Why Google's split will change the S&P 500 forever

http://www.cnbc.com/id/101535041
Posted Apr. 2, 2014

This articles discusses the ramifications of the Google stock split. Google effectively split their stocks on Wednesday. They are keeping the old Google shares and the new ones, making the S&P 500 have 501 components, even though it will only have 500 companies. The S&P 500 is a stock market index based on the capitalization of 500 large companies having common stock listed on NYSE or NASDAQ.
Google offered nonvoting shares with the voting shares that they had. This would then decrease the price of the shares because there were more and decreases the voting power of the shareholders. This prevents future disputes of power with investors who want the company to give more money. Class A shares can vote while Class C shares cannot, but both will be included in the S&P 500. This is something that has never happened before.

I think that this is groundbreaking for the future of the stock market. This is a good move on the part of Google so the company will not lose so much power as more and more people buy stock. There is a greater chance for growth and investment in their company. Our class is learning a bit about stocks through the Stock Market game and I am personally feeling the effects of the Google stock split. While I am losing a great deal of money during the split, I am hoping that I will be making money in the long run. Real investors will feel real effects from this decision. We, as a class can learn from the decisions of companies in the stock market how to respond. Real investors are also swayed in their decisions by the choice of companies like Google to make changes.

Works Cited

           "Google THIS!" Suzanne Evans. N.p., n.d. Web. 11 Apr. 2014.

Rosenburg, Alex. "Why Google's Split Will Change the S&P 500 Forever." CNBC.com. N.p., n.d. Web. 13 Apr. 2014.

Monopolies in a Market Economy

This week in Economics was all about competition. There are four types of competition: perfect competition, monopolistic competition, oligopolies, and monopolies. Perfect competition and monopolies are on opposite ends of the spectrum. Perfect competition has many sellers and more freedom to enter and exit the market. The buyers have control of the price of the product in perfect competition and sellers have control over the price of the product in a monopoly. There are 4 types of monopolies: natural, governmental, technological, and geographical.
I found that the different types of monopolies provided a new perspective on them. We discussed how each monopoly can be helpful. The idea that a natural monopoly can actually decrease the price of a product was introduced. We also talked about how the government has monopolies on certain goods and services because they are not profitable for private enterprise, but they are necessary. We also found out that there are technological monopolies because they have a patent that lasts 20 years. When a business is formed far away from any business that offers that same good, they have a monopoly on that product. These monopolies all have different reasons for forming and they can have either a negative or a positive effect on the economy.
The concept of these monopolies is very important because people can understand whether or not the monopoly is either good or bad for the economy. The knowledge that we gained this week gives us a greater understanding of the business world. This helps us understand why the government does or does not work to fight a monopoly. The help or hurt that the monopoly can cause is essential to understand in the future if we are ever to start a business so that we understand how to make the greatest price while getting the greatest profit.

Works Cited

"Russian Election Monopoly Board." The Poke. Web. 04 Apr. 2014.

Reflection on Scooter Supply

So this week in Weserville was all about supply. We learned about supply curves and the different factors that might affect supply. Supply is simply the willingness and ability of a producer to offer a good or service for sale. Producers a driven by profit motive so the higher a price is, they more they will want to sell of that item, but the lower the price, the less they will want to sell. This is what makes price and supply have a direct relationship. If any other factor besides price is changed, then the whole supply curve moves. Factors that can shift the supply curve are input costs, labor, producer expectations, technology, government actions, and the number pr producers. Any change in these results in a shift of the graph.
Everyone got into groups this week and developed a scooter that they planned to produce. The scooter needed to have all the features and everyone needed to find a reasonable cost to produce the scooter. Then, we had to decide the amount of profit we wanted to make and the from there we could determine the price by adding the cost and the profit. We could clearly see on a supply curve of our scooter that we developed, that the greater the price the scooter was sold, the more scooters we wanted to sell. The quantity that we wanted to sell was only increased when we were told that new technology made our engines easier to produce. This means that our curve shifted so that we were more willing to sell our product at lower prices than before. The curve shifted down and to the right to show that more was being produced at a lower price.
I personally found the concept of supply very interesting because it answers many of the fundamental questions I have about how the economy works. Once the concepts of supply and demand are understood, one can move on to more complicated features of the subject. Supply and demand are then used to find the equilibrium point. The simple concept of supply becomes something so much more important. I feel that the scooter example that we all did helped greatly to visualize many of the concepts that we were learning. The curves were also easier to understand when the product was my own and I was to one seeking a profit. Supply is so important to understand moving ahead not only in this class, but also in life. In understanding supply, we can understand why it is that companies will charge a certain price. We can also be prepared if we ever go into business by knowing that we need to be conscious of the amount of profit we want to make so we increase the price. The balance of supply and demand is how the economy works with the consumer and producers interacting.

