The most popular sports in today's society are basketball, baseball, and of course football. These sports attract thousand of fans each contest and thousands more viewers on TV. So with all this popularity you wouldn't think they would have a problem selling out everygame but recently selling out games has been a huge problem for these big time sports. In comparison, only one of my parents could see me run at the national championships for track and field because tickets were sold out. When my mom told me she couldn't get in i just thought to myself "how the hell can a track meet sell out but every big ten conference basketball game I have watched has exmpty seats everywhere?" Then I tought to myself the principle of elasticity. The demand for tickets to the NCAA Track and Field Championships are highly inelastic because their are no substitutes for the national championships. Therefore raising the prices of tickets for the national championships does not change the demand for the tickets. This is obvious to see since the price of the tickets were $12 and my mom was still called pretty much every person involved with the championships trying to get a ticket. Now on the other side, the demand for basketball tickets are highly elastic because of the many substitutes for basketball games. One substitute is just watching the game on TV. The track and field championships aren't live and won't be on TV for another 2 weeks so by then everyone will already know what happened. Another substitute is all the other pro and college games that are being played at the same time. With the track and field championships, there are no other track meets going on in the country, only division II and III championships and if you want to see the best athletes you won't hesitate to watch the division I championships over these two others. So next time someone tells you a track meet sold out but a basketball game couldn't just think about the real reason why (since we all no it's not because of popularity lol!)

Political Action Committees

In class Professor Hampton made the statement that if you look hard enough you can find an externality with anything. When I thought about it a little more his statement I realized that there is not a better example of this phenomenon than what occurs in our nation’s capital. Depending on your point of view Washington D.C. is either full of or infested with political action committees otherwise known as PAC’s. A PAC is a group that works to elect candidates that support their views by donating money. The reason PAC’s exist is because a group of people have found a way that some certain object negatively affects them and wants it controlled or it positively affects them and they want more of the object. When I checked there were over 4,000 PAC’s in existence. That means that 4,000 groups of people have searched and have found an issue with the existence or lack thereof of a product. They were so moved by the externalities of this product that they are willing to donate thousands of dollars for a candidate to alleviate their problems. They are proof that if you look at anything long enough you can find an externality and currently 4,000 people have done just that.

I was recently working on an assignment with my biology lab partner. On our drive home, he mentioned that he was part of the Student Athletic Activities Board at Ohio State. I started to tune him out until he said “total revenue” and it sparked my interest. I was like “hey! I know what that is!” All of a sudden I was engaged in the conversation and I’m sure he thought I was crazy but we started discussing how the economy is impacting athletic events at OSU. Due to college students, and really the rest of the spectators, being even poorer than usual, the amount of total revenue brought in from athletic events has decreased. I told him this is because athletic events are highly elastic. There are many close substitutes for going to the games, such as watching the game on t.v. when it is televised, or choosing an alternate way to spend one’s time. When I was at the hockey game this past weekend, I realized that there was a surplus of tickets; a lot of the seats in the arena were empty. My lab partner and I discussed that if prices were lowered to accommodate the spectators willingness to pay, Ohio State might be able to bring in more revenue. This is because if the price is lowered it would be closer to the equilibrium price and essentially at the equilibrium price, a ticket would be sold for every seat in the arena. Then our discussion turned to opportunity cost, a student could go to a hockey game for $6, pay for a hot dog that costs around $4, and a drink that costs approximately $3.50. So in total the Total Cost for going to a hockey game for two people is $37. However, staying in and watching the game on your own t.v. and splitting a case of Natty Light for two people has a Total Cost of $12. But, then we considered “implicit costs” for attending the game. These include the school spirit and encouragement to the players and putting money into your school that could potentially end up benefiting yourself. Although, according to accounting profit, school spirit doesn't necessarily count as a cost..there is no way to measure it, no price tag to display. However, an economic profit realizes that if school spirit is increased then the fans will become more devoted and come to more hockey games and maybe increase so much that there love for Ohio State will cause them to start regularly attending other OSU athletic events, therefore in the long run bringing in more money and a higher profit for Ohio State. Unfortunately in accounting profit, they don't realize what they're potentially missing out on. So, thank goodness that my biology lab partner was willing to take away time from biology and engage in a conversation of economics that allowed me to apply everything Kyle has taught me!

Circuit City Closing

One of the biggest competitors of Circuit City is Best Buy. Best Buy would naturally love to see Circuit City close its doors because that means less competition in the market for them; however, what it means for the rest of us is higher prices. By running another store out of business they can become one step closer to becoming a monopoly. Granted there are still many opportunities out there to get cheaper electronic equipment, but if Best Buy were to eventually gain an advantage there would no longer be a need for competitive pricing and the consumer would have to start paying big bucks to get his hands on technology. This is bad for the economy because people aren't going to be willing to pay the higher prices, causing further shut downs since cost is outweighing revenue. More and more people will then start to lose their jobs as the companies crumble causing our bad economic times to get even worse.

Harry Potter and the Predatory Pricers

We all remember the craze that surrounded a Harry Potter book release.  Devoted fans would flock to stores at midnight on the release day and throw nerdy parties until they could get their hands on the latest fantasy novel.  What some might not remember are the economics that surrounded these events.

Harry Potter book releases were a great money making opportunity for any store that carried the books.  As long as customers knew they had the book, they would sell it and make a profit.  That is, until big chain stores started under-pricing their Harry Potter books.

Knowing that Harry Potter books represented a chance to draw a large number of customers, big stores such as Wal-Mart decided to sell the books below standard retail price, or below their seller's cost for the books.  This meant that they made a loss on the books, but it was made up for by the fact that customers who came for the books often bought other things too.  In short, putting a low price tag on Harry Potter books actually earned money for Wal-Mart.

However, Wal-Mart had inadvertantly engaged in predatory pricing.  Small book stores began to complain about the extremely low prices of Wal-Mart's Harry Potter books because they were unable to sell their books to customers who knew about the low prices at bigger stores.  Many of these small book stores were forced to lower their prices and sell their books at zero profit.  Harry Potter books had gone from a sure-fire money maker to a burden on small businesses.

Not again! Gasoline is pretty much completely inelastic.  So over time, as gas prices continue to increase, the quantity of gas in theory should decrease.  But in the present, every company is trying to pursuade the consumer their gas is the best.  Shell has started their own ad campaign claiming superior quality product by having nitrogen enriched gas.  Not only is it better for your car, it will also clean engine build up the company claims.  Shell im guessing will not provide how much money they spent on this ad campaign, or how much money they spent in research developing this technique, but they obviously believe they could sway non loyal Shell gas costumers with this new addition.  Gas is gas in my opinion.

My economic observations as an international student...

A typical Indian grocery shop. The guy behind the counter gives you what you ask for. You can't go in an grab for yourself whatever you want :P.

A typical US grocery store - Pick what you like! :)

I am an international student at Ohio State and this is my second year here. I am from India and as most of you would know, India is a developing country. I am really happy for the fact that I could come to the US to pursue higher education because in the small amount of time that I have been here, I seem to have learned a lot about the world outside of home through mere observation and drawing comparisons between India, a developing country and the US, a developed country. I like thinking about how different the two countries are in terms of culture and I often try to figure out specific aspects of it that make the two countries hugely different.

Every time I go to the mall or maybe even a grocery store close to my apartment, I am almost always awestruck by the wide variety of products available on every aisle. If I were looking for say a bag of chips, I would have an endless number of brands/flavors to choose from. The clothing stores boast of a countless variety of different brands of outfits and I don't have to worry about size because there is always a size available that would fit me. This is probably nothing unusual for most of you who have been here all your life but for someone like me, being in a developed country and observing all the products made available to the consumers here has got me thinking that there is definitely something about how this country functions that makes it so very different from my homeland. And then I realized it's the ECONOMY! It's the different economic conditions that exist in the two countries that contribute to the many ways they differ from each other.

Thanks to the econ 201 class that I'm taking right now and thanks to Kyle because this class has really helped answer some of the questions I've had pertaining to why/how the US gets to enjoy as much material wealth as it does whereas the developing/under-developed countries of the world do not. Now, don't get me wrong. India is not a country with no shopping malls and grocery stores that sell only a single brand of chips. There are huge shopping malls in big cities like Mumbai, Delhi, etc. However, if you were to visit some of the rural parts of India, the conditions are totally different. You won't see malls or grocery stores. What you will mostly get to see is small shops on the roadside selling a bunch of basic need products. A considerable chunk of India is rural and so for the most part, India is not as well off as the US in terms of consumer wealth.

