Thursday, November 16, 2017

Cities Race for Amazon

Cities Race For Amazon
By: Robert Haga

About a month ago Amazon announced that they would be constructing a HQ2 in North America. Amazon is one of the biggest and fastest growing companies in the world today. They are the biggest online shopping market in almost every industry except food, which could change after their recent purchase of Whole Foods, and after their announcement to build a new Headquarters in North America; 238 cities all over the continent are trying to get Amazon in their city. So why are so many cities trying to get Amazon to build in their area?

The benefits to Amazon economically are undeniably substantial. Amazon’s first HQ in Seattle, Washington has boosted their economy as the company has grown. On Amazon’s website they give the affects what their first HQ has done in the last 6 years, “Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy – every dollar invested by Amazon in Seattle generated an additional $1.40 for the city’s economy overall.” $38 billion dollars added to a city's economy due to only one company is unbelievable in itself, but taking into account that Amazon projects its new HQ to be even bigger with over 50,000 high paying jobs along with an investment of more than $5 billion dollars in construction of this new facility, there’s no wonder why so many cities are competing for this  opportunity.
The magnitude of the facility will cause the construction build process to create tens of thousands of jobs along with tens of billions of dollars in the surrounding area. This will likely require a high populated area with a substantial tech labor force for the tens of thousands of tech jobs that will open up. This is why Dallas, Texas is rated the number 1 choice for the new HQ. Texas in general has some of the best tech schools in America. This is a big attraction for Amazon as one of the hardest parts of choosing a location in finding enough qualified young workers to quickly fill the positions needed. Texas has other attractions as well as their low cost of living and lack of income taxe are some of the reasons for Dallas is considered the number 1 choice.  These factors cause Dallas to out rank cities like Boston, Atlanta, and Washington DC.

Cities around the country have been trying things like alternative transportation, business friendly policies, local funding for the business, and etc.. to make them look like a better fit for Amazon’s HQ2, which have caused controversy between their citizens saying they don’t what increased taxes to fund Amazon or new means of transportation which are alternatives from automobiles.

Although Dallas is the number 1 choice on the outside deals can be made that make less likely cities more attractive to Amazon and Dallas is still just one of 238 cities that might get Amazon’s approval.



Works Cited
Bizjournals.com, www.bizjournals.com/dallas/news/2017/11/14/dallas-named-top-contender-for-amazon-s-new.html.
“Amazon Announces 238 Proposals for HQ2 from across North America.” Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & More, www.amazon.com/b?ie=UTF8&node=17044620011.
Parilla, Joseph. “Which Cities Are Well Positioned to Land Amazon's HQ2?” Brookings, Brookings, 8 Sept. 2017, www.brookings.edu/blog/the-avenue/2017/09/08/which-cities-are-well-positioned-to-land-amazons-hq2/.

Jumbo Jets Cleared to Land...for Good?

Jumbo Jets Cleared to Land… For Good?
Alex Steinhaus


Since its rollout in 1970, Boeing has sold over 1,500 747 aircraft. Known by its distinct front hump, the 747 has been dubbed the “Queen of the Skies”, despite being smaller than its competitor, the newer Airbus A380. The 747 typically carries 410 passengers in a standard configuration, while the A380 can carry 544 passengers. While it’s easy to see why these two birds have earned the nickname Jumbo Jet, It is also easy to see that the aircraft are almost ready to be retired and discontinued.

Currently, there are 661 747’s still in service and in the skies: 253 passenger jets, 374 cargo variants and 34 VIP or government owned aircraft. At the end of May 2017, there were only 5 unfilled orders for the most recent model of the 747: the 747-8, as well as 15 unfilled cargo freighter orders.  For Airbus, 100 planes have yet to be delivered, with a total of 217 built since its rollout in 2005. All of the A380s are passenger configurations, and Airbus is no longer exploring a cargo version as it is currently developing the Beluga freighter.

