08S6P :D

友谊万岁! <3

2009-10-23T22:57:00.013+08:00

Something my cousin emailed me recently:

给亲爱的你，
谢谢你曾经陪伴着我..~
谢谢你做我的朋友..^^
谢谢你让我的回忆更美满..
希望我们以后还能继续联络哦..
记得永远都不要忘记我哦....

以前，我们曾经一起吵架过..
以前，我们曾经一起闹纠纷过...
以前，我们曾经一起笑过...
以前，我们曾经一起分享过..
以前，我们曾经一起被罚过..
以前，我们曾经一起游戏过..
以前，我们曾经一起嬉戏过..
以前，我们曾经一起读书过..
以前，我们曾经一起活动过..
以前，我们曾经一起发神经过..
以前，我们曾经一起翘课过...
以前，我们曾经一起唱歌过..
以前，我们曾经一起表演过..
以前，我们曾经一起用餐过..
以前，我们曾经一起忙碌过...
以前，我们曾经一起做弊过..
以前，我们曾经互相挺立对方过..
以前，我们曾经互相包容过..

或许在这些事情当中...我们有些事情是没有一起经历过的...
可是我们还是很要好的朋友哦...
这份情谊是一生一世的...
许许多多的以前，许许多多的回忆..
如今将挂上一个美丽的句号...
这些回忆让我们的童年添加了色彩..
让我们都经过快乐，悲伤，忧虑，害怕...
期盼着要到的将来，
等待着要到的未来..

大家的友情，
永远都没有句号，
大家的友情，
永远都没有污点..
把每一份真诚的友谊，
都藏在心中..
你是我的朋友，我希望你知道这个是真的..
无论发生什么事，我都会站在你这里;
当你需要我的时候，我一定会出现,
给你援手，助你一臂..
有需要的时候尽管来找我..
不因为为什么,
只因为我们是朋友..
虽然我们毕业了，分离了.
不希望你忘掉我..
不希望你憎恨我..
只希望你记住我~
一定要记住哦！
希望我们友谊万岁~
有缘的话，咱们一定会再相遇..
相信我！我们一定会再相遇的~

try to zoom in if the words are too small

Hello all! Grad night was awesome!(:
Thank you all for being so enthusiastic throughout the whole ceremony with all the screamings(cheerings) :D
We are the BEST CLASS ever woohoo! (you can't deny that haha)
I am sure that grad night was memorable with all the photo-takings. (:

一個普通的朋友對你的羅曼史感到好奇。一個真正的朋友可以威脅你說出來。(HAHA so are we all good friends :p)

一個普通的朋友期望你永遠在他身邊陪他。一個真正的朋友期望他能永遠在他身邊陪你(MUSHY)

I apologise for the chim chim chinese words + mushiness in this post!
A LEVELS IN TWO WEEKS TIME!
everyone work hard!! after that we can play all we want! :P
P.S: do upload class photos taken on grad night on this blog(:

-anon

Thoughts on our class

2009-10-23T12:32:00.000+08:00

My practical self told me that I should be studying, not doing other stuff. But if I don't ever blog these things down, I may never get a chance to share my feelings with the class again, or the feeling might be different already in future

I echo with much of what Boon Pin and Yi Chen have said.

冰冻三尺非一日之寒. We bemoan how unbonded our class is. In my opinion, for many relationships, things have to strike off from a very good start right at the beginning, so as to pave way for lesser chances of awkwardness in future. There could have been less of a common identity right at the beginning of J1, which didn't help to break much of the ice between us, and which thus snowballed into our "lack of bondedness" today. If I could turn back time, I may feel a stronger urge to establish better relationships with everyone else. I know it's easy to say so, but I would have tried to make the effort if time could reverse.

On a lighter note, I felt happy last night. Really. It seemed, that being the "final night" it appeared to be last night, it bore much significance, and many of us put down our usual barriers and took pictures enthusiastically together. People never seem to realize that things would be gone until its too late, myself included. Soon, many of us would walk towards different paths, even for the guys, since we may not enter the same bunks. And yet I haven't entirely got to know everyone else well enough. For some of us, we've usually stuck quite closely with our own cliques. Now that the year is coming to an end, I got a bit sentimental. Things would have been a lot different if we had realized that feeling a long time ago.

I do agree with BP YC on the fact that captain's ball gave us some of that sense of common identity. Yeah, I had been very pragmatic in ponning all of the pe lessons during the pre-prelim period so as to make time for studies, but it seemed that I had lost out a bit on these valuable common experiences. Never mind that. After our prelims, I wanted to be less pragmatic, and did played the few games that the girls spontaneously organized. And I appreciate them for doing so. It was one of the nicest experiences that I had with 6P.

Thank you to you girls who initiated the games

In our lives, we forge friendships with many , but there will be some whom you will cherish much much more for life. In the past 2 years, I am very grateful for having made great friends in this class. Yo alex boonpin yichen zhijie zhonghong especially. Shan't elaborate. Very gaowei to do that between guys. But you have been great friends, really. I'll remember alex's suggestion, "once a year". But nah thats too few man...

To the rest of the class...
to benjamin, the one who's exceptionally knowledgeable in history, especially that of china
to bing xiang and jason the loudmouths in the class who are also very funny people
to boyang who can go be a hairstylist
to the super high debbie, melinda, maychew, sherry (and who always calls me ah giao) last night
to the 姐妹帮 of Renice Shuli Jasmine Yiling
and the rest of my PW groupmates Derrick, Huiming, Xueying
to fellow network friend Ziqin
to the German topscorer Shanni, and her fellow best friend in class Shimin, and H3, VBC friend Weichang
and how can I ever forget kungfu master duny ang, who ALWAYS tries to get frisky with me walao, but who no doubt has brought laughter to my time in 6P
All the best for the final hurdle of our JC academic life. To the girls, hope that you all can get into the uni and the course of your choice too. For some of the guys, c each other in tekong ar!

And if the class still wants to play captain's ball or anything, I'm definitely on for it :)

Yu Zheng

Some personal thoughts.

2009-09-02T21:23:00.003+08:00

As you all probably know, I am not one to freely express my thoughts or emotions. However, after reading the recent posts on the class blog, something told me to write this down. Boon Pin has already written down some of the uncomfortable truths of our class, and JC life as a whole. As such, I shall not post on a sombre note.