So what is it exactly about the US economy that makes it possible for such a wide range of products to be available to its consumers? I think it's the advanced technology that helps the abundant production of different types of goods and items in less time and with the use of less labor. Also, international trade has enabled the US make profits off of inexpensive labor available overseas. Also, that way the labor that is available in the US gets assigned other kinds of tasks that they can make more money out of. Remember, the Tiger Woods example from class...

This has helped the US make enormous profits and as a result, good quality products are available to US consumers at nominal rates. I remember how Kyle said in class that it used to take almost a day's worth of work for our great grandparents to earn a loaf of bread but now all it takes is about 7 minutes for us to be able to buy the same thing. Wow! Although, I'm happy for the huge advancements made by the US in this direction, I do wish the Indian economy would grow as well so as to allow for the use of more and more technology and greater involvement in international trade.

Also, I really like the concept of "minimum wage" here in the US. It helps ensure everyone gets paid what they deserve. I do not really know if such a rule is strictly followed in other parts of India but in my hometown, there are instances where employees would be underpaid. Maidservants in a lot of homes are usually paid only about Rs.7 an hour and the price of a loaf of bread in India is around Rs.18. So I guess a person in India would have to work more to be able to buy a certain product than would a person in the US. I thought that was an interesting observation. One of the reasons why labor is so cheap in India is probably because of the huge population. Everyone is looking for work. So, I guess the Indian economy likes to rely on the cheap labor that is readily available rather than on technology which would obviously prove to be a lot more expensive.

Does the Ownership Saves the Whales?

In the last class, there were some comments about economic ecology. It took the sushi as an example, which relates to the Japanese seafood industry. There are thousands of whales in the world killed by Japanese every year. Even though the World Whaling Association has past the law that prevents Japan from over hunting too many whales, the Japanese government still ignores it and insists in killing whales every year.

However, after WWII, Japan had developed its economy and the people there no longer need whale meet to support their food crisis. In fact, killing whales cannot bring Japan any economic profit, then why does Japan insist in doing so? The Japanese government says it is because killing whales is a tradition of Japan, it shows the spirit of the ancient Japanese. Some critics said it is because Japan wants to be independent in food security instead of importing too much American beef.

As a result, Japan insists in killing whales is in order to gain its far-reaching goal instead of the short-run profit. So, does the ownership can really prevent whales from being killed while the killers do not concern about the profit of them? Maybe people will think about it before they killing a elephant of their own in Africa, or a cow in Austrilia, even a rare fish with a GPS on it. Will Japan think as the same way? They probably will keep hunting whales because it is just the tradition of the country, like we do sports and keep on diet everyday in order to keep us healthy. Will the ownership really resolve the problem at this point? Maybe not.

Noise Pollution

It is a Thursday night and my neighbour has decided to have a party, like every other week. Obviously they don't care much for their finals, not like I'm studying, but still..
And this noise pollution they are causing is a negative externality because it is hindering my television time, and later tonight, my sleep. If I was any more studious, this would be distracting to my studying session.
I could always call the security on them but I am not that mean. Everyone has got to have their fun, I just rather stay home, call in delivery and pig out.
On the brighter side, I won't have to put on my radio tonight. Usually I sleep with the music on but on nights like these, I get free tunes courtesy of my neighbour. So I guess I could call it a positive externality.

Not to toot my own horn but I wish all neighbours could be this tolerant. The other night my friends threw me a surprise birthday party over at their place and as it got closer to midnight, the neighbours called the police on us. They didn't even bother calling security, they went straight for the police. In the end, my friend had a citation for disrupting the peace. I thought it was really unnecessary given that my friend had notified all his neighbours about the party that afternoon. Also, his neighbours could have just knocked on the door to give us a heads up but nooo.. they had to call the police, 3 times.

Pomegranate Craze

So, normally when you think of a fad it pertains to something in fashion or the entertainment world in general. I can say with confidence that this fad is in neither one of those categories. Pomegranates are a fruit that have been around for awhile, so it is certainly nothing new to the market of fresh produce. They are right there on the table with starfruits, those special banana's; you know on the exotic fruit section of the grocery store. They have always been the same, nothing has changed, except the demand for this fruit. Consumers are going crazy for this round fruit with a hard outer shell, and a soft inner core with lots of little "nuggets" (the part which you eat). They are literally taking over the isles and shelves of groceries stores; everything from dried fruit, to blends of juice, to even being an essential ingredient in perfumes.

It is honestly mind blowing. This fruit was the third string up until about a year ago.
One thing that has been interesting, since i have jumped on to the bandwagon and can't get enough of it, is the fact that stores cannot keep up with the growing demand produced by this fruit. Usually they would need a cartoon or two to keep up what was demanded by the consumer, now it seems like they need truck loads of different varieties of the fruit. The producers cannot maintain an equilibrium to meet the needs of the consumer and effectively produce this good. With this problem at the forefront, the price has changed significantly. They have always been a more expensive purchase, for the mere fact that they are labeled exotic and not very many have ever been demanded. But now, with people buying more than one, putting the flavor in nearly every juice blend, and producing dried fruit the price is being altered. It has decreased only a little due to the high demand, but since people are buying so much of it, the profit off of pomegranate's is ridiculous.

So i know this may seem a little crazy and over the top, but i am telling you that fruit is A) very addictive (but good for you so whatever) and B) a profit maximizing genius.

The "Stimulus plan" pertaining to small business

Yeah I know, this whole plan has been talked to death. This part though has not recieved much attention, if a small business hires a worker during the '09 fiscal year then it gets a tax credit of about $3000-$4000 dollars as an incentive. Got it, if you hire a person to work for what about $20,000 a year then the government will help you with 15% of the cost......That helps if you were already going to hire another employee, but for most small businesses this is a horrible bait and switch. The government assisting with small business in this manner is purely cosmetic and politically motivated. Would you hire another person thus increasing your average variable cost when your entire market is facing recession and a slump in sales? If yes then try to get a government or labor union job or you will be sorely disappointed with reality. If no then thank you for paying attention in class and seeing that this is like offering someone who is broke .50 cents to pay for a $2.00 bridge toll they are in line for during rush hour, less then useless (don't think so, I can think of a few very long bridges you could experiment this with. It will suck). So wrapping up this thought, the concept of the government covering a minimal amount of a unwise liability to your company is no form of help at all and is a slap in the face to anyone owning thier own company.

Cigarette prices increase

Recently I went to buy a pack of cigarettes, and I noticed that the brand I usually purchase were priced abnormally high. I ended up buying a cheaper kind.  When I returned home, I was curious as to why the prices rose so much, so I did a little research.  Ted Strickland just approved a tax-increase bill that will raise the price on cigarettes.  Ohio is doing this to (potentially) eliminate our states $1.75 billion debt.  I personally don't agree with it and believe our state should eliminate our debt through other means, however, raising the taxes is a valid way to help lower the states debt by hopefully $73 million a year.  Although that is a small chunk out of the 1.75 billion, it still helps.  I thought back to class, and realized that this is an example of how our states overspending put ohio in debt.  I wonder if Obama being in office has anything to do with it.  Not that i oppose it, but if he is lowering taxes in some areas, could that play a role in the rise of taxes in other areas, like cigarettes?   

Laid off

Well this had some sting to it, I was laid off from my work in mid-January. The reason was the opportunity cost for my boss to work two additional shifts in addition to her usual 60+ hours a week was too much for her (I was working part-time at this restuarant 3-4 days a week). This was in contrast to the usual economic slowdown following the December shopping season, where everyone's hours were cut so that marginal cost was above the price of labor and average variable cost. So my boss wanted to fill those 2 day shifts when I was in class during the week, but not at the cost of another part-time worker. So in hindsight I see that she hired a college dropout who could work my shifts plus those extra two other ones my boss had to fill herself without having to give him another shift or two to make the work worth his while to be there (who wants to work 2 shifts a week that change constantly?). The shady part was that I was not notified until this was a done deal and I had trained the new guy, I called on a Sunday night for my schedule to be informed that I was now laid off. So the restuarant gained a worker for full-time employment at the same rate it was charging me and someone to fill those shifts while at the same time eliminating me from a job to cut costs (instead of two part-timers working 3-4 shifts each, one person works 5 shifts= lower overall average variable cost). I believe this was the decision making process for my employeers as to this situation, and as a firm reducing cost while maximizing profit is necessary.

