back to the ground. Although both of these jobs can seem very entertaining and fun, is it really worth the risk? There are so many things that could go wrong. It is possible that either of these two women could break an arm, a leg, or a rib. Or worse, it is a possiblity either could become paralyzed or maybe even result in death. These two women should think at the margin. They should think of the pros and cons of these jobs and see if it is worth the risk. On the other hand, Dylan Lauren has a completely different type of job. Dylan Lauren owns a candy shop, Dylan’s Candy Bar. This candy emporium offers more than just candy. It offers clothing, accessories, souvenirs, and even house wares. Although business is booming for Dylan’s Candy Bar right now, will it always? Candy is a very popular item that almost everyone enjoys. However, it is a known fact, that candy isn’t the best thing to eat all the time. So will people eventually stop buying as much candy? Or will people get tired of always going to the same candy store? These are all risks that Dylan Lauren has to think about. Dylan Lauren just always has to make sure the total revenue from the goods and services the factory produces is greater than the cost of keeping it open.

Redbox Price Increase and the Possible Consequences

Earlier in the month, Netflix increased their rates by up to 60% and split up their DVD and streaming services into two entities which cause 800,000 subscribers, including myself, to drop the service altogether. Netflix believed that the increase in demand for their product warranted an increase in price. However, the price increase was too high. Starting on Halloween, Redbox will increase their price due to their recent successes. Unlike Netflix, Redbox tested their new price in many different locations and only saw an expected drop-off in demand I believe that Redbox increased their price perfectly according to the law of price and demand while Netflix needs to hire some new economists.

Thursday, October 27, 2011

Business Side of paying collegiate athletes

Recently in college sports, especially football, there have been many cases of collegiate players being paid.  In this article it talks about how some of the biggest power houses of college football that are being punished for their involvement of paying players.  It has mainly been the boosters and alumni that are responsible for paying these players.  This aspect brings into question what are the business aspects of paying players.  In my opinion, these universities and boosters are paying these players to increase the demand in their football teams. The amount of revenue that these high ranking teams bring in for playing in big time bowl games and primetime games is enormous. An example would be Texas in the 2009 fiesta bowl; for their win they received around 3 million dollars.   Also a high powered football team creates a great incentive for students to attend the school; TCU is a prime example of this. When their football team started doing well, and became ranked, their applications grew about 40 %.  All of these factors create great revenue for the school, and the easiest way for some school to get these high powered teams is to bring in players by paying them.  I'm not saying that paying collegiate athletes is the right thing to do, but for some schools it may be the solution to bring in huge amounts of total revenue.

Coca Cola Goes White

In 125 years, the Coke can has never changed colors. Sure, during the SuperBowl, one will see footballs on one side, but there is always the red can with the white insignia. For this year's holiday season, however, Coca Cola cans are going white for the polar bears. I for one can look back fondly on the winter Coke commercials with the polar bears from when I was a child, and now they are trying to save the beloved creature. These white cans give consumers more incentive to buy this holiday season, and demand is expected to rise with these white cans. Also, the company is teaming up with World Wildlife Fund (WWF) in this endeavor, and is supplying 4.1 billion white Coca Cola cans. Along with this, Coke is donating $2 million and giving consumers incentive to donate by matching all consumer donations up to $1 million, all to the World Wildlife Fund. According to Carter Roberts, WWF's CEO and founder, " Coke has made a kind of foundational commitment that has never before been seen in our history. They're taking their biggest promotional season and dedicating it to this cause." Clearly, Coke is using their always creative and popular marketing skills to a good cause. This is beginning to be desperately needed, as the WWF is attempting to move the polar bears to areas of the Arctic which are less vulnerable to global warming, giving the speicies time to adapt. All this work effort will take a lot of research, which couldn't be accomplished without Coke's generous donation this holiday season. So, consumers, get thirsty and get ready to propose a toast to the polar bears with your white Coke cans.

Michal Jackson-Highest Earning Dead Celebrity

Michael Jackson was recently named the highest earning dead celebrity by So far he has earned this title twice since his death in 2009. It is estimated that Michael Jackson earned about $170 million last year, making him not only the highest earning dead celebrity, but also the second highest earning pop music act this year. Since his sudden death and because of all of the media attention regarding his death, album and memorabilia sales have actually increased. Cirque de Soleil actually created a show called "Immortal" that celebrates Michael Jackson's life and music. Recently, a memorial concert was held for Michael Jackson in Cardiff, Wales, and tens of thousands of fans showed up. When a celebrity dies, the demand for their music, tv shows, etc. goes up because the supply has been completely cut off. For instance, in a few years, a Michael Jackson autograph will probably be worth way more money now than it would have been ten years ago. Because Michael Jackson is no longer around to sign autographs, no more can or will be produced, so there will not be enough to match the demand and create equilibrium. This is just one example of the way the death of a celebrity can affect the amount of money spent on the celebrity's product.

