Wednesday, May 11, 2011

FEMA Issues

FEMA, the Federal Emergency Management Agency, is responsible for giving aid to Americans who are left with practically nothing after a natural disaster. In 2005, a busy year for FEMA, several thousand grants were given out to those who qualified for the money- and also to those who weren't. FEMA has issued a statement to about 5,500 people that they need to repay the money sent to them by FEMA. Victims of floods, and possibly victims of hurricane Katrina, will be asked to repay what was given to them. Now, nearly all of these people have already spent the money in efforts to restart their lives, like for a new house. These people don't have that kind of money anymore- in some cases up to $27,000 is being requested. Also, these people were given 30 days to pay it off. Obviously this is very unreasonable, so FEMA is attempting to come to an agreement with them and try and find some sort of payment method. FEMA is requesting this money back because of financial, and employee errors. In times like this, it's almost impossible to expect from these people what FEMA is asking. In hard economic times, these people, who are just not getting their lives back together, can't afford to lose it all. My question to the readers, is do you or do you not think the people should be required to repay what they were given? Remember the money given to them in the first place was not a loan, and is typically not required to be re-payed. However, the agency is still obligated to try and reclaim misplaced funds. So please comment with you're answer, as well as an explanation why you feel that way. I personally believe that these people should not have to repay what was given to them years ago because the money has already been used to jump-start these people lives after a devastating natural disaster such as Katrina. There is no way these people can afford to pay $20,000, especially in a recession like this. Making these people repay this money will just complicate their lives even more, and make things much harder. Maybe a payment plan is more reasonable though, as I do understand that the agency is required to reclaim these funds. Let me know what you think!

-Matt Willis

LBJ Construction Faces Difficulties

LBJ, one of the most congested highways in the nation, has recently begun a 5-year construction project to reduce the terrible 5 o'clock traffic. According to an article about the construction, over 500,000 vehicles each day travel this highway. The project, $2 billion dollars in itself, includes the addition of 13 miles with new lanes for LBJ and 4 miles south on 35E. The construction will also include some underground toll lanes for those who are willing to pay for the project. But obviously, there are bad things that come with the reconstruction too.

During the FIVE year period in which this will take place, consumers can expect even more traffic from the construction. Certain lanes will be blocked off, access roads will be shut, and exits will be changed. Combining this post with another article, I read earlier that many businesses located along the highway are worried they will loose business from the folks that are not willing to exit the traffic. Due to this fear, organizers say that most of the project will be worked on during the evenings and nights to eliminate the possibility of economic downfall for businesses.

Since I live right next to LBJ, I see just how crowded the highway can get. But hopefully, after the construction is finished, the additional lanes will be worth the time and money. LBJ is expected to be able to hold up to half a million consumers at one time.

-Amber Stephens

Google Chrome PCs

According to a recent article, the new Google Chrome PCs will go on sale in June to compete with Apple and Microsoft as the world's best search engine. These PCs are part of Googles attempt to create an easier and more convenient computer for consumers. According to the Chrome website, this software is faster, simpler, and safer. In many ways, it seems as if this product is replicating the Apple software (only in a different way). Since so many people are already satisfied with the simple and clean Apple products, what makes Google think they will switch to Chrome? Google says that the software is "essentially a web browser that steers users to use applications like email and spreadsheets directly on the web". This would not only boost the number of consumers willing to try Chrome, but could possibly reduce the number of consumers using Outlook or Word. Chrome and Windows (a program that has been used and trusted for years by almost 90% of the world) are huge rivals since they are compliments to one other. Google is trying to satisfy their customers by removing the burden of time consuming tasks like installing updates, backing up files, and running anti-virus checks. Using the internet reduces the need to do these things. Additionally, since Chrome requires consumers to use the internet more, many will choose to use the Google search engine, "boosting Google's Internet ads business".

But what about those people without internet? It would be hard to create or access an important document if internet service is unavailable for your new laptop. Google needs to come up with some sort of solution to this.

Let's not forget that the demand for Apple products continues to increase and the software is only becoming more popular with time. Google will need to find more ways to attract the attention away from Apple and more to itself. Lowering the prices in June is one way that could create more demand since it will be more affordable.