Fashion & Econ

As a fashion major, I was wondering how in the world a class like mocroeconomics could relate and have any relevance to what i needed to know for my career path. As class went on, there were several examples that actually could relate to the fashion world. As a standard rule in micro, quantity supplied equals quantity demanded. In ready-to-wear fashion, the goal is to avoid the amout of time a product spends in inventory. Therefore, the amount the producer supplies will be relative to the amount the consumer demands. Because the quantity demanded responds strongly to a change in the price ready-to-wear fashions are elastic. If forever21 decides to jack up their prices, there are still a large variety of substitutes to RTW fashion.

In a couture world where products are custom made, the story is a little different. Couture pieces can be considered a luxury good, however, are inelastic. They don't have a large number of substitutes and quantity demanded doesn't respond strongly to the changes in price. If person can afford a $700 garment in the first place, raising the price to $800 shouldn't change the quantity demanded especially if there are little or no substitutes.

Price gouging

I live just steps away from the Exxon station on Lane. When I’m not in the mood to drive to the grocery store I just walk out my door and get what I need at Exxon. I know that Exxon jacks up the prices for goods because they know people like me will be pay for them because it’s convenient. This jacking up of prices higher than what’s reasonable is called price gouging. Price gouging happens everywhere but is more common on university campuses. For example, a 20 pack of solo cups at this Exxon is slightly over $3. If you were to go to Target, you could get a 50 pack of these same cups for the same price. Exxon knows students aren’t going to go to Target to get cups on a Friday night after they’ve already had a few and decide it would be fun to play beer pong. Another example of price gouging on campuses is campus bookstores charging absurd amounts for textbooks. Bookstores know students value their grades enough to spend this kind of money on a book that we can barely understand. These two examples are ones that I’ve come across on campus but there are price gouging problems across the U.S. on a much higher level. When a natural disaster happens and thousands of people lose their things, there is a drastic increase in demand. The sellers of common items needed by disaster victims are aware that people value these supplies much more now. The more they value the supplies, the more they are willing to pay for them. One example, in which I believe was used in lecture, is a person buying generators in bulk and reselling them at a much higher price. Some sort of natural disaster hit this area and this person thought the demand for generators will significantly increase. When the quantity demanded increased, the equilibrium price and value of these generators increased as well. I don’t recall the exact price people were willing to pay but I would imagine it would be at least 3 to 4 times more than the original buying price. If I remember right this is illegal but if I am incorrect and it actually isn’t illegal it definitely should be. I hope I didn’t confuse anybody with that last sentence. Price gouging is bad.

Ryan W

T R 8:00

Another opportunity cost post

I looked at my bank account earlier this quarter and realized I was in some trouble. Actually, I was in a lot of trouble. I crunched some numbers and decided that I have to get a job or change my lifestyle drastically. I’ve been putting off working this school year because my main focus has been school. Being an engineering major, I have very little free time to relax and enjoy the pleasures of being a college student. I started weighing my options for both choices. If I were to get a job, I would have significantly less time for my school work. Since I’m here at Ohio State for school, this point was at the top of my list. If I were to not get a job, I would be constantly watching my spending and I wouldn’t have the “luxuries” that I am so use to having. Not to mention the weekends would not nearly be as enjoyable. After more thinking, I realized there’s an opportunity cost for both choices. I must give up something to obtain something else. I was to decide which opportunity cost is greater for me. Is it less time for school work or living a lifestyle I am not accustomed to? I eventually decided against getting a job and decided to change my lifestyle. This means my opportunity cost for not getting a job is greater than my opportunity cost of getting a job. After a week or two I had enough of my new lifestyle. Shortly after I was lucky enough to get a job with no set hours. Therefore I could balance both school and work on a day to day basis.
Ryan W
T R 8:00

Classic Case of a Monopoly

So I have a little brother that is twelve years old right now, a few years back when I was still under my parents roof my little brother went through the phase where became obsessed with making money. When it got to the point where he no longer could do household chores to make money he turned to my parents and asked for there advice. They told him how me and my other younger brother would always do lemonade stands during the summer to make some extra cash. My youngest brother and his friends got together and made a stand. They set out one day to figure out a good spot in the neighborhood to set up the stand. They found one particular street that had nearly all cars in the neighborhood driving past it. One thing you have to understand about my neighborhood is that it is actually three neighborhoods joined into one. This is like the mecca of soccer mom's and kids running around during the summer. So there really is a great potential to make some dough. After finding this street my little brother and his gang went back the next day to set up a stand but to find there was already a stand established on that very street. My little brother ended up setting his stand up anyways. The two stands ended up really hating each other and were eating away at each others profits. After a few weeks of this going on a kid from the other stand came by and asked if they wanted to join up to stop eating away at each others profits. My little brother and his gang decided to join with the other group(which really surprised me). It ended up being a really good decision because they raised the prices from ten cents a cup to twenty five cents a cup. Not only were they making more money but each kid did not have to work as much. Looking back on it now I find it really amusing how I witnessed a simplified version of a monopoly through my twelve year old brother and his annoying friends.

Manny Ramirez Contract

For all of you who do not follow MLB baseball as extensively as I do you may or may not have know about the Los Angelas Dodges acquisition of Manny Ramirez last year from the Boston Red Sox. This trade was absolutely one of the biggest of last year, the Dodgers could only sign him to a contract that lasted the remainder of the season. The pickup proved invaluable since Manny led the Dodgers nearly to the world series in less than two months of being on the team. After the 2008 season was over the Dodgers had to make decisions. They knew signing Manny would take up a lot of salary cap the team had. The first contract the Dodgers offered Manny was a two year deal worth forty million dollars. The team knew Manny was looking for a bigger contract so that offer was immediately turned down. So the Dodgers organization had to look at the marginal cost of trying to keep Manny. Manny is undoubtedly one of the best hitters in baseball which means he is a very hot commodity and that teams would be throwing big money at him. They had to decide if the marginal cost of increasing his contract to forty five million over two years would be worth it. In the end the Dodgers offered Manny five more million dollars over two years and he took the deal. It is too soon to tell if the marginal cost of five million dollars to keep Manny was worth it but by looking what he has done over the course of his career it is probably safe to say the Dodgers made the right decision. It is easy to see that the opportunity cost of keeping Manny Ramirez was much too high to the Dodgers to possibly let him sign with another team.

SICK OF PAYING AEP MORE AND MORE!

So I've been contemplating for a while. How is it possible that I keep taking more and more measures to assure that I conserve electricity but my bill doesn't reflect that. Well one day I was sorting through a stack of recent newspapers and I believe i got some of my answer.
I read an article about how AEP is planning to raise its price by 15% each of the fallowing three years. AEP is doing this because they are saying that the price of coal is going up. They are also claiming that they need the money to look in to other ways to make energy. People don’t understand why they need to do this. Last year’s profit was near $1.1 billon. They are not just breaking even; they are making a big profit. Also with the economy going the way it is its going to be harder for people to pay for it.
AEP is a monopoly in central Ohio. For one thing there is no other way for people to get power in the middle part of this state. People are stuck paying what they are told to pay. The only thing that people can do is move if they don’t like it or try to put their own form of power up in their back yard or on their house. AEP is not raising prices by huge amounts in one move but they are slowly making it more expensive and by doing this they are able to keep their mega profit. This is not a set in stone rise in price. AEP is in court right now trying to find out if the government will let them do it. The government is trying to keep them from overcharging the users. AEP knows that no matter what happens there will likely be no new competition. The prices and regulations to just start a company are way too much. To change the infrastructure is a huge undertaking and to persuade long time AEP customers to leave for a new company is difficult. AEP is also developing new and different was of making powers, and plans to keep building and growing with the times. They are also trying to keep their service reliable, so that we don’t have times where we don’t have power. This is how AEP has a monopoly with electricity in the central Ohio area and I do not expect that will change any time soon.
It is annoying, stop making me pay more and more for using less!!!!!!

Price of Tickets

The Athletic Department at The Ohio State University has it's own monopoly in the market for athletic tickets. They are the sole local provider for collegiate athletic tickets in this area, they produce and control the prices and amount of tickets. They already produce millions of dollars from all of the sporting events held, but they arent reaching the maximum revenue they could recieve for tickets for certain events.



This is shown through ticket scalpeing, where tickets are bought for double amount of what theer face value is and sometimes even tripple. An example of this would be the Ohio State vs Michigan football game where tickets are sold at crazy prices reaching 2,000 plus for tickets in the upper deck. A single game ticket is usually sold for $60 face value and $30 for students, this is well below what they end up being scalped for.



