Friday, December 19, 2014

It’s The Most Wonderful Time of Year

Kennedi Bates
AP Economics
Mrs. Straub
December 7 2014

It’s The Most Wonderful Time of Year
It’s that time of the year again,  where the stores are filled with Christmas decorations and Christmas lights glow throughout your neighborhood. This is also a huge time of year for producers, as well as buyers! Gift-giving is an essential part of this holiday season. Consumers are looking for those perfect gifts to give to their children, spouse or friend and producers want to make sure you find out exactly what you are looking for. So how much exactly do you think you’re willing to spend this Christmas? $100? $200? How about $1000? Well  according to the 30th annual survey on holiday spending from the American Research Group, Inc, “Shoppers around the country say they are planning to spend an average of $861 for gifts this holiday season”. That is a whopping 8% more than the average planned spending from 2013.  The graphs below show us more on how average spending has increased and decreased throughout the years.

Average Spending
Percent Change

+ 8%
- 6%
+ 32%
- 2%
+ 58%
- 3%
- 50%
- 5%
- 4%
- 6%
+ 3%

With average spending at one of the highest it’s been in years, the Christmas season will bring a lot more total revenue than years before. This will help producers in the short run, as well as the long run.  To watch an interesting video about how big consumers are really spending this year, click on this link.
So now you’re probably wondering, how much of an impact Christmas really has on the economy. Well, Christmas is the by far, the largest economic stimulus for countries across the world. An increasing number of  Non-Christians have started to celebrate this holiday as well. According to, “The United States' retail industry generated over three trillion U.S. dollars during the holidays in 2013. These holiday sales reflected about 19.2 percent of the retail industries total sales that year”  That’s about ⅕ of their sales, was from Christmas season alone. With an average spending rate increase of 8%, imagine how much certain industries will make this year, compared to last year. This is not only good for sellers who gain more profit but also for consumers. By an increased average rate, this means that there has been a possible shift in the demand curve with consumer’s income increasing this year. Also last year, 768 thousand employees were hired throughout the United States to help with the overwhelming demand for products during this busy shopping time. This helped with America’s high unemployment rate and allowed many to be able to buy that special present for their loved one. To read more information about holiday shopping, click this link and see how Americans spend their money!
So while you’re shopping around this Christmas season, looking for the perfect gifts for that perfect someone, think of how much of an impact you are making on the economy. Also think about how this year compared to last year. Has your total income increased? Are the prices for certain products cheaper? Are you enjoying it more than usual? All of these simple things lead to a growing economy, with Christmas time being one of the most important tools for the economy to succeed. Happy shopping and enjoy this amazing time of year!

Works Cited
"How Do We Spend Those Christmas Dollars? | Economics." Economics How Do We Spend Those Christmas Dollars Comments. Web. 8 Dec. 2014. <>.

"Topic: U.S. Christmas Season." Web. 7 Dec. 2014. <>

Christmas Having a Significant Impact?

Mitchell Brown
Mrs. Straub
Economics - B3
December 18th 2014

Christmas Having a Significant Impact?

For those who have been out Christmas shopping lately, have you thought anything of its economic impact? In years past, Holiday shopping boosted the American economy significantly. However, with our current economic recession, citizens are spending less towards gifts and focusing more on survival; therefore, Holiday shopping has less of an impact than what one would initially believe.

Not to say Christmas and Holiday shopping do not have a positive impact on our economy--they do, but as of late, their impact has certainly declined. As an article from the New York Times discussing Holiday shopping’s impact on the economy states: “From 1992 to 2013, December retail sales averaged 23 percent higher than the rate from January through October”. Although this year, it’s only “a mere $67 billion. That’s all of about 0.4 percent of our $17.6 trillion economy.” Yes, one could argue that 0.4 percent of a $17.6 trillion economy is a lot, but in hindsight this isn’t a fraction of what the figures use to be. Therefore, because citizens are spending less because of our economic recession, economic impact from holiday shopping has  decreased due to economic contraction.

Even though the impact Holiday shopping has on our economy has declined because of our economic status, Christmas shopping still has an important impact. Regarding a webpage overviewing statistics regarding holiday shopping and its effects on the economy, “holiday sales reflected about 19.2 percent of the retail industry's total sales”. “ As a result, just over 768 thousand employees were hired throughout the United States to compensate for the holiday rush.” When a business is experiencing peak profit--for many this is christmas, they often hire more temporary or permanent workers. This results in not only circulation of money throughout the economy, but hope for those who struggle to maintain jobs and support their families. Overall, yes, as seen in the preceding paragraph Christmas’s effect on the economy is decreasing; however, it still has an important effect. Without holiday shopping, many who rely on large businesses would struggle to survive or raise a family. For some would be unaffected, others would be suffering at the wrath of the economy.

