Tuesday, October 17, 2017

Making an Economic Decision

Making an Economic Decision
Alex Johnson
Buying a car can be a very tough decision. You have to look at your budget and have to decide what car you want to buy. Many cars look very appealing on the showroom floor. You are even able to take it out for a test drive to see if it meets your expectations. On the other hand, there's really no way to test drive a vehicle reliability. Cars are very expensive to own if you don’t choose the right one. Japanese car companies are known to produce the most reliable cars. They rarely have random parts break. Also, the cost to service a Toyota will be a much lower cost than a BMW. The lowest cost to own cars includes Toyota Prius, Toyota Camry, and Honda Ridgeline. BMW, Mercedes, and Audi are very famous for being luxury brand cars but they cost a lot to service.After the warranty runs out for these companies the depreciation of the car skyrockets. This causing many cars that are being sold to have it’s warranty about to end or it is already done. If you decide to lease a car you don’t have to deal with service fees but there are many terms that can still make you pay fees. With a leased car you have a set limit of miles you can drive and you have to keep the car very nice otherwise you are hit with fees.















Doing research about certain models can save you a lot of time in the long run. Companies have models that are more reliable than other models. In some cases, there are models that are famous for a problem or certain thing to break. For examples, Subaru WRX STI’s are famous for having oil consumption problems which can be very problematic without being treated.You have to look and see if buying a brand new car is worth it. Buying a new car can be hard on the wallet. Not only do new cars cost a lot more than used cars, but they depreciate in value more quickly too. A vehicle loses the most value in the first few years of ownership. In just one year with an estimated loss value at around 19 percent. Not only will you be paying more up front but newer cars often have a higher insurance cost. Although it may seem like buying a used car is a lot better. You have no idea how the person treated the car before you bought the car. Also, it will be super tough to find a certain used car with the color and packages that you want.
Overall you have to look in the long run. If you are okay with spending a little more money at first and you plan on keeping the car for a while. It's a good investment to spend a little more in the beginning because you know that you are gonna take care of it. If you are more on a budget it's a pretty safe option to go with a used car with little miles on it. You may not get all the features and packages but you will be saving money on a reliable car. You have to look at the opportunity cost and see if it is worth it to fork out a bunch of money on a new car.
Works Cited

“Guide to Car Reliability | Owner Satisfaction.” Consumer Reports, www.consumerreports.org/cro/cars/guide_to_car_reliability/index.htm.

Naranjo, Michelle. “CR's Car Reliability Survey Reveals Shuffles in Brand and Model Rankings.”

Vincent , John M. “New Cars vs. Used Cars .” US News cars.usnews.com/cars-trucks/new-cars-vs-used-cars.

Wardlaw, Christian. “Consumer Reports: 10 Most Reliable Car Brands.” NY Daily News, NEW YORK DAILY NEWS, 25 Oct. 2016,

Zhang, Benjamin. “These Are the 18 Most Reliable Used Cars of 2017.” Business Insider, Business Insider, 24 Feb. 2017,

Madness at McKamey Manor

Taylor Baum
Economics
Mr. Reuter
10/18/2017

Madness at McKamey Manor

McKamey Manor is an real life, extreme combination of a haunted house and the worst horror films that have been created. This haunted house is based around the participant's individual fears, and actors have the goal to put the participant into a real life, gruesome, horror film. According to The Guardian, as well as many others, “At McKamey Manor, people sign up to be kidnapped, bound, masked, slapped, stomped on and held under water” (The Guardian).
The manors are located in Huntsville Alabama, Nashville Tennessee, and the original in San Diego California where the manor is located in Russ McKamey’s backyard. Russ had been in the navy for 23 years, and has the ultimate goal of making people feel like they are living their own horror movie.

This house is not for just any ordinary person. In order to enter you must complete 4-5 hours of physical and mental activities. This takes place at Holly’s Playhouse, and it is said that if one cannot survive this house they will have no chance in surviving the manor. They must also have no existing physical or mental conditions that could put them at any greater risk of danger. Participants also need to have a background check, pass a drug test, sign a detailed 40 page waiver, and bring a doctor’s note that states that they are physically capable of completing the experience (McKamey Manor). If you are able to check off all of these requirements you still may not be able to participate because there is a waiting list of over 27,000 people.