So what should the athletic department do to increase their total revenue?

They could use their power and raise the tickets for all the games held.....

They could raise the price of tickets depending on the game.......

They could make all tickets at equal prices eleminating the difference between student and public tickets......



All of these things could work but there would be problems in figureing out the exact equallibrium for the price of ticekets.
If you raise the price of tickets for every game people would be angry but in the end will end up buying ticket.
You never know how good each team is going to be year by year so it would be hard to set a price for each game.
If they made tickets equal price for everyone at $60 students would have a problem, because they are already paying for tuition they might feel as if it should be a part of what they are paying or dicounted because they are students.

In the end the athletic depatment can use their power to receive more total revenue the events they control.

The Music Market (T & R 8 am)

When was the last time you bought a CD? Do you even consider the whole ordeal worthwhile anymore? As the digital age dawns on all of us, it seems that the need to actually leave your home for the newest music from TI, or everyone’s favorite pop star, Brittany Spear’s new CD. But is the digital age destroying the market for music. Granted almost everyone loves some kind of music, no matter how pure, poppy, or weird it sounds, so the market will always be there, but in the last few years musicians and retailers have reported drastic decreases in the sales of CDs, which has some fearing for jobs in the factories where they are produced, and jobs of others involved in the process of making these products. However, as I’ve learned in Econ class, these people should not fear. The digital innovations should actually help the economy (in theory at least). With the ease at which music can be uploaded onto a computer, and the simplicity of putting it on your iPod, time is saved, money is saved, gas is saved, and the resources that go into producing a CD are saved as well. Almost everyone is just as happy, if not more so than if they bought the CD. However, the opposite effect may be in the not too distant future. In all reality however, with the rise of the mp3, it’s true that you can legally buy a digital version of a CD on iTunes or the newly reformed Napster (which rips you off, trust me), but it is also true that there are just as many, if not more places to download the music for free. As we learned today in class, ownership leads to the incentive of protecting your product, but these websites take ownership out of the equation and simply offer music at the low-low price of nothing, except for maybe a couple viruses, but that’s beside the point. Anyways, what I am trying to say is these websites are taking away much needed revenue in the music industry. The advancement of technology allowed for the economy to reallocate many of the resources required in the distribution of music to other more important areas, but in the process has done something that could also completely destroy the music industry. With at least a portion, if not a majority of internet users downloading music illegally, the incentive for musicians to make good music is dropping, and no one enjoys a pay cut. As much as I enjoy free stuff, I am not willing to destroy a market like the music industry all in an attempt to enjoy their music for free, because music is something that I place a value on now and know I will have value for in the future, and I do not want the future’s music to be shoddy just because no one was willing to pay for it now.

Market for Organs?

If you were in class today, you’ll realize that unfortunately for me, Kyle has spoiled some comments that I was going to make pertaining to a market for organs. However, I’m going to Blog about it anyways because this is of a huge interest to me since it is my job. No, I do not buy or sell organs, but I am a trained professional at harvesting them. I am on the tissue team, so I usually harvest tendons, bones, skin, veins and nerves! Isn’t it creepy that one of your classmates does that for a living? Anyways, if you’re wondering, I do believe that there should be a market for organs.

Our system right now is not working! Are you an organ donor? Well only about 30% of people in Ohio are registered organ donors, of those people another several percentage of them will not be able to donate because of different reasons (if they’ve been sick a lot through out their life, if they’ve contracted AIDS or hepatitis C, if they have abnormalities on their body, if they died in a way that harmed the body). On top of that, even if you are a registered organ donor, organ companies default to asking your families for consent. Which means even if you REALLY REALLY wanted to donate your organs, but your parents say no, then guess what? We can’t take them! So be sure to talk to your family and make sure they know what you want!

And since people would only benefit from the money while they’re alive, it should be done in a way where firms will buy rights to your organs when you die. I think this is a good way to keep each individual healthier as well. If the firm initially gives you a certain amount of money when you’re 18 and says that every 5 years after this day if you do a physical with them, and they find out that you’re living healthy (not smoking, drinking excessively, contracting abnormal amount of diseases) then you will be paid an additional amount at that time, wouldn’t we as a society live smarter and healthier?

I also think it’s important to have a market for organs because right now demand is at an insane low. People are dying all around us because one, not enough people are organ donors, and two even if there are organs available, it is hard to find the correct match for every individual patient since the waitlist takes into account several different factors including biological (blood types and age), and also timeline (time till death, and time you’ve been on the waitlist). So what we have right now is a shortage of organs, our quantity demanded is excessive compared to our quantity supplied. And if I remember correctly about what Kyle said about the existence of a shortage “well, we are doing something wrong!” Someone is obviously not happy in this situation because of the ceiling price at zero meaning suppliers can’t increase their prices which ultimately means that supply and demand can’t reach equilibrium!

Now I’ve heard of a lot of reason about why we shouldn’t have a market for organs and I would just like to address a few of them. 1. Wouldn’t people try and steal your organs in order to cash in? Yes, I believe that is a possibility if we start a market for organs but I personally don’t think it will be more than what we have right now with what’s going on in the black market. And also, I think it would help if we make it so that people can only get paid if it’s their own organs. But the main objection I have against this concern is the actual thieving of said organs. Our company goes through an enormous amount of training and procedures before we can even go out into the field. The extremes we go to make sure everything is sterile are pretty ridiculous but totally necessary. We drop off all of our instruments at OSU hospital for them to sterilize. Just 2 days ago actually, one of the companies that we send our harvest, LifeNet, actually came in and talked to us about our contaminations since they test those to make sure nothing is growing on there that’s potentially dangerous. If all of that’s not hard enough, There’s a pretty serious time limit on these organs, I just think it would be difficult to be able to harvest it, package it, send it to a company who will processes it all illegally. Granted I might be dead wrong about all of this, but this is just what I personally think.

2. Wouldn’t the poor or the addicts exploit this system and sell more of their organs? Now what is wrong with that? It’s not exactly exploiting the system if the poor wants to sell more of their organs in order to make some money. Isn’t this a great way for them to get some money and use it in a way to help pull themselves out of the debt they’re in? And I really don’t know how much drug addicts can benefit from this system since most companies I assume will turn away majority of their organs for being in bad conditions on account of the heavy drinking or smoking.

I think these two concerns are the major complaints that I hear when we are talking about a market for organs and since this blog is getting pretty long, I’m not going to go in to the other concerns. So I hope you guys found my little rant interesting, and I wish you all good luck on your Finals and have a great spring break!

Ownership of Fish

After today’s class I was drawn to think about the great Discovery Channel show “Deadliest Catch” where King Crab fishermen try to catch their quota of Alaskan king crab. This made me think about the viability of putting quotas on the catching of fish that were pointed out in class. This I don’t think would have ant real effects on the dwindling populations. I looked at the populations of the Alaskan Crabs are extremely low. They have been declining since 1980 where fishermen were able to catch 200 million pounds of crab where in the winter of 2006 there was only 14 million pounds harvested. I thought about Kyle’s idea of placing an ownership to the various species of fish and implanting them with a gps system to keep track of the different animals. This seems on the surface to be an easy way to get ownership to the different animals but the hard part would be the getting the gps to the animals. To gain ownership to a fish one would have to catch it to begin with and then release it back into the wild. I don’t know if this would work very well if the fishermen weren’t on board to being willing to release the smaller fish when they are young and I think that the technology that would be created could really easily be beaten by seeing the trawlers that can process the fish on the spot and simply remove the gps and then there isn’t any tracking whatsoever. The gps would have kept in the water where it should be until the rightful owner tried to come and get it. Also the different gps systems that would have to be used couldn’t possibly be that hard to remove because it would be an added expense to the owner when they are ready to process the animal. A person doesn’t want to harm the animal’s meat because that is what is the value to them and it would just be another expense that they would have to take and make the fishermen not willing to make the fish owned. All in all I think that something needs to be done but I don’t know how one would do a productive action that would be accepted by all the countries in the world and who would govern and enforce the various rules and regulations

Lacking Moral and Political Will

I know several people have previously discussed why various government policies seem to conflict with the economic principles we have covered in the course. Political capital is normally a finite resource and cannot be used at will. Furthermore, I would like to point out that often times moral codes are what we use to substitute for a competitive market.

