Black Friday

BLACK FRIDAY

Nick Knoke

As November starts to come to an end, the temperatures start to get colder, and the white girls bring out their Ugg boots, everybody has the holidays creeping into their heads. Not Thanksgiving or Christmas but Black Friday. The day after Thanksgiving has become known for people to camp overnight outside of stores just so they can get up at 5 A.M. and trample someone for the newest gaming console of pair of Beats By Dre. The only question is, how are businesses making money if they are offering such crazy deals to people. The answer is, when people come into the stores to get good deals, they see items that they like better or think are nicer and instead of just getting the original item, they end up buying more than they wanted.

Another way that companies rope people in is by all the advertizing that they put out on television and social media. They try to get people interested in the cheap items then once they get into the store, they feel rushes by the thousands of other shoppers so they just go around and get “deals” on things they don't need. Black Friday grabs the attention of so many people that last year alone had about 90 million shoppers. The average person spent about $400.00 on this day alone. This sudden surge of money re entering the market would cause a peak in business profits. Last year, Black Friday pulled in an estimated $592.6 billion which is just proof that the businesses know how to take advantage of the demand for Christmas gifts.

Black Friday is almost the exact opposite of Thanksgiving because people go from being thankful for what they have to stopping on people in order to get something that they don't have. Although it may not seem very good, it brings in a lot of revenue which helps our economy flow. By buying things that people don't really need, they put more money back into the system which can be used to pay other people who in turn spend their money on things that will help others. It is all one big circle and although many people might think Black Friday is dumb or a waste of time, it helps money stay moving through our economy.

Works Cited

"Black Friday Shopping Impacts Economy."Grand Valley Lanthorn ::. Web. 12 Nov. 2014. <http://www.lanthorn.com/article/2013/12/black-friday-shopping-impacts-economy>.

Elliott, Stuart. "Retailers Like Lowe’s Are Getting a Jump on the Holidays." The New York Times. The New York Times, 29 Oct. 2014. Web. 12 Nov. 2014. <http://www.nytimes.com/2014/10/30/business/media/retailers-like-lowes-are-getting-a-jump-on-the-holidays.html?_r=0>.

"What Are The Economics Behind The Black Friday Sales?" Forbes. Forbes Magazine. Web. 12 Nov. 2014. <http://www.forbes.com/sites/quora/2013/11/27/what-are-the-economics-behind-the-black-friday-sales/>.

"3 Reasons Why Black Friday Sales Aren't So Jolly." About. Web. 12 Nov. 2014. <http://useconomy.about.com/od/demand/f/Black_Friday.htm>.

Increasing College Tuition

Jason Berg

Mr. Reuter

Economics
17 Nov 2014

Increasing College Tuition

College tuition is on the rise. When seeing the prices some students think they won’t be able to afford it and should just get a job instead. In fact, there are several debates on whether or not the college degree is still worth it. Citizens are wondering why college tuition continues to increase at a rapid pace.

In the last 36 years, college tuition and fees have increased by 1,225 percent. By far it is the biggest increase in price than anything else. If somebody attended a four year public institution in 1974, the average cost was $1,563. Today, the average cost is $22,826 for in state students who get a reduced price meaning it could be even more if you chose to go out of state. Its clear to see the college is going to leave students with a big pile of debt even with scholarships. The average college student will finish college with about $25,550 in 2014 which was a 25 percent increase from 2008.

When the college graduate enters the competitive workforce with already having $25,550 of debt it will take several years just to pay it off, because the average bachelors degree earns $51,206 per year. According to bloomberg,com it will take an average of ten years to pay off your college debt if you spend your money wisely. So why not just go work full time and make money instead of spending thousands of dollars?  The reason is that citizens with a college diploma make about $17,500 more annually than those without a college degree. So when thinking long term, going to college will benefit you more than just entering the workforce. Also, when working with a college diploma there are more chances of working up in a company. So there are more opportunities when you have a college diploma which is also a benefit.

