Monday, February 27, 2012

Prom dresses in relation to the economy

It's prom dress season and for all the girls, it is one of the most exciting times of the year for shopping! There is a variety of options, colors, designers and many more to choose from. Many girls have already bought or ordered dresses and prom isn't even until April or May. So why all the hype for these designer dresses that range from hundreds to thousands of dollars? After all, it is just one night to dress up and show off a beautiful but expensive purchase. Plus, every year prom dresses seem to get more expensive. However, women seem to run the economy. At least the shopping aspect of things. I've heard a saying once that said, "Without women in the world, money would be useless." Since all these girls are planning to spend millions of dollars overall on dresses, it is a stimulant for the economy and allows us as a society to continue our recovery from the recession. I believe since people are planning on or have already spent several hundreds of dollars on dresses, this shows how our economy is improving and into a recovery phase.

Friday, February 24, 2012

Stopping the drug war or producing more addicts?

Milton Friedman talks about legalizing drugs. He makes so very interesting points. He explains that legalizing drugs is a moral issue not a economic issue. He post the question why is the government wanting to make criminals out of people "who may be doing something you and I don't agree with but is causing harm to no one else?." The initial reaction I had was well when you are under the influence you have a lack of making smart judgments and you may harm other people. But after looking at it through a different perspective I saw that hypothetically if I was walking down the street smoking a drug that is illegal I would get arrested and put in jail causing one more person in the already over crowded jails, making me a criminal and making it less likely for me to get a job. Going to jail even though I am not causing harm to anyone but myself seems petty and a waste of time. At the end of the day Milton poses the question that how far should we let government in our personal decisions? Over eating causes negative effects as well as illegal drugs but the government doesn't tell you ho much you can eat. Exactly where do you draw the line?

Thursday, February 23, 2012

In this article the author, David Francis, expresses a concern that even though we are likely headed into a recovery, it will likely be what is considered a "jobless recovery". Jobless Recovery basically means that the economy is improving, but there aren't many jobs created/available in the process.

As the economy improves some new jobs will become available but some of the old ones, such as manufacturing jobs, will no longer be available in such large numbers as before. These manufacturing jobs for the most part have been shipped over seas or their pay has been dropped so much that no "American" would be willing to take the pay cut. Francis explains that since many old jobs are disappearing and different ones are being created, the only way to keep up with the growth of the country is education. He explains that people must go back and "retrain" (go to college) so they will have marketable skills that can get them a decent job. The people currently preparing to go into the workforce also need to make sure they equipped them selves with skills that are necessary to get a job in the near future, and hopefully get them by the rest of their lives. Francis also points out that as college become more important, the cost has gone up significantly. So, for those who can't afford the big universities, community college is a decent plan B that can still help these unemployed get back on their feet. Other wise, people will remain unemployed and keep this cycle of recovery from reaching it's full potential.

Friday, February 17, 2012

Yes, I know we have talked about welfare a lot in class. I have already done a post about welfare.This video looks at a different side of welfare. In my last post about welfare I discussed how welfare effects the economy viewing the world as a economist. But have you ever thought about a person on welfare feels? And how that will effect the economy? I do not agree with what Milton's approach, that we should cut welfare and maybe that will force people to get a job. Milton and the people in this video do bring up an interesting perspective on welfare. We often look at welfare as a hard working taxpayer, but have you ever seen welfare  through a different pair of glasses? The first family in the video cannot receive government assistance because they earn only a few dollars too much, but they are not making enough money to pay for their child's medical experiences. The family has tried  to receive medicare care but they can only qualify for five dollars a month. Milton goes on to talk about how many families that receive welfare often create a cycle of government hand out among the generation. Milton also goes on to explain that being on welfare takes away their "human independence". Once interviewing another family, Milton concludes by saying that welfare doesn't only effect the economic stand point but also the "moral fibers" of Americans.The people giving out the welfare feel a "God like power" and the people receiving it feeling a "child like dependence".

Thursday, February 16, 2012

This video explains supply and demand, and why the two rely on each other, but in this post i'd like to focus first on "supply".

Supply, in simple terms, is the amount of a product that will be available at a particular price, and the law of supply states that more will be made available when the price is higher. For example, if the iPhone costs $90 to make and apple is allowed to charge customers $400-$500 to buy the phone, more will be made. But if the phone cost $300 and Apple can still only charge $400-$500, less iPhones would be made because they wouldn't bring in much of a profit.