Today, how there is not a competitive market for organ transplants and various medical materials. Certainly we can all agree that the reason that is opposed by professional groups and government is based on a code of morals that we have allowed to override market forces. I do not argue that this is absolutely a bad thing, only that it is not as efficient as it could be. We has a nation have to answer our own questions about what we value more in this specific case: the moral code that tells us that selling organs shouldn't be allowed, or the economic forces that would allow us a more efficient allocation of resources. Again, I am not saying that one of these is a better choice, only that the two choices exist.

The most important thing to remember is that economics is only one way of organizing the world. If my experience as a history major has taught me anything, it is that looking at the world through different means is the only true way to arrive at the truth. Some might say that economics argues money is the key to happiness. Obviously, this is not true but in many cases, the markets will provide the most efficient allocation of goods. The good news is that we have the understanding of when the market may not be as efficient and those are the situations where we need the political will to make changes.


Finally, if this was something that we as a nation wanted to change, would the political will really exist to change it? I argue that it does not. Your average American does not understand the ramifications of a free market for organs, but they do understand the moral code that certainly prevents us from selling them. This is a view that is based more on emotions than logic, which for most people is the strong influence on their lives. However, those of us who are more educated can understand why allowing emotions to control every one of our decisions might not be the most ideal situation. Understanding these types of complicated economic issues is what makes taking this course as a non-major valuable.

Red Lobster and Olive Garden?

Today's class really had me thinking why Red Lobster, Olive Garden and even Applebee's prices have increased in a short period of time. Our fish and other ocean life are endangered. I have recently eaten at these restaurants and my experiences were similar. I occasionally go out to eat at cheaper restaurants because I am a poor college student but recently I have been eating on campus because restaurant prices have gone up. I went to Red Lobster the other night and I was shocked when I looked at the menu because I usually order the pick two dinner. I was shocked to see that the price went up, so I was thinking maybe the portion size went up also. The waiter brought my food to the table and the portion size was extremely smaller than what it used to be. I knew that fish and other sea life is diminishing rather quickly but I never considered that it would drive the market price up. But today's class made me realize why the prices of seafood dishes have risen. But it's not only the seafood dish prices that have risen, prices in general are rising and it's all because the price of everything is increasing and in order for companies to make money, they have to raise their prices to make profit.

Econ 200
T R 8:00 am

Job or Trip

Shortly following my graduation my friends and I decided to go to Myrtle Beach as our long awaited senior trip. Obviously I was excited for this last chance to travel with all of my high school friends for a week. However, two weeks before we were planning to leave I received a summer job offer that would be a recurring opportunity for every summer I’m in college. This was an offer I could not pass up. Unfortunately if I wanted to accept this job I would have to interview for the job and go to the job training class that was held only during the week of our trip. I was torn between the once in a lifetime senior trip or a whole summer’s salary worth thousands of dollars a year. Eventually I choose to interview and go to the job training class because it would have been crazy to pass up that kind of opportunity. I was still disappointed that I missed out especially after hearing the tales my friends wove when they came back to town, but after taking Econ 200 I finally am able to rationalize my decision with proven economic theories. If I had decided to forgo the summer job and go on the senior trip my opportunity cost would have been thousands of dollars for not only this summer but also thousands of dollars the next few summers. Knowing this now I am now content with the hard decision I made at the beginning of the summer.

Economics(simpified)

Wants to open up a company
Not so sure how successful it would be
Wants to work hard and make a lot of money
But not to only make a couple dollars or a penny
The business world seems really cut throat
If you don’t know your “stuff” you might fall out of the boat
But, first consider your opportunity costs
Once you start you may have already lost
Then check out the market
If it’s not rolling, you may want to park it
Will you even make a profit?
You don’t want to jump in if you’ll have to shut down or exit
Review everything before you invest and lose it
Invent something and get a patent
But then you have to worry about other snatchin’ it
Maybe get involved in an oligopoly
Or even better your own monopoly
Whatever you choose, you will have competition
Just don’t lose will or ambition
The world of economics is so complex
It may be smart to move on to the next
But maybe this is where you want to be
Give your all before your tank is on “E”

Econ 200
T R 8:00 am

The supply curve of professional athletes

There is a problem in the MLS. There is a barrier to entry for foreign players into the professional soccer teams in America. This means that each team can only have a limited number of foreign talent. Where is the problem? The problem is that this barrier has a negative effect on the supply curve for professional athletes. The market is limited to mainly national players. This means that for the most part there are no international substitutes. This causes the price of the substitutes that there are to be very high . This in turn causes the supply curve for national players to shift to the right. More players are purchased for a cheaper amount of money. This happens because the teams need to save money for the more expensive international players. This also causes two negative effects. The better national players face an opportunity cost. They can play in the MLS for cheap, travel abroad for less money but better experience, or possibly get another career. Unfortunately for the condition of American soccer the second option is chosen far too often with players going to contries like Bulgaria to get bench time when they could be making huge impacts here. Another problem is that since American players are now getting paid much less, the quality of these players also decreases. American soccer needs reform.

Another New York Monopoly on Professional Athletes?

While trying to think of a topic for my blog I took a short break and while doing so visited ESPN.com when I thought of the Cleveland Cavs, Lebron James, and the summer of 2010 when Lebron becomes a free agent. This means I started thinking of Lebron James wearing an ugly blue and orange New York Knicks jersey. Then I thought of the New York Yankees and the way they get every and any player they seem to want. The Knicks have already been preparing to have an exceptional amount of salary cap space in order to make an offer for not only Lebron, but also another NBA all-star. Thanks to some price discrimination, the Cavs have a very good chance at keeping Lebron in Cleveland. Price discrimination works in an odd way when speaking of Lebron and other free agents. Lebron would cost less to the New York Knicks, or any other team, than he will for the Cavs. Who would think that since they Cavs are allowed to spend MORE money, they would be better off? I wonder what the demand curve for Lebron James looks like. How much would a team be willing to pay without any price ceiling? Unlike major league baseball, the NBA has a successful salary cap and many other restrictions on salaries. Hopefully all of this results in Lebron staying in Cleveland and stops another professional New York sports team from becoming an all-star team!

An Obsession Made Worse

A couple of weeks ago, a few of my friends introduced me to this show. Before I agreed to watch, they warned me that once I watched the first episode, I would be hooked. And they were absolutely right. The show is a Korean drama called Boys Before Flowers that airs on Mondays and Tuesdays in Korea. Despite the fact that the whole show is in Korean, and I have to watch it in subtitles on my computer, I haven’t missed an episode. A little pathetic I know. But according to the viewing count of the videos, I am not the only one who is obsessed, there have been over 2 million views just on one site. It’s a sensation I tell you.

So yesterday morning in class we were discussing the different types of goods and their characteristics. Yesterday was also Tuesday, which meant the last episode of the week was to be uploaded sometime midday. And I have to admit, there were a few times when I got distracted and had to check the website to see if the videos were uploaded yet. Then after I got home from class, I started to realize how similar my obsession to this show was related to what we had talked about in class. The ability to freely watch Boys Before Flowers without hindering anyone else’s capabilities of watching it, means that it is a public good. It is both non-excludable and non-rival. But this is only up to a certain point. For example yesterday when I was finally going to watch the latest episode, the website crashed, and had a notice saying they were having difficulties due to the amount of people trying to watch. I was horrified! I had waited a whole week only to have to wait longer because my favorite public good had now turned into a common resource. How did this happen? While Boys Before Flowers was still non-excludable, due to the overwhelming popularity of the show, it had become rival and therefore difficult to access. Luckily after a couple of hours I was able to beat a few competitors and squeeze my way through to catch the latest developments of the drama.

So now I know that patience is the only way to combat this atrocity we call the common resource. Now if any of you want to join me in this fight, Boys Before Flowers usually gets uploaded on Mondays and Tuesdays on Viikii.net. I guess this doesn’t help my chances, but I believe in sharing too. Enjoy!Emma Lynch
Econ 200
Tues/Thurs 8.00 am

Airline Companies & Expensive Flights

One thing I have noticed over and over again is the market’s ability to constantly play mind games with the consumers. Living in the state of Florida definitely has its benefits. I always get to vacation and go home to a warm place in the summer, spring break, Christmas break, or any other time I get the chance to get a break from school. One of the most negative aspects is that there is a 15 hour distance from my home with my family and where I attend college. With that kind of distance I cannot drive because it is too far for me to do alone, which means I am always paying for plane tickets any time I want to go home (which gets extremely expensive). Most people who attend Ohio State University have the convenience to drive just a couple hours, while only having to worry about the cost of plane tickets when they are traveling for some kind of occasion. Within the flight industry, the airlines are very competitive, trying to get as many travelers as possible for their own company. With that being said, I have learned that the airline market is very elastic. This means that the quantity demanded responds strongly to the changes in price. People, such as myself, are always looking at websites that offer alternative/ cheaper prices on airfare, as flight costs are constantly changing. Whether the market is full of busy costumers or not, the prices will adjust to the scenario that benefits the airline industry. The more people that are willing to fly, always leads to high prices in flights because then the airlines know people are willing to pay the ridiculous costs. The reason flights are elastic is because there are many different airline companies, who will raise or lower their prices within the market to benefit their company. Airline agencies are usually aware of what other airlines are doing because if they raise their own prices too high, revenue will fall. Fortunately people have the opportunity to chose an alternative substitute (airline agency) if they are not happy with the prices their usual airline provider offers.

