Although I understand that many people are suffering from unemployment and poverty right now, I think minimum wage should stay the same. If increase, only by a little. Yes, by increasing minimum wage, workers would gain more money and have a slight alteration in their lifestyle but if increased by too much, employers would no longer feel the need to hire more workers because that is taking money out of their own pockets and with less money to work with, they don't have the motivation of expending more money to hire and pay even more workers. Instead, they might take the easier route of cutting workers and even replacing them with technology in order to save money which is not the right approach for the economy. I think the best choice is to stabilize the current minimum wage and promote more small businesses and future business leaders to create more jobs and generating a greater workforce for the unemployed suffering right now.
Would the economy be able to provide and work with a minimum wage of $10.00? What would need to change in order for this concept to work?
Monday, October 29, 2012
Price Floors
Price Floors should also not be implemented because it won't have any benefits for our economy. If the price floor is below then nothing will change because the market price is already set above, therefore it is ineffective but when the price floor is placed above the market economy price then suppliers can now work with a higher price and possibly gain more profits. But when this is altered, consumers will likely drop or even drop out of the market because the price is now higher than what was offered before. Also, when the price rises, suppliers will also have to increase the amount of supply which is unreasonable when there is less demand for the product, overall creating a surplus which is not needed.
What is the point of having the price floor be below the market price?
What is the point of having the price floor be below the market price?
Price Ceilings
In my opinion, I don't think that the government should include price ceilings into our market economy because it is not very reliable or effective and overall it has too many consequences.
It is fine when the price ceiling is set above the market price because then nothing would be affected but when it is below, suppliers are forced to lower their charge on the product compared to the original market price. As a result, some suppliers are forced to drop out of the market because they can no longer make the profits they had before. When the prices drop, demand will rise which creates a shortage in the economy. This will create more problems if the government does not initiate relief programs so that supply can meet demand. Shortages can also create discrimination among consumers.
There are also some conception that with the drop in price, quality will drop as well which would not be good for the consumers. Also, when the demand is not met, consumers will have to turn to black markets in order to receive the product that they want.
Overall, implementing price ceilings into our system would be far too risky therefore it is better that we don't have one. The free market equilibrium price may also alter and change from time to time and it would too much of a hassle to have to change the price ceiling along with it.
America does not seem to benefit from the price ceiling system but which kind of economy or what country out there would benefit from having a price ceiling?
It is fine when the price ceiling is set above the market price because then nothing would be affected but when it is below, suppliers are forced to lower their charge on the product compared to the original market price. As a result, some suppliers are forced to drop out of the market because they can no longer make the profits they had before. When the prices drop, demand will rise which creates a shortage in the economy. This will create more problems if the government does not initiate relief programs so that supply can meet demand. Shortages can also create discrimination among consumers.
There are also some conception that with the drop in price, quality will drop as well which would not be good for the consumers. Also, when the demand is not met, consumers will have to turn to black markets in order to receive the product that they want.
Overall, implementing price ceilings into our system would be far too risky therefore it is better that we don't have one. The free market equilibrium price may also alter and change from time to time and it would too much of a hassle to have to change the price ceiling along with it.
America does not seem to benefit from the price ceiling system but which kind of economy or what country out there would benefit from having a price ceiling?
Wednesday, October 17, 2012
Friday, October 12, 2012
Complements
The definition of a complement in economics is when one item shares a beneficial relationship with another. So if the price of a good goes up then the sales for the complement will fall because they are related.
For example, for breakfast I really like to eat cereal. If we run out of milk, then we would go to the store to get more because milk is a complement with cereal and usually one wouldn't eat just cereal alone. There are also instances when we don't have time to go to the store and would have to wait, when that happens, I would avoid the meal itself because it's in our lifestyle to pair the two together so when they're not available, we would usually just skip it. The reason for this type of relationship is because Milk and Cereal is an enlastic demand, there are no substitutes for it so even when the price of milk goes up, the sale for cereal will continue because they are complements with one another.
