Chapter 10 - Industrial Organization in Canada

http://www.wawa-news.com/index.php?option=com_content&task=view&id=2960&Itemid=113

Canada Post Release New Stamps

Summary
Canada Post wants to mark milestones and celebrations on stamps to hold a Canadian memory. Some exciting events include the 2010 Winter Olympics and Paralympic Winter Games. Robert Waite, Chairman of the Stamp Advisory Committee and Senior vice president of Corporate
Social Responsibility at Canada Post says, “There was a very diverse and impressive number of topics to choose from, which made final selection challenging. But in the end I believe we have created an outstanding stamp program, one which Canadians will embrace with pride."

Connection
In Chapter 10, the definition of monopoly is that it occurs when only one seller of a good or service exists in a given industry. In this case, Canada Post, a postal system is categorized as a government monopoly. This means that that the post office is operated by the government itself. Since it is the only company in the industry, it has easy control over the price of the product. Therefore, it does not engage in a great deal of advertising since it less competitive.

Reflection
Although, Canada Post is the only one firm involved in the Canadian monopoly, that firm still may have competition. It competes with all other industries for the consumer dollar because it is not the only form of communication available to the consumer. I believe that since it sets an advantage of a single price for all consumers, the quantity of goods are lower at a high cost under perfect competition. Therefore, it will yield the largest possible profits. However, Canada post may not remain monopoly forever unless the barriers to the entry of new firms are substantial

Chapter 8 - Stabilization Policy

http://www.ibtimes.com/articles/20090520/spending-without-jobs-strange-case-todayrecession_1.htm

Automatic Stabilizers Help Increase Consumer Spending in Recession

Summary
There has been a decline in employment in manufacturing, construction, retail and financial services. In the first quarter, there was an increase of 2.2% in consumer spending while 700 000 jobs were lost over the three months of the quarter. John Silvia, the Chief Economist wonders if the economy was affected by the low employment and the consumer spending or were households over-saving? Recently, employment insurance and reduced income tax payments contributed to enormous income gains for households to ease the recession. As well, transfer payments such as welfare, social security and disability also have increased more than what was expected.

Connection
In Chapter 8, the definition for automatic stabilizers are government programs react automatically to help adjust the level of aggregate demand during changing economic conditions. The article introduced the two most recognized automatic stabilizers which were the employment insurance and the progressive income tax. While employment was declining, an increase of employment insurance contributed to enormous income gains for households to ease the recession. The textbook explains that since individuals are unemployed, their spending decreases, the multiplier effect initiates and overall spending in the economy declines. By receiving some money in the form of employment insurance benefits, it encourages consumers to spend more. Lastly, a reduction in the progressive income tax means that a lower percentage of income in taxes is paid. It provides the individual with a greater proportion of income to spend.

Reflection
It is amazing how automatic stabilizers can still stabilize the economy that is in a recession. It is good sign that these automatic stabilizers are successful contributions that helps increase 2.2% in consumer spending when there are so many job losses. With the rise in overall spending, the unemployment should be seen more of a concern. I believe that the increased spending will slowly take an effect on creating a demand for more workers, which can reduce the level of employment. Hopefully, consumers will gain the confidence in boosting the employment growth. It sounds likely that the worst of the economy may soon be over.

Chapter 5

http://www.vancouversun.com/Business/loses+jobs/1263615/story.html

Lost Jobs In BC

Summary
In January’s worst record, 68,000 BC full-time workers lost their jobs. From Statistics Canada said that most of these workers were from manufacturing and construction sector and was counterbalanced as an equivalent by a gain of 33,000 part-time positions. BC’s unemployment rate has risen from 3.8% in March 2008 –all-time low record to 6.1% as of now. The highest unemployment rate known in BC records was 14.1% in 1987. The Canadian economy was affected by a lost of 129,000 jobs in January which consisted most of full-time workers.

Connection
In Canada, the employment rate statistics are released every month. The unemployment rate is defined as the percentage of the labour force that is not working, yet is looking for work. The increase in unemployment rate is not necessary mean it’s a good indicator of the economic hardship that Canadians are facing. In Canada, the employment insurance program provides monetary benefits to people who cease to be employed. Those eligible to collect benefits are people who have been terminated or laid off from their job, who are able to work because of illness or who qualify for maternity benefits. In order to qualify, a person must have been employed and have made contributions to the employment insurance fund. The contributions are automatically deducted from earnings at the person’s place of employment.

Reflection
I believe that the unemployment rate will continue to rise since the recession has begun at the start of 2009. There are many factors that influence this change, which can include changes in the composition of labour force, changes in the employment-insurance program, changes in oil prices, changes in technology and the changes in the pattern of world trade. I think that the employment insurance program is regarded as an income supplement and not as temporary income assistance between jobs. The solution to the unemployment probably depends on the number of vacancies available. If there are no jobs available, then jobs will need to be created. If jobs are available, then a way will have to be found to match the unemployed workers to the available opportunities

Chapter 7

http://www.azcentral.com/news/articles/2009/03/03/20090303mr--trade0304.html

The Good Value of Barter in the Bad Economic Times

Summary
David Robinson, is one of the 500 members in the Arizona Trade Exchange who barters for $50 000 worth of services to maintain business operations. To be a member, a one-time fee of $495 is necessary to join. He trades granite countertops for services like his truck maintenance, office cleaning and air conditioning. Rob Miller, founder of the Mesa-based trade exchange says that the Arizona Trade Exchange had a total of $4.9 million in transactions. National Association of Trade Exchanges states that among this exchange group, there are 400 exchange groups as well that have transactions that are worth billions of dollars.