Rent control for off campus housing?

Around the same time of this class discussing price ceilings and price floors, I was looking for a place to live for next school year. It was becoming very difficult to find a place to live that was in my budget. Like all college students, I was willing to give up quality for a cheaper price. The cheaper places were going fast and I started to worry. My roommates and I were not able to afford to stay at our current residence because the monthly rent for next school year is going to be 125% of the current monthly rent. When hearing this, my roommates and I could not believe this increase of rent. I started to think about rent control and the possibility of setting a price ceiling on the price landlords can charge for housing off campus. While thinking about this possibility, I realized how much this would hurt the university financially. If living off campus started to get cheaper, the demand for students staying more than one year on campus would decrease. Rent control for housing off campus sounds possible at the first thought of it. But after thinking about it more and more, the possibility of it becomes more and more unlikely. In order for the university to be on board with this policy, they would need to force students to stay on campus for at least two years. This would require the building of more residence halls. Although rent control would be great, it appears like it will never happen and students will have to continue cutting costs by buying cheap beer instead.


Ryan W
TR 8:00

From Econ Lecture 8:00 on Tuesday and Thursday

College is a transformative period in one’s life. It is during this period that people, unsurprisingly, experience their strongest period of intellectual growth. Just in my first few months of being here, I have been exposed to numerous intellectual perspectives and arguments, as well as other ways of thinking about the world. The most compelling and interesting perspective that has been exposed to me, however, is the economic perspective. My first encounter with the economic perspective has exposed to me, among numerous other things, that besides being a place of intellectual stimulation and growth, college is a place of extreme price discrimination.
This price discrimination is best encountered in the market for school supplies. The other day, I found that I had completely filled up my notebook with notes. I went to CVS after class to buy a new notebook, and found that a 3 subject notebook cost between $8 and $9. The same notebook would have cost less than $5 back at the convenient store in my home town. I also found that 1 subject notebooks were between $1.50 and $3, whereas back home they were $0.50. This price discrimination in school supplies is the result of the higher value college students place on the availability of such resources. I know that this is indeed true because despite my indignation at being ripped off so hard, I did indeed value that $8 notebook enough to buy it. I knew that other vendors would also take advantage of the higher value we college students place on school supplies anyways, and that I wasn’t likely to find a much better price.
Another economic phenomenon associated with college life is the consumption of an EXTREMELY INFERIOR good – Natty Lite. I mean “inferior good” in both the economic sense and in the sense that Natty sucks….seriously, if you didn’t want to puke the first time you tried natty you either have a really high tolerance for pain or were already drunk. Regarding natty’s status as an inferior good in the economic sense can be explained by the fact that in college, students have relatively much lower income compared to other segments of the population. When the income of a given population goes down, it generally leads to an increase in consumption of what are called inferior goods- cheaper alternatives to normal goods, which are defined as those goods consumed when income is higher in a given population. Because many college students don’t work, and those that do don’t work often, so as not to compromise their schoolwork, we have lower incomes during this period, and must consume the inferior good Natty Lite, the normal good alternatives to which are tolerable to good beers like Miller, Budweiser, Sam Adams, etc.

Imports

While many people think that importing goods from other countries can only harm an economy, this is not always true. The example I am referring to is that of the automobile industry. The benefits to consumers greatly outweigh the disadvantages that the producers encounter when the equilibrium price is lowered from the lower world price. When there is no importing of automobiles it could be assumed that the domestic producers have a type of monopoly on the industry and the consumers can only choose to buy from the domestic producers. This gives the producers the chance to make poorly assembled vehicles because they know if a consumer wants a vehicle they will be forced to buy from the options of what is being produced. When trade is introduced into this same market, and the importing countries are producing better made automobiles at lower prices, the domestic market is required to provide safer, higher quality vehicles to the consumers at the same price as the world price if these domestic producers want to keep their sales up. An example of this is how most older people I know are not in favor of having imported cars, but as many have come to find out through experience, imported vehicles like Hondas are the best economic choice of car for a list of reasons.

Rebelling Against the Market

I have a friend who recently had his car broken into on campus and had a significant amount of valuables stolen. The person(s) who broke into the car stole a subwoofer, amplifier, and the Sony head unit from the car, and then had the common courtesy to leave everything which was of little value to them in a neat pile outside the car by the tire.
Where do I begin with this one?! I would have to assume that this thief did their econ homework and realized that they demanded too low of a price in the market to ever have a chance of encountering a satisfactory equilibrium price for the stereo, amp, and woofer that they stole. This person was not satisfied with their market situation so they did what many people do when they are unhappy with the situation they have been forced into and they decided to rebel. By stealing from someone else, this person got the goods they wanted essentially for free (aside from opportunity costs and the risks they took from engaging in an illegal action).
Now I want to take into consideration the idea that there were two or more thieves who planned out this robbery (and possibly more) and decided to split the earnings equally. During the time they were going through the car, they see the cop car cruising through the alley and immediately, all but one of the thieves run off to safety. This one loner wasn’t prepared for this so they duck underneath the car but they have already been spotted. This thief ends up in a situation of a prisoners’ dilemma.

Producers Love Consumers Like Myself

I guess you could call me a clutz or technologically unlucky, but I have no doubt that producers count on people with my luck to keep their businesses running. Since high school, I have broken or lost three cell phones and three digital cameras. Cell phone and digital camera producers are well aware of the fact that despite my clumsiness I will always feel that it is necessary to own both of these pieces of equipment. Personally, I think this is why they make the brilliant economic decision to provide consumers with a one year limited warranty in most cases.
Most people initially want a nice camera so they will save up and get something that suites their desires. When you get to my position, however, you just want something functional and are in no position to be greedy. This is when you begin looking for a semi-decent substitute. If you were to purchase a phone or camera without the intent of spending hundreds of dollars to buy sturdy, durable piece of equipment, you are going to end up with a product made of cheap materials that are likely to break within the first six months of the expiration of the warranty. In my opinion, this is a tricky move by the producers but they know they can do this by what I would compare to collusion. If all the businesses in the market agreed to sell poorly manufactured phones and cameras, people of a certain class or people on the low end of the demand curve would be required to buy one of these phones or cameras. This begins a vicious cycle of cheap things which break more and more frequently as you can see in my case. My advice to everyone is to buy the things you want and don’t ever, ever EVER lose or break them.

Two for the Price of One

Naturally, econ is not the only class I have homework for. So, when I was told I had to write an original children’s story for my Spanish class, I thought, why not kill two birds with one stone? Our story was supposed to have a moral and teach kids a lesson, so teaching them about sharing would satisfy my Spanish requirement, and I could also incorporate economics concepts and then write about my assignment for the econ blog. The story I created was about two characters, each well practiced in separate trades, and each producing a different good. The people living nearby rely on these two goods, thus creating a demand for both products that each character supplies. By ignoring each other, they are self-sufficient and consume whatever they produce that they do not supply to the town. But, both characters also needed what the other produced, and they were unable to produce it themselves. If the two characters were to specialize in their own trades, but also trade with one another, they could both become better off. This way, they minimize their costs as well as maximize their profits because they are using their time to produce the good that they can best produce. With an understanding of economics concepts, I was able to write an original story for one class and also gain more knowledge about another class. 

Free-Riders

When we were talking about free riding, it made me think way back to when I was elementary school. They redistricted my neighborhood to a new school that was closer so we had to walk to it. There was a bike path that we used to walk to school it but it was by a busy road and we had to cross the busy road in order to get to the school. Obviously young children crossing a busy road could be a problem. The city couldn't put a stop light on the street because it's a "historic" road. So what they did was propose a levey that would create an underground crosswalk. If the levy passed, the crosswalk would be built. If the levy failed, it would be back to the drawing board.