Before JC life, you would probably call me an extremely introverted person. Much more introverted than now, at the very least. I usually spent my time in a combination of studying and gaming, sometimes meeting up with primary school classmates or the rare occasion of class outings. But that was basically it.

Now, such a lifestyle seems so remote to me. I am one who builds defenses, constantly (or overly) cautious of others, and it takes a long time for me to build trust in other people. However, after casting my thoughts on my JC life, I have realised that I actually trust most, if not all, people in our class. Unknowingly, as the end of JC life draws near, and looking back at the end of secondary school, I am a different person than I was before.

Ironically, as Boon Pin mentioned, the events which bonded our class together were not JTS, STJ, nor were they GEMS or class outings. The events were such that we were separated from our usual group of friends, such as PE (captain's ball), various group assignments and Project Work. Yes, project work. It was one of the subjects we abhorred, and even Boon Pin said cynically "PW is my favourite subject" repeatedly over Year 1 (although this changed to GP in Year 2). However, looking back, I have enjoyed the experience of working with different combinations of classmates. No matter what the combination, I have always found that we work well together to somehow finish the job. Is this not evidence of our ability to laugh and work together? Perhaps Boon Pin would say otherwise, but I believe that we are, at the very least, able to "co-exist" effectively in the class. Not because we liked one another from the start, but because it was a necessity to work together to produce results. And that is what is common between camps, captain's ball, and PW, and that is what brought us together.

On the "last day" of school, I could tell that the atmosphere was tense to some extent in our class, for instance the sudden urge to take pictures with the teachers together as a class, however other than that, it was just like any other day. But what's wrong with that? To live the last day as a class together just like any other normal school day - I believe that other classes were unable to do that. The sense of familiarity of the usual tutorials, lectures and whatnot, and even the fact that the queue at the canteen was just as long... Such ordinary, daily happenings are just as significant if we pause a moment to think about the stuff we have been doing over the past 1.5 years. But that's not the point. The point is that, even when our time is over, we remember our class not because of the last day of school, but because of all the fun (or otherwise) stuff we have done together on a daily basis. As such, to continue moving on as usual, even on the last day of school, felt comfortable to me. For now, I guess we should focus on the end result of why we came here: to do well in A levels. Pragmatic as it may seem, and contrary to belief, we still have a month after A levels to play captain's ball :). For now, whether we like it or not, our time together as a class is over for now, and neither tears nor strong emotions can change this fact, for now what our parents and teachers hope for us is to focus and work hard, and I'm sure that we all want to achieve what we set out to achieve. Group study sessions at the reading room or random classrooms can easily resolve our want to see classmates. Even today, I could see Yu Zheng consulting Ms. Claire for GP, Shimin and Sherry consulting Mr. Tan and Mr. Remedios respectively. How difficult can a class study session be?

To be frank, I immensely enjoyed my life in JC. Even though I may have seemed emotionless and blank most of the time, you can bet that I enjoyed the company of our class. From the start of Year 1, you could say that I was one of the few who actually felt, at the time, happier in my new class than our orientation groups. Maybe it's just me, but at the very least I feel bonded to our class, and I'm thankful for the fact that stuff like PE lessons, PW, and even VBC has brought me closer to fellow classmates. Even if we go our separate ways, we have a shared memory as a class, and for that it is enough for me to remember those happy times we spent. It doesn't matter whether we spent some of our time in our cliques, or whether there were awkward moments at times. Although I accept the fact that we could have done better as a class, perhaps with more PE lessons like the recent ones, I can feel the general attachment within the class. I would probably use a model of chemistry to describe this. Take an example of a compound with numerous different atoms(e.g. alloy of aluminium or some metal). Granted, some atoms will innately be more attached to each other, but the compound generally stays strong together. That is my impression of our class, and thanks guys (and gals) for all those memories.

In essence... Nah, just kidding. I'm sure you can come to your own conclusion. (:

-yichen

P.S. Why do people post anonymously? I don't see the point -.-

離別

2009-08-31T00:18:00.003+08:00

On the last day of school,
I sat at the class bench in the morning, like any other mornings, yet knowing that it could be the last time.
I mugged through maths and chem tutorials, trying not to look at Mrs tham and Mr yee so that I wouldn't start tearing.
I sat through econs lecture, trying to hold back my tears as I read the tutors' dedications.
I took a last glimpse at the class, to save it as a final memory, just before I left the classroom after econs tutorial. But I tried not to cry.
However, I broke down after reading Boon Pin's post. And I woke up with puffy eyes the next morning >.<

2 years is really a short time. Everything ended even before it really started. and it is time to let go of everything to start all over again. The class has given me many wonderful memories, be it the uneventful and mundane lectures and tutorials, or the interesting PE lessons.

Many said that sec sch life is the most unforgettable of all. I beg to differ, due to the fact that memories are created and treasured by us. So similarly, jc life can be fun too.
We may think that hey, the class hasn't accomplished much together. But I feel that it is the simple things that forms part of our hc memories.
-Memories are not meant to be compared, but to be relished.

I will miss the times that we:
1. have lunch together as a class
2. play captain’s ball together
3. have swimming lessons together ( although it wasn’t very fun haha)
4. won the econs blog competition
5. have physics tutorials in the SRC
6. project work!!!
7. all the teasings haha
7 is a good number to stop. (: But there are so many things that I can list down.

The future holds many possibilities for us. The guys are going NS. The girls going Uni. Some of us may go overseas to study. It could be a long time before we will ever see each other again or maybe never at all. Who knows?
There are so much things I want to say, yet do not have the courage to do so.
<3 you guys(: and thank you!

Maybe ten years down the road, I will visit the blog again, to have rediscovered these wonderful memories.

To those who are reading, good luck for your prelims, A levels, and all the best in your future endeavours. (:

Can we have another game of captain's ball after As pretty please? (:

our class

2009-08-29T00:03:00.002+08:00

I tried quite a large number of emails and password combinations before I got here. But anyway. I just felt a strange urge to write what I thought.

I remember there was a point in time last year, and as I was taking the badge off my secondary school uniform, I held it in my hand, looked at it and told myself: “I’m gonna get back into Hwa Chong after I get my results no matter what”

Then it was results day. I sat at the bottom of the stage, worried yet excited. They started calling the top scorers up onto stage. I sat there confidently, waiting for my name to be called. 10 A1s. 9A1s. 8A1s. 7A1s. 6A1s. And completely no sign of my name. I sat there, shocked. Partly because of my unexpected results. But mostly because the prospect of me being unable to get back into Hwa Chong was staring at me right in the face.