Many students wonder why college tuition is increasing at such a rapid rate. The answer is simple. Colleges are spending more and more money every year and increase the cost of tuition in order to help cover the cost of their spending. Another reason is that the state funding is decreasing so the schools are getting less money every year and need to make that lost money up by increasing tuition.

Overall, the high school students should plan on going to college. Even though the student will most likely have thousands of dollars of debt when finished. The benefits are worth the cost and the price is also going to increase in the near future.

Christmas and the Economy

Caitlin Osborne

Mr. Reuter

Economics

16 November 2014

Christmas and the Economy

As we approach the holiday season people are beginning their holiday shopping. SInce the recession consumer spending has continued to slowly pick up and this year spending is expected to increase from last year. The holiday season is typically the greatest season for consumer spending, and this spending boosts the economy. Consumer spending can be attributed to two-thirds of the economy and the holidays are the biggest gift giving season, thus the economy thrives on this time of year.  

From this graph we can see in 2008 during the recession the average american spent $616. This upcoming year it is expected that this will increase to $781. There is a ripple effect in the economy expansion occurs. The more consumers are spending the more the revenue business are bringing in. In turn these business can afford to and will need to hire more workers both full time and seasonal which will lower the unemployment rate. This ripple effect is created when these workers now have a higher annual income and are buying more products and the cycle continues.

The holiday shopping begins the day after thanksgiving, or in someplace on thanksgiving on consumer holiday deemed “Black Friday”. Each year the official start of this day crepes earlier and earlier taking over Thanksgiving a true national holiday.

People obsess over receiving the reward of low prices no matter what the cost is. Black Friday plays an important role in the nation's economy by fueling the business cycle. Businesses themselves have to put out huge amounts of money to advertise their low prices and doorbusters. This raises consumers demand for products which is evident by the long lines that build for days prior to the sale.  While this spending may be crucial to the nations economy it reveals a lot about the nature of the United States. There are millions of people who camp outside of stores instead of celebrating the holiday with loved ones and acknowledging all they are thankful for.

This spending continues into late december with people trying to get in some last minute shopping. Of merchants total profits over forty percent is acquired during the holiday season. These businesses depend on this revenue in order to make ends meet and balance out the slower months at other times of the year. Without this income many companies would not be able to stay in business and this would severely harm the economy. Consumer spending is a reflection on the economy, because if more people are spending money on gifts it can be inferred their income is also increasing. A strong holiday shopping season can be what America needs to continue its economic upturn. However, no single event can be credited as the only factor that boosts the United States economy, but it can be assured holiday spending plays a big role. Without this large national consumer spending the economy could suffer and ultimately enter a contraction phase from a lack of monetary flow.

So, as we enter the holiday season for the economy’s sake continue to purchase goods and services to help businesses profit from sales,and higher more work that will lower unemployment and raise the economic status. However, don’t get caught up in raising the purchasing power of your dollar and miss spending time with your family and a warm turkey dinner in order to get the best deals. Rather spend time with those you are thankful for and do your shopping after thanksgiving is over.

Works Cited

The Hartford Courant. "How Big Is Christmas to Economy?" How Big Is Christmas to Economy? Web. 19 Nov. 2014. <http://www.azcentral.com/business/consumer/articles/2009/12/11/20091211christmaseconomy.html>.

Saad, Lydia. "Americans' Initial Christmas Spending Estimate Is Positive." Americans' Initial Christmas Spending Estimate Is Positive. Web. 19 Nov. 2014. <http://www.gallup.com/poll/178859/americans-initial-christmas-spending-estimate-positive.aspx>.

Web. 19 Nov. 2014. <http://wciv.images.worldnow.com/images/16115635_BG1.jpg>.

Web. 19 Nov. 2014. <http://activerain.com/image_store/uploads/7/6/2/0/8/ar135351670480267.jpg>.

