Please leave your comments about our blog and the articles you have read here, if you are not a blogger. Thank you very much! :)
Members
Zerge Zandueta
20 years old and counting, this dude loves sports and videogames. he hopes to contribute something good to society one day and make other people happy
"Humanity is the virtue of a woman, generosity that of a man." - Adam Smith
Kathryn Pua
this perky girl never fails to brighten up anyone's day. very friendly, approachable and outgoing, this person enjoys going out with her barkada, though an 'introvert' at heart
"And very often the influence exerted on a person's character by the amount of his income is hardly less, if it is less, than that exerted by the way in which it is earned." - Alfred Marshall
Bea Lim
they say silent water runs deep. this girl may seem quiet at first, but once you get to know her, you're in for loads of fun
"The friend of the present order of things condemns all political speculations in the gross." - Thomas Malthus
Raymond Lee
a 23 year old korean who makes all the girls go "ga-ga." 'nuff said. ;)
"Entrepreneurial profit is the expression of the value of what the entrepreneur contributes to production." - Joseph A. Schumpeter
Carlo Medina
hypnotic on the hardcourt, this basketball icon is not only good at putting 2 on the board but 3 on the report card
"In the long run we are all dead." - John Maynard Keynes
Learning Corner
Eco Lesson of The Week : Determinants of Supply and Demand
The intersection of the supply (upward sloping) and demand (downward sloping) curves is called the equilibrium pt. This point represents the price at which goods are sold and purchased at the market. However,
this equilibrium point may change depending on a shift by the curves. The curves may shift one at a time or at the same time both either upwards or downwards. An upward
shift by either curve would raise the price, while a downward shift would lower it.
What we want to know this week is what causes these shifts in supply and demand, called their determinants.
The Determinants of Supply
1. Costs of production
2. Profitability of alternate goods in supply
3. Natural occurences
4. Expectations of future prices
5. Profitability of goods in joint supply
6. The number of sellers
The Determinants of Demand
1. Tastes, fashions, preferences
2. The number and price of related goods
3. Income
4. Expectation of future prices
5. Population
By: Clay Bennet (The Christian Science Monitor, Boston)
By: Thomas Boldt (The Calgary Sun, Alberta, Canada)
Friday, October 12, 2007
Time to Place your Bets!
Time to Place your Bets! by Kathryn Pua
UAAP season has come and gone and once again I'm reminded of an issue usually swept under the rug-- betting and gambling on sports. People from all ages and all walks of life do it-- they place their bets on lotteries, casinos, horse races, cock fights, dog fights, etc. Indeed, there's definitely the economics of gambling! There's the hush-hush aspect of gambling and there's the out-in-the-open types. Such out-in-the-open, "legal" venues for gambling draw in so much cash daily that they truly are worth the attention. Speaking of which, I recently came upon an article about the world's biggest casino located in Macau. The article "Macau Wow" talks about the gambling industry in Macau and particularly the newly opened Venetian Macau. The world's biggest casino cost a fortune to build ($1.8 billion to $2.4 billion for construction costs alone, according to the article) and a lot more to operate (needing "16,000 employees and enough power for 300,000 homes").
The article also talks about how the local monopoly was penetrated by the Las Vegas operators, hence decreasing the customers of Macau's old casinos. As I've learned, real casinos are usually monopolies or oligopolies, with very few market players-- as explained by the huge capital or funds, requirements and efforts needed to set one up and keep it in operation. According to my research, in order to open up a casino, one needs to obtain licenses to operate, gather investors, accumulate funds, set up the tables and machines, tackle the construction, etc. Add to that the perennial dealings with government agencies who check up on the casino's operations. These barriers to entry are difficult enough to tackle and if you add to that a government granted monopoly, you have an almost impenetrable market. Particularly in Macau, the local casinos used to be secure through a government-protected monopoly. Hence, as I've learned, local Macau operators probably had a huge market power. But it opened up the industry to Las Vegas operators and now local Macau casinos are forced to compete in a deadly market, especially against the newly opened Venetian Macau, which will surely draw in not only tourists but also locals. Since firms seek profit maximization, more foreigners have since then penetrated the market-- realizing its profitability and clawing at each other just to have a bigger share of the pie.
Aware of the industry's situation, however, Chinese authorities have intervened. They are now, according to the article, stricter about visas. This political intervention may be a hindrance to strategic planning, according to "Macau Wow" but the crowd turn-outs can very well assure their success.
Although the local casinos no longer have a monopoly over the market, it doesn't mean that they have to drop out of the race. As our lessons have taught us, firms in oligopolistic settings can still make positive economic profits in the long run. That means that if local casinos play their cards right and compete in the best possible strategy, they don't have to come out as losers in the industry. As I've learned, there many possible models for oligopolies and many possible ways to act or react in the market. Although at a disadvantage now, local casinos should take a risk and try something novel. Perhaps price competition can be an answer, perhaps they could persuade more government intervention, perhaps they could invent a new kind of game or maybe other methods combined can be the solution to their problems-- they'll never know until they try. They could use the major ace up their sleeves-- experience in the local gambling industry to predict customer's preferences and respond to their needs or create a new need altogether matching the local customs and culture. A few losses shouldn't leave their spirits daunted-- instead, they should respond bravely to the challenges mounted by the foreign casinos!
Brings new meaning to the label of macau as the Las Vegas of Asia. If they were to survive the initial rise in the competitive intensity within the market, they can stabalize their profits in the long run.
Name: Leontief Lovers Home: Manila, Philippines About Me: people wonder why we are called leontief lovers. it's simple, in eco, there is a canonical form of utilty and production function called Leontief Preferences / Technologies. In a two good/input world, you always would need the other good/input in order to remain satisfied/have the ability to produce... in other words, you will never substitute one good for another, you need to consume/use both goods at a fixed proportion at the same time... LIKEWISE, in our blog, WE WILL NEVER TRADE NOR SUBSTITUTE ECO FOR ANOTHER! See my complete profile
An economics professor and a student were strolling through the campus.
"Look," the student cried, "there's a $100 bill on the path!"
"No, you are mistaken," the wiser head replied. "That cannot be. If there were actually a $100 bill, someone would have picked it up."
Feudalism: You have two cows. Your lord takes some of the milk. Socialism: You have two cows. State takes one and gives it to someone else. Communism: You have two cows. State takes both of them and gives you as much milk as you need. Bureaucratic Communism: You have two cows. State takes both of them and gives you as much milk as the regulations say you should need. Bureaucracy: You have two cows. State regulates what you can feed them and when you can milk them. Then it pays you not to milk them. After that it takes both cows, shoots one, milks the other and pours the milk down the drain. Then it requires you to fill out forms accounting for the missing cows. Fascism: You have two cows. State takes both of them and sells you milk. Nazism: You have two cows. State takes both of them and shoots you. Liberalism: You have two cows. State dosen't care whether you exist, let alone your cows. Capitalism: You have two cows. You sell one and buy a bull.
PRICE IS IMPORTANT! (disclaimer: may be a little off-color)
"My Dear, would you go to bed with me for a million dollars?"
"Well, yes, I guess I would."
"How about $100?"
"What kind of person do you think I am?"
"My Dear, we have already established that. We are merely haggling over the price!"
Brings new meaning to the label of macau as the Las Vegas of Asia. If they were to survive the initial rise in the competitive intensity within the market, they can stabalize their profits in the long run.