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Economies of scale is the increase in efficiency as a company gets bigger. In this case the economy of scale is the creation of larger shipping containers. The great thing about scales of economy is that it has lowered the production cost of products such as the creation of t- shirts for some companies. However as companies have more products to they needed bigger containers to transport their goods. As the supple of t- shirts increases the size of the ship that transports the goods needs to increase in size as well. Maersk lines , the world's biggest shipping container company has decided to increase the size of his ships. The company plans to build 20 ships with a capacity of carrying 18,000 twenty-foot equal units. The company does this out of efficeny in transportation and gas cost. The larger the ship the more it can carry and the less times the ship will have to travel back and forth to transport goods. The increase in ship size than is an example of the economies of scale when bigger = more efficient.

The Japanese automobile maker Nissan announced a couple years ago its plans for a new completely electric car, the Nissan Leaf. However, sales in the United States have been fairly low, only selling 10,000 of the cars in 2012. The reason for the small amount of sales is believed to be caused by its high price, due to an expensive and large battery back in the car, and the fact that the car has a small 80 mile range. In hopes to increase sales, the company is beginning to start production here in the United States. Producing the product closer to where it will be purchased will reduce production costs for the company, allowing it to decrease the price of the car and leading, hopefully, to an increase in demand.

Nissan is opening up a production plant in the U.S. to produce their car, the Leaf electric car. This is the first production plant. The short term is the building of the plant, which should decrease unit costs because they will no longer need to transport the cars to the U.S. The long term is the plan to create new technology to improve the car (battery, charging, etc.) and hopefully increase the demand, which could reduce unit costs even further. 

This article showed the relation between the price and demand. The oil companies need guar gum powder for fracking to get oil, this increase the demand of guar and the guar price rised up. In our textbook, the relationship is a little bit different. Our textbook said as the price increase the demand of the product will increase, where as in this article as the demand increase the price will increase. This article showed me the mutual relation between the price and the demand.

Money has become virtual with the introduction of virtual currencies such as bitcoin and ripple. Through sites such as bitcoin and ripple, which were the forerunners for online currencies, people can invest, transfer and convert money on the web with ease. It is simple and efficient. It is similare to an online bank. Bitcoin producer states that he made bitcoin to provide a more efficient "way to send money around the world". True to his word, it is efficient. A person interested in sending money online can open a bitcoin account. The individual would than transfer the amount of money he/she wishes to send to his account and send it to the designated individual person or place. Of course this transaction is not free, it requires bitcoins. A bitcoin is essentially 1/1000 of a penny. Amazing right. However, virtual currency is not real. If the police and government decide to crack down , the system will have to shut down. But for the most part, it seems they dont have the intention to.

Money has become virtual with the introduction of virtual currencies such as bitcoin and ripple. Through sites such as bitcoin and ripple, which were the forerunners for online currencies, people can invest, transfer and convert money on the web with ease. It is simple and efficient. It is similare to an online bank. Bitcoin producer states that he made bitcoin to provide a more efficient "way to send money around the world". True to his word, it is efficient. A person interested in sending money online can open a bitcoin account. The individual would than transfer the amount of money he/she wishes to send to his account and send it to the designated individual person or place. Of course this transaction is not free, it requires bitcoins. A bitcoin is essentially 1/1000 of a penny. Amazing right. However, virtual currency is not real. If the police and government decide to crack down , the system will have to shut down. But for the most part, it seems they dont have the intention to.

This article talks about the organic milk shortages, that farmers can't buy enough food to feed their caws because the price for their food has been increased, as a result they give less nutrition to their caws and get less milk. But demand for organic milk is still high and in the article they will some suggestions how to solve that problem.

The demand for organic milk is greater than supply because the production cost of creating organic milk is greater than the revenue. The reason for the shortage is that the cost of organic grain and hay has gone up but the price farmers receive for milk has not. As a result farmers buy less grain and hay which lowers the production of milk. The low supply of organic milk than in turn increases the overall price. The solution for this issue would be to increase the price of income the farmers would receive for their milk. If the solution were applied, the farmers would pay more for organic grain and more milk would be produced and consumers would be satisfied.