Reflection on Advertising Weserville

This week in Personal Finance and Economics, we formed groups that made advertisement campaigns to draw tourists into Weserville. We considered six factors that affect demand: income, consumer tastes, consumer expectations, substitute goods, complementary goods, and market size. These are all ideas that pervaded our advertisement campaigns. We had to make a newspaper ad, a radio ad, and a TV ad. My group found that the small town charm would appeal to consumer tastes. We also thought that the fact that it is a small town with lower prices than big cities, that tourists would not feel as much of a strain on their budget.

The other attractions in Weserville made for great points to increase the market size. Our ads proposed opportunities that would attract people of different backgrounds. There is a Walmart coming as well as a YMCA, McWeser's, and Bass Pro already in Weserville. We also wanted to appeal strongly to consumer tastes by making people aware of the stunning wilderness that surrounds Weserville. The beauty that can be found in Weserville is an amazing point to bring to potential tourists. This would attract both those who seek adventure hiking and those who seek peace in the quiet setting. The advertisement campaigns we made really demonstrated how the factors that can change demand are what guides advertising and how many of the interactions in the world happen.

Demand is a strong influence on many of the occurrences that happen in the economy as well as the rest of the world. If people cannot or do not want to buy something the demand goes down and in knowing the factors that affect it helps to understand what is happening. The concept of demand is something that provides a building block for many future concepts. If someone does not understand demand, they will not understand how the pricing of items works. They will not understand how the quantity of a particular item's production is determined. Demand is a constant and integral part of life and the importance of it cannot be understated.

Works Cited

"Ricketts Glen State Park - Google Search." Ricketts Glen State Park - Google Search. N.p., n.d. Web. 13 Mar. 2014.

The US should stop squirming and put sanctions on Russia

http://www.theguardian.com/commentisfree/2014/mar/05/us-should-put-sanctions-on-russia

Recent events have seen Russia making bold moves in Ukraine. This article pushes for the U.S. to do something about Russia coming into Ukraine on the grounds that they have Russian citizens living there as the minority. The article thinks that the Obama administration is making strides to do something about the withdrawal of Russia, but that it is not enough. It claims that putting sanctions on Russia are long overdue. The article thinks that Europe and the U.S. have been passive for long enough and that the recent turn of events prove that this is unwise.
I think very strongly that the U.S. should be making preemptive decisions. This could lead to something much more difficult to deal with if it is not handled now. The U.S. would just be waiting for a larger problem to present itself. I personally think that the government is being a lame duck administration as usual and needs to pull itself together to make sure that Russia does not cause too many problems with foreign affairs.
I think that this affects what we discuss in class because we talk about the government's role in the economy. We pay taxes for government officials to do their job among other things. If they are not doing anything, they could be leading to future problems with our national defense. We will appear as a country that is willing to sit by and do nothing. As an informed citizen after learning more about the role of government, I know that public goods is one of the things that the government provides, but how can a person expect the government to provide public goods when the nation is worried about what it will do about the national defense.