When bringing supply and demand together, like on the video, both the supplier and consumers point of views are brought into the picture and things get a bit more complicated. When quantity of whats demanded meets the quantity of what is supplied a market equilibrium is met, which looks like this. But when one changes, supply for example, everything changes over time. If the price of drilling and refining oil goes up, the supply line on the graph will change. In this example, the supply line would move to the right, thus causing the quantity of supply at the original price to decrease. Meaning before $2.15 would have gotten you a gallon of gas, but now it only gets you half. This also causes the original equilibrium to move up.

There are several factors that could cause the supply line to shift in a market, such as change in cost of inputs, taxes and subsidies, change in the amount of sellers, future expectations, etc.

Thursday, February 9, 2012

According this article, the super bowl was bigger than ever. Generally, the Super bowl brings in the most money in a calendar year, but this year it brought in more than money than ever in history. But why?...During Super Bowl the food, beer, and tv sales tend to go up since so many people raid the stores at that time. This year, the same thing happened, but even more people did it!

During black friday and the holiday sales, it was expected that tons of TVS would be sold, so the supply went up. But, the normal demand for TVS just didn't happen, leaving the companies with a surplus of TVS. Because of that, the were forced to drop their prices a big more to get rid of the left overs. When Super Bowl came around, people took notice in TVS again, and a record amount went out and bought new TVS. This is one factor that led to making this Super Bowl the biggest in history.

Monday, February 6, 2012

Nothing Bundt Cakes in relation to supply & demand

Nothing Bundt Cakes is becoming a popular cake chain throughout various parts of the United States. With its moist cake and unique concept, it is no surprise consumers enjoy walking into a store and quickly become returning customers.
Supply and demand is an important thing in any business if they want to continue being successful. However, supply and demand is a delicate balance and many factors can affect it. Consumer demand is important because if demand changes it may affect the supply and overall sales negatively. Nothing Bundt Cakes strives to continually develop strong, friendly customer relationships that allows the customer to enjoy walking into any store and enjoying their product, bundt cake. If the economy continues to worsen, Nothing Bundt Cakes could face a loss in consumers and therefore causing a chain of struggling Americans starting with the consumer up through the employees and operators of the corporate offices. Another factor that affects supply and demand greatly is future expectations. Since Nothing Bundt Cakes is a cake shop, they mainly focus around holidays so they can market appropriately and gain spikes in profit around those times. Without demand for these holidays and special occasions, Nothing Bundt Cakes may not survive.
These are only two of the concepts we covered in relation to how supply and demand could be affected. Obviously they are two important factors in any business but these two especially to Nothing Bundt Cakes.

Friday, February 3, 2012

This article/video talks about American Airlines cutting jobs nationally. American Airlines has a maintenance base here in Fort Worth. The base is expected to close, leaving a lot of people out of work. The company is said to out source some of these jobs in order to save money and emerge a stronger and better company at a later time. What caught my eye was that, American Airlines is outsourcing some of these jobs. By the company out sourcing raised some moral questions. Saving money is what every business man wants to do, but at what cost? A lot of people will be out of a job because of this outsourcing. Many people knew American was going to cut jobs in order to save money, but these cuts are far among peoples beliefs. American Airlines should keep the creditably to it's name and keep the jobs in American even though it would cost more money

Thursday, February 2, 2012

Oil Demand

In this article, the rapid rise in gas prices is explained. It is believed that sometime during this year, the price of gas will reach atleast $100 a barrel, and $5 a gallon. Main factors that have led to the rising prices include growing/improving economies around the world, and Americas lack of being able to drill.

In Asian countries such as China, major economic growth is taking place, thus causing a substantial increase in the demand for oil. With more people wanting more oil, the price is forced to shoot up because the supply is rapidly decreasing. It is unfortunate, but it seems that as more countries thrive, the worse off the countries that are already established are. If everyone starts demanding as much oil as the US, the world as a whole will be in a VERY bad position. Environmentally and Economically.

Generally, to off set this huge inflation of oil prices, America would just drill for it's own oil. But, because of the disaster in the Gulf, a majority of drill has ceased. Even though companies have been given the ok to start drilling again, because of regulations, the main oil wells of the Gulf are inaccessible, this making drilling in the Gulf nearly pointless at this point. The amount of oil that would come from the Gulf wouldn't even come close to lower our demand for foreign oil.