At that moment, I genuinely felt Hwa Chong had so much to offer me. The school. The people. The class. All brimming with potential. Yet, I was about to be kept away from all these because of my results.

You could then imagine how nervous and afraid I felt as I lined up and waited for my form teacher to give the results back to us. She smiled as she passed my results slip to me, yet at that moment, it felt more like a consoling smile rather than a congratulatory one.

I signed my name and opened my results slip, trembling. I quickly scanned through the paper. A B4. A couple of A2s here and there. I quickly counted my L1R5. And recounted. And recounted again. And then I almost shouted out.

Yes! I am going back to Hwa Chong!

That was then.

Today, a year and a half had passed. It is technically the last day of school. Somehow, that fact never quite seemed to set in until I was on the bus back home. Today was largely uneventful as usual. We had the usual dose of lectures, tutorials recess and what nots. As our last lesson ended, there was this odd sense of emptiness. Our last ever tutorial as a class in Hwa Chong ended. Just like that. There was just something lacking. Something that is characteristic of all other “special” days. It just lacked this sense of significance.

Perhaps, then, it was this lack of significance in even our final day of school that serves as an apt illustration of our class.

Let’s be extremely frank with ourselves. Our class, although some of us might disagree or would not like to accept, is less united or bonded as an entity than we would like it to be. It was not sudden or abrupt. It was just this gradual, subtle process that we all naturally started drifting into cliques. Or “gangs”, as Renice often likes to put it.

Perhaps a couple of us might sometimes look at other classes in envy, on how they can be so “bonded”, or why their class seems so fun, then lament on the state of our class.

As our class slowly divided into groups and drifted into parts, it gets harder and harder for us to put it back together. Overt attempts often appear as over-enforced, or simply put, “trying too hard”, merely appearing as just awkward.

Yet, there were instances where without any deliberate attempt, our class actually really looked like a class. And the catalyst of it all was not JTS, STJ or anything else. It was, albeit somewhat strangely, captain’s ball.

Initially it appeared to me somewhat odd. That ultimately, throughout these 2 years, the missing link that many of you might have been looking for to bond our class together lies in this simple game during PE.

Perhaps it was because when playing captain’s ball, our differences did not appear all that pronounced anymore. Everyone was part of a homogeneous group, running about the field. There was just too little time for anyone of us to think or judge each other. We just passed to the first person we saw.

Perhaps it was because playing captain’s ball kind of gave us a common goal to work towards. And the results were not only tangible, but immediate. We could immediately see the rewards of scoring a goal, and so worked towards it as a team.

Perhaps it was because we “suffered” together in a sense, as we did push ups when we lost a point.

I think that few sessions where we played captain’s ball together was actually enjoyable for many of us, whether we admit it or not. Not because of the game itself, but because it was one of those rare instances where we were doing something together as one class. Somehow it showed me the potential our class had, and gave me a short sense of reprieve from our usual state. And I think as we leave Hwa Chong eventually, it is these shared memories, of PE, of Mr Tan’s lessons, of Maychew debating with Mr Foo during econs, the T-H-A-M song and everything else we ever did together as a class, that we would always remember.

In the end, I don’t know how much I will miss the school(or not miss the school) until I leave the school itself, just as how I didn’t quite understand what I really felt about the whole concept of being a “class” until “class” officially ended today.

The only time we would see each other would probably only be during prelims, before we all go for study leave, and then A levels. What others might feel from reading this is really inconsequential to me now.

Perhaps there is this idealistic part of all of us that wants to be part of a close-knit group we can call our class. It is merely an over-rationality and over-sensitivity of what others might think of us that has prevented it from happening.

boon pin

What I'll be thinking in half a year

2009-06-25T00:30:00.002+08:00

Hanging around in school these few days really reminded me of how much I miss my school days. Those times spent in lectures/tutorials/canteen/underblockA still feel so vivid but I realised that about half a year has passed since we all had our last lecture/tutorial together. Now when I see the juniors in school, I feel like stopping them in their busy schedule to tell them to treasure these two years of JC cause it'll be over before you know it. But I guess it always happens that we don't treasure something fully until we lose it. Personally I thought I really treasured every bit of those two years but now, I think that I could've treasured every single second a little more.

In school, we see each other everyday and we take everyone for granted. Forgot to say something? It's okay I'll tell her tomorrow. Did something evil? It's okay I'll make it up to her tomorrow. And it goes on until you realise that everyone's gone separate ways. But then it's too late to regret.

As stressful and hectic as school may seem, it's still the most carefree time of our lives. Most of our JC life has been carved out for us and ultimately there's only one goal at the end of those two years. After that we think, alright! Our biggest exam's over and now's the time of our lives! But then you start feeling lost as to what to do with your life. Which university? What course? Where do I get a job before university? Where're my friends? What am I doing with my life?

And you start wishing that you were young all over again, under the shelter of our parents, schools, teachers and friends.

2009-04-27T21:57:00.000+08:00

Anyway.

I love economics 3

2008-05-23T00:14:00.005+08:00

This will be my last and final post on economics. For a change, im not going to review articles. Instead, i will be commenting on the previous post. Yup.

Local cinemas have COLLUDED to launch this promotion. EVERYWHERE THE SAME.NO NEED TO LOOK FOR CHEAPER BARGAINS. This means MONOPOLY POWER

Actually, both examples given in the post were promotions by the same company: Cathay. This doesn't show ccollusion/cartelling between firms.

·The movie ticket cannot be resold from one market to another because they check your ID cards.

Actually, it is possible to resell these tickets. This is because identity cards are needed only when purchasing the ticket.Thus, a person who is eligible to buy the ticket might be able to purchase the ticket and resell it to someone else. This is of course assuming that the ticket issued is a similar ticket to the normal tickets, and not specially marked.

Since the primary aim of price discrimination is to generate more revenue and higher profits for the monopolist than when a uniform price is charged, we should not be overly excited by such promotions (i was not an economics student back then, which explains.)

The monopolist generating more revenue does not mean that we, as consumers, cannot gain from it too. Think of it this way: if we purchase the tickets at the specified time slots, we will only be paying $6, relatively lesser to the normal $8.50 we would normally pay. Do we not gain in this sense?