So why are the jumbo jets losing popularity amongst airlines? Fuel costs are a major factor. Even with low fuel costs, jumbo jets are still gas guzzlers, and lack the fuel efficiency technology that manufacturers are putting into their smaller planes, which are in greater demand. Why? Operating costs. The A380 has an operating cost of between $26,000 and $29,000 per hour. Comparing that to a smaller Boeing 737-800, the 737 can fly for $2,180 an hour. With planes that fly for a cheaper operation cost, airlines make a larger profit, despite the fact that the jumbos can carry more paying passengers. Even though these planes can fly farther than a 737 for example, manufacturers have used those fuel efficiency technologies to create their newest products: the Boeing 787 and the Airbus A350. The 787, also known as the Dreamliner can carry anywhere from 242 to 330 passengers, while the A350 has a capacity of anywhere between 280 to 366 passengers. While these twin-aisle wide body jets are considerably smaller than their jumbo counterparts, the range of these aircraft is comparable. On the American side, the 787 has a range of 14,140 km, and the 747 has a range of 14,816 km. For the European Airbus, the A350’s range is 15,000 km and the A380’s range is 15,200 km.

While the appeal of flying on a double decker plane is cool in appearance, economically it’s a different story. The future of commercial aviation are smaller planes, and the manufacturers have delivered with the launch of the 787 and the A350. While Boeing has conceded that the 747 no longer will carry passengers in the future, the queen is predicted to survive in the cargo freighter market. This as the only american carriers still flying the 747, Delta and United, have plans in place to retire their planes by the end of this year. Airbus, on the other hand, still believes that there is a future for the A380, and is already developing the A380plus, a more fuel efficient model for the world’s largest passenger plane. No matter the case, only time will tell the future for the jumbo jet, but with the current trend, the skies will be dominated by the smaller planes, leaving the queens to be sent to the scrap yard.



Works Cited
“Airbus A380.” Wikipedia, Wikipedia Foundation, Inc, en.wikipedia.org/wiki/Airbus_A380.
“Boeing 747.” Wikipedia, Wikipedia Foundation, Inc, en.wikipedia.org/wiki/Boeing_747.
“Boeing.” Boeing: 787 Dreamliner, Boeing, www.boeing.com/commercial/787/.
Gates, Dominic. “Boeing Admits Its 747 ‘Queen of the Skies’ Has No Future as Passenger Plane.” The Seattle Times, The Seattle Times Company, 20 June 2017, 11:10 AM, www.seattletimes.com/business/boeing-aerospace/boeing-admits-its-747-queen-of-the-skies-has-no-future-as-passenger-plane/.
Goldstein, Michael. “Operating Costs Killing Jumbo Jets As Airlines Profit From Smaller Planes.” Forbes, Forbes Media LLC, 5 Oct. 2017, 8:25 PM, www.forbes.com/sites/michaelgoldstein/2017/10/05/operating-costs-killing-jumbo-jets-as-airlines-profit-from-smaller-planes/#7b753237336a.
“Technical Specifications & Range.” A350 XWB by Airbus, Airbus SAS, www.a350xwb.com/technical-specifications/.

Holiday Madness

Holiday Madness
By: Izzy DeAngelis

Christmas time is all the buzz in late November and December. Everyone’s looking for the “perfect” gift and those great deals. So with good deals comes some opportunity costs, especially on a hectic day like Black Friday. The day after Thanksgiving, also known as Black Friday, is when most people go out to shop for their gifts. According to the National Retail Federation, there are about 164 million people that go shopping during Thanksgiving weekend. The craziest thing about this day is people waking up at the crack of dawn to go sprint into the stores and get the limited offers. In this process, they may still not get the goods they seek to get, which would not only be an opportunity cost just like having to wake up early, or potentially getting hurt in the process by being trampled by crazy ladies.
Since this is the one of the most busiest shopping days of the year, the U.S. made on average last year about $655.8 billion(Amadeo). This increase over the years has shown substantial growth for the sales in retail stores like Kohl's, JCPenney’s, Boston Store, etc. With the increased traffic of people going in and out of the stores, there is usually an increase in employment options for these stores. These job opportunities open up which help create marginal benefits to people in need of a job/money. But as with anything there are always marginal costs. In this case, by having a new job the employees won’t have as much time to do other things besides work because of the increase of sales. In the end, the good outweighs the bad and the employers will not only be helping themselves but others too, especially when their customers find that perfect gift.
Not only do stores experience an increase in employment but they also increase the demand of their goods. According to the law of demand, with the increase in demand of certain products in these stores there will be a decrease in prices, which is why there are sales that happen during the holidays. Since there will be an increase in demand, the supply curve will also have to shift as well. With the decrease in a lot of the product’s prices, the supplier won’t want to produce as much therefore showing a decrease in production. This is why there are only a certain number of products available for purchase in stores, on Black Friday.
Overall, companies like Kohl’s and Best Buy, usually have large sales around the holidays because their products are more elastic than companies of higher name value, like Gucci. Those companies are inelastic because they are known for their high prices and uniqueness, so those companies know that during the holidays people will spend an absurd amount of money on the ones closest to them. This is why Christmas is the most wonderful time of the year.

