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The recent drought in the pass summer in the Midwest has resulted in a decrease in crops. As a result, not only that restaurants have to struggle with high fuel costs and inactive economy, they also have to struggle with higher food costs with poorer quality. For example, a restaurant used to offer a bowl of pasta at $8.95. However, in the late August, the price jumped to $9.95. Eggs cost 18% more than they did a year earlier. Restaurants need to adjust menus, reduce portion sizes, even consider staff cuts, and also increase prices of their food in order to sustain their businesses.Experts predict that the overall food costs could possibly rise at 5% to 20%. In consequence, customers are less seen out in restaurants. This relates to price mechanism and equilibrium. Lower supply of food shifts the supply curve to the left. This means that the amount being supplied and demanded is different. Producers then must have to raise prices to adjust to higher costs of production. In consequence, amount being demanded at a new price is decreased, setting a new equilibrium price and quantity. This is a downside for the producers since they must increase price to adjust to higher food costs, but because of that, less is being demanded. The restaurants can either choose to lower their price to the original in order to attract customers or remain at the increased price. Either way, restaurants are still affected.

I thought this article was relatable since we are all students and looking at internships in the future is something many of us will have to go through. In this article, it explains that sometimes students are reluctant to take up unpaid internships. This is because even though it would be very good for work experience some can not afford to not get paid. Being a student is expensive: having to pay for their education, a place to live and everyday essentials. I thought this was a very good example of opportunity costs, either gain the work experience but have to cut down on living costs because you are not getting paid or find a paying job but that might not best suited for your interests. Another issue they mentioned was that if all interns were obligated to be paid that many companies would cut back or completely get rid of their internship programmes. So this was another example of opportunity cost, either have fewer internship programmes and positions and, if you are lucky to get the job, get paid or, continue to have many unpaid internship positions.

A negative externality is a cost incurred by a comapny or a party that did not agree to whatever action caused the extra cost. This article discusses the negative externalities that we incur when we use fossil fuels etc. The cost of production and damage caused by the use of fossil fuels is not included in the price we pay for 1 gallon of gasoline. This is the negative externality. A lot of the government involvement in the private sectors is actually aimed at reducing such negative exteranlities concerned with environmental pollution. Several companies also try to reduce externalities by introducing policies. For example, SAP AG has policies that its employees cannot buy cars that have carbon emissions beyond a certain limit.

Your article is very interesting. In the end the writer talks about the oil spill in the Gulf of Mexico, two weeks ago or something like that I read that BP (they were the owners of the deepwater Horizon) will pay $4.5 billion in fines and other payments, the largest of its kind in US history. It is a lot of money but how can we estimate the value of million animal life's and the destruction of a big part of the Gulf of Mexico. The worst is that we could avoid it because the BP company saved money in the security systems in these Deepwater. I think that after this disaster the government should check all the deepwaters in order to reduce the possibilities of new cases.

A negative externality is an action of a product on consumers that imposes a negative side effect on a third party. Many negative externalities are related to the environmental consequences of production and use. for example the emmisions of green house gases. in this article it explains that when i company creates negative externalities neither the company nor the consumer pays for them so there the government has to step in to stop it by ptting regulations which increases the cost of the comapanies decreasing the negative externalities. but national companies complain because they say if regulations are set they cant compete with international firms like in china where there are no regulations for fuel negative externalities. for example a negative externality was the gulf of mexico oil spill where BP oil prices didnt rise to clean up the mess but the taxes did

Negative externality happens when firms or individuals do not have to pay the whole cost when making decisions. The costs are passed on to society. This article talks about an Italian's ILVA steel plant plans to suspend its operations as it has received several warrants as a result of the pollution it has produced over the years. Some parts have been closed due to damaged environmental reports which show high cancer rates. The suspension has affect 7,000 ILYA jobs and thousands more in the steel sector. This relates to negative externality as firms choose to pump pollutants into the air, affecting people's health and environmental problems. Although the firm needs to pay for electricity, resources, etc., but the people living around the area needs to pay for health expenses and causing them poorer quality of life. Firms choose to pump pollutants into the air since it's obviously much cheaper than finding an advanced machin. This is also the cost the the firms do not have to pay.