GV's price discriminations are only valid at cinemas where PED is less elastic (ulu places like jurong point, tiong bahru)

In actual fact, the PED at these places are price elastic, instead of inelastic. Let's think about it. If the PED at these places were price inelastic, then there would be no need for the cinema to reduce the price of the tickets, because it would lead to them making less profits. In actual fact, they should actually raise prices to increase their revenue. Thus, the fact that the cinemas offered cheaper prices at these places shows that demand at these places are actually price ELASTIC, and not inelastic.

Boon Pin ( I almost forgot to put my name )

2008-05-22T22:51:00.004+08:00

I remember how excited i was to see this poster at Cathay until i saw the following:

Terms and Conditions• $6.00 per ticket from Mondays to Fridays, for any movie before 6pm at any Cathay Cineplexes• This promotion is open to all Primary, Secondary and Tertiary students in Singapore• This promotion is not valid on Public Holidays and the Eve of Public Holidays• Each student pass is valid for 1 discounted ticket only•This promotion is not valid with online / phone / corporate / block bookings, other discounts and promotions at Cathay Cineplexes. • The Management reserves the right to alter the terms of this promotion without prior notice.

Then i saw an even cheaper bargain which unfortunately does not apply for me.

Similarly, it had the following texts in very very small font ( i wonder if the senior citizens can actually see):

Terms and Conditions• For Senior Citizens aged 55 and above• NRIC to be presented at Box Office to enjoy discount• Offer is valid on Mondays to Fridays, excluding Eve of Public Holidays and Public Holidays• Offer is not valid for movies screening at the Picturehouse• This promotion is not valid with other promotions / discounts at Cathay Cineplexes• The Management reserves the right to alter the terms of this promotion without prior notice

Hence, my evaluation may be slightly biased. SLIGHTLY.

MY EVALUATION!

This is a form of price discrimination. It is the practice of charging different prices for the same product or for different units of it when such price differences do not result from differences in cost. Whether you are old/young, guy/girl, pretty/not pretty, hwachongian/rafflesian, you take up one seat and the cost is the same.
Local cinemas have COLLUDED to launch this promotion. EVERYWHERE THE SAME.NO NEED TO LOOK FOR CHEAPER BARGAINS. This means MONOPOLY POWER
The "cartel" segmented the markets. Mainly, adults, students and senior citizens. these markets have different PED. Students have generally lower income(pocket money) than adults , hence demand is price elastic for students. Senior citizens generally do not love Brad Pitt or Tony Leung as much as adults and students do, hence are less willing to buy a ticket to watch movies( or pretty faces) at such a high price.
The movie ticket cannot be resold from one market to another because they check your ID cards.
Since the primary aim of price discrimination is to generate more revenue and higher profits for the monopolist than when a uniform price is charged, we should not be overly excited by such promotions (i was not an economics student back then, which explains.)
terms and conditions ensure that this primary aim is reached and the monopolist exploit us and they ensure we do not exploit them instead.
cleverly, the cartel specifically, especially, intentionally, purposely, indicated that the promotion is not valid on weekends and public holidays when most of us have more time and have more impulse to watch movies.(PED less elastic)
they also made the promotion to be valid for students only before 6pm on weekdays when most of the students are mugging or having their ccas(PED elastic)
not forgetting to earn all the money from booking of seats through internet or phone calls, the promotion is not valid with online and phone bookings. which means we don't get the best seats.
GV's price discriminations are only valid at cinemas where PED is less elastic (ulu places like jurong point, tiong bahru)

*personal conclusion(economically unsound): TERMS AND CONDITIONS ALWAYS APPLY. Monopolists minimise consumer surplus.*

ziqin :D

The dinosaurs are taking over!

2008-05-22T22:48:00.003+08:00

Lawrence Lessig: The "Dinosaurs" Are Taking Over
If the media giants have their way, the Net freedom fighter says, content will be rigidly controlled and innovation stifled

SPECIAL REPORT -- THE FUTURE OF E-BUSINESS
Who should control the Internet? If Stanford University law professor Lawrence Lessig is right, the Internet will soon belong to Hollywood studios, record labels, and cable operators -- corporate giants that he says are trying to cordon off chunks of the once-open data network. Lessig's mission is to stop them. At age 40, he's already the Net's most famous freedom fighter. Since 1995, he has been a seminal thinker on many of the Digital Age's most important battles -- the AOL-Time Warner merger, Napster, and the Microsoft antitrust case.

In his latest book, The Future of Ideas: The Fate of the Commons in a Connected World, Lessig argues that imminent changes to Internet architecture plus court decisions that restrict the use of intellectual property will co-opt the Net on behalf of Establishment players -- and stifle innovation. On Apr. 29, Lessig spoke with BusinessWeek Online Technology reporter Jane Black about what he sees as some disturbing trends. Here are edited excerpts of that conversation:

Q: You argue that the Internet's popularity as a new medium is a result of its open architecture. How do you see this changing? And are the changes a threat to e-business?
A: There are two places where it's changing. One is at the physical level of the network. As we move from narrowband to broadband [access to the Net], broadband operators are developing technology that gives them control over applications and content on the network. Cable companies, for example, have a view of what the network should be used for. And they're beginning to pick and choose what kinds of content will flow quickly as a way of favoring -- or not favoring -- content providers. For instance, perhaps cable companies can make it more difficult [for Web sites] to use streaming video if that interferes with their video business. It's your father's AT&T all over again: They, not the user, decide what the network should be.

Q: What's the result of a controlled network?
A: The cost of innovation goes up significantly. Before, you just had to worry about complying with basic network protocol. Now you have to worry about making your program run on the full range of proprietary systems and devices connected to the network. Before, the network would serve whoever and whatever people wanted it to. Soon, you will need the permission of network owners. Think about other platforms in our lives, like the highway system. Imagine if General Motors could build the highway system such that GM trucks ran better on it than Ford trucks. Or think about the electrical grid. Imagine if a Sony TV worked better on it than a Panasonic TV. The highway and electricity grids are all neutral platforms -- a common standard that everyone builds on top of. That's an extraordinarily important feature for networks to have.

Q: And the second change that threatens e-business?
A: Dominant media is a huge threat. [Record labels and Hollywood studios] make their money because of the control they assert over the production and distribution of artists' work. In the music business, a handful of companies control more than 80% of the music in the world. These companies control not just distribution but a market where artists have to sell their souls to a record label just to have a right to develop music that can be distributed. That's the model for the last century. The economic reasons that might have justified that tightly controlled structure have disappeared. The Internet can support much greater competition in production and distribution than [is possible with] the dominant five companies. The record labels have launched lawsuits against every company that has a model for distributing [music and entertainment] content they can't control. That has sent a clear message to venture capitalists: Don't deploy a technology that we don't approve of, or we will sue you into the Dark Ages. The result is that the field has been left to dinosaurs. There would have been more chips, computers, and devices to deliver content if Congress had been more keen to allow innovation to occur. We've given control over the future to exactly the wrong people. And before we know it, the possibility for innovation will have disappeared.