Wednesday, October 26, 2011

Durable goods demand shows economy strengthening

With the fourth quarter coming up, the demand for long
lasting items has significantly increased, giving the economy solid momentum
for going into the fourth quarter. There was also data that showed an increase
in economic activity due to the amount of homes sold and mortgages paid off in
the previous month. This past month showed an economic increase that was larger
than any increase in the past 5 months. The Commerce Department said “durable
goods orders excluding transportation rose 1.7 percent after falling by a
revised 0.4 percent in August. Economists had expected only a 0.4 percent
increase after a previously reported 0.1 percent dip. But a drop in demand for
transportation equipment as bookings for motor vehicles and civilian aircraft
declined pulled down overall orders by 0.8 percent. Overall the increase in
demand for more durable goods has shown strengthening in our economy.

Monday, October 24, 2011

Misleading Trailer for Paranormal Activity 3

We’ve all seen the Trailers for the Paranormal Activity movies, but oddly enough the viewers were disappointed to find that the scenes from the trailer didn’t make it on to the big screen. The scene of the two girls playing Bloody Mary in the bathroom was on one of the first trailers that came out for this movie, but it wasn’t on the screen. This happened with four other scenes that were in the trailers, but did not seem to make it to the final cuts of the film. So why did the director put these scenes from the film on the trailer only to lead to disappointment for the fans. Even though I do not watch scary movies, those 5 scenes that didn’t make it to the big screen, but made it to the trailer of the movie, made me want to go watch the movie. Did the director feel that he needed to do this as an incentive for the film or was it because the director sent out the trailers before he ACTUALLY decided his final cut? Either way, he led fans into disappointment because they were left pondering on what led up to those scenes and what those scenes led up to.

Friday, October 21, 2011

Hiding From the Goverment

Glen Morissette, a 42 year old man, lives on only 11,000 dollars a year. How does he do this? Well, he lives in his R.V full time which requires him to pay no house or apartment payments, car payments, electrical and other types of bills, and so on. So what does this mean for our economy, if this is the direction that people are now taking? This could be a devastating blow to our economy if more and more people keep deciding to live like this. These people fly under the radar not paying taxes, and other payments, that the government uses to help the citizens and wealth of our nation; our economy. People have replied to the post saying,” That’s nothing I live on 8,000 dollars a year.” This lifestyle seems it is slowly rising in population. If we let this happen it could quite possibly lead to another depression. The government, to dispel more people from living this type of lifestyle to help insure the safety of our nation’s wealth, should develop a tax, which would be a high tax for people who live in R.V’s therefore not helping out the government economy. But this also raises trouble, not everyone who live in RV’s have the option to live in it or not. This means that problem has to be taken to the source, the RV dealers. Some law has to be introduced for the RV Dealers to make them discriminate against who buys their product for in essence hiding from the government.

Thursday, October 20, 2011

Jay-Z 101: Inside The Georgetown Classroom

In a recent attempt for a teacher at Georgetown to get students to sign up for his classes, he introduces a new class, Sociology of Hip-Hop: Jay-Z. His normal classes usually ranged from about 20-30 people. After introducing this class, his class size grew seven times what it had previously been. In economic terms, Jay-Z is an incentive. Because Jay-Z is subject of class and more people sign up, there is more of an incentive to sign up for the class.

Daniel K.

Monday, October 17, 2011

Facebook Rumors: Charging Money to use it?

Lately, there have been lots of rumors circulating that Facebook is going to start charging $7.00 monthly for facebook users to create and be active with their accounts. Though the rumors are not true, why was it started in the first place? These rumors can simply be defined as supply and demand, a commonly known concept in economics. When Facebook is free, the demand for creating an account is very high therefore requiring more and more supply, like computer storage chips and such. However, when Facebook will require monthly payments the supply will be larger but the demand to create a facebook will lower simply because Facebook is only to communicate with others and have fun with sharing photos and such.

Sunday, October 16, 2011

Louis Vuitton Sales?