The Effect of Clash of Clans on the Economy

Sam Queen

Mr. Reuter

10/15/14

Economics B-2

The Effect of Clash of Clans on the Economy

In the past few months, a new MMO game has taken the Apple and Google Play app stores by storm. This new game has quickly become popular in PHS, and in a large variety of smartphone users, ages ranging from 12-24, with the game being the most popular with people in their 20’s. This game is known as Clash of Clans, or CoC. As this game shoots up the leaderboard for most popular app, its popularity increases which demands for this game to be analyzed. More specifically an analysis on the effect of Clash of Clans, and its sister game, Hay Day, and how these games and the creator Supercell are hurting or helping the economy.  

Both Clash of Clans and Hay Day are time based games designed to draw the player in initially by making them active in the initial building of their village or farm. Supercell (creator of CoC and Hay Day) has been hailed as finding the perfect formula for creating a popular game. First, they create a tutorial that is creative, attention grabbing, but short, and not to extensive. Then you a way in which hard core players are able to mingle and co-exist, then you keep making updates to the game to keep the veterans of the game happy while keeping the new players from quitting due to an overwhelming amount of information. Both CoC and Hay Day have done a great job with this, but there are some areas in which CoC out does its older sister game. Clash keeps people active by supplying them with incentive to keep logging in and check on their village by allowing different players at different levels to be able to retain and harvest the in game currency, which is elixir and gold.

But, as you continue to grow your village and progress through the game, the collectors and mines that provide you with exiler and gold are not able to keep up with the amounts required to upgrade your buildings and other structures. Eventually, you reach a point in the game where it is impossible to advance without paying money, which is where gems come into play. You can purchase gems to fill up your respective storages for the two main currencies, or you can build time shields to protect you villages from getting attacked, both with gems. The going rate right now is $5 for 500 gems, 1200 gems for $10, 2500 gems for $20, 6500 for $50, and 14000 gems for $100. So by increasing the gem to dollar ratio, Supercell is trying to entice their players by getting them to believe that by spending more money, they are increasing their marginal benefit by getting them to buy more gems than they initially wanted to buy, or by causing them to buy gems in the first place. Supercell has been quoted as saying “That 90% of CoC players do not spend one cent on the game.” Meaning that they receive all revenue from around 10% of their players, who tend to be the best worldwide.

Supercell has reported that they generate 982 million dollars annually in revenue, around 2.4 million dollars a day. That is around 400 million dollars profit before taxes.It is reported that Clash of Clans alone generates 4.6 million dollars a day in 2014. This is a staggering figure, as Supercell is feeding off of the small amount of big time players who are addicted, much like a casino receives most of its revenue from those who gamble too much. Now, how does this relate to the economy. While Supercell does not provide many people with jobs, as they only employee 110 people, with the amount of profit that they generate, most goes back to the people as Supercell pays more than they are required for taxes each year in Finland. Which is great, but does it really help. Since many of the users who play CoC are smaller children, they may not be able to grasp the idea that in app purchases cost real money, and they may end up spending a lot of real money without even realizing it. Obviously this is harmful in any economic situation, with the opportunity cost being anything that the money that was spent on gems being used on something else.

In conclusion, Supercell is one of those companies that seems to have found the perfect formula for producing quality games while still being able to turn a large profit. Personally, I think that if you want to spend gems and buy things inside the app, go ahead, I am not one to judge. As a current clasher, I see the value of doing something like that, but after doing research and seeing just how much Supercell makes off of people partaking in the purchasing of gems, I don’t won’t buy gems, because in my case personally, the marginal cost outweighs the marginal benefit by a landslide.

Works Cited

Spencer, Evan. "'Clash of Clans' Developer Supercell Reports $829 Million In Revenue And A Desire To Support The Finnish Community." Forbes. Forbes Magazine, 21 Feb. 2014. Web. 17 Nov. 2014.

