Economics HL - Jacob Solomon's group - Year 1

"Facebook Inc.'s lineup of six major Wall Street banks to manage its initial public offering reflects the social network's determination to pursue a conventional IPO and avoid an exotic approach to the share sale, people familiar with the company said." This article approaches to the idea about the interaction between the banks and Facebook, these interactions can shown in a relation of the free markets. also, the article mentions the competition Facebook with other social sites.

I thought this article about the state of the US economy was particularly interesting. The statistics of ratio large firm to small firms (3-1, small) is increasing. The article also states, "The market rewards and punishes with little regard to whom or what or how it impacts. Generally, it is large firms that enjoy these little gems of taxpayer munificence. They have become "too-big-to-fail."

This articles start out by talking about how Chinese support the world with cheap goods. However, prices are expected to go up as Chinese manufacturers run down with higher wages, more expensive raw materials and an growing currency. This article shows the increase of production cost and the effects it will cause, such as: having companies to opt out, or relocating their companies to other countries.

For decades, China's factories have supplied the world with cheap goods - from denim jeans to desktop computers. But export prices are expected to go up as Chinese manufacturers are battered by higher wages, more expensive raw materials and an appreciating currency.

This article discusses the declining revenues of Connecticut's Gaming industry. As the demand decreases, the revenue begins to drop. The state is looking at new ways to gain revenue, including through online gaming, which a few provinces in Canada have already done successfully.

Google shares fall as costs surge and revenue falls as a result of lower prices.

Hello, In this article it talks about how South Sudan has suspended its oil production due to a disagreement with the Republic of the Sudan. South Sudan says it will stop its oil production because it does not want to share its revenue with Sudan. Sudan has accused the south for not paying transport fees, because the south has all the oil fields however, it relays on the north because south Sudan does not have a port and uses Sudan's port to export their oil. South Sudan claims that Sudan has stolen $350,000,000 worth of crude oil as an exchange of their transport fees. The two countries are know in Ethiopia trying to settle an agreement in which the south can use the north in order to export their oil.

This article describes the recent growth in a number of firms producing Greek Yogurt in the United States. As a result of this growth, the firms are experiencing economies of scale and they are all expanding their factories to increase their output. As the article states: "The Chobani plant today bustles with 14 production lines mechanically squirting yogurt into plastic cups that zip down conveyor belts." - this shows a technological improvement that is an economy of scale: due to the increase in size in the firm, it can employ more efficient, lower cost methods of production.

Hello, In this article it talks about how the shares for GE fell in response to a lower revenue than expected. The fall in revenue of General Electric was caused by a slower than expected growth in the European credit crisis. It says even though GE was making a profit, the slower European market causes them to have a decrease in revenue. They say that because if the credit crisis sales in Europe are not as high and even though people are still purchasing products, the growth at which sales in Europe should have increased are increasing less than what GE wants them to. GE claimed that they are going to change their market footprint through new products and technology in order to increase their revenue and thus increase their shares. From Tim

This article concerns the fact that "China's fiscal revenue soared 25% to record in 2011". This is related to our study of revenue. This means that its is an abnormal profit.

A sea change in the consumption of a resource that people take for granted may be in store: something cheap, plentiful, widely enjoyed and a part of daily life. And it isn't oil. The two commodities have a great deal in common: Like oil, meat receives government subsidies in the U.S.

Sirius XM Radio was once saved the "January Effect" thanks to their merger several years ago. They experienced the benefits of economies of scale as a much larger organization, which brought the two previous companies back up in stock. However, they are still facing many challenges because economies of scale do not solve all problems. Some of the issues: "A low profit margin of 9.2 percent, and an astronomical Total/Debt to Equity of 492. Also, the rapid change in broadcasting technologies, and the Internet radio gaining ground, it is a matter of time before satellite-radio becomes obsolete. Satellite subscriptions are part of consumer spending that is usually negatively affected by a weak economy, consumers will not spend excessive money on this."

"Poet, which currently produces 1.5 billion gallons a year of ethanol from corn, said its 1-year-old pilot plant has reduced the cost of making ethanol from corncobs to $2.35 a gallon from $4.13 by cutting capital costs and using an improved "cocktail" of enzymes" - (picked from the article) The company also changed their source of fuel in order to produce a bigger amount of ethanol.

Most of you all already know about RIM's decision to cut the selling price of their tablet, the Playbook, by more than half (presumably because they are discontinuing the product). This is an example of a large firm cutting costs and reducing its output (from their inventories). We can also relate it to the concept of economies of scale, since Blackberry was able to afford to lose the Playbook as their other products are more successful.

This article discusses the option and possibility of Private Jails coming to Canada. This is because there are so many prisoners who need to be cared for that the cost has risen by extreme amounts! The possibility that jails could become a private enterprise is a very likely possibility.

The prices for iron ore, an essential resource for the production of many goods, has been predicted to decrease during this upcoming year.

Have you ever wondered if the cost of the iPhone or other electronics actually relflects how much money it takes to produce them...this article explains it :)

Production costs have risen for farmers producing milk from their cows, which has resulted in a shortage of milk, but a still constant supply.

This article describes the cell phone costs that one small business owner is experiencing. These cell phone costs could be both fixed and variable costs - she still has to pay her basic cell phone bill no matter how many clients she has, so that cost is fixed regardless of output, in that sense, because at a certain rate the costs are constant. However, if she has a larger number of customers, and needs to call to deal with more of these customers, therefore going over her monthly plan limits, than the cost will begin to vary, so in that sense it is a variable cost. Overall, she needs to attempt to reduce this production cost in order to gain a better profit for her business.