Credit

This week in Econ class we have been learning all about credit. We have learned everything from what to look for in a credit card to how a credit score is configured. The most surprising thing that I learned this week is that there is good debt.  Good debt is when you cannot afford to pay for something you are in debt but you will gain money on it later on. A prime example of good debt is higher education. A lot of people cannot finance for college on their own and must take out a student loan. A student loan is similar to credit because you are using someone else's money to pay for something--in this case college-- and will pay them back with interest.  Higher education is good debt because a college degree will often get you a better, high paying job than you would get without the degree. In this way, you receive money on the debt of the student loans because in the long run you receive more money than you owe. The topic of financing higher education is a good topic for us to discuss as highschoolers preparing to go to college.

Net Neutrality 101

I read an article on www.savetheinternet.com called Net Neutrality 101. We briefly discussed this issue in class. Net neutrality is how we currently use the internet. We pay for the internet from our internet provider and are allowed to visit any website we want to while we are online. However this system is in danger.  The companies that provide us with internet access want to charge extra fees so that websites will load properly and so that online applications will work. This is the opposite of net neutrality which means open and free access to any websites and applications.  The internet providers want to the owners of certain websites more money in order to have their website operate properly. This fees will trickle down and affect us. If Verizon charges Netflix more money to provide service for the website, then Netflix will charge customers more to cover the cost. This is unfair. We already pay a lot to these companies for internet and other services we should not have to pay extra costs to use websites that should be offered to us for free.  The destruction of net neutrality will have damaging effects on the economy. Some internet based companies will go out of business and customers will be unhappy.

http://www.savetheinternet.com/net-neutrality-101

Banking

This week in economics we have learned all about banking. We received banking cards and opened checking accounts. We have a sheet where we record all of our withdrawals and deposits. We also learned how to write checks in order to pay bills. I think that this is really helpful. This way we will be prepared for what our future will soon be. Right now, we as students usually do not have to go to the bank often and usually are parents take care of the bills. By learning all of these money skills we will be prepared to live on our own and spend our money wisely. In today's world, many people do not know how to properly balance their check books and how to use money wisely. I think that is good that we are be taught how to be fiscally responsible.

Business Structures

This week in Economics class we learned about the different types of business structures. We learned about sole proprietorship, partnerships, and corporations. I believe that partnerships are the best type of business structures. Partnerships allow for specialization and offer more resources than sole proprietorship. Yet partnerships still have less government regulation and are easier to open than a corporation. Partnerships still have a lot of liability but a business with more than one owner is more likely to succeed than a business with one owner.  We still see many people try to open their own businesses and be sole proprietors. However, many of these businesses fail. We do not see many new corporations open. Partnerships open businesses often and they are more likely to succeed.

Competition

This week in economics we learned about the different forms of competition and business structures. I found the forms of competition pretty interesting. Perfect competition is the most competitive form. It has the most sellers, most freedom to enter and exit a market, the least amount of control of price, the most informed buyers, and standardized products. However, I don't believe that it is the best form of competition for most markets. I believe that most markets should have monopolistic competition. Monopolistic competition is similar to perfect competition because both have a lot of sellers, a lot of freedom to enter and exit a market, and little control of the price. Monopolistic competition however, has differentiated products. This means that producers make their products different from others so they can still make a profit. In perfect competition there is the same product offered by all and this means that the price will go down. The price will eventually drop so much that producers would not be making enough profit. Monopolistic competition still offers a lot of freedom to the buyers but it also has more benefit for the sellers as well.  The other forms of competition  are oligopoly and monopoly. They are less competitive and there are less sellers and the sellers have more control over the price. Competition is important in everyday economics because there are many of the forms present in the economy. All forms of competition have their benefits and disadvantages. The right type of competition has to be selected for the right market.

Supply

This week in Economics we learned about supply. Supply is the ability and the desire of the producer to sell a product. The law of supply says that when prices go down, quantity supplied goes down and when prices go up, quantity supplied goes up. Producers are motivated to increase supply by profit. They want to make more profit and so will supply more at a higher price. The supply curve is constantly sloping upwards unlike the demand curve. This is because producers want higher prices but consumers want lower prices. I think supply and demand are the main things that drive the economy. Consumers will demand more products at lower prices and producers will supply more products at higher prices. This relates to everyday life. Supply and demand constantly affect prices. Prices are either lowered or raised by the demand of consumers and the supply of producers.

Elasticity

This week in economics we continued learning about the relationship of price and quantity demanded. We further learned about elasticity of demand. We learned that you have to take the percentage change in quantity and divide it by the percentage change in price. Then if that number is less than one, the change is elastic. If it is greater than one it is elastic. We also learned of a few examples that represent elastic demand and inelastic demand. Insulin is inelastic because no matter the price the same amount of people who need it will buy it. Movie tickets are elastic. As the prices go up or down there is a big change in the amount of tickets sold. This is important to daily life. Many businesses look at elasticity to see how they should change their prices to yield the most revenue. They use the Total Revenue Test. They look at the quantity demanded at the original price and how much money was made and compare it to the quantity demanded at the new price and how much money was made. They then will choose the price that makes the most revenue.