This article talks about an earthquake and the lack of water available.This article essentially talks about how the demand for water was high but the price remained therefore people with more use for the water werent able to get the resource; it; some needed it for baby formula whilst others for cleaning dishes. The writer argues that if the price of the water was raised, as it was scarce, then people with higher priorities wouldn't mind spending the extra money. Economist Eric Cramption then dismisses an argument against price allocating resources; the poor would get poorer. . 

When it comes to the reasons of deflation most of the economists see it as a monetary phenomenon which is affected by demand and supply. If the supply of money is more than demand then the value of money increases and prices go up as a consequence. When the supply of the products are higher than demand it results with the mass production which leads to the fall of prices. Some people believe that the deflation occurs because of the mass production and falling the aggregate level of demand. The biggest effect of deflation is unemployement. Deefletion is more serious and dfficult than inflation. To prevent deflation first is give an upward push to the aggreagte demand by increasing government spending or the second they can increase the money supply by decreasing cash reverse ratio.

When it comes to the deflation some of the economists believe that it is a monetary phenomenon which is affected by supply and demand. The reasons that leads to deflation are if supply of money is less than its demand than the value of money increases and the prices would go up. If the supply of the product is more tha its demand then it will lead to the mass production which the large amount of products will lead the prices to fall immidietly. The biggest effect of deflation is unempoyment. Deflation is more diffucult and serious than inflation. To prevent deflation first give an upward push to the aggregate demand by increasing government spending or the secong they can increase the money supply by decreasing cash reserve ratio.

This article talks about the rising tensions in the middle east and its effect on the price of oil in the world. As the middle east supplies most of the world with oil, the recent demonstrations in Libya and Egypt, and the sanctions on Iran are causing oil prices to rise. The threat of higher prices due to the fact that only a few countries control the limited oil supply in the world is causing increased pressure on the United States to release their oil supplies.

I like how you identified that all of this forces the U.S. to consider releasing their oil supplies. Some problems with this are that it is currently not possible to do so in the areas where oil is most abundant. After the B.P. oil spill, the current administration put a time ban on all off-shore drilling and new construction. If this ban were to be lifted, companies like B.P., Shell, and Marathon would begin constructing new refinement plants and drilling facilities immediately, which would significantly reduce the price of oil at home. When some people here this, their inclination is to say "the government has good reason to do this, look at what happened in the gulf, it is better to ere on the side of caution," but the sad thing is, these companies have put forth revised safety plans as well as contingency plans that have all been approved, but legally, they can do nothing. The companies own the land / water as well, which in my mind makes the fact that they are prohibited to build on land that they own that has never been part of a reserve or park seem a tad bit anti-constitutional, but until the piece of legislation is overturned, prices will continue to rise.

This Bloomberg article talked about how China is trying to raise the currency and make Yuan become a global currency. It also mentioned China used to peg Yuan on US dollar until 2005, then they changed the policy to manage Yuan in a certain range.

The article is concerned with the increasing currency value of the Yuan. In the past couple years, the value of the Yuan has increased significantly. This increase in the currencies value is due to the China opening its markets and showing leniency in trading. However, the Yuan though growing in strength has much to do before it becomes the world currency. It must be adaptable. The Chinese government has stated that they will open the market more by 2020. When the currency will replace US is unknown but it seems that it will surpass the US dollar with time. The article was eyeopening. I had never realized the Yuan was so strong. I will definitely look at the Yuan when i read economic news.

This article discusses the duopoly in the telecommunication industry here in the UAE, Etisalat and Du. the article clearly points out the fact that both companies over charge, stating that internet here costs 50% more, when compared to internet pricing in the UK. This market was a monopoly, dominated by Etisalat but the entering of DU is said to be rapid and thus they are suffering from some diseconomies of scale. The way the article concluded was quite interesting as it stated that the Abu Dhabi government subsidized it's airline industry so that people could visit and enjoy lower rates, and then says it should keep the broadband cost more competitive so that it can attract the companies of tomorrow

This article is interesting because it talks about the chain affect of low supply. The articles talks about how the global failure to harvest maize and soya is causing the supply of pig-feed to be low. This causes the price of pig feed to increase and makes it hard for farmers to continually purchase it. This isn't only affecting the farmers, but it is affecting the public. Farmers can't maintain healthy pigs so the supply of pork and ham decreases, which causes the price to increase. This means people aren't as willing to buy pork and ham. The competition between the large amounts of farmers also doesn't help the supply of pig-feed.