Each year the manor has a goal of making the experience scarier and scarier. Russ has spent over $500,000 on these houses so far, but that cost is necessary to keep up with the high demand of people who wish to attend the 8-10 hour extreme event. Russ had stated that, “Every year it’s got more crazy, more aggressive. We wouldn’t be infamous if we weren’t able to deliver the product” (The Guardian). There is one show per week, and it is free of charge for those who enter the house. In order to make a profit Russ accepts donations in the form of cash and dog food for his pet greyhound. Out of the thousands that have entered not one person has been able to complete the entire night, but if they were able to they would receive a $1,000 reward. The cost of attending this house is a strain on one’s physical and mental health, and the benefit is no more than the satisfaction that they had gone through it. There is no safe word, and you are not allowed to leave no matter how much you beg; the only way to get evicted is to return the contact to the actors (which is hard to do when they have you chained and duct taped together).

Overall, this show is beneficial to the local economy of Texas, Tennessee, and California. This event brings in a population from all around the world, because so many wish to partake in the experience. In turn this creates a heightened profile for the cities surrounding the houses as the people who attend also bring profit to the goods and services within the area.






Works Cited

Carroll, Rory, and Mae Ryan. “Extreme haunted house: inside the real life kingdom of masochists.” The Guardian, Guardian News and Media, 30 Oct. 2015, www.theguardian.com/lifeandstyle/2015/oct/30/extreme-haunted-house-masochists-mckamey-manor.

McKamey, Russ. “McKamey Manor.” mckameymanor. 10. 2017,

www.mckameymanor.com/

Should the MLB have Salary Caps?

Ted Fuhr
Mr. Reuter
Economics B4
October 15, 2017
Should the MLB have Salary Caps?
As a young boy I would always dream of being a professional baseball player, and many of my friends shared this same dream. To be playing a sport we love and making unimaginable amounts of money doing it - it didn’t seem possible. However, for only few, this unimaginable pay became very much a reality. But these salaries came at a cost; a cost payed for by American citizens and any other that visit one of these baseball stadiums. Ticket prices, concessions, taxes, and parking are all increased to support the unbounded increasing salaries of players in the MLB. Without salary caps, there is no telling the extent to which these salaries will reach bringing other costs in baseball up with it, and allowing some teams to get ahead with far greater payroll. Imposing strict salary caps would allow America’s favorite pastime to be maintained as an affordable source of entertainment with far more amusing matchups.
Of the 4 major sports, Major League Baseball is the only one with no salary caps. Salary caps prevent teams from spending too much money on the salaries of players. The MLB technically does have salary caps but they are so high and forgiving, that they are rendered useless. Without these salary caps in the MLB, players have reached salaries as high as 34 million dollars per year (“Here Are the 25 Highest Paid MLB Players of 2016.”), which is about ⅔ of the payroll of my home team, the Brewers, who have the lowest payroll in the MLB of 51.2 million dollars (“2016 MLB Team Payrolls.”). The salary caps of MLB range from the lowest, held by the Milwaukee Brewers of 51.2 million dollars, to the LA Dodgers with the highest of over 248 million dollars (“2016 MLB Team Payrolls.”). This grandiose payroll is about $50,000 above the salary cap of the MLB showing its leniency and insignificance. These big-market teams have greatly increased ticket prices to support their enlarged payrolls. For instance, the average ticket price to a game of the Boston Red Sox, who have the 3rd highest payroll in the MLB, is $53.98, while the 22nd ranked payroll in the MLB, the Arizona Diamondbacks, sell tickets at an average of $15.67 (“Why The Prices Of Sports Tickets Vary So Much.”). There is a direct correlation between the payroll of teams and the price of their tickets because the revenue earned in selling tickets is a major source of funding for the team and the salaries they pay (“Major League Baseball's Business Model & Strategy (NKE, ERA).”). As the pay to these players increases, the price to attend baseball games will increase and the according to the law of demand, the demand will decrease due to the raised price. Baseball games will likely prove to be fairly elastic as they are not a necessity but within marginal costs, they are desirable. The elasticity comes with opportunity costs that may outweigh the cost of going to these expensive, unnecessary games, such as a tank of gas or a nice meal. With salary caps, and thus lowered payroll, the price of tickets would be decreased and baseball games would become more affordable causing the demand to increase and the ticket prices to become consistent throughout the league. However, ticket price is not the only inconsistency caused by these big-market teams. They cause uneven skill as with more money, better players may be acquired. For example, the Dodgers, with the highest payroll, had a regular season record of 104-58, while the Brewers, with the lowest payroll, ended the 2017 regular season 86-76 falling just short of the playoffs. With strict, salary caps, teams would have to strategically budget their money to present the best offer to players so they may be acquired. This would allow for more even distribution of elite players throughout the league. The only possible negative externality would be increased traffic due to increased attendance from the high demand caused by the low prices.
The bottom-line is that more strict salary caps would improve the affordability and fairness throughout the league. Ticket prices would be lowered, increasing the demand to attend these games. In addition to the affordability, the teams would be more evenly matched and the players more evenly spread. The MLB would be made into a more affordable and entertaining sport with the implementation of strict salary caps. With this change, America’s favorite pastime would be maintained and more available than ever.