This article talks about the importance of caring about the environment because this year there have been alarming weather activities possibly caused by climate change: Droughts, floods, the record melting of Arctic ice and the recent Superstorm Sandy. We can´t affirm that this happened because there is a change in the climate but we have to admit that this is one of the possibilities. If we don´t do nothing the situation will be getting worst. The water level is increasing more than we have predicted and many specialists admit that San Francisco and other cities near the coast might be under water in 20 years. Retrospect, we have neglected the full costs and hidden environmental price tags of economic progress. Only if we are aware of the externalities of our actions can we then build a more organic living environment and actively cut down emissions.

UK expects an increase in the Consumer Price Index to 3pc by June 2013 and to remain above 2pc until early 2016. In comparison, wages are only expected to rise at an average of 1.5pc. This will put more pressure on household as they have already seen a higher cost of living, which has risen four times more than wages. The recent increase is a result from petrol prices and energy bills. The bank's aim has been at 2pc, but the Chancellor may change the mandate. Another interesting point is the Chancellor may change the target inflation measures to CPIH- includes housing costs- and RPIJ, which is an alternative way of calculating retail prices. This article obviously relates to inflation rate. We can see the use of CPI as a measure for inflation rate. We can see that inflation rate does affect people with high cost of living and also people which has fixed income. Here, although many people does not have fixed income, they are still affected by the inflation due to the slower increase in the wages. We can also see that in order to reduce inflation, it does not only involve the government, but also the banks of those countries.

As a cost-saving strategy, the Canadian government has cut off circulation for the Canadian penny. The nickel, the toonie and all the coins in between cost less than their face value to produce, yet the penny cost 6 cents more than it is worth. The federal government has calculated that terminating the production of the penny will save the government 11 million a year, allowing the federal government to spend on more pressing issues. However, this change only affects physical cash transactions and not purchases made with credit or debit cards.

Japan's trade deficit increases in October as increase in imports exceed increase in exports to the US and China. Over the past years, weakening yen has helped promote exports, but also increases the cost for imports. The increase in cost for imports, such as crude oil, helped widen trade deficit. This shows the relationship between the current account and the exchange rate. Japan is currently going through a balance trade of goods and services deficit. This results in downward pressure on the exchange rate of the currency as there is an increase in the supply of yen due to increase in imports.

This article focuses on the trade deficit of Japan. Japan's trade deficit nearly doubled in October, as growth in imports outpaced robust increases in exports to the U.S. and China, the Finance Ministry reported Wednesday. There are several factors that led to trade deficit. Firstly, the weakening of the yen over the past year had its significant impact on imports and exports. After meltdown of the nuclear power plant in 2011, Japan has faced loss of the generation capacity, therefore forcing Japan to import natural gas and oil. Overall, weakening in the Japanese yen over the past year has helped exports, but it has also increased the cost of imports.However, the exports are not as stable as they could be. Slowdown in economic growth of China has led to decrease in demand for Japanese exports.Overall the article talks about the details of the trade deficit of Japan.

I think we will see the change of the market of smartphone through the windows phone is about to start to pre-order. Windows phone is one of the biggest competitors of Iphone over the world. In this case, the supply of the smartphone increases. And I believe the demand or price of iphone is going to chance because of it, after people consider about the oppotunity cost of either buying iphone or windows phone.

Yes I do agree with you that the "windows fones" are going to create a huge competition with the apple iphone and i think this is a positive aspect to the phone market because now the iphone will probably not dominate the phone market anymore and it's price will drop, making it more availible to people. Also this is a positive aspect that there is competition because it will lower the prices of telephones in generally making it more availible to everyone. Adding to the competotion aspect, it will force the to companys to finance their reserch even more, to try and beat their opposition, which will improve the technology of telephones of our day!