Works Cited

Amadeo, Kimberly. “How Much Do Americans Spend on Black Friday?” The Balance. n.p. 11 Nov. 2017. 13 Nov. 2017.
hibbardj@nrf.com. “Holiday Headquarters.” National Retail Federation, 6 Oct. 2014. 13 Nov. 2017.
Quora. “What Are The Economics Behind The Black Friday Sales?” Forbes, Forbes Magazine, 27 Nov. 2013. 13 Nov. 2017.


Tuesday, November 14, 2017

Got Milk?

Becca Dettlaff


Got Milk?

Milk alternatives are increasing in popularity, causing the US Dairy market, milk in particular, to experience losses in their overall profit, and will continue to do so, due to consumer trends and preferences. For many years, milk alternatives have been growing in popularity whether it be for lactose allergies, health concerns, or veganism as a lifestyle. The government was one of the US Dairy markets’ best customers, and dairy in the US has been known to be inelastic because the because many dairy has been considered staple foods in the American diet. But times have begun to change and consumers are have been finding that there are many health benefits of switching to alternatives to these dairy products.

Nowadays, the demand for milk has been decreasing due to the alternatives and substitutes that are becoming available and increasing in popularity. Milks made out of nuts like almond milk, cashew milk, and even macadamia nut milk have entered the market, as well as coconut milk and soy milk. Many consumers have found there have been many health concerns related to consuming dairy products, and according to the USDA, since the 1970’s the amount of kids that have chosen to stop drinking milk daily has been rising. And because of perfect competition, it is hard for firms within the industry to compete against one another and other drinks that have been entering the market.

Unlike cheese, which consumers’ willingness to pay continually remains pretty high, people have become very price sensitive to buying milk because of all the changing in trends. Raising the prices milk would cause the demand and consumption to decrease.





Work Cited



Merlo, Catherine. “Why Dairy Demand Has Become More Elastic.” AgWeb - The Home Page of Agriculture, 5 Mar. 2015, www.agweb.com/article/why-dairy-demand-has-become-more-elastic-naa-catherine-merlo/.

Schwartz, Elaine. “Perfect Competition Can Explain Less Milk Consumption.” Econlife, 26 Oct. 2017, econlife.com/2014/06/milk-perfect-competition-limits-firms/.

Low Turkey Prices During the Thanksgiving Season

Low Turkey Prices During the Thanksgiving Season
Emily Wagner
With Black Friday coming up, many Americans are fixated on hunting for the best deals. Yet flying under the radar is the surprisingly low price of turkeys during the Thanksgiving season. While the price of turkeys remains fairly steady throughout the year, there is an annual decline starting shortly before Thanksgiving and lasting until Christmas.
Leading up to Thanksgiving, many stores advertise deals on turkeys and each store attempts to outdo one another with lower prices. As the industry for turkeys is an example of monopolistic competition,  due to differentiation in types of turkeys offered and the large number of suppliers, there is a lot of competition between the suppliers. Most stores choose to offer low prices as they are focused more on maximizing their profit instead of the marginal revenue for each turkey. By lowering the cost of their turkeys, the poultry acts as a loss leader, or a product sold cheaper to attract more customers. If people come into the store to get a cheaper turkey, they are likely to buy other Thanksgiving necessities, such as stuffing, pie or cranberry sauce. Thus, the overall profit increases. Additionally, the price is able to be lowered as not only demand, but also supply increases. Throughout the year, wholesale turkey suppliers stock up on turkey and freeze it so they can sell a large amount to retailers and stores during the holidays. As there is a large amount of turkeys stored away, the supply is elastic. The amount of turkeys available also increases as many stores or businesses that do not usually offer turkey sell it for a limited time, thus increasing the number of suppliers.
Thanksgiving in itself is something to be excited for, and the low prices of turkey are just another thing about the holiday to gobble up. Thanks to increasing supply and demand, as well as companies using turkey as a loss leader, Americans can enjoy turkey for a truly great price.