Works Cited
“2016 MLB Team Payrolls.” Online Payroll Service for Small Business - SurePayroll, www.surepayroll.com/resources/blog/mlb-team-payrolls.
“Are Salary Caps for Professional Athletes Fair?” Priceonomics, priceonomics.com/are-salary-caps-for-professional-athletes-fair/.
“Brewers Year-By-Year Results.” Milwaukee Brewers, milwaukee.brewers.mlb.com/mil/history/year_by_year_results.jsp.
Dorn, John. “Here Are the 25 Highest Paid MLB Players of 2016.” AOL.com, AOL, 2016, www.aol.com/article/2016/04/19/here-are-the-25-highest-paid-mlb-players-of-2016/21346726/.
Fontinelle, Amy. “Major League Baseball's Business Model & Strategy (NKE, ERA).” Investopedia, 2015, www.investopedia.com/articles/personal-finance/062415/major-league-baseballs-business-model-strategy.asp.
Parker, Tim. “Why The Prices Of Sports Tickets Vary So Much.” Investopedia, Apr. 2012, www.investopedia.com/financial-edge/1012/why-the-prices-of-sports-tickets-vary-so-much-.aspx.
Review, NU Business. “Why Certain MLB Teams Can Afford Star Players and Others Cannot.” The Northwestern Business Review, The Northwestern Business Review, Mar. 2012, northwesternbusinessreview.org/why-certain-mlb-teams-can-afford-star-players-and-others-cannot-bb5d9fca0524.
“Year-By-Year Results.” Los Angeles Dodgers, losangeles.dodgers.mlb.com/la/history/year_by_year_results.jsp.

Champion’s on the Rise

Champion’s on the Rise
Thomas Knoke


Champion or Champion U.S.A. is an American manufactured clothing line that has specialized in sportswear since the year it was established, in 1919 by Simon Feinbloom and his two sons Abraham and William in Rochester, New York. Champion is a subsidiary to the major establishment of HanesBrands Inc. Champion was really popular starting in the years of 1980’s and 90’s when they made uniforms for every single basketball team in the NBA along with some NFL teams and some major colleges. One of its most defining moments was when it supplied the 1992 USA basketball “Dream Team” there uniforms during the Barcelona Olympics. In the article “How Champion Became One of the Coolest Brands Around --- Again”, Manny Martinez, Champion’s global brand ambassador stated, "You didn't even have to put it [Champion] on racks back then, stores would crack open a box and just put the box out and the people would buy it out of the box.” But soon after Champion’s peak in the 1990’s it seemed as though they had dropped off the face of the planet. People weren’t flooding stores to buy Champion anymore. Through the years of 1990-2000 demand for Champion products decreased tremendously, meaning supply and revenues would eventually get forced down. But do not fret, because in the mid-2010’s Champion was finding its way back into business and it had to do with its broad range of collaborators. Champions most influential collaborators are streetwear legend clothing lines Supreme and Undefeated. These clothing lines not only brought  Champion to become a high-end street/sportswear company but they also put Champion products in the hands of some of the most popular celebrities, for example, Chance the Rapper and Kylie Jenner. This recognition put Champion back on the map, because when the public saw celebrities wearing Champion, demand for their products skyrocketed and so did supply and revenue. In addition, to celebrities putting Champion back in the hands of millions of Americans, they also made it so Champion barely even had to promote their products. When’s the last time you saw a Champion commercial in 2000’s? Let me answer that for you, never. That’s because celebrities did the work for them.
In conclusion, Champion was a national and extremely popular clothing line that dominated sportswear sales for a good chunk of time until they fell dramatically during the span of the years 1990-2000. But not only did Champion make an incredible comeback, but they are on the rise and becoming one of America's favorite brands again.
Works Cited

“Champion.” HYPEBEAST, hypebeast.com/tags/champion.