-Amber Stephens

Toyota quarterly profits drop but recovery expected

According to a BBC article, “Toyota Motors' profits plummeted by 77% in the last quarter because of disruption caused by March's earthquake. “ Reports say that profits fell to $315.5 million USD between January and March. The drop is caused due to a shortage of parts caused by the earthquake. They claim that by July production will start increasing but that it will not recover until the end of the year. Toyota Motors is currently having a shortage. Thought eh demand remains the same or probably even higher, the company is unable to supply the quantity demanded causing disequilibrium. During this time of the shortage Toyota will losing customers to competitors creating a substantial loss of profit for the company. But as well over the time of their shortage, demand will build up, as more and more consumer want to purchase a car from Toyota. This build up of demand will eventually benefit the company in the future when they are able to supply the quantity demanded. Over the next few months their production will pick up and the factory will start being able to supply more cars, witch eventually will put their market back in equilibrium and some of their profit will be made up by the excess demand during the shortage.
Santiago Z

Gaga for Lady Gaga!!!

Many people know about Lady Gaga due to her catchy songs and her eye-catching outfits. Her audience is very diverse because of her songs and her speeches of one being who they truly are. She has been able to sell out every concert of her Monster Ball tour at an age of 25 years. Tickets averaged of a cost of $112 making a fortune. The demand to see Lady Gaga is very high but not everyone can afford a ticket and going to a concert of hers can be seen as a luxury that not everyone can enjoy so the supply is very limited. Some fans will save their money so they will be able to buy a ticket so they can do the trade-off they desire. Due to her big audience companies such as Virgin Mobile want to use her image and be promoted in her concerts to obtain consumers. Virgin Mobile even donated $20,000 as stated in the article to secure the liability of Lady Gaga to advertise Virgin Mobile in her concerts. These is a strategy of Virgin Mobile to obtain a variety of clients on behalf of Lady Gaga, who many fans perceive her as an icon, since many fans want what their idol have in a lower scale. Will other companies call Lady Gaga to promote their goods? Will Lady Gaga be one of the richest singers in the future as her concert prices go higher and demand increases?

By Abby Garcia

McDonald's Vs. Subway

Food is inelastic because people have to consume food regardless of the price. However, the people have the right to choose what they want to consume. Logically they will target the cheaper food products. Recently, the Subway food chain will soon surpass the McDonald’s food chain of restaurants. Even though the McDonald’s budget passes Subway’s budget by billions of dollars, Subway is determine to open more locations. A strategy that McDonald’s utilizes is it has many locations internationally while Subway tries to open locations in places such as malls, stores, and gas stations to provide the option of food without crossing the street. McDonald reassures that in the long term of business it will still surpass Subway. On the hand, the popularity of Subway is growing we can start to see that consumer sovereignty is going towards healthier food options with lower prices, which represents competition for McDonald’s. Consumers are starting make better trade-offs such as buying a Subway sandwich over a 2,000 calorie meal at McDonald. Consumers will always look for their options to pursue their self-interest. McDonald and Subway must keep present that some consumers can make a decision due to the income effect and McDonald’s has a dollar menu, which is a disadvantage for Subway. Will Subway surpass McDonald’s profit in the future? Will Subway suffer economically and shut down locations giving McDonald’s the win?
By Abby Garcia

Microsoft Expansion

All businesses go through an expansion period, and recently, technology giant Microsoft has begun to expand again. On May 10, 2011, Microsoft bought Skype for $8.5 billion. This expansion allows for many more consumers to get the benefits that Microsoft has to offer. Skype had over 170 million users at the time of the purchase. This influx of consumers for Microsoft will surely increase demand for other Microsoft items. For example, Microsoft is thinking about offering Skype on the Xbox Live Marketplace. While it’s a stretch, this may provoke people to buy the Xbox game system if they were originally a PS3 person. However, many of the other gaming systems don’t offer this level of social networking, which is a major factor these days in purchasing game systems. This will create an increase in demand, which in turn will drive prices to equilibrium. Since an increase in demand is an outward shift of the demand curve, equilibrium would drive prices higher for Microsoft products, thus providing the opportunity to gain more profit, which is the goal of all businesses and firms. Skype is also going to be offered on Windows phones. So not only is Microsoft’s purchase going to show up in the gaming community, but it’s also going to show up in the general community. This is going to increase demand for Windows phones. And if equilibrium is reached, then prices for Windows phones will go up, maximizing Microsoft’s profit.
-Mark E.