Works Cited
Melton, Alex. “Low Wholesale Turkey Prices in 2017 Should Translate to Lower Costs for Consumers This Thanksgiving.” Economic Research Service, United States Department of Agriculture, 6 Nov. 2017, www.ers.usda.gov/amber-waves/2017/november/low-wholesale-turkey-prices-in-2017-should-translate-to-lower-costs-for-consumers-this-thanksgiving/.
Rampell, Catherine. “Turkey Economics, Annotated.” The New York Times, The New York Times, 20 Nov. 2013, economix.blogs.nytimes.com/2013/11/20/turkey-economics-annotated/.
“Why Do Turkey Prices Fall Just Before Thanksgiving.” US News, 24 Nov. 2015, www.usnews.com/news/articles/2015/11/24/why-do-turkey-prices-fall-just-before-thanksgiving.
“Why Turkey Prices Fall At Thanksgiving.” NPR, NPR, 23 Nov. 2013, www.npr.org/templates/story/story.php?storyId=246872425.


Thursday, November 9, 2017

Is College Worth it?

Stevie Ward
Mr. Reuter
Economics A4
30 October, 2017
Is College Worth It?
Attending college is an enormous investment that can leave participants in debt long after they have left college. A question that is becoming increasingly argued is whether college is worth the thousands of dollars or not. In government, traditional thinking prevails. Former President Barack Obama stated that higher education “is an economic imperative” (Bittar). Education is the single highest expenditure of both the federal and local governments, spending about 30% of their allotted budgets. Of this spending, about 40% is spent on higher education - around $386 billion per year. Why is the government choosing to allocate a significant portion of its budget to higher education? Because postsecondary education is an invaluable investment in human capital that benefits the individual and the whole.
Opponents of attending college cite the ever-rising costs. Over the past 40 years, the average price of college has more than doubled. The average public 4-year college costs around $20,000 a year (including tuition, room, and board), while the price of private colleges has risen even higher at the average of $40,000 a year. However, there are many options to help prospective students with their debt. Financial aid from the federal government can substantially decrease the amount of money one needs to pay based on a family’s financial need. In 2014, the government provided $24 billion in grants (don’t have to be paid back) to college students who needed it. The government also disbursed around $100 billion in low-interest loans with flexible payback options. On top of government aid, there is also private aid available from individual colleges and scholarship granting organizations.
It is incontestable that college is expensive, and costs rising every year, providing the one of most valid argument against attending college. However, attending college and attaining a degree allows one more opportunity to find a higher-level job that supplies a larger income than if they only had a high school diploma. Opponents of going to college, believe that the opportunity cost of attending is giving up the opportunity to get a job and immediately start earning money. However, the Pew Research Center found that the income gap between those with higher levels of education (Bachelors, Masters, etc.) and those with high school education is larger with millennials in 2013 than previous generations, averaging a difference of $17,500 annually. For baby boomers, the average difference is $14,245 while for gen xers the difference is $15,780 (Kurztleben). The average 4-year bachelor’s degree holder earns nearly $1 million more over the course of their lifetime than someone with only a high school diploma. Today, there is a large demand for workers with degrees in higher education, as less than 30% of Americans have a degree. Since there is a scarcity of workers in the job market with a degree, it has become increasingly valuable and a desired aspect to applications.
In general, the benefits of attending college outweigh the costs in the end. Employers desire degree-holders more, more high-level and high-paying jobs are available, and average income improves overall.


Bibliography

Bittar, Catherine. “The Economics of Higher Education: Why College Is a Worthwhile Investment.” The Huffington Post, TheHuffingtonPost.com, 19 Oct. 2012, www.huffingtonpost.com/catherine-bittar/college-investment_b_1989876.html.