“Champion (Sportswear).” Wikipedia, Wikimedia Foundation, 10 Oct. 2017,
en.wikipedia.org/wiki/Champion_(sportswear).

Raymer, Miles. “How Champion Became One of the Coolest Brands Around-Again.” Esquire,
Esquire, 23 Mar. 2017,

www.esquire.com/style/mens-fashion/news/a54070/champion-sweats-comeback/.

Monday, October 16, 2017

The Electric Boogaloo

Written by: Carlos Teran

Gun rights are a hot topic in the United States today.  It is such a hot topic because gun rights are deeply rooted in American culture. When you bring up the idea of banning guns, some people can get very defensive. “Rock, Flag & Eagle” says Charlie Kelly when talking about his right to own guns, even while living in one of the most gun violent cities in the U.S.
It will be a very long time until anything happens with gun legislation. On October 1st 2017 the largest mass shooting in recent American history happened. In Las Vegas, 60 people were killed by a gunman and over 500 people were injured. One would think that after a catastrophic event like this the longing or (demand) for guns would go down. However the demand has only increased since the shooting. In addition the price for the stock of guns has gone up as well. This seems odd and like the opposite of what should happen but in a market economy anything can happen. Perhaps people are worried that with each mass shooting we will get closer to banning guns completely, and guns will become a scarce source. This is an example of change in expectations which is why the demand and price are changing.

Graph from CNBC

This is not a surprising trend, according to CNBC “Gun stocks have tended to rise after similar shootings”. It seems as though Americans are worried about what will happen to their guns and they are looking at the opportunity cost of what will happen if congress decides to ban guns. On one hand, it seems as though it needs to be done to keep people safe. Mass shootings have increased over the years and the damage they have caused has also increased. The opportunity cost would be people losing their First Amendment rights. We will see how congress responds and how the market will respond to congress.
The facts I have  laid out before you are  precisely why it will be a long time until gun laws are put in place. Mac McDonald said it best, Even in the face of a catastrophe caused by guns, people argue that we need more guns. People go out and buy more guns. Americans want guns. And this is the land where the market takes priority.

Cheng, Evelyn. “Gun stocks jump, following historical pattern after a mass shooting.” CNBC, CNBC, 2 Oct. 2017, www.cnbc.com/2017/10/02/gun-stocks-rise-after-deadly-las-vegas-shooting.html.

Foxconn

Foxconn

Kolton Osterman


Foxconn is the largest contract electronics maker in the world. They provide screens for almost all the phones and devices you see today. As a company they are continuing to look for other opportunities to  expand their company and open more locations across the globe. The major company was looking to open a building in southeastern Wisconsin but this has raised questions from all around to whether this would be a good decision or not.
There is no doubt that Foxconn coming into Wisconsin would create a giant increase in the supply of jobs by creating around one thousand jobs. The only problem with this is there is not a high demand of jobs in Wisconsin because the unemployment rate is around 3% meaning it will be very hard to fill all the jobs that foxconn is creating. Having a high supply and low demand will create a surplus in jobs and Foxconn will have a lot of empty slots.

On a good note, Foxconn in Wisconsin is easier access to the screens. America will spend less money shipping screens from Wisconsin than shipping them from other countries. There are not a lot of substitutes for device screens which means Foxconn would not have a problem trying to compete with other companies which is beneficial for creating a new location. Around 77% of Americans own a smartphone and this number is continually growing. Foxconn is a complement to the phone companies because the more phones that are sold, the more screens Foxconn is going to sell. A location in the U.S. would do well because the demand for smartphones is high which would make any complements demand be high as well, which is good for a company like Foxconn that is trying to expand and open new locations.