This article is interesting because it is quite important in terms of the impact it could have on the U.S. India is one of very few countries near the Middle East that is "stable" at the moment, and the U.S. as a country imports quite a bit of its oil from the Middle East. This is very closely related to what we have been studying this week, in that when something is scarce, or demand is high, prices elevate. Not only is it a good decision on India's part to raise prices because it will help their own national fiscal rating, but it will also take advantage of the fact that many countries will begin turning to them as a primary source of oil / diesel until the situations in the arab spring are resolved. India is doing a smart thing fiscally, while capitalizing on unrest in the arab spring and maximizing their profit during this time of high interest in the good that they have to offer.

Since our topic this week is on exchange rates i thought it would be a good time to address a topic of interest to me - virtual money. the bitcoin is accepted as a form of currency by many and from the article, we can deduce that it has a high exchange rate. A norwegian man had bout $27 worth of bitcoins which now translates to $886,000. this value and exchange rate is un-paramounted and extremely high but there are reasons for this. Bitcoins are now being used as a form of currency for illegal trading - forged documentation serving as an example. This increase in demand has lead to appreciation for the value however many countries are just starting to recognise the bitcoins currency value. many owners are just starting to accept bitcoins as a form of payment in the hopes that it can appreciate and they can sell it for more in the future. However in the article we get an understanding that the bitcoin fluctuates greatly. This detracts consumer confidence however the sheer idea of investing in virtual money is enticing to many, increasing the demand for the bitcoin.

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The article is talking about the economy of US right now. The aggregate demand is far lower than potential and government is cutting expenditure rapidly. However, the author thought that's not the right way of doing it. Although the money is short, government is still supposed to take necessary actions to induce recovery.

The article is talking about the federal government which has shut down today because of an impasse over the budge and in two weeks, the nation is set to hit its borrowing limit.The major problem in the articles is that there is an oversupply of global labor, an oversupply of global productive capacity and an oversupply of global capital. The jobs created low wages and part time. Growth in domestic manufacturing is still slow which will prevent the development of a country in their own production and prevent the large amount of profit they will get as a result of the domestic production.Business spending has fallen, rents of the houses falling where home prices have increased. The reason why its hard to get out from the rut is because they are no longer faced with a world in which supply-side economic remedies, easy money, reduced taxation, fiscal belt-tightening and deregulation can spur new capacity and the creation of well-paying private sector jobs.Countries that were recently poor find themselves with huge surpluses and sovereign wealth funds. The rich countries of the world, while still rich, struggle with monumental levels of debt, both private and public, and unsettling questions about whether they can compete globally.Also to clear this mess,developed nations need to put the huge surplus of underemployed workers back to work by any means, including big public sector investments to improve infrastructure and competitiveness.Moreover, a new economic multilateral ism with the developing world, to encourage them to re balance their economics away from savings and toward consumption, while we in the West must curb our addiction to credit and consumption is necessary.

This article explained the relationship between supply and demand. The industrial demand in Asia had been increasing for so long that the factories kept adding supply. When the demand dramatically fall, Asia suffered capacity indigestion. The excess supply was too severe  that the equilibrium may not happen for 7 years. The demand could not keep up with supply.

Zimbabwe has set extremely low price controls for many primary products, and this has caused many people to go out of business. People are losing a lot of money, but the government is refusing to let the prices go higher. The government is making up for the loss by printing more money, which is causing price inflation. The people are upset, but with the government making sure that the prices are low by threatening to close businesses, there is nothing the people can do about it.

Zimbabwe government is controlling food price by physically forcing merchants and shop keepers to low their price down, other wise will be beaten. It is actually not going to work and can not last for long time. Producers can not supply the goods at a price that allows retailers to make a profit. The inflation of this country also reached the world's highest level. This article showed that price control has to be realistic otherwise will harm the economy.

This article is talking about how the result of the presidential election effect the health care. Mitt Romney will probably end the health care whereas Obama will absolutely keep it. Health care is a public good, it has positive externality and should be encouraged. However, the cost of providing health care is very high. According to the article, 'Affordable Care Act won't be fully in place until 2014'. Two candidates has different solutions. Obama choose to keep it, and Romney choose to end it due to the high cost. From this article we can see the limitation of government intervention of economy, and how different parties and people have different opinions.