To conclude, Christmas and Holiday shopping has a definite significant impact on the economy. Even though its impact has began to decline because of our economic recession, the benefits Holiday shopping bring to the table help out the lives and families of thousands. In the future, if holiday spending begins to increase at an even rate, that might be enough to bring us out of economic recession. But for now, Holiday shopping’s economic impact is great enough not to be argued with.
Works Cited

Irwin, Neil. "Don’t Believe the Hype: Holiday Sales Won’t Make or Break the Economy." The New York Times. The New York Times, 26 Nov. 2014. Web. 19 Dec. 2014. <>.

"Topic: U.S. Christmas Season." Web. 19 Dec. 2014. <>.

Thursday, December 18, 2014

Brad Wahlgren

Brad Wahlgren
AP Economics
Mrs. Straub
17 December 2014
Falling Gas Prices: Good or Bad?
The average consumer purchases based on self-interest. One of the ways that people always try to save money is by purchasing gas for their car from the station that offers the lowest prices, and oftentimes one can observe competing gas stations on opposite sides of an intersection, each trying to outdo the other. Currently, oil is below fifty six dollars per barrel and consumers are celebrating the subsequent low prices of gas. However, this current low equilibrium price of gas could be detrimental for the businesses and industries that sell or invest in these products.
            The reason for these low gas prices is related to the United States’ greater production of domestic oil and resultant decrease of imported oil. This means that oil prices will drop because a determinate of supply has shifted the supply curve to the right. Additionally, consumers drive less during winter so there is not as great of a demand for gas during this time of year. If prices continue to be so low, the loss of revenue could have a very damaging effect on companies and areas that are dependent on the oil industry.  Businesses will shut down if the variable costs of production exceed the revenue generated, and if prices persist, 500 rigs will be put to a halt in production. The production of oil is an expensive process with which companies are subject to governments fees and taxing when they drill on certain federal and tribal lands. Therefore, a substantial amount of revenue must be generated in order to cover these costs and sustain at least a normal profit.
Gas prices in the year 2014
This lowering of prices will have different economic effects on different parts of the country.  Last year, forty billion consumer dollars were spent on gas. According to chief oil analyst Tom Kloza, consumers will spend at least two billion dollars less this year on the same product. This means that there will be extra earnings that people will be able to spend on other parts of the economy. Therefore the difference in oil revenue will saturate other industries, and many consumers throughout the nation will enjoy an increase in spending power. However areas such as Wyoming and North Dakota could suffer greatly from the new oil prices, because the petroleum industry comprises a huge part of the local economy.  When oil rigs and companies affiliated with the industry must downsize or close down permanently, many workers find themselves without a job, and therefore must become thriftier with their income and will not spend it as freely as before. This in turn hurts local businesses who sell products to these local business. The domino effect of a failing oil industry resonates throughout the whole community.
While consumers around the country are quite pleased with the current low gas prices, it is not necessarily a beneficial situation for the whole country. Some areas will be revitalized by increased real incomes of consumers, while other areas will suffer from the less profitable oil industries.
Works Cited
            Burke, Kelly. "Falling Oil Prices Could Hurt US Producers, Fracking Industry." Fox News. FOX News Network, 16 Dec. 2014. Web. 17 Dec. 2014. <>.
Philips, Matthew. "Return of the $3 Gallon? U.S Gas Prices Are Falling Fast."Bloomberg Business Week. Bloomberg, 17 Sept. 2014. Web. 17 Dec. 2014. <>.