Dredge, Stuart. "Clash of Clans and Candy Crush Saga Dominate Apps 'superstar Economy." Www.theguardian.com. The Guardian, June-July 2014. Web. 17 Nov. 2014.

Smith, Julie. "Millions of Children Play "Clash of Clans"" Kids and Teens Online. Kids and Teens, 9 Sept. 2014. Web. 17 Nov. 2014.

Brustein, Joshua. "Finland's New Tech Power: Game Maker Supercell."Bloomberg Business Week. Bloomberg, 05 June 2014. Web. 17 Nov. 2014.

Smith, Steven. "Gyrovague." Gyrovague. Gyrovague, Jan.-Feb. 2014. Web. 17 Nov. 2014.

Is Hunting Season Helping The Economy

Austin Shibilski

Mrs, Straub

Economics

18 November 2014

Is Hunting Season Helping The Economy

When it comes to fall most people think about football, But when it comes to me I think about hunting season. Many people have mixed feeling about hunting season because they think you're killing a poor innocent animal. As deer population gets  bigger and bigger it;s hard to keep deer in check at a decent percentage. With a deer percentage of about 76% hunter walk the woods with a gun the 3rd weekend of November trying to chase the Buck of a life time. Deer season is here, and the as people of the economy i'm going to ask you to hit the woods and go after deer. .

As most people know deer can cause serious damage to a car or person and many other things. Over the past 4 year over 1,000 car crashes have occurred  due to deer which is up 14% from 68%, with a new time high for crashes more tags will be given out to hunters to prevent this from happening. The Economic Growth is affecting the wildlife, as more building, business or roads are being built the wildlife area starts to decrease.  we are more susceptible  to car crashes if the economy keeps building in wildlife areas.

One of the managers at DNR headquarters In Wisconsin says that only 28 percent of product sold goes to the government . Even though this does not look like a large number it is quite a big number. The 28% the government get is from store sold products, hunting land, and much more. In the end the Government makes a lot of money off hunters. If the DNR were selling land for 26,000 dollars the government would ruffly get about 7000 dollars, It might not seem like much but overtime that adds up.

You might not think that huntings a good thing but for the safety of the humans and the safety of our economic growth you need hunters. Without hunter we would have more damaged materials and thing we liked, thats why hunters are a good thing for the economy to protect other and protect what they love the most their stuff.

"U.S. Deer Herds Over Populated." Mother Earth News. 7 Feb. 2013. Web. 20 Nov. 2014. <http://www.motherearthnews.com/nature-and-environment/us-deer-herds-in-trouble-zbcz1409.aspx#axzz3JZkzw11w>.

"Urban Deer vs. Car Crashes on the Rise."Channel 3000. Web. 20 Nov. 2014. <http://www.channel3000.com/news/Urban-deer-vs-car-crashes-on-the-rise/29688348>.

Copy & Paste | Parenthetical

"Yahoo." Yahoo Image Search. Web. 20 Nov. 2014. <http://images.search.yahoo.com/images/view;_ylt=AwrB8o_cbG1ULUkA4F6JzbkF;_ylu=X3oDMTIybHVxcGV0BHNlYwNzcgRzbGsDaW1nBG9pZAM2MTRjMzhiMjVhMjUyN2I2N2E2NjViMDI0NWZiNWZmNwRncG9zAzcEaXQDYmluZw--?back=http://images.search.yahoo.com/yhs/search?p=wisco>.

Is Christmas Giving Hurting the Economy?

Hannah Snyder

Mrs. Straub

Economics

18 November 2014

Is Christmas Giving Hurting the Economy?

As the infamous Christmas season is quickly coming upon us, we have to ask ourselves, “Is holiday giving truly necessary?”. I’m sure many of us have been given some dud gifts in our day. Whether it’s a pair of bunny slippers from Great-Aunt Agnes or an imitation metal necklace from the little girl you babysit, not everything we receive on this holiday is completely useful in our lives.Think about all the money that could be saved if presents like this weren’t purchased. But more importantly take all of our philanthropy during the Christmas season. Do you think twice about participating in food drives and gift providing programs? Hopefully not! But are these things hurting economic growth more than they’re helping those in need?

