Archive forSection 02

Would You Spend $1,849 for a PS4?

In America the going price for the new PS4 is just a mere $399.99, a small number in comparison to what it’s listed in Brazil. It’s sad to say that for many Brazilians they’re forced to pay R$3,999, roughly $1,849, for this counsel. This ridiculous pricing isn’t because of price discrimination but rather due to tariffs. In an attempt to eliminate gambling in Brazil, the government decided to heavily tax any item labeled as a “game,” especially ones imported into the country, thus the price of video games has also been affected. Yet regardless of the price, Brazilians are still willing to pay the fee which has resulted in Brazil possibly being the “fastest growing games market in the world when it comes to total consumer spending [with an] anticipated growth of +32%[,] way ahead of the global average of +7% and even more compared to the US with +1% and Europe +3%,” says CEO Peter Warman on Newzoo’s website.

To read more regarding this issue, please check out Forbe’s “The PS4 Will Cost More Than $1,800 In Brazil” article.

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Why Government Should Spend More On Public Goods

http://www.forbes.com/sites/timworstall/2013/05/05/why-government-should-spend-more-on-public-goods/

This article discusses the definition of public goods and how they are non-rivalrous and non-excludable. Public goods raise an economic problem in a free market or capitalist system because private actors do not want to invest in them therefore people such as Tyler Cowen argue that the government should produce and provide more of these goods.

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Climate negative externalities show dismal hope

This article in the New York Times discusses how although renewable energy in the short term seems environmentally and economically beneficial, in the long term many problems arise and make the negative out weight the positives; an example being the cost of wind turbines, and inconstancy of wind powering them. The article also discussing how taxing CO2 emissions will not show much economic profit because of the cost of producing energy from coal. All of these negative externalities make the future of climate change inevitable.

Article

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The Economics of Sexual Inequality

This article from The Economist discusses how the failure of many third world countries to educate girls is a wasted resource.  The author points out that reducing sexual inequality, especially in terms of education, will provide many benefits, including improvements in female health and a decrease in child mortality.  However, there are no incentives in many of these countries to improve girls’ education.  In Uganda, for example, females comprise the majority of the agricultural workforce, so families put their daughters to work in order to support the family income.  However, this is only beneficial in the short term.  There is a greater incentive to keep boys in school, since educated males are more sought after in the job market than are educated females.

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American Candy Makers, Pinched by Inflated Sugar Prices, Look Abroad

This article discusses how many American candy shops are looking to move internationally, as the cost of sugar is far too high due to the federal sugar program, which uses import restrictions, production quotas and loan programs. The price for wholesale refined beet sugar is about 43.4 cents per pound, while the world price is 26.5 cents per pound. American sugar producers say that it is necessary to keep other countries like Brazil, India and Thailand from flooding the American market. But this is destroying small businesses who make candy and is driving them abroad because of lower sugar prices. They use the example of the Spangler Candy Company in Ohio (maker of Dum Dums) who moved 200 jobs to Mexico. Other companies have been forced to do the same. People are hoping for a change with the sugar program, but sugar producers keep lobbying to keep it the same, because it works to their advantage.

http://www.nytimes.com/2013/10/31/us/american-candy-makers-pinched-by-inflated-sugar-prices-look-abroad.html?pagewanted=1&_r=0&ref=economy

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Price Ceiling in India

This article announces a change in price ceiling in India on pharmaceuticals.  Because of the current state of India’s health care system some of these changes will help people be able to afford necessary medication.  http://www.indianexpress.com/news/drug-price-ceiling-to-be-revised-with-fresh-data/1131392/

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Halloween spending seen cooling down this year

http://money.cnn.com/2013/10/15/news/economy/halloween-consumer-spending/index.html?iid=SF_E_LN

The National Retail Federation estimated about $1 billion dollars less would be spent this Halloween compared to the $8 billion dollars spent last year. They believe this is caused by a decrease in consumer confidence due to expectations of the economy to drop. In other words, the expectations of a declining economy  has resulted in less consumer spending on recreational goods such as costumes and candy for Halloween.

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Elasticity of Milk

Because of government shutdown, the latest Farm Bill has expired. The result of this is the chance of milk prices doubling, which are making consumers looking for an alternative. This is addressed in a video published by Time Magazine

VIdeo Link

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Buying Food That’s Past Its Prime to Save the Planet

http://rendezvous.blogs.nytimes.com/2013/06/25/buying-food-thats-past-its-prime-to-save-the-planet/?ref=foodprices&_r=0

This article talks about how grocery stores sell foods that close to its “best by” date. It suggested that the demand for the nearly expired foods is very elastic. The article said the popularity of these food is growing because consumers become price conscious. So when the prices go down, many would be willing to buy food that is close to its expiration date.

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Willingness to Supply Gold

This article describes the struggle of African Barrack Gold, a gold mining company that is more reluctant to sell it’s gold as the price of gold continues to fall. With the London based company losing %60 of its value per share and gold at $1300/oz the company is losing profits. The article goes on to say that the supply of gold is diminishing because of a rising in production costs which are affecting miners profits. This article is useful in illustrating how production costs can affect producer surplus and supply curves.

http://www.ft.com/cms/s/0/d7503d88-1ebe-11e3-b80b-00144feab7de.html#axzz2gL3QMOR8

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