Works Cited

"Russian Lawmakers Okay Invasion, Ukraine Readies for Combat." Www.JPost.com. N.p., n.d. Web. 07 Mar. 2014.

Reflection on Tax Bases

There are three different types of tax bases: proportional tax, progressive tax, and regressive tax. With a proportional tax, everyone would pay the same tax percentage. With a progressive tax, those who earn less money would pay a smaller percentage for their taxes while those who earn more would pay a higher percentage for their taxes. On the other hand, with a regressive tax, those who earn less have to pay a higher percentage while those who earn more get to pay a smaller percentage.
The town of Weserville took the concept of these tax bases and had sample groups of people from the town each pay taxes with the different types of tax bases. The class learned that some tax bases are more fair than other, although many people still felt differently over which one was the most fair. When there was a proportional tax, people were slightly irritated that the tax did not make much of a dent in the money of the rich. When there was a progressive tax, the poor were happier, but the rich were a little unhappy they needed to pay more.  The citizens of Weserville were pretty upset when there was a regressive tax because the poor were almost broke and the rich barely felt the tax.
I flat out think that the regressive tax is completely unfair because the poor have to give more money that means more to them than the rich. The rich have more money overall to give so even if they are paying more, they are not giving money that mean as much to them as the poor. I personally am torn because the proportional tax is more fair to the rich and not completely unreasonable with everyone paying the same tax percentage. I also think that the progressive tax is fair because it helps the poor more and also provides more money by taking a greater percentage from those who have more to give. The tax bases are very different, but I think it can be clearly seen that the regressive tax is far more unfair than the proportional and progressive tax.

                                                                   Works Cited

"Lower Mac News & Issues." Lower Mac News Issues. N.p., n.d. Web. 27 Feb. 2014.

Don’t Sell Cheap U.S. Coal to Asia

http://www.nytimes.com/2014/02/13/opinion/dont-sell-cheap-us-coal-to-asia.html?ref=economy


In this article from The New York Times, the issue of selling coal that is being subsidized to Asia is confronted. Cherry Point, near Seattle, Washington, is being used by corporations to build a terminal that will "export nearly 50 million metric tons of coal to Asia annually." The business will provide jobs, but at a cost. There would be an increase in pollution as a direct result and on a national level, there are problems because the land that the government is leasing to the corporations is valuable. The government is leasing out land for corporations that are not even seeking out the American buyer, but instead China, Japan, and Korea. These countries will be able to produce more with the increase in coal imports, but the U.S. benefits little because these corporations are giving so little back to the federal government. Taxpayers are losing out because the government is charging so little for the corporations to use valuable coal strips. The issue of pollution is also heated and an effort to use clean energy is strongly debated. Asia really wants any coal they can have and they do not care about the negative effects of pollution. The article thinks a good first step is "a moratorium on new coal leases."
I think two things on this subject. I believe that the government should not be leasing the land for corporations to mine coal so cheaply. The taxpayers are not being treated fairly in this way. The government is firstly leasing the land cheaply and they are spending tax dollars to subsidize the mining. This is not fair because the government is wasting money on a business that will not benefit U.S. citizens. Only the corporations will see any real profit from the coal.  For these reasons I support the government making the cost for the corporations using federal lands for private use higher. Another issue that I feel strongly about is the pollution. I think that Asia needs to work on their pollution regulations because they are ruining air quality for everyone. Asia has to find clean energy and promote that more. The reduction of the burning coal would improve the issue of pollution that Asia finds itself in right now.
I think this will be another step to molding how businesses and governments work together. Neither side should cave to another and should have a firm position. They should compromise and be fair to each other or else there will be situations such as this one in which the corporations are getting the better deal. I think this will also affect future positions on pollution policies in government. If governments continue to disregard the effects of their decisions on the environment, they will run into some serious problems. I think that selling cheap coal to Asia needs to be fixed and a new solution should be found, for example increasing the cost of leases to use the federal land for coal mining.