The majority if people in the area having children attending the nearby school really pushed for the levy to pass. My next-door-neighbors had children in private schools and did not feel that they should be taxed by the city for an underground crosswalk that their children would "never use." They complained endlessly about it.

This made me think of the free-rider problem... especially since my neighbors kids did end up using the underground crosswalk when riding their bikes or walking their dog.

Jessica Kelly

TR 8:00

The economy and the NHL

The ever-popular National Hockey League is feeling the effects of the economy as much as anyone. As the NHL and the NHL Players Association argue over salary cap and player rights, attendance continues to take a dive. Corporate sponsorship is down, causing teams in large markets such as New York and Chicago to struggle to spend to support big-ticket players. Five years after first applying the salary cap, the league is finding itself on the verge of having to lower the cap. Several teams such as Atlanta, Nashville, and Phoenix struggle to make money and are possible considerations for relocation. None of those three teams have been making money since the rule changes and lockout five years ago. However, NHL commissioner Gary Bettman says relocation is not an immediate threat. According to the Collective Bargaining agreement made during the lockout, there is a revenue sharing agreement that is keeping some teams afloat.
Here in Columbus, low attendance has been a glaring problem for most of the season. The first few years of the franchise saw the majority of games sell out and very few seats go to waste. After seven seasons of finishing in the bottom third of the league, the fans waned. Ticket prices continued to increase as the economy went down the toilet. Most casual fans were simply unable to afford the luxury. However, with around 15 games remaining and the Blue Jackets in a playoff position for the first time, attendance is starting to climb for the first time in history. While the cost of tickets is overwhelming for the casual fan (lower bowl tickets around $80 bucks a pop) it is becoming clear that the excitement of bringing a professional championship to Columbus is outweighing that cost.

Travis H
Econ 200 (8:00)

Madoff and International Trade

George Madoff, former chair of the stock market Nasdaq, has been in recent news involving financial swindling. Madoff is expected to plead guilty to eleven criminal counts tomorrow, when he faces prosecuters in U.S. courts. Madoff used new client funds to pay investors in what is called the "Ponzi scheme." The funds in the "Ponzi scheme" are worth over $50 billion. Not only is this amount incredibly large, but it also comes from interesting sources.
Madoff was using money from multiple investing companies, but also from charities. He was stealing funds meant to benefit members of society who were in need. Those organizations designed to create positive externalities will have had their funds stolen by a corporate thief. In addition, Madoff was using funds from private clients from North America, South America, and Europe. International trading of investments with Madoff are now nonexistent. Traders on all of these continents were investing their funds because they believed that the benefits of trading would be better than retaining their funds, or investing them domestically. In the realm of international trade, the gains of the "winners" should out outweigh the losses of the "losers." Madoff gave investors a false idea of the markets in which their funds would be placed, and threw off the standard of international trade. He faces a potential sentence of 150 years in prison. I wonder if this example of international wrongdoing will trigger an even greater call for a world court in which international policies can be settled.

People come to Ohio State and there are many benefits that are established for us. Such as Scholarships and internships. One benefit that we get but, at the universities expense would be resources. Such as free books, Free clothes, free schooling if you get a full ride. I have a friend who is here on a full ride for gymnastics and he benefits from all of these things that the school supplies. Also there are people who are not on full rides and they still get benefits but, just not as many. Such as they do not get there schooling payed for, do not get free books, or free clothing. This is a good example of a prisoners dilemma. Where the Scholarship and internships kids benefit but, for someone Else's benefits or losses. Also the football players and baseball players get a major benefit by getting to the major leagues where there as well everything is payed in full just for them to play the sport. So pretty much if your not on a ride than you have to pay like 10,000 dollars a quarter where as if you were on scholarship you would have it payed for you. It is your choice whether you just want to go to a school that will benefit you or go to a school that wont.

Mike Behles

Philip Onorato

World of Warcraft, also known as W.o.W, is played by millions and itself is an economy inside an economy. World of Warcraft currency is divided into three different denominations gold, silver, and copper. The base of the games economy revolves around an auction house and is related to what we call a free market in our economy. A free market is many buyers and sellers and price is self-correcting. The auction house is formed of many buyers and sellers and the quantity of goods and prices always change. There are competitive markets, monopolies, cartels, and oligopolies that affect the normal market. Price will go down when there is an abundance of a certain product and on the rareness of that product can fluctuate the price to go up. The cartels in this game are not companies but guilds and guilds progress through end game content to achieve certain goals, certain goals allow you to make rare products that no other guild can make unless they have reached the same end game content as you. We do not want to flood the markets with this rare good so we can keep prices high, so we make deals with other guilds that have reached the same status as us. Making this agreement is a cartel and we are hurting the market buy keeping prices high on certain products which hurt the little guys, but it is just a game and isn’t illegal but it is illegal in the real world and companies have known to be caught. Monopolies also are a problem in this game for some guilds (companies) they reach a certain point in the game so fast that no one can keep up and they charge up to 10,000 gold for certain products which is a lot of money for one piece of gear. They have many affects on other goods as well as these new products hit the market there is less demand for other goods and this product takes over a certain part of the market but once again you cant call the FBI and you have to go one playing. The items that a certain guild is getting from this end game content can be compared in the real world as when the iPhone hit the market and how the demand was so high on it and the cost as well but apple is the only company who made a touch screen phone at the time and had a monopoly on that product. It is amazing that real world economics is now becoming a process in a video game and what will economics think when more and more games come out like World of Warcraft and what they can learn form a different form of market.

Blood and Turnips

I was told the other day that 'you can't squeeze blood from a turnip.' Well let us just say for the sake of argument that you can, and that this type of turnip blood is so beneficial to the human body that it cures HIV and AIDS after being in the blood stream for two weeks. Now lets just say the a company called REsrch initially developed the process to extract the blood for the vegie, but decides not to produce anything. That is until after a few docters discover its benefits to the human body. The Docters then go to REsrch and say that they would be willing to pay $100 per unit of blood obtained. Now the production chart for REsrch looks very grim because the marginal cost grows very quickly the more units that are produced.

Units Total Revenue Total Cost Marginal Cost Marginal Revenue
1 100 10 10 90
2 200 60 50 140
3 300 120 60 180
4 400 220 100 180
5 500 480 260 20
6 600 690 210 -90
7 700 900 210 -200

Since REsrch wants to squeeze all the profit out of the turnips that they can (pun intended), they decide to produce about 3.5 units per hour because that is where their marginal cost equals marginal revenue. This goes on for a couple of weeks until a disaster strikes. A group of Religious Zealots and AIDS promoters decide that this is not what humanity needs. The Zealots say that God is punishing people, and the AIDS promoters are shouting 'FREEDOM OF CHOICE' so they both decide to attack TRnip, the farm that produces turnips for REsrch. This attack results in a loss of three quarter's of TRnip's crop for the year (only three quaters because the police were called in, but they responded a bit sluggish). Anyway, this loss of crop production results in a drastic decrease in the supply of turnips to REsrch. This drives the cost of turnips up drastically to the point where REsrch will need to charge about $350 per unit of blood to keep the same level of out put. Because of this, REsrch goes to the docters and ask if they can charge more. The Docters reply that they can only pay $350 total per hour for the turnip blood. Because of this, REsrch has a marginal cost that is greater than the marginal revenue to produce 3.5 units per hour, and they have to reduce their output to only one unit of blood per hour. This is where the new marginal cost equals marginal revenue.

The next year, the attack on TRnip was a complete success which caused REsrch to shutdown in the short run and hope that the police will be able to guard TRnip next year.

End of Quarter Humor

Hey all. With the end of the quarter and finals upon us I was just gonna put up here a few bits of humore I found to be aplicable to Econ 200. Enjoy Spring Break !!!

1. The Republicans have made a new weapon that destroys people but keeps the building standing.
It’s called the stock market.

2. Do you have any idea how cheap stocks are?
Wall Street is now being called Wal-Mart Street .

3. The difference between a pigeon and an investment banker.
The pigeon can still make a deposit on a BMW.

4. What's the difference between a guy who lost everything in Las Vegas and an investment banker?
A tie!

5. The problem with investment bank balance sheet is that on the left side nothing's right and on the right side nothing's left.

6. I want to warn people from Nigeria . If you get any emails from Washington asking for money, it's a scam. Don't fall for it.

7. What worries me most about the credit crunch is that if one of my checks is returned stamped “insufficient funds,” I won't know whether that refers to mine or the bank's.