PSN to Be Running Again by May 31

Many PSN users will be happy to hear that their beloved gaming network will be up and running again by May 31. For almost three weeks, the massive networks of gamers that use the PSN haven’t been able to access online gameplay due to the hackers that attacked it. This caused Sony to shut down the network until the problem is fixed in order to prevent further damage by the hackers. Everyone’s suffering from the outage of the network. There’s bound to be a decrease of demand this month due to the outage, which screws over Sony in this month’s profits. Fortunately though, this decrease in demand should drive prices for the PS3, or anything else that has the PSN, lower. However, I think it would take a much longer time for this decrease in demand to deal any major damage. On the other hand though, producers and developers of the major games that use the PSN are also getting screwed over. People aren’t going to go out and buy a game if they can’t even access the online portion of the game. This really hurts Sony because everyone who would have bought a PS3 this month during the outage, and the games that go along with the system, have most likely turned to Microsoft and bought an Xbox, which is a substitute for the PS3. For the most part though, we won’t see the extent of the damage until it releases its sales report sometime this year.
-Mark E.

Baskin Robins making a deal with 31 Cent Scoop Night

Baskin Robins 31 Cent Scoop Night was a huge success for all of the neighbors surrounding nearby locations on April 27. This event was inspired by the National Fallen Firefighters Foundation. For the fifth year in a row Baskin Robbins has had more success than imagined, raising $100,000 all for charity. The event raises interest and demand for customers and for some is a very sweet treat with the price and the ice cream. We all know that with summer coming around this spiked the demand for many ice cream lovers and got them re-interested in their favorite sweet treat. This was a very smart move on Baskin Robins part because, by lowering the price, consumers are more inclined to buy more than one scoop, then spending more money, and also more likely to come with their families and friends to have a cheap night out. With the price lowered, consumers feel more at ease with their purchase, and will not have buyer’s remorse when it comes to overpriced ice cream. This will then make the consumer think back to the good times they had at Baskin Robins and come back there, thus increasing the flow of the economy.

--Sarah Allegro

Tuesday, May 10, 2011


Seeing a fight is a form of entertainment, which boxers inside the ring gain millions of dollars. For example, the fight between Mosley and Pacquiao should have had a better outcome. Viewers were disappointed at the performance of these well-known boxers. As a result, viewers suspected the fight was just fixed for profit. The representatives knew that by fixing this fight would result in high profit because peoples’ demand was high and the prices of tickets were ridiculously high because they knew that people were willing to pay a high cost for this boxing match. The ticket prices for famous boxers such as Manny Pacquiao seem to be inelastic to his fans; therefore, the representatives take advantage of this fact to organize a fight that will produce millions of dollars. The income effect will come into play as the fans will start to save money and cut themselves from other trade-offs in order to be faithful to their idol Pacquiao. The organizers have already starting to plan a match between Pacquiao and Mayweather that is surely to generate more millions than this past match. However the question still remains if famous boxers keep organizing matches that will produce millions will the demand go down if the performances keep being unsatisfactory to the public like this past performance?

By Abby Garcia

AT&T Starts Capping Broadband

This week, AT&T began capping Internet delivery to DSL and broadband customers. Economically, I can see how AT&T would feel the need to start this cap. AT&T analysts strategized this move, like many other broadband providers, such as Comcast. This move was set in place, in order that customers will not completely drop cable or satellite. Many customers have found that video on demand, like Netflix and Blockbuster, instead of television on demand works out perfectly for their situations. AT&T economists do not want Netflix to become a monopoly, and lose money on the cable companies. This cap was also set, because the highest-traffic users download as much as 19 typical households, on average, which slows speeds for other users, AT&T said. Personally, as soon as my family and I, AT&T U-Verse, and cellular users, heard of this news we quickly started looking into other cable, Internet, and cellular options for us. Even though in the big picture for AT&T this is a smart move, because eventually all cable providers will begin enforcing caps, in the short run, I think that AT&T will begin to start loosing many of their valued customers. Looking at the comments at the bottom of the article attached, you can see that many are very upset about this and the AT&T users will begin to decline significantly.