Q: The current debate over Web radio is a good example. New fees that the U.S. copyright office has mandated threaten to put small Webcasters out of business.
A: Web radio is a perfect example. In the course of its testimony before the CARP hearings [the Copyright Arbitration Royalty Panel, the government group responsible for setting compulsory license fee for Webcasters] the RIAA argued that higher rates would reduce the number of competitors to four or five big players. That's their model: To wipe out diversity and get back to a place where only a few people control delivery. I understand why they want that. But I don't understand why Congress is giving it to them. And it's not just the fees that are ridiculously high -- it's the data collection that has been mandated [by CARP and is awaiting approval]. If the RIAA has its way, Webcasters would have to report every song that every listener heard. In essence, it asks to create a national police state of music listening by forcing Webcasters to collect data and turn it over to copyright holders. My question is: Why? It kills competition and the development of niche markets. This is a classic example where the legal process is being used to destroy creativity and innovation.

Q: Do we need a new definition or vision of copyright and intellectual property in order for e-business to move forward?
A: We don't need a new vision. We just need to recognize what the traditional vision has been. The traditional vision protects copyright owners from unfair competition. It has never been a way to give copyright holders perfect control over how consumers use content. We need to make sure that pirates don't set up CD pressing plants or competing entities that sell identical products. We need to stop worrying about whether you or I use a song on your PC and then transfer it your MP3 player.

How E-Biz Rose, Fell, and Will Rise Anew Break Out the Black Ink Going to the Source, on the Web Microsoft: A Dip That Delights?Commentary: Hey, We've Got History on Our Side The Freebie Road to Digital Riches The Battle of the Online Content Models The RIAA: "The Piracy Rate Is Growing"Lawrence Lessig: The "Dinosaurs" Are Taking Over

Sherry says:

I THINK THIS LESSIG GUY IS GOOOD. He makes a lot of sense.

This article shows why and how some firms are very keen to maintain their monopolistic position. You can easily identify the economics concepts he refers to in the article.

Characterisitics:
- oligopoly, significant market power -> "a handful of companies control more than 80% of the music in the world"

Methods they use are:
- develop technology that gives them control over the applications and content on the network -> makes it difficult for smaller firms to compete
- launch lawsuits against every company that has a model for distributing music and entertainment content they can't control -> using artificial/legal barriers to restrict the entry of new firms

Consequences:
- innovation stifled -> no incentive to be innovative since creative efforts are not rewarded (use of intellectual property rights restricted)
- kills competition and the development of niche markets -> market dominated by the few oligopolistic firms

Possible measures:
- pass low fixed compulsory license fees for distribution of music and entertainment content on the Web
- make it a crime to circumvent copyright-protection technology

That's it! (:

Sherry

2008-05-22T22:10:00.006+08:00

For people who cannot resist eating popcorn while watching movies! :D

LOS ANGELES (AdAge.com) -- Suddenly, in Hollywood and sticky-floored movie theaters across the nation, "corn" really is a four-letter word. Thanks to the inflating cost of popcorn, the price of movie tickets is expected to skyrocket by as much as 30% this year, according to Ricard Gil, a University of Santa Cruz economist who studies the business. "You're going to see a one- to two-dollar increase in the price of a movie ticket," he said. "And that's being conservative."
Roughly 25% of the price of a movie ticket is subsidized by popcorn, soda and candy sales. According to an Agriculture Department report, next year's corn stocks are expected to plunge to a 13-year low and, as a result, corn-futures contracts have soared to an all-time high. This can be attributed to the demand for ethanol, which will claim 40% of next year's corn crop, munching away at the margins of theaters that rely on concession sales for as much as 45% of their revenue. "They're going to lose some of their customers," Mr. Gil said. "Some of them are just not going to go to the movies." This is terra incognita for the movie-theater business. Ticket sales had been insulated for the past 30 years from both inflation and recession. (Adjusted for inflation, tickets today cost less than they did in 1977, according to the Motion Picture Association of America; the National Association of Theater Owners notes that in five of the past seven recession years, box office and admissions actually increased.) Subsidizing ticketsThat's in part because angst-riddled consumers sought relief from financial woes in the dark of the cinema, but also because roughly 25% of the price of admission is subsidized by popcorn, soda and candy sales -- a discovery Mr. Gil published in a landmark joint study with Stanford University's Graduate School of Business in February. (Popcorn accounts for an average of 32% of concession sales in the theater industry.) In an interview with the Los Angeles Times in March, Mike Campbell, CEO of Regal Entertainment, the nation's largest theater chain, conceded as much: "If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20." (According to the MPAA, last year's average movie-ticket price was $6.88.) But while ticket prices have more than quadrupled since 1970, per-capita spending at concessions has only a little more than doubled in the same period. This year's popcorn crop is down roughly 10%, said Larry Etter, chairman of the National Association of Concessionaires. In the past 18 months, the cost of coconut oil used for popping corn has risen 24%. And the price of the paper pulp to produce popcorn tubs has jumped 40% in the past 36 months, making the tub more expensive than the corn inside it.

MY EVALUATION!

supply of corn fell, leading to a sudden surge in demand(stock up)from movie companies, therefore prices of popcorn rocketed

price of paper pulp to produce popcorn tubs rocketed too! therefore, cost of popcorn further increases

since sales of popcorn, soda and candy subsidises roughly 25% of prices of movie tickets, price of movie tickets increases too :(

therefore, consumers' demand of popcorn and movie decreases

PED of popcorn? highly price elastic. substitutes like hotdogs and NACHOS WITH HOT CHEESE.

YED of popcorn? highly income elastic. "luxury good" especially for students. hence when we have more pocket money, we buy more popcorn ;)

PED of movies? highly price elastic. substitutes like DVDs (pirated or legal DVDs!)

YED of movies? highly income elastic. if pocket money is reduced, we will not watch that much movies

movies and popcorn are complements!

