Priyanka's Econ Blog

Quarter 1 Reflection October 23, 2009

Filed under: Section 2 — priyanka821 @ 1:39 am


Wow the quarter is over ;). I have learned that the biggest challenge for me so far this year is drawing the diagrams. At first it was really hard and I got confused between my supply and demand curves, but as the quarter went on and by the time of the second test I had a good grip on it. The confusing part about drawing the diagrams was understanding which curve shifted and why. With the help of acronyms I learned the determinants of supply and demand. The interactive quizzes on Moodle have really helped me reinforce what we learn in class and read of the Triple A Text Book. Though the blogs are useful and easy to work with, I don’t think they have changed my learning much. The only plus point of the blog is that I can share my work with my friends, and also comment or read their blogs. Though blogs haven’t affected my capacity of learning, I think it is more fun than writing in a Note book because we can add pictures and access information easily :).


Thailand’s Rice Crop October 21, 2009

Filed under: Uncategorized — priyanka821 @ 3:49 am

Picture 2

Along with DVDs, bags, shoes and clothes, Thailand is known for its Jasmine rice. Thailand is the top exporter of rice in the world, but unfortunately the government has messed up. When Thaksin put in a price floor, he put it up too high up and to solve this mess, the rice scheme allows the farmers to sell their rice to the government for a guaranteed price. The price floor means the price that the government is willing to buy rice for (E1) is much higher than the equilibrium price (E) for a lower quantity(P1). Since farmers want to profit as much as they can, they are only willing to sell to the government. But, what will the government will do with all the surplus of rice stored away? If they sell the rice,  the equilibrium price down will move down, as it is a surplus, and the farmers will not be happy. The government also has to pay for storing the rice. There is corruption suggesting that the government only buys rice from the central plains leaving the farmers of the north-east miserable and hungry. The reason for this corruption is mainly because of the low investment due to weather conditions in north-east. The central plains are irrigated by the  Chaophraya River, where as the conditions in the north-east tend to fluctuate between  drought and flooding. Thailand must find a way to save its farmers from famine and corruption, by giving all farmers equal opportunity.


Data Response Reflection October 20, 2009

Filed under: Section 2 — priyanka821 @ 11:52 pm


Today I got my result for the Data Response Test. I am quite satisfied with my grade, but in order to get a better grade, I need to identify the concepts. I realized that I explained the concepts but did not  identify them.  The biggest part I missed in the ‘Evaluate’ section was to mention that Real Ale can be a Veblen good: as price goes up, the demand does too, a lot like branded shoes and bags. I didn’t consider beer  a Veblen good because majority of the population is not alcoholic and would stop buying real ale if the price rose by too much.


Versace Through With Japan October 16, 2009

Filed under: Section 2 — priyanka821 @ 2:22 am


Gianni Versace says good bye to his last Versace store in Tokyo ,  an evident sign of the contraction in the luxury market. Tokyo, being of the world’s fashion capital has obviously been hard hit with the global economic recession. Something you probably didn’t know is that in Japan, leather hand bags and accessories create a larger profit margin than clothes. In the 1990s, the Japanese had heavy wallets, but recently they seem to be lighter.

Picture 1

With a decrease in real income, the demand for luxury goods, such as Versace bags, has decreased drastically. Decrease in quantity demanded, Q to Q1 causes a decrease in price, P to P1 thus a new Equilibrium price (E to E1). Though Versace can be considered a Veblen good by many, the world-wide recession has hit the consumers hard, not allowing them to sustain their luxurious life style. The elastic market  for luxury goods has decreased by 10% this year in Japan. That is a HUGE decrease.  Contrastingly, China’s luxury good market has increased by 7% in the recent years. Versace has opened 20 new stores in China. Many brands including Loius Vuitton are beginning to re-evaluate their presence in Japan.

Looks like we won’t be living in a country with a fashion capital soon…


Protect Polar Bears October 9, 2009

Filed under: Section 2 — priyanka821 @ 1:44 am


The Arctic circle has about 6% of the world’s oils, and is the last oil reserve found. Most of it is blocked and protected by the rigid ice surface of the Arctic. Due to human’s reckless use of the world resources, and mindless carbon emissions, the ice is melting rapidly. “With global warming causing the polar ice pack to break up and retreat, it has become possible to sail ships through the Northwest Passage for the first time in recorded human history(Nelder, 2009).” Poor polar bears are losing their habitat, and not to mention their prey,  due to human’s rape of natural resources for their own benefits.

Should this new discovery of oil motivate us to harvest oil so that it is more economical, or concern us about the ethical implications of the destruction of the life in the Arctic?

For more information:


Artic: Oil and Gas


‘Nestle to stop milk Mugabe Deal’ October 2, 2009

Filed under: Section 2 — priyanka821 @ 2:12 am


To prevent Zimbabwe’s dairy industry from collapsing, Nestle had bought milk from Grace Mugabe’s Gushungo Dairy Estate. Nestle, a Swiss based firm declared that its temporary deal has come to an end. As Nestle stops receiving milk from the farms, the Dairy Board of Zimbabwe will resume buying from the Gushungo estate and seven other farms.

“In light of our long-term commitment to Zimbabwe, we bought this milk on a temporary basis. This helped prevent a further deterioration in food supplies in Zimbabwe at that time,” a statement from Nestle corporate-head verifies.

Zimbabwe had been a major supplier of food to neighboring countries, but as the white-owned farms were seized and given to native people, the country’s agriculture based economy collapsed. Grace Mugabe and Robert Mugabe face sanctions from the United States and European Union, however, since Nestle is based in Switzerland, the sanctions do not apply.

For further details visit:


Naked Economics

Filed under: Section 2 — priyanka821 @ 1:40 am


From flights to shoes  it is clear that allocation of resources is heavily dependent on the price system. In Naked Economics, Chalres Wheelan writes, “Markets are consistent with human nature and therefore wildly successful at motivating us to reach our potential (Weehlam, 2002, p. 18).” This most definitely true and corroborated by the entire market system; suppliers compete amongst themselves to produce goods at a low price and sell at the maximum price consumers are willing to pay for them. Another important point Weehlam makes, is that the  market doesn’t provide  what we need, rather it provides what people want to buy. The only reason why Jimmy Choo can get away with pricing shoes at $500 is because people want to buy them.

The market system has the ability to “self-correct” unlike communism, where the prices were set by the government.  In the liberal market, if demand rises, prices rise too. Charles Wheelan has effectively communicated concepts of the price system through real world examples.