While they are continuing to fight for a new location in the state of Wisconsin, there are arguments are arising if letting Foxconn in the U.S. is really a good idea. By relocating it would increase the supply of jobs and create huge sales because of the high demand for smartphones and other devices. But they would be creating jobs in the state that people might not need as well as create stress for those who are in the area of construction.



Works Cited
Barrett, Rick. “Foxconn Supply Chain Could Bring Opportunities to Wisconsin Businesses.” Milwaukee Journal Sentinel, Milwaukee, 2017, www.jsonline.com/story/money/business/2017/07/30/foxconn-supply-chain-could-bring-opportunities-wisconsin-companies/517626001/.
Bosman, Julie. “Questions Emerge Over What Wisconsin Must Give for Foxconn Plant.” The New York Times, The New York Times, Oct. 2017, www.nytimes.com/2017/08/10/us/foxconn-jobs-wisconsin-walker-tax-incentives.html.
Chan, Kelvin. “What Is Foxconn? Only the World's No. 1 Contract Electronics Maker.” Chicagotribune.com, 2017, www.chicagotribune.com/business/ct-what-is-foxconn-20170727-story.html.
“Foxconn: Latest News on Foxconn | Top Stories & Photos on Economictimes.com.” The Economic Times, economictimes.indiatimes.com/topic/Foxconn.
“Mobile Fact Sheet.” Pew Research Center: Internet, Science & Tech, Dec. 2017, www.pewinternet.org/fact-sheet/mobile/.

Thursday, October 12, 2017

Pumpkin Spice Lattes

Hannah Theyerl
Economics
Mr. Reuter
10/10/2017

Pumpkin Spice Lattes


As many would agree, the fall season is one of the most trendy times of year as people from all around purchase oversized sweatshirts, UGG boots, and none other than pumpkin flavored goodies such as coffee, muffins, pie, and pretty much anything else you could think of. One of the companies that has had the biggest influence in this pumpkin flavored trend is Starbucks. Starbucks launched its Pumpkin Spice Latte, or PSL, in 2003, and ever since more and more people have been purchasing this drink every year. This drink is said to be a fall essential by many, and a must try by most.

Since this drink has been produced in 2003 there have been over 200 million that have been sold, so this drink has a very high supply and demand. Also, because this drink is only sold throughout the fall season buyers wait all year for this drink and there are always new people who want to see what the craze is all about. Since this drink is so scarce, only coming around once a year, and for only about five dollars it’s almost hard to resist.

Speciality drinks and items always bring in a large revenue because some people wait for so long to buy this drink and get multiple throughout the fall season. Starbucks is not one to release sale revenue for specific drinks, but it is estimated by Forbes that, Starbucks will make in the region of $100 million in revenues from pumpkin spice lattes this fall (Forbes).

Because Starbucks had been so successful with their pumpkin flavored drink other companies had decided to produce more products in order to keep up with this ever growing demand. Other large companies such as McDonald’s also jump into this annual craze in order to keep up with what the people want, but when one thinks about this drink, Starbucks is the main company that comes to mind. Forbes also states that, “the instances of pumpkin as a flavor on restaurant menus is up 21% since 2012. While just over half of this growth is in baked goods, statistics show we like everything from dressings (20% increase) and dips (6% increase) with a pumpkin flavor” (Forbes). Most cafe-like companies make a good profit as the fall season rolls around, and because they are in a free market economy they make the strategic move of producing these products because they know that the consumers will purchase it.

In conclusion, it is obvious that the Pumpkin Spice Latte, along with many other seasonal drinks and items, are very popular and apparent once the fall season comes around each year. Whether the consumer is young, old, from America, UK, or almost anywhere in between, it is likely that they have tried or at the very least have heard of this type of drink. At a low price, and high demand companies make a very large profit during this time and bring in a relatively large revenue.


Works Cited:
O'Connor, Clare. “The Pumpkin Spice Economy: How Starbucks Lattes Fueled A $500 Million Craze.” Forbes, Forbes Magazine, 10 Nov. 2015.

Higgins, Marissa. “How Much Does A Starbucks Pumpkin Spice Latte Cost? Fall In A Cup Can Be Yours For About $5.” Bustle, Bustle, 1 Sept. 2016.

Starbucks. “Pumpkin Spice Latte”. Starbucks Coffee Company, 09 Sept. 2017.