Question:
This leads to me wonder that although milk and cereal are complements, they are a little bit different from other complements because they have an inelastic effect so unlike the definition, when the price of milk goes up, the sales for cereal WILL NOT fall because the products have an inelastic demand. Does this type of relationship occur with other complements as well? or does it depend?
Wednesday, October 10, 2012
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Friday, October 5, 2012
Demand Headlines
Complementary
"Salmonella outbreak! peanut butter and jelly makes consumers go nuts "
Substitute
"Huge mob breakout; Nike goes bankrupt as Adidas swoosh in business"
Elastic
" Coca Cola sinks in business, polar bears finds new home with Pepsi"
Inelastic
" Tooth Brush goes up to $7, customers still brush by with a smile"
During the years of 2014-2015, the United States have been suffering from an economic crisis, such as people out of jobs and skyrocket prices, it is hard for anyone to make amends. But even through these downturn of events, customers still manages to brighten with a cheerful smile everyday through nothing but the magical use of a toothbrush. When received with such news, news reporters nationwide reacted with skepticism, " How could people in such harsh economic conditions have the courage to spare a single toothbrush for $7? Aren't there other cheaper alternatives to this problem?" The answer is no.
When we interrogated Amy Smith, a health specialist at OSU, she responded " the answer is simple, we need toothbrush to survive, it is a necessity that cannot be replaced, like that of the toilet. The habit of brushing our teeth is not only sanitary but also good in maintaining a healthy body" She then leads us to her lab and explains project WT (whiter teeth) which was funded by the government in finding better alternative ways for cleaning our teeth. During her research, Amy tested 3 items, 1) bubble gum 2) tooth pick and 3) napkins and the end result was not so effective compared to the tool of the toothbrush. First, although bubble gums could eliminate bad breath, it does not make up for the fact that it can't clean teeth but destroy teeth for that typical bubble gums are sugary and is a main culprit for cavities. Test tool number two the tooth pick did not go as planned either. Even though it's good for cleaning the nitty gritty in between teeths, it's still impossible to cover the entire base of our teeth using such small and skinny object. Finally, the napkin which was ineffective because again, it's hard to use and another, it's hard to reach cracks. Overall, the lesson here is, we NEED toothbrushes. It's better to suffer the consequences now then to face more or even harsher and costly ones in the future, so pay up and brush up! and keep that smile on!
"Salmonella outbreak! peanut butter and jelly makes consumers go nuts "
Substitute
"Huge mob breakout; Nike goes bankrupt as Adidas swoosh in business"
Elastic
" Coca Cola sinks in business, polar bears finds new home with Pepsi"
Inelastic
" Tooth Brush goes up to $7, customers still brush by with a smile"
| http://media.photobucket.com/image/recent/photomama/toothbrush.jpg |
When we interrogated Amy Smith, a health specialist at OSU, she responded " the answer is simple, we need toothbrush to survive, it is a necessity that cannot be replaced, like that of the toilet. The habit of brushing our teeth is not only sanitary but also good in maintaining a healthy body" She then leads us to her lab and explains project WT (whiter teeth) which was funded by the government in finding better alternative ways for cleaning our teeth. During her research, Amy tested 3 items, 1) bubble gum 2) tooth pick and 3) napkins and the end result was not so effective compared to the tool of the toothbrush. First, although bubble gums could eliminate bad breath, it does not make up for the fact that it can't clean teeth but destroy teeth for that typical bubble gums are sugary and is a main culprit for cavities. Test tool number two the tooth pick did not go as planned either. Even though it's good for cleaning the nitty gritty in between teeths, it's still impossible to cover the entire base of our teeth using such small and skinny object. Finally, the napkin which was ineffective because again, it's hard to use and another, it's hard to reach cracks. Overall, the lesson here is, we NEED toothbrushes. It's better to suffer the consequences now then to face more or even harsher and costly ones in the future, so pay up and brush up! and keep that smile on!
Tuesday, October 2, 2012
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