Sarah Allegro

Groupon, Live Nation partner on concert discounts

Groupon and Live Nation have decided to join together in selling discounted tickets for concerts around the country. Both of these discounted ticket sites are both successful individually. By combing both of these major companies, each company will lose money. Joining these two companies will cause the demand to go higher but the price of the tickets will remain the same, causing each site to lose money. Although each site will be loosing money, people in general will be more pleased. Combing these two sites will allow people to pay less for a better concert. Live nation and Groupon used to be compliments of each other, but now that they have combined, it will make the site more pleasing to others, not including themselves. Buyers, like me will be spending less time working on finding the best discounted concert ticket price, because there will be one less site to check on.  Which is another reason why combing these two major companies will be easier and more useful to the people. Although the companies may lose money, each company has had their own strengths, which, in the end will help the combining of the two companies more than the others. Live Nation and Groupon both, together will have to compete against the most widely known discounted ticket seller, Ticketmaster. Also, by combing these two companies it will cause a greater competition between all of the discounted concert ticket companies.

-Meggan S.

Monday, May 9, 2011

Payrolls Show Strong Growth but Jobless Rate Rises

Unemployment ratescontinue to rise while the pay rate and number of jobs available increase. This is showing signs of a lagging indicator; people are seeing older unemployment rates and are figuring there is no chance to find a job, while indeed there are plenty of new jobs available everyday. Motoko Rich, the writer of the article stated that they major worry for the Labor Department is that unemployment insurance claims are still rising. Leaving economists to question what the problem is have unemployed Americans just given up? Or are the available jobs not what they are looking for. A big factor coming into play is the rising gas prices; it is difficult to drive around looking for a job when they know that gas is at about $4.00 a gallon. The job market right now is a huge lagging indicator though, economists make note that the job market right now might be seen as bad, but it isn’t as bad as it seems. Along with the number of jobs available, they pay rate has increase by three cents, but the hours worked is still a little flat at about 35 hours per week on average. It doesn’t mean we are out of the woods completely but it is an “out of the woods report.” So there is a light at the end of this tunnel of the great recession in the job market.

-Haley M

Sunday, May 8, 2011

A 50-Book List in This Economy

Well here's a little nugget from the UK. The Independent online newspaper just released an 'official' 50-book list, deemed the fifty books that every child, eleven years old, should read. Talk about advertising; The Independent, being on par with the Huffington Post in America, is one of the most read online magazines in Britain, and has an enormous fan base, which, statistically, must have a good handful of parents of younger-aged children. While many of the books on the list could be considered classical works, many are contemporary works by authors still avidly working their craft.

Regardless of whether the literacy rate rises, or the average books-read-per-year increases due to this list being published is insignificant. What this list will surely do, is increase both the supply and demand of all the books given on the list. As parents flock to bookstores to buy the 'books all their kids should be reading,' the price for each book will naturally increase to eliminate the excess demand that could spring up from this list. Going past the books though, what does this mean for bookstores? It's safe to assume that, because many of the books are classics that the parents have read themselves, some parents will succumb to reacquiring the old editions of the books that they read as children, meaning small business bookstores could see a small surge in customers due to this list as well, as the large, chain book retailers tend to stock only the most modern versions of the books on their shelves.

-Zander Mapes

The Death of the Playstation?