You may or may not have heard about people like the ‘K-Mart Santa’ paying off people’s layaway bills and handing out $50 bills at the store’s exit. Of course, this person’s generosity is astounding, but is this truly helping? It can be inferred that more often than not, people focus on the idea of helping others in such a giving time of year more than how much their dollar truly helps. If people don’t give to organizations that use donations to the fullest, their once thoughtful giving doesn’t really help the impoverished, or the economy. But even more importantly, charity work can create a disincentive. If you make too much money, or if you gain success, you will no longer be able to reap the benefits of the charity. If there’s no incentive, there’s no economic growth.

Peter Greer, the CEO of a microfinance organization says something along these lines about a charity in Africa in an interview with Forbes Magazine. He said “ We were doing a study in [Africa] and actually found that in this one community, every year there would be one family that would be selected, and it would be the poorest family, to get a new home from this very generous group. But what that did is create a disincentive for people to make modest improvements, and it actually disincentivized people to say, “I’m going to do something to improve my house, my home.” Because one woman said, you know, “If I do that, then I won’t be seen as the neediest, and I’ll miss out on my chance to have the extreme home makeover.” So there is a problem, where what is good in short-term and what is good for the experience of the giver, might not be what is more difficult candidly and more long-term. It’s easier to give someone something and feel good about that in the short-term, than it is to do the much more difficult work of helping someone provide for their needs so that that person can be generous to others in their community.”

While his statement doesn’t necessarily connect to Christmas giving, It does ring true for the effects of charity work. With household disincentive, GDP per capita will be on the decline. Take a look at this graph relating to Peter’s scenario:

So, now that you know that charity work has the ability of hurting those in need more than helping them, what will you support this holiday season?

Works Cited:

Carden, Art. "Ruining Christmas: An Economist's Guide." Forbes. Forbes Magazine, 18 Dec. 2011. Web. 18 Nov. 2014. <http://www.forbes.com/sites/artcarden/2011/12/18/ruining-christmas-an-economists-guide/2/>.

"Anonymous Donors Pay Off Kmart Layaway Accounts Across Country." Fox News. FOX News Network, 15 Dec. 2011. Web. 18 Nov. 2014. <http://www.foxnews.com/us/2011/12/15/anonymous-donors-pay-off-kmart-layaway-accounts-across-country/>.

Bowyer, Jerry. "Your Help Is Hurting: How Church Foreign Aid Programs Make Things Worse." Forbes. Forbes Magazine, 30 July 2013. Web. 18 Nov. 2014. <http://www.forbes.com/sites/jerrybowyer/2013/07/30/your-help-is-hurting-how-church-foreign-aid-programs-make-things-worse/>.

Are You Getting the Best Deal on Thanksgiving?

Matt Lupo

Mrs. Straub

AP Economics

17 November 2014

Are You Getting the Best Deal on Thanksgiving?

Before a holiday, prices of goods associated with that holiday tend to rise. This makes sense, since the impending holiday tends to increase the demand for holiday-related items from the position it occupies the rest of the year because consumer tastes are temporarily altered. The demand for roses spikes just before Valentine’s Day (Larson), as does the demand for candy prior to Halloween and turkey in the week before Thanksgiving. In accordance with this upward shift in demand, firms can charge more for holiday-related goods. Since the demand for turkey rises before Thanksgiving, is a traditional Thanksgiving dinner the most cost-effective meal? Surprisingly, it probably is.

For the sake of argument, we’ll only consider reasonable substitutes to a traditional meal; that is, switching from turkey to ham is in play, but replacing the entrée with fast food isn’t. Within these parameters, then, turkey may be the cheapest choice. This seems counterintuitive because the demand for turkey increases so precipitously around Thanksgiving, but there are a couple of factors that counteract this price change. The graphic below reflects the cheapness of frozen turkey at Thanksgiving, as the price drops, on average, about 9% during the month of November.