Kurtzleben, Danielle. “Study: Income Gap Between Young College and High School Grads Widens.” U.S. News & World Report, U.S. News & World Report, 11 Feb. 2014, www.usnews.com/news/articles/2014/02/11/study-income-gap-between-young-college-and-high-school-grads-widens.

Tuesday, November 7, 2017

Black Friday

Black Friday
John Valla

Although it may seem early many retail stores across the country are beginning preparations for black friday. On november 24, 2017 the “Christmas-shopping season” begins. Black Friday is now a nationwide “deal day” where retail stores drop their prices with “door-buster” deals. If you are like me you may be wondering how retail stores are able to give such good deals, and there are three major reasons that companies are able to afford these massive discounts. The first reason is the large increase in foot traffic. The world of retail is getting better and better at marketing sales for “black friday”. One example of their growing education of the market is through the use of discounts to increase marketplace force. By lowering prices smaller retail stores are able to bring in a larger market bases, and for a company that has a strong walk-in/sales ratio the increase in profits can be monumental helping boost stores to their highest potential. Another way retailers are able to afford their discount prices is by limiting discounts. A common sales tactic used by retailers is lowering the prices of complementary goods. For example on “Black Friday” big name retail stores will lower the prices of more expensive products such as video game consoles, however the stores will not alter the prices of accessories and games for the systems. As a result any profits lost through the discounted systems are made up through the newly increased sales of regularly priced complementary goods. The third and final reason stores can afford “low prices” is “baiting”, more often than not companies will advertise a first come first served sales tactic, this creates a sense of urgency causing customers to splurge on one sales trip rather than waiting to purchase their desired products. Through the use of this tactic there is both an increase in immediate sales and a long term increase in sales as more often than not the items will remain on discount long after black friday has passed. This helps clear out store space to bring in new goods for the retail stores next “big deal day”.

Work Cited

Goel, Nalin MBA. “How do online retailers make money despite giving huge discounts?” Quora, May 17, 2015

How Netflix has Replaced the Video Rental Industry

How Netflix has Replaced the Video Rental Industry-
By: Ian Petoskey

Back in the late 1990’s, when the idea of Netflix was spreading the owner Reed Hastings wanted to team up with the owners of Blockbuster (video rental store) but, they turned him down thinking it was a horrible idea. As time went on Netflix started off slow, but when it hit 2007 the major video rental stores like: Blockbuster and Hollywood Video, the firm they had turned away had turned into a $2.2 billion company. As you can see in the chart below the audience of Netflix grows exponentially every year. Netflix gets closer and closer to knocking out video rental stores by providing similar services that takes less effort to receive, they are becoming the fall back to customers in the market. Netflix lets their customers watch whatever they want for a low of $7.99 a month and Netflix provides their own series to cheapen their average total cost. Netflix having such a low price that allows customers to watch any movie or show anytime they want  had impacted the video rental industry by replacing the services that caused other businesses to lose profit.
“The number of video rental storefronts in the U.S. has dropped dramatically, to 6,122 in 2012 from 28,000 in 1999.”(Fairchild) Blockbuster believed with Netflix being in the market, families wouldn’t want to come out and rent movies for a higher price because users that use Netflix don’t have to leave their house and spend money on each individual movie. Blockbuster and other video rentals were forced to lower their prices which decreased their profits and total revenue. In the long run their business had started to have their average total cost above their marginal revenue forcing them to shut down. It was costing more to keep them running than it was to produce or sell the service because they weren’t making enough money. Hollywood Video was forced to cease their operations in 2010 right before Netflix started to be known internationally. Blockbuster had to cease their operation during 2014. Blockbuster had their breakeven price help them through four years of business until they had given up and didn’t see the point of selling their services if they weren’t making profit and Netflix was getting more popular every year. Overall, the strong recognition of Netflix has diminished the video rental industry by replacing the time and effort it takes to use the service.