Wednesday, December 17, 2014

The Economics of March Madness

Zach Brennan

Mrs. Straub



The Economics of March Madness

March madness is a single elimination NCAA tournament at the end of the college basketball season, there are total of 64 teams that compete and there is only one victor. March Madness is one of the most popular tournaments in sports. Nearly a third of America watched the tournament last year. Sixty-eight teams from all over the country battle head to head to become the NCAA champions. From school yards to elderly homes, there is a variety of people who watch this annual tournament.  March Madness is actually good for the economy and helps not only local businesses. Billions of dollars will be spent on products relating to the tournament whether it’s tickets or key chains.
When it comes to tickets they are a very elastic good. Ticket prices range from $150 to $700 depending on where and how far into the tournament each team it. As the price of the tickets go up less people feel that the positive externalities do not outweigh the negative externalities. The cost is way too high for the average joe to go to a march madness game. However, people are still willing to pay ridiculous  prices for these tickets.
Majority of the activities during march madness by fans are wagers. In fact it’s the second most wagered event in the US, just behind the Superbowl. Just in Las Vegas alone there was about 80 million dollars wagered in 2013. The odds of getting a perfect bracket are 1 in 35,360,000,000. So definitely the odds may never be in your favor.
Although the tournament is a major distraction, since “ Many more—86 percent of workers, according to a 2013 MSN survey—will check brackets or scores intermittently throughout the day. Which in turn does have some negative economic costs to businesses. Although it does increase moral of workers and most businesses do have bracket tournaments.
Many local businesses benefit where the games are played. Such as restaurants, hotels and bars. However, businesses that are located in places where the local team reaches the sweet sixteen, have major economic benefits. A survey showed that “fans will spend $100 or more if their team makes it to the sweet 16”. The products that they spend on are team apparel or even a new big screen tv.
Marketing from sponsors is one of the primary sources of income for the tournament for colleges. Ranging from espn to the weather channel, all of them have som source of marketing for the tournament when March comes around. When it comes to broadcasting for the tournament it’s very monopolistic. The few channels that have the privilege of live broadcasting are CBS, TNT, Turner Sports and TruTV. Because of this many other channels receive a scarcity of revenue during the tournament, because their channel’s viewing goes down tremendously.
Overall the economics of March madness are mostly positive. It does not only benefit the city that the games are played, but also the hometowns of the teams. Unfortunately the amount of revenue is dependent on if or how far the team goes into the tournament. So there is no guarantee of profit. An example would be a store in the area of a number one seeded team. They would increase the supply of the team related gear in the store. The farther the team goes into the tournament the more profit on the team gear for the store. If the team loses and is out of the tournament earlier than expected  the store will lose money, because people are much less likely to buy the goods. So there can be some negative impact on the economy.
Works Cited

Forbes. Forbes Magazine. Web. 15 Dec. 2014. <>.
Swatek, Rick. "The 3Ms of March Madness: Money, Marketing, Media." Bloomberg Business Week. Bloomberg, 17 Mar. 2011. Web. 15 Dec. 2014. <>
"The Feudal Economics of NCAA's March Madness." The Islamic Monthly. 15 Dec. 2014. Web. 15 Dec. 2014. <>.

Vinik, Danny. "The Economics of March Madness: The Tourney May Not Hurt the Economy as Much as You Think." Web. 15 Dec. 2014. <

Friday, December 12, 2014

New Year, New You, New Economy?

New Year, New You, New Economy?

As the end of the year approaches, many of us are preparing to declare our New Year’s resolution for 2015. Some may vouge to volunteer for charity more often, or save money for that trip to Hawaii, but most americans are likely to take the pledge of eating healthier and working out. For those who are already gym rats, you are well aware that the worst time of the year is quickly approaching. With January comes the many, many New Year's Resolutioners. Gym memberships ramp up in January, and without any warning at all really, the crowds flood in on your once almost empty gym. New Year's is the ultimate Monday for the "I'll start on Monday" crowd.
While some sources claim this crowd is short lived and starts clearing out by early February, others state that the number of gym memberships significantly increases throughout the entire first quarter of the year. “More than 12 percent of gym members join in January, compared to an average of 8.3 percent per month for the full year. February comes in second in terms of new clientele, with just over 9 percent of new members joining that month, and March comes in at just under 9 percent of members,” says the International Health, Racquet, and Sportsclub Association (US News). This turns out to be about a 30% to 40% increase in gym traffic.

The graph above represents the number of new members to join a fitness center from the years 2004 to 2009. Notice the spike in data from November to January.

Demand for gym memberships significantly increases during the first months of the new year not only because people are feeling motivated, but also because many gyms offer incentives. “From a gym company's perspective, Keightley said gyms have an incentive to sign members up on Jan. 1, instead of Feb. 1, if members are paying monthly membership fees. “‘The company is making more money,’” he said, explaining that many gyms offer promotions in December to have people commit starting Jan. 1” (ABC News). Because of the increase in demand, gyms can lower their membership fees to attract clients while still keeping their marginal benefits higher than their marginal costs. There are so many competitive producers when it comes to fitness centers that these promotions are almost essential if gyms want to bring in the desired amount of new clients in the early months of the new year. On that same note, however, ‘"Americans are increasingly seeing a gym membership not as a want but more as a need," says Dale Schmidt, industry analyst at market research firm IBISWorld. "It's something Americans are increasingly budgeting into their normal expenses, as opposed to a luxury purchase"’ (US News).

