Archive forUncategorized

Obamacare

Although Obamacare is an incredibly controversial topic of discussion, there are recent articles proving that the economy has been growing since Obamacare passed in 2010. Some facts that prove this statement are that;
-more than 15 million jobs have been added through November
-the number of people who are struggling to pay for medical care dropped by 22%
and the share of uninsured Americans dropped by 8.9%
This article makes it clear that we need to stop using Obamacare as a scapegoat for our troubles within our economy.

Link Below:
http://money.cnn.com/2016/12/09/news/economy/obamacare-economy-jobs/index.html?iid=SF_LN

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U.S. Home Prices Hit New Peak

Supply and high demand forced home prices in September to a new peak nationwide.  This is hopefully the start of a new advance in housing recovery we have needed for a while now.  An example, is that in Seattle, prices jumped 11.0 percent year-by-year.  The supply for homes, however, is still fairly tight, but economists are hoping for the advantage to swing in favor of the buyers, rather than in favor of the sellers which it has been for years.

 

The link to this article is below:

http://www.cnbc.com/2016/11/29/us-home-prices-hit-new-peak-in-september-sp-corelogic-case-shiller.html

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OPEC Has a Deal, But Will Its Members Cheat?

This article in today’s Wall Street Journal represents exactly what we have been talking about in class when it comes to cartels and their incentive to cheat. Recently OPEC (Organization of Petroleum Exporting Countries) reached an undisclosed agreement to cut production in response to exceedingly low oil prices as a clear result of supply outweighing demand. The article expresses how all countries did reach this agreement, but there is no official mechanism for punishing members that decide to cheat and increase their own personal revenue. If OPEC truly has a goal of reestablishing oil prices to where they once were, they cannot afford to continue to cheat because if it continues, these countries will just continue to bid down the price of oil to its market price, as opposed to the monopoly-like, above market price that they are trying to establish.

 

http://www.wsj.com/articles/opec-has-a-deal-but-will-its-members-cheat-1481483692

 

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Energy Environment

http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0

This article illustrates the concept of Supply and Demand, as it talks about the changes in price per barrel, and the consequences of this occurrence. Not only are hundreds of thousands of workers losing their jobs due to the plunging prices of oil, but companies are also going bankrupt. This article talks about the current oil prices, and why they have fallen to its current state. Domestic production has increased, making the value of oil much less. The more we have of a certain product the cheaper it will be, mostly because not only will there be more of the product in the market, but there will be more producers willing to sell their product at lower prices.

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Bundling Products

http://www.economist.com/node/686457

This article illustrates the concept of “Bundling,” and how it can’t be easily done in some cases. “On June 28th, an American appeals court upheld parts of an earlier judgment that, by bundling its Internet Explorer browser with its Windows operating system, Microsoft was seeking to preserve, or even extend, a monopoly position in operating systems.” This illustrates the concept of bundling, and how certain companies will attempt to bundle items in order to in some sense spread their products into the market, by pairing goods with higher demand, with goods with a lower demand.

 

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Overfishing is a Big Threat !

In the article “Overfishing is a Big Threat to Humanity as it is to our Oceans” illustrates the decline of fish and other marine vertebrates– mammals, reptiles and birds– populations since the 1970. The author, Dermot O’Gorman, mentions how he saw fishers bring home fewer and fewer fish each day due to the amount of fishing that was taking place. As we get closer to 2050, it is expected that the demand for seafood will grow tremendously. However, this is a major issue for both humanity and the ocean. The more fish that are caught means the less fish in the long run for people to survive off of and it will affect the life-cycle in the ocean.