A luxury good is a good that does not apply to the law of demand. For "normal" goods, as the price goes down, the demand goes up. For luxury goods, the price never goes down, because the supplier believes that if it were to ever go down, the demand would go down as well. This is just a theory though, because the supplier wouldn't dare test it in fear of losing demand. Louis Vuitton bags are luxury goods, and according to this website, Louis Vuitton bags never go on sale. In fact, this author believes that "if these luxury, designer handbags were too cheap it would not appeal to them and they would place a lower value on these items.", them being the buyers. People who have these expensive luxury handbags believe that having these bags makes them more important. When people see others with this bag they immediately know that they have money and that they can buy something like it for themselves. Even if it isn't the best looking bag, it is still a recognizable status symbol. According to this article, "Wealthy people for the most part enjoy telling others how much they've spent on luxury items because it makes them feel good, important and rich." Even in this recession, Louis Vuitton bags stay at the same price, and they will as long as some people can still afford to buy them.

Beamer, Benz, or Bently... how bout neither?

As many of us teenagers know, Beamers, Mercedes Benz, and Bently's are the hottest cars on the planet earth. These luxury goods are the status symbol of our favorite rappers and celebrities in the 21st century. People like Tom Cruise, Rick Ross, Lil Wayne, and many more show off their luxury cars regularly, causing a "demand" amongst young kids all over the world. I put quotes around "demand" because it really is not a demand that kids have... its a fairy tale and a dream. Demand is something people have the ability to purchase with their current wealth, which very few have. Therefore, Beamers, Mercedes Benz, and Bently's will never be in demand with young people. Less than 3 percent of the world can afford such luxury items. This may have you thinking, if only three percent of people can buy these goods, how do they stay on the market and make any money? The answer is simple. Luxury goods always stay above the market, when I say this, I mean that supply and demand of these more expensive items are above the regularly priced car lines. For example, a Ford Focus is a middle class commonly bought car. This opens up a much larger economic class who can afford to purchase this car, causing the supply to fluctuate depending on the demand. This is not the case for luxury goods, which are perfectly inelastic because as opposed to the supply being the manipulated variable, demand is the manipulated variable for luxury goods. This is the reason that people are on lists just to get the opportunity to purchase some of the most luxurious Beamers, Benz, and Bently's.

Friday, October 7, 2011

Facebook Makes Extreme Changes

Facebook has recently changed the way their site works entirely. Now that they have to compete with sites such as Twitter and Google plus, they need to constantly update their site to keep people interested. They completely changed the way the privacy settings work. Now, people can choose who they want to share what with, which will probably cause people to gravitate to Facebook instead of other sites, because it is in the consumer's own self interest to control who sees what they do. However, some changes like the timeline are looked down upon by some customers. Some people don't want to see everything their friends are doing at the exact moment they are doing it. If Facebook would make getting rid of the timeline an option for customers, more people might want to use Facebook. Facebook makes changes all the time to keep up with the competition in the social networking industry, however, this time they may have gone too far for some of the technologically challenged people out there.

Monday, October 3, 2011

Sports Fans Are to Blame for High Salaries of Athletes

Many times the conversation has come up about the ridiculous amount of money the New York Yankees pay 3rd baseman, Alex Rodriguez. However, what fans do not realize is that they are the ones who contribute to his enormous salary. It's not necessarily their money, but because of fans passion for the game and willingness to pay more to see and watch baseball. Sports are businesses and they are high factors of production in our market economy. Due to consumer sovereignty, consumers get what they pay for and sports bring in a lot of revenue from tickets, television deals, and memorabilia. Players salaries do tend to be looked as a matter of societal importance rather than the worth of that product to a business.

Sunday, October 2, 2011

Rise of Dental Care

The steady rise of the cost of dental care has affected the majority of Americans. Some Americans without dental insurance haven't been to the dentist in 3 years while surgeons recommended twice a year visits. Statistics show that 77% of those without dental coverage have delayed regular dental care due to the cost. This has become a major issue because lack of oral care has been linked to diabetes, heart disease, and stroke. With as much as it costs to go to the dentist nowadays, some people are simply skipping out on their suggested biannual check-ups. As with any service, companies are inclined to provide an incentive to choosing their product. For example, has "pre-negotiated rates that is says are 20% to 60% lower than typical prices, says Winebaum." This is a glint of hope for customers who are looking for the best priced services in the economy today.

-Danielle W.