First, producers anticipate the increase in demand because it happens annually, and the supply of turkey can be increased to meet the demands of the holidays (Rampell). Unlike the producers of roses, who can also foresee an increased demand at Valentine’s Day, the producers of turkeys can prepare for this demand change months in advance (Rampell). Goods like roses – perishable goods – can only be stored for so long before they expire, but turkeys can be frozen for extensive periods of time. Because of this, turkey producers can stockpile large inventories to prepare for the Thanksgiving rush, which helps to lower prices by significantly increasing supply in November. The graphic below outlines the contributions to the frozen turkey stockpile made each month. A sharp drop in the October-November timeframe represents turkeys flooding the market to meet the Thanksgiving demand, and such a large supply temporarily decreases the price of turkey.

Besides the high supply elasticity of turkeys, the overall declining price of a traditional meal supports the claim that it is the cheapest option. According to the American Farm Bureau Federation (AFBF), the average cost of a Thanksgiving meal, adjusted for inflation, has recently stagnated and dropped to a three-year low (Grondine and Sirekis). The price changes of each component of a traditional dinner is outlined in a video produced by the AFBF. Each price is calculated as the amount necessary to feed this traditional meal to ten people, and in 2013, such a meal cost $49.04 (Grondine and Sirekis). After scouring the internet for cheaper alternative meals, the closest I came was a dinner for eight people that cost $79.47 (Schrambling), or a 62% increase in cost for a 20% decrease in quantity. Though some side dishes could be replaced to further lower costs – like substituting cheaper rice for more expensive mashed potatoes – a traditional meal is about the cheapest Thanksgiving meal you can make.

In theory, while rice may decrease the overall cost of a Thanksgiving dinner, decisions about what to include should be based on the marginal utility per dollar of each food in order to maximize total utility. However, as Ezra Klein, a behavioral economist, points out, we often act irrationally on Thanksgiving (Klein). Instead of stopping our consumption of turkey or mashed potatoes when marginal utility begins to decrease – or even when it hits zero – we continue far into the negatives because gorging ourselves is a holiday custom. By ignoring the feeling of being full, we rob ourselves of some of the utility that could be gained by not eating another bite.

Overall, while a meal consisting of traditional foods may be the best deal financially, we rarely maximize the total utility of a Thanksgiving meal.

Works Cited

Grondine, Tracy and Cyndie Sirekis. Cost of Classic Thanksgiving Dinner Down for 2013. 14 November 2013. 17 November 2014 <http://www.fb.org/index.php?action=newsroom.news&year=2013&file=nr1114.html>.

Klein, Ezra. The behavioral economics of Thanksgiving. 24 November 2011. 17 November 2014 <http://www.washingtonpost.com/blogs/wonkblog/post/the-behavioral-economics-of-thanksgiving/2011/08/25/gIQAR5BMpN_blog.html>.

Larson, Heather. Why roses cost more on Valentine's Day. 4 February 2011. 17 November 2014 <http://www.bankrate.com/finance/personal-finance/why-roses-cost-more-on-valentine-s-day-2.aspx>.

Rampell, Catherine. Turkey Economics, Annotated. 20 November 2013. 17 November 2014 <http://economix.blogs.nytimes.com/2013/11/20/turkey-economics-annotated/>.

Why is Turkey Cheaper when Demand is Higher? 19 November 2013. 17 November 2014 <http://www.nytimes.com/2013/11/24/magazine/why-is-turkey-cheaper-when-demand-is-higher.html>.

Schrambling, Regina. Thanksgiving on a Budget. 2014. 17 November 2014 <http://www.epicurious.com/articlesguides/holidays/thanksgiving/budgetmenu>.