In case you missed it, the online system of the Playstation --Playstation Network, or PSN-- was hacked in the last week of April. It was a big fiasco, as thousands of credit card numbers and various other forms of user information was stolen, and Sony had to shut down the PSN entirely, leaving many people without a way to watch movies or play video games. However, what's worse, recent reports indicate that much of the information has been released by the hackers online, and Sony announced that they would not be able to re-initiate their online system until a later, undefined date. How does this relate to economics? It's a prime example of a situation that would cause people to substitute products. Commonly, the theory states that a person will replace a product they are purchasing for something less expensive, and sometimes inferior, especially if their income changes suddenly, but what happens in a situation like this? Surely, some people will temporarily, if not permanently, move to another medium of entertainment, inferior or not. Surely, Microsoft will see an increase in users of the Xbox and their online system, or Nintendo, with their Wii and online system. Basically, the sudden lack of demand for the Playstation is leaving a vacuum that will naturally be filled with the supplies of the video game alternatives available. A similar situation seen in the past would be the situation that Peter Pan Peanut Butter found themselves in a while back. Reports of Salmonella kept popping up due to consumption of that Peter Pan brand. Naturally, people replaced the Peter Pan Peanut Butter they usually purchased with another brand of peanut butter, at least until the Salmonella scare had passed, but I'm sure some people ended up finding themselves fancying their new peanut butter from then on, whether because of continued fears of illness, or because they preferred the taste. So, too, will some people permanently drift away from their Playstations.

-Zander Mapes

Thursday, May 5, 2011

Fish Soup

Would you break the law if it were lucrative enough? How lucrative you say?
How about $40 per unit. No its not meth, its something much more dangerous you'd
be smuggling…something that could take a chunk out of you. Recently a fishmonger
weighed the pros and cons of smuggling the illegal snakehead fish in New York. Sadly it
didn't work out for him since he got caught and now must face the consequences. The
economics behind this escapade though are pretty interesting. Mr. Wu (the fish monger)
would sell snakehead soup for close to forty dollars a bowl. The demand for this bizarre
delicacy was obviously very high since he could charge an arm and a leg just for a bowl
of the stuff. Not to mention there was enough demand that he would risk getting some
major consequences for breaking the law if caught. One must deduce then that the reason
price is so high is because the supply doesn’ t meet demand causing a flux in price by
creating a second market. The invisible hand of the market place will always move the
price of an item to equilibrium…even illegal ones. As long as snakehead fish are still
in high demand, the supply will continue to rise-no matter the cost of life or limb. Feel
free to read up here.

-Henri Levy

The (Anti)Hipster Movement

An infestation has been sweeping across America recently. I have been an actual witness to this. We have been over run by hipsters. Being humane though we don’t want to kill the hipsters we just want to put them in a place where we can't see them. Here's the skinny jeans on the situation. There is a HUGE supply of hipsters right now. Now our demand of hipsters cannot keep up with the amount of hipsters there are. Their pretentiousness is only tolerable in 2s or maybe 3s but any more is too many. Since are demand for hipsters is dwindling, the supply should start dropping soon…one can only hope. With this surplus of hipsters we must decide what we want to do with them. We have two options 1) take care of them 2) put them somewhere and let the government take care of it for us. The best decision is to put the hipsters somewhere and just pay the spillover cost of doing so (spillover cost being the price we pay when government picks up and deals with trash and waste). The benefits are many by doing so. The most notable being reduced time around them. Help fix the problem by reading the article here

-Henri Levy

Going green, or going down?

The posting of First Solar’s first quarter earnings were shocking compared to Wall Street’s estimates on Tuesday May 3, 2011. First Solar is one of the world’s largest solar energy companies which received an estimated net income of $116 million for the first quarter this year, 2011: this number represents a 33% drop from the first quarter of 2010 which would have brought in about $154 million. Net sales, however came in at $567 mil this quarter which was very similar to last year’s net sales and was greater than estimates of about $544 mil. First Solar mentioned that lower sales this year led to lower selling prices which inevitably lowered their net income this quarter. This statement very well explains the law of supply in their situation of decreased sales. With these number not even in favor of the company, CEO Rob Gillette of First Solar felt there was good hope for rising demand in the rest of 2011. With this positive attitude, it is estimated that net sales by the end of 2011 will approximately hit $3.7 to $3.8 billion. Hoping that net sales will rise to these numbers by the end of this year’s fourth quarter, First Solar will have to find the key to greater demand. In this economy though, with its high gas prices and go green attitude, this should hopefully prove easy to accomplish.
Written by: Holly Williams