Pollution from the Motiva refinery in Norco, Louisiana has been a major pollutant in the region since 2005, and it doesn't show signs of stopping. There have been 301 reported cases of accidents in 2011 and many more unreported. The firm may be only concerned with its marginal private costs and have no intention in even dealing with the marginal social costs caused by the negative externality. The government must intervene and cease this crime; the injustice towards its community, society and the environment.

I didn't heard about this case before. I find it ironic because USA with their great judiciary don't have methods to fight with companies like Motiva. We can ask ourselves who is worst a murderer who kills one person and is sentenced to death or a company who is killing hundreds of humans beings. The oil is very important in our live, we need it every day but we must ask as where is the limit? what is more important a human being or using a car? We have to eliminate negative externalities like pollution because if we don't do anything then we will destroy the world because we have infinite wants (this is the sad reality).

I find this article very interesting because it is really related to our actual theme and it is about a recent topic. It talks about the decrease in the unemployment benefits and the decrease in the unemployment rate is USA. The unemployment rate fell to a four-year low of 7.7%, however, is not so low because probably in the USA there is a big hidden unemployment (people who are working in an industry that doesn't utilize their skill set properly or those who have given up on looking for another job are not counted in the official figures and are thus considered a part of hidden unemployment). The good aspect is that the government is reducing the spending's on the unemployment benefits. The unemployment have very big costs, cost for the unemployed people (they receive less employment and some of them suffer mental problems like depression), the society (poverty, homelessness, higher rates of crime and vandalism, increased gang activities, however not all of them are created by the unemployment) and the whole economy (It´s not operating at full capacity).

President Obama visited the University of Michigan and outlined a new plan aimed at limiting tuition increases at U.S. universities.A key reason for high rates of tuition increase, is simply that the supply of freshman slots hasn't kept up with demand and such shortages lead to price increases.Top universities should focus on increasing the number of students they admit and all who care about expanding opportunities should pressure boards and presidents to spend some of the money on opening up more spots in the classes.

Scottish Power has announced a price rise in the gas and electricity bills by 7%. The firm has 2.3 million customers and the average yearly bill will increase to £1,271. The rise is said to be caused by an increase in costs for transporting gas and electricity. Other energy firms have also raised prices. The demand for the product, electricity and gas, is definitely inelastic in this case, since electricity and gas are necessities for the people. People will still need electricity regardless of how much price has increased. Demand will remain the same. All the energy firms are also raising costs, so the consumers have no substitutes. They have to endure to higher bills to come.

As the third major international crop, the price of corn rising is affecting the globe. As droughts plague the agriculture of African countries, the price of corn is surging, reminding us again that world hunger is still prevalent in the world today. The title of the article was eye-catching and reading it through "economic lens" really made it interesting. Droughts in Africa is affecting the agriculture of corn and making crops scarcer. In addition, price of fertilizers is two to four times more expensive in Africa, detrimentally affecting the region, which uses the most fertilizers. The opportunity cost of purchasing fertilizers is enormous as the money spent on fertilizers can be used for providing services for workers, better equipment or improving on infrastructures. Furthermore, farming technology is still quite primitive compares to North American standards and as a result the production possibility curves are smaller than other agricultural regions. This article was really interesting because it relates so closely with what we have learned so far, and it reminded me that world hunger is still very much present in our world.

The tuna stocks around the world are being fish out an alarming rate, to fast for the tuna to reproduce and keep there numbers constant. This constant battle between the supply of the fish and the demand for them in Japan (75% of the tuna market) is devastating the tuna populations. The U.E. and other organzations have been trying to put quatos on the catcing of tuna but are being ignored by the fisheries and the tuna stocks are being continually fished. In a matter of years there will be no tuna to fish. As you can see this a problem of supply(where there aren't enought tuna) and demand(which is greater than the supply).