*personal conclusion(economically unsound): please buy popcorn the next time you watch movie so that you help to subsidise movie tickets, in this way, all of us can watch movie at a cheaper price! *

ziqin:D

it's the effort that counts (:

2008-05-22T21:24:00.003+08:00

Conditions for an Oligopolistic Market

Oligopoly is the least understood market structure; consequently, it has no single, unified theory. Nevertheless, there is some agreement as to what constitutes an oligopolistic market. Three conditions for oligopoly have been identified. First, an oligopolistic market has only a few large firms. This condition distinguishes oligopoly from monopoly, in which there is just one firm. Second, an oligopolistic market has high barriers to entry. This condition distinguishes oligopoly from perfect competition and monopolistic competition in which there are no barriers to entry. Third, oligopolistic firms may produce either differentiated or homogeneous products. Examples of oligopolistic firms include automobile manufacturers, oil producers, steel manufacturers, and passenger airlines.

Cartel Theory of Oligopoly

A cartel is defined as a group of firms that gets together to make output and price decisions. The conditions that give rise to an oligopolistic market are also conducive to the formation of a cartel; in particular, cartels tend to arise in markets where there are few firms and each firm has a significant share of the market. In the U.S., cartels are illegal; however, internationally, there are no restrictions on cartel formation. The organization of petroleum-exporting countries (OPEC) is perhaps the best-known example of an international cartel; OPEC members meet regularly to decide how much oil each member of the cartel will be allowed to produce.

Oligopolistic firms join a cartel to increase their market power, and members work together to determine jointly the level of output that each member will produce and/or the price that each member will charge. By working together, the cartel members are able to behave like a monopolist. For example, if each firm in an oligopoly sells an undifferentiated product like oil, the demand curve that each firm faces will be horizontal at the market price. If, however, the oil-producing firms form a cartel like OPEC to determine their output and price, they will jointly face a downward-sloping market demand curve, just like a monopolist. In fact, the cartel's profit-maximizing decision is the same as that of a monopolist, as Figure 1 reveals. The cartel members choose their combined output at the level where their combined marginal revenue equals their combined marginal cost. The cartel price is determined by market demand curve at the level of output chosen by the cartel. The cartel's profits are equal to the area of the rectangular box labeled abcd in Figure 1. Note that a cartel, like a monopolist, will choose to produce less output and charge a higher price than would be found in a perfectly competitive market.

Figure 1

Profit maximization by oligopolistic cartel

Once established, cartels are difficult to maintain. The problem is that cartel members will be tempted to cheat on their agreement to limit production. By producing more output than it has agreed to produce, a cartel member can increase its share of the cartel's profits. Hence, there is a built-in incentive for each cartel member to cheat. Of course, if all members cheated, the cartel would cease to earn monopoly profits, and there would no longer be any incentive for firms to remain in the cartel. The cheating problem has plagued the OPEC cartel as well as other cartels and perhaps explains why so few cartels exist.

source

http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/Cartel-Theory-of-Oligopoly.topicArticleId-9789,articleId-9779.html

Motives behind merger and acquisition

These motives are considered to add shareholder value:

Synergy: This refers to the fact that the combined company can often reduce duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit.
Increased revenue/Increased Market Share: This motive assumes that the company will be absorbing a major competitor and thus increase its power (by capturing increased market share) to set prices.
Cross selling: For example, a bank buying a stock broker could then sell its banking products to the stock broker's customers, while the broker can sign up the bank's customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
Economies of Scale: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts.
Taxes: A profitable company can buy a loss maker to use the target's loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to "shop" for loss making companies, limiting the tax motive of an acquiring company.
Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders (see below).
Resource transfer: resources are unevenly distributed across firms (Barney, 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.
These motives are considered to not add shareholder value:
Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger.
Manager's hubris: manager's overconfidence about expected synergies from M&A which results in overpayment for the target company.
Empire building: Managers have larger companies to manage and hence more power.
Manager's compensation: In the past, certain executive management teams had their payout based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders); although some empirical studies show that compensation is linked to profitability rather than mere profits of the company.
Vertical integration: Companies acquire part of a supply chain and benefit from the resources. However, this does not add any value since although one end of the supply chain may receive a product at a cheaper cost, the other end now has lower revenue. In addition, the supplier may find more difficulty in supplying to competitors of its acquirer because the competition would not want to support the new conglomerate.

source

http://en.wikipedia.org/wiki/Merger

JIAYOU FOR BLOCKS!

HAPPY HOLS :D

Jasmine

2008-05-22T20:04:00.005+08:00

Biofuel blowback: Fifty percent rice price hike could spell trouble

Rising prices and export bans among some producers indicate a crisis may be coming in rice consumption, Asia’s main food staple.
Despite the fact that supplies remain at about last year’s level, since January rice prices on the international market have jumped almost 50 percent, according to a report in the upcoming edition of East-Asia-Intel.
Long-term trends and short-term shocks have collided to produce the price spikes. Higher incomes across Asia are leading to increased consumption of both rice and meat with more grain being diverted for use as cattle feed. Production of biofuel — particularly the corn programs in several Western countries, including the U.S. — has put pressure on grain supply.
Also In This Edition
Global rice stocks are at their lowest since 1976. Rice prices had been slow to follow wheat, corn and other agricultural products moving upward, but a rapid increase started at the beginning of the year. Since January, prices on the international market have risen on almost a daily basis, causing unprecedented market volatility.
“Many people who have been in this business for 30 to 40 years have never seen this kind of market situation in their lives,” said Wanlop Pichpongsa, deputy managing director of Capital Rice Company, one of Thailand’s leading rice exporters. “In the morning rice is at one price, and in the afternoon it’s another,” said Wanlop. “It’s like the stock market.”
Rice prices have been rising steadily on the world market since 2003, in tandem with oil, and began to shoot up last year as oil approached and then this year surpassed $100 per barrel. But this year’s rice price hike may also be fuelled by something else, which has some observers worried.
The U.S. Department of Agriculture forecasts global rice stocks for 2007-2008 at 72 million tons, the lowest since 1983-1984 and about half of the peak harvest of 2000-2001.
“I think there is a lot of speculation and a lot of hoarding, because with the dollar going down you don’t want to hold on to currency, you want to park this currency somewhere and where it is parked now is in commodities,” said Shamika Sirimanne, a development policy expert at the UN Economic and Social Commission for the Asia Pacific (UNESCAP). Around the world, particularly in Asia, governments are moving cautiously to trim exports and in some instances to increase stocks.
China, among several countries in the Asian region that subsidize rice, is facing an increasingly expensive subsidy proposition. It has had record-breaking increasing food costs since August, in large part a result of having to cull swine due to the highly infectious blue ear disease. Now there are likely to be regional shortages of rice. According to early government estimates the recent three-week snow storms caused $7.5 billion in damages, including destruction of winter crops leading to the government’s granting a $700 million relief package for farmers.

