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.

Economic Demand

This week in Econ Class we learned all about demand. We learned about the law of demand, demand schedule, and demand curve. We learned that in order to have demand, you have to have the desire to buy something and the ability to purchase something. The law of demand states that as the price of an item goes up, the quantity of that item will go down. Similarly, as the price of an item goes down, the quantity of that item will go up. We did some demand curves and schedules to prove this. I think that this basic principle is true but I feel that it is much more complex than this.  There are many factors that can effect the demand of a product or service.  There are things like consumer expectations, substitute goods, consumer taste, and market size that affect the demand of an item. I believe that income would be the biggest factor to affect demand. The more income a person has, the more willing a person would be to buy a product at a higher price. Income to me seems the most influential. I think the more money you have the more quantity you will buy also. The principle of  demand still relates to everyday buying and selling. The rule stays to true to every product or service that is sold even into today's market.

The Free Enterprise System and Entitlement Programs

This week in Econ we learned about the American Free Enterprise System. We learned about the role the government plays in the economy, what makes a public good, taxes, and government spending.  We learned about the different types of government spending. There is mandatory spending which is required by law and discretionary spending which has to be approved each year. Mandatory spending makes up more than 50% of the government's spending.  Some things that fall under mandatory spending are entitlement programs. Entitlement programs are programs that are funded by our tax dollars to people who meet a certain requirement to receive them. Some examples of entitlement programs are medicare, medicaid, and social security. These are a big cost in the budget each year because there is a set amount that the government has to pay on them. I personally believe that the requirements to receive these entitlement programs and others like them should be revised and made more strict. These programs are putting to much strain on the budget. We have had a huge deficit with our budget for years. This is still relevant today because many people advocate that we get rid of social security, medicaid, and medicare all together. They do not realize how lengthy a process it would be to get rid off these programs or what damage it may cause. However, I do agree that these programs need some re-advisement.

Will Walmart Come to Town?

    This week in our econ class, we have been trying to decide whether or not Walmart will be able to open up in Weserville. Part of this decision included voting on what businesses would come to Weserville, writing a petition to Walmart, and holding a Town Hall meeting to discuss the decision about Walmart. We also watched a video about Walmart and how it affects small towns like Weserville. I think Walmart is beneficial in most towns. Ashland was the small town featured in the video. A lot of people in the town did not want the Walmart. They felt it would destroy the small businesses within their town much like the people of Weserville believe. However, I believe that Walmart is beneficial to the town in the long run. It would create more business and it helps employs many people. Even though the jobs do not have the best wages or conditions it offers jobs to people who would not be able to get a job elsewhere because they lack certain skills. Walmart is still a big issue for many people today. Many people are trying to bring back small town businesses in opposition to Walmart. Many people are trying to bring attention to the shortcomings of Walmart that need to be fixed. I think more action does need to be taken against Walmart in order for the business to improve. Walmart still is the largest employer and right now there is a rising unemployment rate. I think that Walmart would benefit any economy right now. The pros of Walmart outweighs the cons.