Roanoke College Economics: Roanomics is here! Vol. 3, Iss. 1 - An Election da...

Roanoke College Economics: Roanomics is here! Vol. 3, Iss. 1 - An Election da...: Student Editor Kerry Murphy `13 and I hope that you enjoy our latest. Thank you to all contributors. ENJOY! Roanomics Vol.3, Iss. 1

critique of dying companies

while it may be true that some businesses such as blockbuster, myspace, and saab are slowly fading away and falling behind their competitors, i think that it could possibly work out that these businesses will make a rebound. To me blockbuster has the most realistic chance to make a rebound because of what it offers that other companies do not. Blockbuster is fading because of the rise of netflix and other companies that provide streaming video and unlimited movies for a low monthly fee. its my belief that eventually netflix will level off and blockbuster will make a comeback. just as online shopping grew in popularity and then declined because people enjoy being able to see the tangible item and have it with them all the time. even though it may be easier to just download the movie online, eventually people are going to long for the old days where they could go to a store and actually see and experience looking for a movie. blockbuster needs to hold on and keep surviving because eventuall they will experiece a comeback. as for now they need to spread out and focus on providing some of the internet services that their competition does but not go all the way into internet. people enjoy the tangible too much to stick with online anything for too long. if this theory were true, everything would be done online because its much simple and easier for people who are lazy and dont want to leave their house.

Critique on "Studios disarming cable in battle with Netflix"

The writer of this article is correct in believing that cable companies and online streaming sites are definitely substitutes of one another. It is true that as technology develops and more options are given when it comes to entertainment, the one with the easier access will dominate. Though I do have to critique on why the writer had to group Hulu and Netflix together. Netflix does have an online base but the main difference between the two is that Netflix charges a monthly price whereas Hulu is a completely free online streaming site. Even though cable companies, Hulu, Netflix, and many more are considered substitutes of one another, when it comes to the choice of money and free; the average consumer will often leans towards the free side. The writer was correct in stating Netflix is dominating the cable company with the amount of subscribers, but even though we all know what Netflix is, the writer never mentioned that Netflix only provides movies whereas cable companies provides movies and TV series.

Because of the differences in the output of the product each of these two companies provide, there will obviously be a difference in the number of subscriptions. Because in this generation, the majority of the population does not have leisure time to catch up on their favorite sitcom or TV series, movies are becoming more popular. Not everyone has the time to follow a series from beginning to the end which usually takes about half a year; a movie is much more convenient to watch during leisure because a person can begin and finish a movie in as little as two hours. None of these points were pointed out in the writings. The writer only mentioned that the cable companies were in fear of being pushed out by Netflix.

If the writer had done a comparison between cable companies and Netflix then cable companies and online sites such as Hulu, the article would’ve been more understandable. Because websites like Hulu are hosting TV episodes online free of charge for the public. Therefore not only are the cable providers competing against Netflix for the movie showings, but also Hulu and other sites for free access to their copyrighted materials. The government itself is able to regulate this behavior by copyright infringement, which has already been put into action, yet it is still being done. Many points like the ones that I have mentioned will make this a better blog. Though overall the writer did a good job of summarizing and using economic terms we were taugh in class, though the blog itself is shorter than expected.

-Tien Nguyen

"Apple Not Likely to Feel the Economic Chill” Critique

"Apple Not Likely to Feel the Economic Chill” Critique

From the blog title it is obvious that it will be discussing whether or not Apple will be successful or unsuccessful with the recent economic downfall. I completely agree that Apple will not be affected and will even flourish in our economic hardship. Apple not only produces iPods, but now they produce the Iphone. They have many different versions of the Iphone and the prices all vary. In society the Iphone is considered the best phone in the market by most. The demand is extremely high on the phone because every kid wants to have the phone that can call, play music, have Internet, and thousands of amazing applications. With the demand this high, Apple is constantly producing more and more of the iphone in accordance with the shutdown point. In the original blog it talked about how Apple is always aware of its outputs and demand curves, so they can know their production. Due to the diligence that Apple possess towards its inputs and outputs, and how they affect the profit, they are the most valuable brand on Earth! Apple is extremely smart with their marketing and always engages the consumers with sales on items. There was a deal where you could get an iphone for $99.00. They lowered the price because the demand was so high, and now the demand will eventually rise again due to the want for an Iphone and the reduction in price. Kids these days see celebrities with the Iphone and want the Iphone for a fashion statement more so than for a way of communication. Apples results speak alone, they doubled their earnings and sales from the most recent quarter by going up 83% from a year ago. A thing I found interesting is that 59% of those sales came from overseas. Apple has expanded itself worldwide, so if for whatever reason everyone in The United States of America stops buying from Apple it would not completely diminish the company, because they have consumers all over the world. The world would have to end for Apple to shutdown as a company. On top on the revenue that Apple receives from the iphone, they continue receiving revenue from selling ipods. The IPod touch was extremely popular when it first came out because it was solely touch screen. After being in the market for along period of time it wasn’t producing, as it was when it was brand new. Apple created a sale where when a senior in high school heading off to college buys a fairly expensive laptop; they get a free iPod touch. This is a way Apple continues to spread and profit from its products. Apple has the laptop that is pretty expensive that you normally wouldn’t buy on its own, but then there is a free iPod touch thrown into the deal. Now the consumer doesn’t think the laptop is that expensive after all. Every time the deal is made Apple is doubling its revenue because the cost of production is a lot cheaper from the store item set price. If Apple continues with fair prices and sales on their products with top of the line technology then, it makes complete sense for them to not be affected by our societies economic downfall.

