Airline Ticket Prices

The airline pricing system is confounding, but the presence of discount airlines and business travelers heavily influences the prices in some routes. Click on the link to access some clarity to this riddle and also view an accompanying video clip.

Soft Drink Oligopoly

Though there appears to be a lot of variety and a multitude of choices in the soft drink industry, the vast majority of products emanate from just three firms. The "pseudo-variety" is in reality a proliferation ploy to gobble up all of the remaining shelf space from smaller rivals.

Price Holds The Key

Click on the title and you'll access a passionate plea for more substance in the efforts to wean Americans off of oil. The opinion here is to raise prices through heftier gas taxes based on the assumption that high prices create disincentives and motivates to seek alternatives. At this stage, gas taxes are lower than they've been at anytime over the last 40 years (adjusted for inflation). The implementation would be painful, but price is almost always a market changer.

Why Starbucks Lost Its Mojo

Why Starbucks lost its mojo - CSMonitor.com
This article addresses the motives behind the purchases we make. More often then not we buy things for what they say about us, not because we necessarily have a craving. Starbucks sold an image, but now their logo is so ubiquitous that it is no longer trendy. They same thing happened to Nike. The "swoosh" became so commonplace and thus mainstream, killing the coolness. Both companies had a nice run, though.

A Holiday Case Of Supply And Demand

Click on the title above to explore a classic conundrum that baffles economists and shoppers every December. Why are there shortages of the items we want? This article focuses on the X-Box, but also addresses some memorable frustrations in shopping history.

Making the Case for Cap-and-Trade - Business - The Atlantic

Making the Case for Cap-and-Trade - Business - The Atlantic
As the latest attempt to pass an energy bill goes up in smoke, there is one thing for certain, a lot of ignorance surrounds this issue. Click on the link above to get an understandable description of the cap and trade system. Every economist worth his salt would tell you that the answer to global warming has to be disincentives to produce the causes of global warming. A pigouvian tax, for instance, increases the private cost of the action to equate or surpass the social cost. The cost of polluting is currently not a deterrant.

How Much Would Your Social Conscience Allow You To Pay?

In a previous post I offered an article describing the race to the bottom for wages in the garment industry. This article describes an unusual factory in the Dominican Republic that is bucking the trend and paying a living wage to its workers while freely allowing for unions. The factory makes t-shirts and sweatshirts for over 400 colleges and universities in the U.S., but because of higher labor costs has to charge a premium price for their garments. Many universities have grown uncomfortable with the knowledge that their items are produced in what are perceived to be "sweatshop" conditions. Thus, they applaud the efforts occurring in the Dominican. Many consumers might consider paying extra to support these fair labor practices, but how often does one know the origin of the product? Without effective marketing, many consumers may pass over the unfamiliar brand for the more recognizable logos. Thus, some see this as a noble experiment that will eventually fail. Meanwhile, many garment workers are realizing lifestyles they never thought imaginable.

Free Speech As An Economic Stimulant

Iceland was one of the major victims of the 2007-08 global financial crisis betting the proverbial farm on the derivatives market and losing badly. Now, in an attempt to remake itself, the country's Parliament is proposing sweeping reforms to establish a safe haven for free speech in an attempt to draw the world's media organizations to headquarter in this tiny island nation. The legislation known as the Icelandic Modern Media Initiative is meant to attract organizations into publishing online from Iceland, by adopting the strongest press and source protection laws from around the world. This could be especially debilitating to Britain where the laws make it quite easy to bring suit against journalists and publications.

Markets Interact

One of the most difficult concepts for students to grasp is the chain reaction that occurs throughout an economy when the interdependence becomes evident. This article is a terrific example of the impact the Gulf disaster is having on markets thousands of miles from its shores. People who never had a clue there was a connection are discovering the extensive reach of this calamity. According to the journalist, it all starts with the simple oyster. The impact on the cullers, captains, and shuckers is obvious but what of the fate of workers in the burlap bag factories in Mississippi? In Minnesota, oyster shells are ground to produce an ingredient in chicken feed. The restaurants in New York, Los Angeles, and Las Vegas are having to strike the delicacies from their menus.

Tech Behemoths

Here is an interesting comparison of the big three tech giants Microsoft, Google, and Apple. There are interactive graphics that allow exploration of the different levels of competition they wage.

Leno And Incentives

1. Comedian Jay Leno takes his show to Michigan to help "not just the autoworkers -- anybody out of work in Detroit."

2. He gives away tickets for free.

3. Someone tries to sell his ticket on ebay.

4. Mr Leno objects.

So I wonder: If a person down on his luck prefers the cash to the opportunity to watch Leno live, why would Leno object? Is it altruism that is really motivating Leno here? Is he really sure that the unemployed person in Detroit would be better off with an evening of laughs than $800 in his pocket? Or does Leno want to play to a live audience of unemployed workers so he will seem altruistic to his television audience?

Absent externalities, markets improve the allocation of resources. Both the buyer and the seller of the ticket must be better off: otherwise they would not engage in the transaction. The only significant negative externality that I can see here falls on Mr Leno himself. In other words, Leno's objection to the ebay sale is an understandable and fundamentally self-interested act in that the sale impedes his abilty to appear selfless.

Did he play Detroit to lift the spirits of the unemployed or to elevate his own image?

Parking In L.A.

This is an article about the traffic problems in Los Angeles that the author believes are the result of a pricing issue. It's a good study in incentives and how a realignment could fix an inefficient market. There are follow-up questions at the end of the article for your students to answer.

Advertising and Brands Effect on Price

Here is an in-store project that can be done with your regular Econ students. It's a non-scientific way of looking at non-price advantages that brand name products have over off-brand ones in a grocery store setting.

Love For Our Pets Is Recession Proof

This article describes the unconditional "love" we shower upon our pets regardless of the state of the economy. The pet care and pampering business isn't deterred by a little global financial meltdown.

A Glimmer Of Hope In The I.P.O. Market

If you incorporate the stock market challenge into your curriculum, this article might interest you. It discusses the difficulties companies have faced in recent years taking their firms public. From the Internet bubble to frozen equity markets, it's been a tough decade for fledgling businesses seeking capital.

Plummeting Marijuana Prices In Northern California

Price Gouging?

As hurricane season arrives, we harken back on some of the harsher experiences and hope they never revisit. Inevitably we'll be scrambling for supplies in the wake of a big one and the less prepared among us may face a dose of sticker shock when looking for plywood or ice. Are the seemingly exorbinant prices gouging or simply a manifestation of market forces? Do we really want legislation against "gouging"? This article discusses the ramifications.

Will The E-book Save Reading?

With publishing revenues in decline and the general practice of reading fading, the industry is pinning it's hopes on the new electronic book movement to salvage literacy and sales. The article breaks down the costs to uncover the potential profit of this breakthrough.

McDonald's Egg McMuffins Are "Normal" Goods

This article may help in clarifying normal and inferior goods as more people skip their fast food rituals and eat toast as they drive to work.

Talking Business - Financial Mistakes, Doomed to Be Repeated - NYTimes.com

Talking Business - Financial Mistakes, Doomed to Be Repeated - NYTimes.com