Connection
Arizona Trade Exchange is an example of a barter system. In order for barter to take place, one needs to have some item to offer for exchange. This form is a direct bartering system that requires a coincidence of wants from another person. It is the medium in which goods or services are directly exchanged for other goods or services, without the use of money. That is, if you have an item to trade you have to find someone willing to sell the item that you desire.It is difficult to express values or prices in a barter system. With no common denominator, there can be as many prices for one item as there are articles for trade. As well, divisibility is also a problem with barter because it is not possible to divide many items up into smaller units.

Reflection
In our economy, money performs the function of being a store of wealth, as well as a medium of exchange. However, the barter system is not dead. It’s good that some people are seeing the value of barter in the bad economic times. Exchange systems can generate more customers together in producing new sales and growing higher mass of businesses. It acts as a great way to offset expenses by paying in trade instead of cash. Therefore, you are able to preserve cash. Some individuals resort to barter so that they can avoid paying income and sales taxes.

Chapter 3

Alcopops still flow despite tax rise

http://www.theaustralian.com.au/business/industry-sectors/alcopops-still-flow-despite-tax-rise/story-e6frg98o-1225795200239?from=public_rss

Summary

Alcopop sales have returned to double-digit growth, despite last year's 70 percent tax hike, amid signs the overall market for alcohol is growing, industry research obtained by The Weekend Australian shows. Alcopop tax had reduced teenage binge-drinking and that the Prime Minister seemed intent on tackling the big issues of opening hours, hard-hitting advertising and the price of alcohol. The people who worked in the Adelaide's hospitality industry said they had noticed a drop-off in sales of ready-to-drink alcopops. Claire Flood, 23, said she knew many people who would now buy a bottle of spirits and mix their own drinks instead of buying alcopops, "which i think is probably more dangerous than the standard drink... because it's not a standard measure".

Connections

One consideration is the responsiveness of the volume of a good consumed to a change in its price. In economic jargon, this is called "owned price elasticity". Demand for a good is said to be price "inelastic" if one per cent changed in its price results in a less than one per cent change in the quantity consumed. When demand is elastic, a rise in the tax rate increases government revenue even though consumption falls. Governments find a way to raise their revenue of tax systems by taxing some items more heavily than others. It can be efficient to tax most heavily those items that are comparatively price-inelastic.

Reflection

It is reasonable why a product with an elastic demand, in this case alcohol, has the objective of raising revenue for the government. With excise taxes imposed on alcohol, consumers will still continue buying them. I believe that the government should tighten on the tax act. They need to figure out other ways to decrease the consumptions of alcohol. Taxing is what we hate the most.

Chapter 2

Why the uranium price is set to soar

http://www.moneyweek.com/investments/commodities/why-the-uranium-price-is-set-to-soar.aspx

Summary
This article talks about the uranium price surged from $5 to $29 in just two weeks last year. China, India and Russia plans on to build new reactors and more reactors would cause a run on the limited supply of uranium. In the next 15 years, 130 new nuclear power plants will be built. Nuclear power provides about 16% of the planet's total annual electricity generation. France receives 78% of its electricity from nuclear power, Belgium gets almost 56% of its power from nuclear plants and Sweden's power is close to 50% that is nuclear.

Connections
In Chapter 2, the textbook talks about factors affecting demand and supply. The increase in demand of Uranium will result the demand curve to shift right. As more uranium being demanded, regardless of the price before. There will be a change in supply. As uranium increases in productions costs, the supply curve will result to shift left. Then the same amount of uranium will be supplied to the market at a higher price to earn profit.

Reflection
In my opinion, as the uranium price continues to rise in the future. Demand will increase, no matter what the cost is. Lot of countries are in need of uranium for power plants to produce electricity. People need electricity to survive, such as heat. The countries which uses uranium for electricity, need to find another way to get electricity due to the supply of uranium. As supply goes limited, demand rises.

Chapter 1

Water scarcity 'now bigger threat than financial crisis

http://www.independent.co.uk/environment/climate-change/water-scarcity-now-bigger-threat-than-financial-crisis-1645358.html

Summary
This article talks about facing a water bankruptcy which results a crisis even higher than the financial crisis. In the next 20 years, half of the world's population will be affected due to water shortages with millions of people dying and conflicts will increase. Some 60% of China's 669 cities are already short of water. By 2030, 2.8 billion people live in areas of high water stress. By that time, water scarcity could cut world harvests by 30% which is equivalent to all grain grown in the India and US. Gigantic water banks supplying 2 billion people in Asia are melting faster as global warming accelerates.

Connections
Water is a limited resource which we use everyday in our lives. We need to make wiser decisions on how we use it. Almost everything is scarce because very few things are available in unlimited quantities. China is running on short of water and we need to get the best possible decision on how to use the resource. Demand is high for water but supply is low. This is a great article that shows how water scarcity is increasing.

Reflection
In my opinion, I believe that people should use their water more carefully. Working together would make the world a better place. We need to contribute on these causes, but that's easy for people to say. Taking action would take a lot of effort, but would help in many ways such as saving people's lives by conserving water. Having a water crisis would increase the price of water and high demands will follow. Help do your part, save a life.