Doug P.
Econ 200

Resale Price Maintenance

I work for a small music store chain of three stores in northeastern Ohio. We sell guitars, basses, drums, pianos, PA systems, and much more. We only cover a small area and most of our customers are return customers that have become friends with management or just prefer shopping at a small market music store as opposed to a national chain or online retailer. I feel this is because we will focus on each individual customer and help them with their individual needs. If this means that we sit down with them for a while and let them try out the product, then that is what we will do. We do not focus on selling as much product as we can, but more on the quality of the sale and the customer experience. Therefore, we are forced to try and make more profit on the items that we sell compared to the national chains or online retailers. Without a resale price maintenance enforced by the manufacturers, we might not be able to compete in the market. However, since there is one on most of the products that we carry, we are able to make enough profit to stay in business and maintain the business strategy that we have. Without this resale price maintenance enforced by the manufacturers, the online resellers and national chains would drive the price down and we could no longer afford to stay in the market and would have to go out of business.

Resale Price Maintenance

I work for a small music store chain of three stores in northeastern Ohio. We sell guitars, basses, drums, pianos, PA systems, and much more. We only cover a small area and most of our customers are return customers that have become friends with management or just prefer shopping at a small market music store as opposed to a national chain or online retailer. I feel this is because we will focus on each individual customer and help them with their individual needs. If this means that we sit down with them for a while and let them try out the product, then that is what we will do. We do not focus on selling as much product as we can, but more on the quality of the sale and the customer experience. Therefore, we are forced to try and make more profit on the items that we sell compared to the national chains or online retailers. Without a resale price maintenance enforced by the manufacturers, we might not be able to compete in the market. However, since there is one on most of the products that we carry, we are able to make enough profit to stay in business and maintain the business strategy that we have. Without this resale price maintenance enforced by the manufacturers, the online resellers and national chains would drive the price down and we could no longer afford to stay in the market and would have to go out of business.

House MD Cares About Patients?

I came across the idea for my blog while watching House MD season one. In the episode the owner of a high profile pharmaceutical drug company gave House a choice; either he could fire a member of his team or give a speech discussing a newly developed drug for heart disease. Instead of talking about the benefits of this new drug, House explained how the drug was essentially the same drug as the company produced before only changed minutely and more expensive. This was done because the patent on the old drug was running out causing it to become generic. He explained during the lecture that this was an excellent business move in order to make the pharmaceutical company millions of dollars at the expense of the sick patients. Having not taken economics, I would not have realized how valid of an argument House made and how pharmaceutical companies are stealing from sick patients. These companies must be making ridiculous amounts of money because every time I turn on the television there is a erectile dysfunction commercial chalked full of sexual innuendos. ED, I'm sure is important to some people but my complaint is how the elderly are forced to pay insane amounts of money for name brand drugs that are said to be an improvement but are really a scam. Don't get me wrong, I believe that new ideas should be rewarded with patent and financial rewards. My complaint is the new drugs that are only changed in order to make money because the original drugs, which work fine, are becoming generic. A lot of the elderly are on a fixed income and cannot afford the new drugs and might not know that a drug, that has essentially the same chemicals, is available as a generic. During the patent the pharmaceutical company has a monopoly and maximizes their profit by producing a quantity of medicine at which the marginal revenue equals marginal cost. The price at which the drug is sold at is way above the marginal cost of manufacturing the drug. Once the drug becomes generic competition causes a competitive market in which the price will eventually equal the marginal cost of manufacturing the medicine. I don't think we should allow the pharmaceutical company's to rip off sick patients by scamming them with supposed "improvements" to the medicine they are currently taking.

-Charles Penvose ECON 200 8:00 am

Externalities for gymnastics

Externalities

Externalities such as chalk and it's affects on its audiences. Chalk is used in many sports and you can see it consuming the area that it has to float. The chalk radiates off of the athletes, equipment or components wearing it and it can have some affects on the audience or crowd within attendance. Some of the externalities that chalk gives off to the people in attendence are anything but good. Most of these affects are negative externalities because it can some times give the crowd a tough time breathing, can get into the eyes affecting the eye sight or some times give the crowd depending on the person the sense that it is a bit gloomy in the room they are in. Also chalk can have affect on personal items such as Ipods, phones, purses, clothing and other things that could be of importance to you. So a good suggestion would be not to wear anything that you would mind getting a little scuffled or messed up. How big the place is also has a factor on what the damage will be.

Mike Behles

Externalities from Free Riding Neighbors!!!

In my apartment complex we live with the coolest neighbors. They are all older, "super seniors" and to them my roommates and i are like their little sisters. Though these guys are pretty cool at times... they are absolute slobs! They are lazy, and due to their laziness they don't take out their trash... and it has been an obvious concern for the last few weeks. We take our trash cans down every tuesday morning, and every tuesday morning they don't take their down. So during the week while their trash cans are full they start filling ours up, while we use our trash cans, and this leads to an overflow of excess trash. It is disgusting. Though we have cool neighbors and they look out for us. They are just messy, this messiness not only leads to extra smelly trash, but a bad looking outside of our apartment and calls to the City of Columbus to give us fines to pick up their trash. Not only are they messy, but they are free-riders. EVERY TIME we have a party they always bum stuff off of us. Especially our alcohol and food. Now I know proper party code is to buy alcohol when you throw a party to give to your guests... our guests are our friends who walk lengths to get to our apartment. Our neighbors are 23, 24... with jobs... they buy beer every weekend... but in order to make that last longer, they come and ask us for ours... now I know this is a skewed view of negative externalities and free-riders, but I guess I needed to vent a little bit about my neighbor situation, and what better way than through an Econ. blog.  : ) 

Morgan H. 

TR 8:30

Demand and Price Discrimination in Fuel Prices

I have to complain about fuel prices. I know that the prices have gone down since the last time I drove but what I want to know is "Why does diesel cost more than gasoline?" The last time I checked, it was cheaper to make diesel than it was to make gasoline. I have a feeling the reason for this insane overpricing of diesel has something to do with demand. The demand for diesel has gone up since 911 due to the fact that the army vehicles run on diesel, and they are being used more. Along with this, the truckers and farmers who have diesel rigs and tractors have to keep buying the diesel no matter how high the price to do their jobs. I know the fuel companies have increased their prices as a result of the somewhat inelastic demand for diesel, but it is insane to be charging more for something that costs less to make. Plus it is just annoying that if you have an older diesel you have to modify it and add fuel additives to your tank every time you fill up to make up for the fact that the diesel is different now than when the vehicle was made. Therefore, you cost of filling up is increased even more.

There is one plus to driving a diesel vehicle. Certain truck stops actually charge 10 cents less a gallon if you pay cash instead of credit card. This is major price discrimination, but it works. If I am taking a long trip, I actually map out where the places that do that are, so that I can get the lower fuel price, and make sure I bring along plenty of cash. There is also other price discrimination that can be found, such as if you have a Kroger plus card and spend $100 dollars at Kroger's in a month every time you fill up you get 10 cents off every gallon. Also Giant Eagle has a program where if you spend money at their store, including buying fuel, you get fuel credits and after so many you get money off of your next fill up. These price discrimination are awesome, but some of these places make up for the difference in their price by charging a high price than everywhere else, so that when you take the ten cents off a gallon, it is actually the same price as every other fuel station.

I do have to say that thanks to this class, I have been able to understand some of the reasons that the fuel companies and fuel stations have for charging higher prices and giving chances for rebates on fuel. Demand and price discrimination have a lot to do with the fuel in our nation.

Price Discrimination

I was at work one Friday night when I get the idea for my econ blog. I have worked at Donatos pizza (not at the ones on or near campus) for about 3 and a half years now and have obviously gotten to know the regular customers. One customer in particular is a man named Mr. Burwell. Mr. Burwell comes in every Friday night and orders two large pizzas. About two years ago we had this half price deal where if you buy one large pizza you get another large at half price. Well as most specials do, the special ended but Mr. Burwell was not happy about it one bit. So in order to make him happy since he’s come there for years my manager has us put in a special coupon just for him so he still gets one of the larges for half price. Any other customer must have their coupons in order to get a reduced price on something…but not Mr. Burwell. I realized after learning about price discrimination that that was exactly what we were doing with Mr. Burwell. I also remembered Kyle saying that even if the prices rise it won’t really stop too many customers from coming back. If we just would have put our foots down and told him that specials end and that he must pay the full price then we wouldn’t be in this situation now…which is us price discriminating every Friday because we thought we would lose his business.

April Allen
Econ 200, 8:00