The above graph shows how largely the fitness industry has grown from the years 1997 to 2005.

Works Cited:

"Díaz De Terán: The Power of Search Trends." Díaz De Terán: The Power of Search Trends. Web. 5 Dec. 2014. <>.

Kim, Susanna. "Is the New Year the Best Time to Sign Up for a Gym Membership?"ABC News. ABC News Network, 31 Dec. 2013. Web. 5 Dec. 2014. <>.

US News. U.S.News & World Report. Web. 5 Dec. 2014. <>.

Apple Excels during the Holiday Season

Makenzie Barton
Economics A3
Mrs. Straub
08 December 2014

Apple Excels during the Holiday Season

While December quickly approached us, the most common thought of course is celebrating one of the most cheerful, blissful holidays of all time; Christmas. Families and friends gather around as they all make Christmas cookies, watch the snowfall, and spend a large quantity of money on gifts for their loved ones. With Christmas shoppers being on the move traveling from store to store, it is safe to say that all businesses, ranging from American Eagle to Pick N Save, in some way  excel during this time of the year. However, just how much impact does this world wide holiday have on the economy alone? It is configured that Christmas is typically the largest economic stimulus for many nations around the world as sales increase dramatically in almost all retail stores, according to The Statistics Portal. Looking back to the 2013 Christmas season, United States retail stores generated over three trillion U.S. dollars during the holiday season, which is depicted below.

Looking past the obvious realization that the holiday season generates an extremely high revenue across the nation, demand for specific products skyrockets due to the customers wants and needs. If we look at the traditional company of Apple, it is known that companies with technology based products are going to excel in purchases. Looking at the 2012 Christmas season, with the launch of the iPhone 5s a few months back from this time, Apple sold nearly fifty million iPhones in the December quarter alone due to the holiday purchases (Blodget). This number easily surpassed the income of the tablet, kindle, or any other technology based product, Apple or not. With the excessive, increased demand for one product, it becomes clear that the supply must be outrageous, in order for Christmas shoppers to be satisfied knowing they received the product they earned for. Although this was back two years ago in 2012, this tradition continues, specifically with Apple. While it is older news that the iPhone 6 has been put onto the market, Apple is expecting to sell nearly sixty million iPhones this December alone for the holidays. Not only will price continue to increase with consumers still purchasing the product due to the high demand, prices can continue to increase as well due to the lack of competition between Apple and any other technology based company such as Samsung (James) which is displayed below. As price continues to increase, demand continues to increase as well while other companies cannot keep up with the extensive updates Apple performs, resulting in a huge economic boost due to the large amounts of money being spent.

Looking beyond just Apple, retail stores experience thousands of sales per day during the holiday seasons. With that being said, seasonal employment continues to be a factor in the world of retail. Due to the profits made by stores on a daily basis during the month of December, in the 2013 year, just over 768 thousand employees were throughout the United States to compensate for the holiday rush, according to Statistics Portal. As the employment rate continues to increase during this time when individuals need jobs the most, the economy excels in the aspect that unemployment rates for the time being have decreased significantly, almost to a single digit percentage. With employment rising, although for only the holiday season,  the economy is continuing to grow as a whole which lowers the chances of a recession in the near future.

The holiday season brings much joy and excitement to the table, while nearly raising the economy drastically. With demand for products being at an all time high, supply also needs to counteract with that need, which most retail stores perform during the holiday season. As seasonal employment continues to rise as well,  the economy during the months of early December to the beginning of January are at an ultimate peak, in which benefits and helps the economy grow and stabilize for the next few months following this time.
Works Cited:

"Annual Retail Industry Sales in the United States 2000-2014 | Statistic." Statista. Web. 9 Dec. 2014. <>.
"Apple IPhone vs. Samsung Galaxy Smartphone Sales [Chart]." IClarified. Web. 9 Dec. 2014. <>.
Blodget, Henry. "And Now It's Time To Fret About The Number Of IPhones Apple Sold..." Business Insider. Business Insider, Inc, 22 Sept. 2012. Web. 9 Dec. 2014. <>.
"Topic: U.S. Christmas Season." Web. 9 Dec. 2014. <>.
"IPhone 6 Expected To Help Apple Sell 60M IPhones In December Quarter, Analysts Say." International Business Times. Web. 9 Dec. 2014. <>.

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