Works Cited
Aquino, Judith. “15 Companies That Died In The Past Year.” Business Insider, Business Insider, 30 Mar. 2011, www.businessinsider.com/15-companies-that-tanked-2011-3#blockbuster-will-close-110-stores-by-the-end-of-march-4.
Dunn, Jeff. “Here's How Huge Netflix Has Gotten in the Past Decade.” Business Insider, Business Insider, 19 Jan. 2017, www.businessinsider.com/netflix-subscribers-chart-2017-1.
Fairchild, Caroline. “Blockbuster Didn't Have To Die. This Video Rental Company Proves It.” The Huffington Post, TheHuffingtonPost.com, 8 Nov. 2013, www.huffingtonpost.com/2013/11/08/blockbuster-die_n_4235344.html.
“Hollywood Video.” Wikipedia, Wikimedia Foundation, 18 Oct. 2017, en.wikipedia.org/wiki/Hollywood_Video.

Satell, Greg. “A Look Back At Why Blockbuster Really Failed And Why It Didn't Have To.” Forbes, Forbes Magazine, 21 Sept. 2014, www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to/#2c8c35781d64.

Tampon Tax

Madison Sterling
AP Economics
Mrs. Straub
11/04/17

With all of the natural disasters and ample news stories, we can all too easily lose sight of the small events that are still happening within our community. Recently, women everywhere are realizing the absurdity of having taxes imposed on tampons and other feminine hygiene products. Considering women do not have any control over getting their periods, this taxation is unnecessary and unfair, especially as there are women who cannot afford the inelastic products and men’s products often go untaxed, making women’s total cost higher than men’s.

In the United States, feminine products are a $2 billion industry and the sales tax is eight cents on the dollar. This may not sound like a lot, but for those living in poverty, every penny counts (Weiss-Wolf). Because of the ridiculous prices for something that cannot be controlled, 17% of women worldwide miss school or work because they are unable to afford proper supplies. Not only do women have the opportunity cost of having to miss school or work, but not having the right resources can lead to infections in developing countries as well as high rates of cervical cancer, which has been reported frequently in India (Weiss-Wolf). Women here in the United States have also been reported to face similar risks because they can’t afford or access feminine hygiene products. Jessica Weiss Wolf also stated, “women have even been known to trade food stamps for tampons.” This just goes to show that women are not always losing only money for this transaction, but instead they are sacrificing other necessities as well for their health.


Maryland, Massachusetts, Pennsylvania, Minnesota, and New Jersey are the only 5 states to so far change the law by cancelling the tax for feminine hygiene products (Phelan). There are also another 5 states which don’t have a tax, but this is because they don’t have sales tax on any necessities or luxuries. This means that in the other 40 states American women must pay various taxes on something they cannot control. These products also have a constant supply and demand for women everywhere with competition within the industry. In 2015, Canada became the first country to eliminate the “tampon tax”, which cut the sales tax charged for tampons, sanitary napkins, and other feminine hygiene products (Hillin). According to Splinter News, necessities in the US that are not taxed include groceries, food stamp purchases, medical purchases (prescriptions, prosthetics, some over-the-counter drugs), clothes (in some states), and agriculture supplies, yet somehow feminine hygiene products are still considered an elastic, luxury product.

All in all, the taxation on sanitary products (a.k.a. the tampon tax) is unjust for women, and this unnecessary taxation should be abolished. Other countries and even a few states have realized that this tax is only harming the women who live there. It is time for the other states to realize this as well. The taxation should be eliminated so that women can stay happy and healthy, without worrying about an extra cost.

Works Cited

Hillin, Taryn. “These are the U.S. states that tax women for having periods.” Splinter, Splinternews.com, 3 June 2015, https://splinternews.com/these-are-the-u-s-states-that-tax-women-for-having-per-1793848102

Phelan, Jessica. “Tampon tax is real. Women everywhere pay their governments extra to have periods.” Public Radio International, 15 Aug. 2015, https://www.pri.org/stories/2015-08-15/tampon-tax-real-women-everywhere-pay-their-governments-extra-have-periods

Tribune News Services. “Tampon tax: Does being female in the U.S. carry unfair costs?” Chicagotribune.com, 21 Apr. 2016, www.chicagotribune.com/news/nationworld/ct-tampon-tax-20160309-story.html.

Weiss-Wolf, Jennifer. “America's Very Real Menstrual Crisis.” Time, Time, 11 Aug. 2015, http://time.com/3989966/america-menstrual-crisis/