...

...
Both Vietnam and Cambodia, major exporters, followed India’s lead in March by ordering an increase in stockpiles. Vietnam has been hit by a virus called tungro and infestations of the brown plant-hopper insect. Farmers are complaining that despite a 50 percent increase in price of rice in the last three months, prices have doubled for fertilizer, insecticides and labor. Furthermore, to curb rising food costs and inflation, Hanoi has cut rice exports by a million tons this year.

Evaluation

According to the passage, the supply of rice has remained at about last year's level. However, due to an increase in income, the demand for rice and meat has increased. As grain is used as cattle-feed, the increase in consumption of meat causes an indirect increase in demand for rice.

There is also a change in consumer's expectations. Consumers expect currency rates to decrease, therefore they rather invest their money now in commodities like rice. Many people also expect a further increase in rice prices, which is why many people increase their demand for rice now.

All the above factors will cause a rightward shift in the demand curve.

When there is a rightward shift in the demand curve quantity increase from Q1 to Q2 and the price will increase from P1 to P2, thus causing price hike.

As the price of rice becomes too high, the government has to impose a price ceiling to make sure consumers are able to afford thhe rice. The price falls from P1 to P2 and quantity supplied drops from Qe to Qs. the suppliers will be at a loss. Thus the government most give the producers a subsidy (of the shaded region, P2+S-P1). As price of rice rises, the supply curve needs to shift more in order to meet the demands at Qs and the more subsidies the government has to pay the producers, which causes China's increasingly expensive subsidy proposition

-Xueying

P.S. Sorry for the ugly graphs. And I cant seem to shift them to where I want them to be =P

2008-05-22T19:03:00.002+08:00

Income in monopoly sectors 3 times national average
(Xinhua)
Updated: 2006-06-06 14:04

Average wage income of workers in China's monopoly sectors, such as telecom, finance and tobacco industries, has reached three times the national average, while non-wage income of workers in these sectors enlarged the gap with the national average up to 10 fold as much.

"Income is now deviating from the contributions of staffers in the monopoly sectors," said Bu Zhengfa, vice minister of Labor and Social Security, at a recent forum on salary management.

Bu cited an example of a worker in a civic electric power company. His monthly salary approaches approximately 6,000 yuan (about US$750), but his annual income could amount to 150,000 yuan (some US$18,750) with his bonuses, allowances and housing accumulation fund, which could reaches about ten times the national average.

Relatively exorbitant salary of monopoly firms, mostly state-owned ones, has become the most eminent problem of China's income distribution system, Bu acknowledged.

An interview by People's Daily at two leading universities in Shanghai showed that many of their graduates are eager to work in the sectors of tobacco, telecom and petroleum, no matter what positions they might be offered.

"With a guaranteed high salary and job security, I feel secured in monopoly sectors," A university graduate surnamed Wang, who just signed his job contract with a telecom firm, was quoted as saying.

Wang is expecting to earn 4,000 yuan (about US$500) a month upon his entry of the firm, while the monthly salary for his peers is predicted to attain an average of 2,000 yuan (US$250) in these two years.

"Lack of strict regulations constitutes the major cause for monopoly firms to enjoy excess profits," said Prof. Wang Zeke, with elite Zhongshan (Dr. Sun Yates-sen) University in Guangzhou. He suggests the government step up its pace to do away with monopoly and take prompt measures to restrict the profits of monopoly sectors.

In China, the government has stopped levying profits from state-owned firms since 1992 to encourage their development. With relevant preferential policies and their right to use state-owned assets, most state-owned firms enhanced their monopoly status in their respective sectors and enjoyed higher profits over recent years.

The central government has begun taking measures to control the salary scope in monopoly firms. Some telecom and financial companies have even been urged to restrain the salaries for their employees.

Su Hainan, director of the salary research department with Labor and Social Security Ministry, said relevant ministries are considering of collecting more taxes from state-owned firms which have a large proportion of state-owned assets.

This is a very old article but it's still quite relevant so (if you're interested.. you can read on =O)

Evaluation:

Generally people view monopoly as a threat to consumer welfare, as consumers usually have to pay higher prices for a lower output/quantity of products.

China, ~~the big country which has unfortunately just experienced a hugeeee earthquake,~~ has a few monopolistic sectors, which include the telecommunications sector, finance sector etc. It is not surprising to hear that employees who work for firms in monopolistic industries are actually getting higher pays than those who work in other industries (non-monopolistic ones, as we know things like oligopolies do exist). This is due to the fact that monopolies actually have a huge market share, which can be as high as 80-90% (as in Microsoft in the world's desktop market).

As we have learnt from our monopoly lectures and tutorials, in order to become a monopoly, or near one, the firm/firms has/have to have a huge market share (various companies can do so by colluding!) and there shouldn't be close substitutes in the industry so that consumers have no other alternatives to turn to. In this case, there are indeed few alternatives to turn to in the monopolistic industries (e.g. finance, telco etc.). As such, firms in such industries can rejoice because they can earn a lot of money without having to worry much about consumers not choosing to buy their products!

Hence we know now where their money comes from, and how these workers actually earn more than their fellow workers who don't work in monopolistic firms, reaching as high as 3 times the national average!! That's precisely why everyone's rushing to work in such industries.

The same situation probably applies to Singapore as well, but not really evident here (i think!). But for those who really need $$ to pay class fund, can consider working for Singtel or something, maybe they'll give you more smses per month.

Hahahahahahaha i am so sorry for making you all go through my analysis (if anyone's reading! :>)

Happy happy last day of school!!!!!