This article describes how the tuna stocks, around the world, are being fished out at an alarming rate. Too fast for them to recover naturally. Demand for tuna far exceeds the supply (what the sea can produce) without disturbing the natural order. So the WWF & ISSF have tried putting quotas but no one is obiding and the overall catch of tuna each year is increasing...

I found this article interesting because it shows us that demand and supply is not the only factor in determining gas prices. As we know, gas prices are on the rise. But this article tells us that it is not just demand and supply that causes this and that we need to take other factors into consideration.

i thought that this article was really interesting because before i actually thought that the oil companies raised the price of oil randomly just to make a profit but now i realise that there are many other reasons why they bring up the price, for example there economy.

This article talks about an increase in the excise duty on soft drinks which are already subject to a 23pc VAT rate. With this measure the government is trying to reduce the obesity and to increase the revenues of the government. I think that this is a good idea because the problem of obesity is very concerning. Also the costs of treating the obesity are very high (in Spain the government is paying 37 million each for treating the obesity) Many doctors says that the obesity is the epidemic of the XXI century. The fat tax has been introduced in some countries in Europe. The problem is that these taxes are very unpopular because the food is a necessity product. The biggest impact of a tax increase would be felt by the young and lower income groups who are the biggest consumers of soft drinks.

This article talks about how the Americans are copping with the increase in gasoline to 3.50$ a galon. It states that all around America in New York for example, where nearly everyone uses public transport, the public transport has increase by 5. Even in the south west where driving is strongest public transport has reached its maximim capacity during rush hours. It also states that the US in having problems with upgrading and even sustaining public transport as faires only cover 1/3 of the cost and rely on government funding. the article also says that most americans are now buying smaller cars and driving less agressively to save fuel. So what this article is telling us is that the American economy is using the XED principle where the price of petrol has risen and therefore the demand for it has dropped, even thought its very inelastic, and the demand for public transport has risem.

According to this article, the recession has induced Americans to reevaluate their spending and adopt cost-saving strategies such as using coupons or taking advantage of sales. Many people have reduced the amount of money they spend, over the last couple of years, especially those who have incomes of under $45,000. "The consumer mindset has changed (…) they've become used to being careful about what they buy and where they buy it." However, while price is a major factor, consumers said that quality was still a top priority. The article indicates that there are certain items that consumers will not go without: The first item on the list was animal protein: 10 percent [of consumers] said they refuse to give up meat, poultry, fish and seafood. Also, 8 percent saying they would not forgo alcohol, tobacco; coffee, tea; milk, juice, or household and laundry supplies. As expected, "38 percent say they're purchasing less clothing and 20 percent said they're buying less expensive brands." Therefore, items such as proteins, alcohol, tobacco, coffee, tea, milk, juice, and household supplies are relatively inelastic goods with regard to income. On the other hand, clothing is an inelastic good during this recession.

A ruling has been passed leaving medial device makers stuck with an excise tax on sales of replacement hips, implantable defibrillators and other FDA-approved devices. This tax is intended to help finance the health law's board expansion of insurance coverage and is expected to raise $20 billion by 2019. The tax, which will commence January 1st 2013, has already affected some manufactures. Few companies will be able to pass all or even a small amount of the tax onto hospitals or distributors, resulting in many companies to begin putting cost-cutting plans in place. It is expected that smaller companies will take the worst hits, small device makers could see earnings per share fall by 10%. Because the tax is on total sales, rather than profits, companies with the smallest margins, such as unprofitable start-ups, will face the deepest impact. The tax looms at a difficult time for the industry, as patients will then delay elective procedures. Unlike other health-care sectors, analysts don't expect device makers to benefit much from the expected flood of newly insured patients because they depend largely on older patients who are already covered by Medicare.