Oprah’s supply curve is inelastic. Since she is a woman who has an enormous effect in the States, produces magazine, has her own tv show, and works as an actress, her supply curve has to be inelastic. If I were Oprah and the tax I have to pay is 45% of the income, I would stop supplying or lessen the supply. I would think that my work is worth more than 55% of the income.
From the drop of its sales, it has been shown that Hovis bread is an elastic good. Because of the economic recession Hovis raised the price of the bread but that lead to the fall in demand. Hovis bread is very sensitive to the price and that is the reason why the demand of the bread had fell dramatically after the price change. The original Hovis consumers substituted the expensive Hovis to other breads due to the change in preferences. If Hovis breead was inelastice, it would not have been damaged but since Hovis is an elastic good unlike other breads, it had negative consequences. If Hovis lowers the price back to how it was, the consumers would come back to them again.
Because of the global economic recession, JAL is going through a big financial crisis. To a lot of people, plane ride is a luxury good and they have decided to reduce the number of going on the plane. Therefore, JAL is constructing a new solid business program to bring a big change. First, there will be changes in the domestic network. JAL will operate more jets on domestic routes and look for further areas for cost cuts. For the international network, highly efficient aircraft are replacing old and big planes that consumes a lot of fuel. Cost will be reducted by bringing a change in maintenance, flight operations, cabin crew, airport operations, sales and other operations. They are finding a way to maximize profit even with cost reductions.
a) The article suggests that the European air travel is price elastic in demand. BA changed its stragety by reducing the number of economy seats and increasing the cost. On the other hand, Ryanair added more routes and lowered the price.
b) Due to the increase in the aircraft routes, low ticket price, and the landing place, (far from the city)Ryanair profited the most. Also, the buses or train services meets each flight and it attracted people even more.
c) Ryanair planes landed outside far form the city so they could have more planes land faster. Also, they do not give out peanuts and asks the passengers to tidy up their seats. In that way, Ryanair can save money and make the price cheaper.
I have learned that I learn more from writing. For example, I cannot just read the Triple A text book online and understand and that is why I tend to take notes while reading the text. Also, I have tried to record Dr.Anthony’s lectures by my laptop but it did not work well. For diagrams, I get it when I actually draw it but not seeing it happen to be drawn.
First of all, I learned that Data Response is Very Hard! I think I should try to think simple. I thought too hard about the article without getting to the point. Of course it requires Economic knowledge but you also have to know how to take the test. For example, if you do the evaluate question without knowing CRAMPSS, you would not get a good score. I think I should learn how to apply the real life examples well.
When the Ipod was first release in 2001, people around the world were shocked because of its uniqueness. Allured by the simple design, thousands of people started buying it. Then the Apple Company started to modify the Ipod into different styles and that brought another success as well. However, recently, the company introduced another shocking item, the Iphone. Iphone is a combination of Ipod touch and a function of phone cells. Then people started buying the Iphone, causing the less demand of the original Ipods they have been producing. This is a dilemma for the Apply Company. Their new Iphone is boosting up their popularity but the demand of the Ipod is decreased at the same time. I think the Apple Company should come up with a total new Ipod again this time. Then more people would buy the Ipod. After that, the company can come up with a new generation Iphone too. This will make a balance between the production of Ipod and Iphone and it will benefit the Apply Company in the long run.
From the circular flow I learned the relationship of interdependence between the market and homeowners and the business firms. Also from this flow, I can assume that there is no government, no overseas trade, the economy consists of two sectors: household and firms, no saving, and that all output is purchased
On August 15th, 2009 the Lehman Brothers, the fourth largest investment bank in the US, has gone bankrupt. The bankcruptcy of the Lehman Brothers had affected the entire world. Hundreds of elites no longer held a job and the Lehman Brothers building was left for tourism.
Lehman Brothers was a global financial service firm that participated in investment banking, trading, and investment management . Until 2008, the price of the real estate of the US has risen and the demand of the expensive houses had extremely increased. Companies such as Lehman Brothers borrowed money and then sold exceedingly many houses so they would benefit from the bubbled house prices. But the greed brought a downfall. The bubbled price of the houses soon fell and the demand of houses decreased. Because no one bought any houses, the companies which borrowed money to buy the bubble priced houses are not able to pay the money back. The Lehmans had no income and could not pay the money back. They could not even find a buyer and just had to rush to liquidation. The bankruptcy of the Lehman Brothers has influenced all the investment banks around the world. Lehman Brothers was like the core of the investment companies. Then the investors worldwide suffered loss, making the stock markets unstable.
Althought the Lehman Brothers company had more than 100 years of history, their desire to become more wealthy has brought the end. Many people were shocked and struck dumb after the fall of the Lehman Brothers. AIG was another investment company that went near bankruptcy but the US government had bought 50 percent of the company to prevent the 2nd economic destruction that might take place. Merrill Lynch, also stung by the credit crunch, was also taken over by Bank of America, which was also unbelievable. A year has passed since the bankruptcy but the economy of the US, and the world is not recovered yet.
http://www.nytimes.com/2008/09/15/business/15lehman.html?pagewanted=all
http://news.bbc.co.uk/2/hi/business/7615931.stm
http://www.nytimes.com/2008/09/11/business/11lehman.html?_r=2&hp&oref=slogin
All the economies have different goals. However, I learned that most of the economies share six goals; economic efficiency, economic equity, economic freedom, economic growth, economic security, and economic stability. Today, we read two student diaries and found which economic goals apply to them.
For diary A, the student lived in a command or planned economy. I thought that the economic security and stability applies the best to her economy because the government of the student’s country provided health care and jobs. Also, in her economy, there was no unemployment and the prices of goods were always the same. On the other hand, the economy of student B seemed to be a market economy. Economic growth and freedom applied to the economy of student B. The mother of the writer owned two restaurants and the writer owned a car. Moreover, in the diary, the student mentioned that the economy grew by 3 percent.