Critique: Can Gold Investors Profit From Apocalypse 2012?

This was an excellent article. It was well written, easy to understand and actually very interesting. I have recently seen commercials that try to sell away their gold and promise that the price of it has risen steadily over the last few years. They show graphs and charts to show how well it has performed and promise that gold is showing signs of growing in value even more. I assumed this would be a poor man's attempt to invest. No well managed business would sell their gold at this point in time if they thought that in the near future it would be worth even more than it is today. But with the recession and a possible doomsday approaching, I can see how the demand of gold could sky-rocket in the coming years. In the year 2012, people will be uncertain if civilization as we know it will come to an end. Those who truly believe in the Apocalypse will have no idea what to expect if they survive. The American dollar could be reduced to a fire starter but gold will remain rare and beautiful no matter what occurs. Even if we are reduced to caveman times, the value of gold will survive the impact.

The author did a great job in constructing the article. He gave it a good foundation starting with how gold has been used throughout virtually all of mankind and points out that it has done considerably well over the past few years. He uses the Y2k epidemic and the Great Depression as references to the fact that disaster scares are a perfect launching point for an already well performing commodity. He shows his knowledge of economics by giving a supply and demand prediction that the future chaos may produce. I like the ending to the article in which the author warns us that if the Mayan calendar ends and the world continues to go on as normal the gold that has been hoarded will become far less valuable and closes with a little humor on how to avoid it.

I found one grammatical error and he got a little comma happy, both near the bottom of the second paragraph. He used some informal language in some parts of the article but it was in good taste. Other than that this was a very good blog and a good read for me.

Critique of RIM Profit Falls Below Estimates

http://kassensecon121.blogspot.com/search?updated-max=2011-06-20T10%3A25%3A00-07%3A00&max-results=7

http://www.nytimes.com/2011/06/17/technology/17rimm.html?_r=1&ref=business

  The article I would like to critique is “RIM Profit falls below estimates.”  I found this article to contain lots of interesting information, as well as useful financial statistics about the company Research in Motion, and its competitors.  This company is the producer of the original Smartphone, the Blackberry.  However, I disagree that RIM is a member of an oligopoly market with Apple and Google.  I disagree with this, not only because it’s illegal in the United States, but also because they do not sell similar products.

  It is true that they sell smart phones and while they share similar features, the software, hardware, functions, and features are vastly different.  This seems to be a monopolistically competitive market to me.  When an oligopoly occurs it is among firms that sell products that are much more similar such as food, cigarettes, and oil.  Also, because of the nature of oligopolies, collusion and price setting tends to occur among the firms.  I am no expert in the inside dealings of RIM, Apple, and Google, but I see no reason for Apple, the leading firm in Smartphone technology, to collude with RIM, who is currently falling behind in Smartphone sales. 

  While I disagree that these firms make up an oligopoly, I felt that this article was very appropriate considering the number of Smartphone users and the impacts that these companies may have on consumers as well as stockholders.  I found it very interesting that even though RIM made the original Smartphone, they have fallen behind competitors who entered the market late.  The volume of sales apple made with their ipad also surprised me.  3.27 million in the first quarter is a huge amount of revenue.  I found this so surprising because other companies have produced similar sized products long before apple decided to produce the ipad.  The fact that apple was able to sell so many suggests that their customers have an overwhelming since of brand loyalty.  Not only was apple able to create an entirely different market focused around the portable tablet, they were able to create demand from their current Apple computer and smartphone customers.  While their closest competitor, Google, may have recently sold more units of Smartphones than apple, no one has come close in the portable tablet market.

AUSTEN, IAN. "RIM Profit Falls Below Estimates - NYTimes.com." NY Times Advertisement. N.p., n.d. Web. 28 June 2011. <http://www.nytimes.com/2011/06/17/technology/17rimm.html?_r=1&ref=business>.

Critique: In Sickness and in Wealth

The article I chose to critique talks about the euro and how it will remain the main form of currency in the European Union. The European Union consists of 27 countries and all but Great Britain use the Euro. I agree with the author and his point that the Euro will not and should not change. Many countries have recently converted to the Euro, such as Spain, who changed their currency from the Peseta to the Euro between 1999 and 2002. Also, the European Union will be expanding within the next few years, and will then include countries such as Croatia and Turkey. I have personally dealt with the exchange rate of the Euro to the US Dollar, for the past year I have been studying and Spain, and along with Greece, their economy has experienced a downfall due to the change of currency. For example; in 1998 a loaf of bread in Spain would cost about 35 pesetas, once it changed to the euro, companies were not properly converting their prices, and they would charge what they felt sounded right. Once the Euro was the primary currency a loaf of bread would cost at least €1, which is equivalent to 166.38 pesetas, which meant people were paying four times more than they were and this did not just happen with bread but many other necessary goods. The citizens of Spain are just now getting adjusted to the Euro as well as many other countries, it would not be wise to change the currency again, I feel that it would lead to another economic downfall, because once again prices would change, and would not correspond with what they should be. Just because one country is struggling with the Euro does not mean that the currency for all the other members of the European Union should have to change. The Euro is a very convenient currency, especially because so many countries use or accept it. If the European Union changed the currency, it would be a hassle; it is not uncommon for Europeans to travel just as Americans do for work and if they had a different currency in each country, that would be terrible, it would be like having a different currency for each state in the US. The value of the Euro has also risen, when I first moved to Spain last August, the exchange rate was $1.356 for every Euro and it has now risen to $1.44 for every Euro. It seems that the Euro is doing just fine for the majority of Europe; it would not be wise to change it now.