This article connects to Public Goods and The Tragedy of Commons because it shows how if there is not a restriction on people’s actions then things will get worst. An ocean is non excludable meaning nonpaying people cannot be excluded from fishing and it is nonrivial because people can use it and not stop the access of others. If there was a fine or a charge then people would be mindful about how much or how often they are fishing. If access to the ocean was excludable then populations would probably be higher.

https://www.theguardian.com/sustainable-business/2016/feb/16/overfishing-is-as-big-a-threat-to-humanity-as-it-is-to-our-oceans

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Price Ceiling Impacting Profits

Article: http://www.nst.com.my/news/2016/11/190653/msm-malaysia-appeals-raise-sugar-ceiling-price-profits-plunge-over-60pct
A major sugar producer in Malaysia is urging the government to raise the price ceiling that has been put on Sugar. The reasoning for their dislike of the price ceiling illustrates the effects caused by price ceilings. Because the government does not allow sugar producers to raise their prices, these producers are having challenges making profits because global sugar prices have increased greatly. Because these producers are not able to adjust their price to match the global price, they are facing challenges in making profits. If producers are not able to increase there prices, it is very possible that the sugar industry will face shortages and reductions in production quality. In order to save money without raising prices, sugar producers will have the incentive to use cheaper production techniques that will have a reduction in the quality of the sugar they produce. As well, since the sugar producers will not have a great incentive to produce as much due to lower profits, it is possible that there will be a sugar shortage because producers will not supply enough sugar to satisfy the consumer demand for sugar. The sugar producers have faced a serious decline in profit since the global increase in the price of sugar. Without a change in the price ceiling, the sugar market in Malaysia will face the negative effects caused by price ceilings.

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Wheat Hits Record Global Demand

http://abcnews.go.com/Business/story?id=4017581&page=1

One of the main principles of microeconomics is the law of supply and demand. The laws of supply and demand show the effects of supply and demand graphs on each other, as well as how the prices in the market can fluctuate depending on the level of demand for a specific product. In the article, the laws of and supply are shown regarding the global produce market. The main product that is focused on in the article is wheat as well as other grain products and corn. She explains how prices of wheat have skyrocketed recently due to a lack of supply, while demand remained the same, if not higher. Due to the fact that there is a shortage of wheat, the producers need to charge more per bushel in order to keep their businesses afloat. The reason for the prices jumping is that there has been severe weather in the countries that are known for producing and exporting wheat. In addition to that, the United States has also caused a decrease in the supply of corn, which could also have created a jump in price in the corn market. The US contributed to this decrease in supply because of the decision to use corn to produce ethanol rather than sell it as the fresh produce/vegetable people wish to buy it as.

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The Ocean is a Common Resource

Common resources are rivalrous, so they commonly suffer from overuse and unsustainable exploitation. The ocean is an example of a common resource for many reasons including pollution, overfishing, etc. This article from The Economist focuses on overfishing and the issues that come along with trying to regulate it. The ocean belongs to no one so it is very difficult to control through individual governments because of the fear that if you don’t go above the sustainable amount, someone else will and you will make less revenue. So even if one government did the right thing and started to regulate overfishing more, there would be little to no change overall. Most nations have signed a “law of the sea” but there is little enforcement of this law and people have high incentives to cheat.

http://www.economist.com/news/leaders/21596942-new-management-needed-planets-most-important-common-resource-tragedy-high

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Overfishing and Tragedy of The Commons

https://www.theguardian.com/sustainable-business/2016/feb/16/overfishing-is-as-big-a-threat-to-humanity-as-it-is-to-our-oceans

There are many problems with the worlds oceans as of recently. Data can be seen in the article of fish populations and other underwater mammals, and how their populations have been cut inhale since 1970. The people who rely on fish for a source of income and food are left in a state of panic. This had opened a lot of peoples eyes that this problem is just as big of an issue for the human population, as the estimated demand for fish will increase just as the human population will. As fish stocks are in large declines, global seafood demands are estimated to grow another 50 million tonnes by 2025. This situation happens to describe an open access good. The problems that are caused by over fishing cause a negative effect on fishing and the demand for it. But since fishing is a public good, and has the negative effect on the environment and people around it, this causes it to be an open access good.

 

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