-Yiling :D

2008-05-21T21:32:00.005+08:00

Hot News // Thursday, April 17, 2008
Who wins in numbers game?
HEDIRMAN SUPIAN hedirman@mediacorp.com.sg
"A SEA change" is what Mr Leong Keng Thai believes full mobile number portability will bring to the local telco industry. And the Infocomm Development Authority's (IDA) deputy chief executive is not alone in expecting a shift of power towards consumers now that a key barrier to switching between operators has finally fallen.
.As it stands, Singapore is well on its way to having a fully-liberalised telecoms market. Subscribers already have their pick of more than 25 mobile pricing plans from the three major telcos, and mobile subscription prices have dropped every year since 1997 — from $47 a month for a basic plan, to as low as $20 today.
.Could plans become even more attractive now?
.With its 5.8 million mobile phone subscribers, the Republic has a penetration rate of 127 per cent. Hong Kong has a mobile penetration rate of 152 per cent.
.Mr Leong said the IDA did an extensive study on "all" markets, and Hong Kong showed the highest annual churn rate — the percentage of subscribers that port their number from one telco to another — of 15 per cent.
.Hong Kong has five mobile network operators and in the past year, these averaged over 110,000 portings of mobile numbers each month. In total, over 1.38 million numbers were ported last year.
.If such figures are any indication of what might happen here, then it is fair to expect the three telcos — SingTel, StarHub and M1 — to offer more competitive prices and plans, in an effort to retain or sway subscribers in an already saturated marketplace. SingTel has 41 per cent of the market, while StarHub and M1 trail with 31 and 27 per cent, respectively.
.But consumers expecting a price war in the long run might be disappointed. Mr Quek Peck Leng, SingTel's executive vice-president (consumer), said: "Offering the best value through all our various offerings and providing the best possible service experience have always been our top priorities. Ultimately, it does not make sense for us to engage in a destructive price war and destroy value."
.Mr Foong King Yew, a research director from Gartner, said: "It has happened in Australia, Hong Kong, Korea and Japan — there will be an increase in the churn rate for the first 12 to 18 months. This will stabilise eventually."
.Mr Adit Harinasuta, StarHub's head of services and solutions, said: "We do not foresee full mobile number portability having a significant bearing on customer churn. We believe that cultivating loyalty will be a key focus for all operators."
.Mr Foong expects telcos to "go into product or service bundling and offer handset subsidies" to offset the attraction of consumers being able to switch operators without the hassle of changing numbers.
.SingTel already bundles broadband, mobile phone and pay-TV services with its mio service and StarHub does a similar bundle with its Hubbing concept.
.M1 has matched its competitors by offering per-second billing and savings for subscribers with multiple accounts. "Carriers will strive to hold onto their existing customers with more focus on service packaging. But I don't expect them to be draconian in their tactics," Mr Foong said, referring to the concern that telcos might impose more drastic penalties for contract termination.
.As barriers are lifted for consumers, the IDA hopes new players will come in. Wireless broadband providers or Voice-over-Internet-Protocol providers could provide mobile voice calls routed through the Internet, it said.
.But the odds are against new entrants.
."The market is very mature, and stacked against new entrants because the existing players already have service and product bundling, and post-paid contracts are already in place," said Mr Foong. "New entrants have to come up with something compelling or disruptive."
.This is not impossible.
.Japan - where prices for voice calls have been traditionally high - has seen an industry shake-up thanks to daring price moves and better product offerings.
.No 3 mobile operator SoftBank has intruded on the turf of market incumbent NTT DoCoMo, by bringing prices for voice calls down. Its advertising campaign even featured a zero-yen tagline for its mobile service. KDDI, another smaller player, has lured subscribers with better mobile handsets and being first-to-market with multimedia download services.
.It would be wise, perhaps, for the big telcos to keep their ears close to the ground in their battle for market share, as consumers are likely to demand more competitive prices and innovative services.
.Ms Laura Khng, a public education executive, said: "I can't wait to switch. Ultimately, I want lower prices, but if they want me to stay with them, they may need to offer better loyalty rewards and cooler products.
."Consumers are better informed these days. It's easy for us to compare and spread the word around when there's a good deal. The operators should take heed of that."

My take on this issue:

DEMAND AND SUPPLY
In singapore, the 3 main telcos offer up to 25 or more different pricing plans for customers. With more plans available now, supply increases(supply curve shifts right), demand stays roughly the same and thus the equilibrum price falls ($47 per mth to even $20 per mth now)

PED
In the past, it was prohibitively costly and very troublesome for customers to switch from one hp service to another as they needed to change their numbers all over again, but now with this new ruling of hp porting made legalised, it has greatly reduced the hassle and cost involved for switching services. They can stick with their present numbers. Customers would always choose the best plan with the most possible savings. When they feel that their present hp contract is not to their liking, they can now easily switch to another more attractive plan by another telco. This greatly reduces barriers for customers. They now have a more price elastic demand, since substitutes are extremely available. A small increase in pricing will result in a more than proportionate decrease in demand, resulting in lower revenue. Therefore, the best option for telcos will be to lower prices so that there will be a more than proportionate increase in demand for their plans. This will result in a rise in total revenue.

CED
Since the plans offered by the various firms are similar in a way (eg. same per minute rates, same no. of free smses etc), with the new hp porting policy introduced, this makes their products ALMOST perfect substitutes of one another. They have a positive CED. When the price of 1 firm's plan falls, the demand for the rival firms' plans decrease too. Therefore, certain strategies are employed by the firms. Firstly, when rival firms cut prices, they follow suit and slash prices too. Secondly, they differentiate their products so as to reduce the degree of substitutability between their products and those of the rival firms'. For eg, "SingTel already bundles broadband, mobile phone and pay-TV services with its mio service" while "M1 has matched its competitors by offering per-second billing and savings for subscribers with multiple accounts". These will ultimately increase the revenue for the firms.

MONOPOLY
Eos
The only present local telco giants are namely, Singtel, Starhub and M1, Who have 41%, 37% and 21% of the mkt share respectively. The whole singapore mkt is supplied by these 3 firms solely. They have a certain degree of monopoly power. They have invested heavily due to the high fixed costs required to build up the telecommunications infrastructure in singapore. Presently, these few firms can reap substantial EOS with LARGE output. The MINIMUM EFFICIENT SCALE is reached at a very large output. The firms have incentive to expand production to enjoy even lower average production cost per unit. Should there be many more firms supplying the mkt together, the total output would be shared amongst all the firms, resulting in lower output per firm. They would then not enjoy substantial EOS as that enjoyed by the 3 firms now.

Barriers to entry
-"The market is very mature, and stacked against new entrants because the existing players already have service and product bundling, and post-paid contracts are already in place," said Mr Foong. "New entrants have to come up with something compelling or disruptive." The existing frims already have many innovative products that will appeal more to customers than uncreative, common gds. They have contracts that will bind existing customers to their companies for a period of time. Their R&D increases customer satisfaction and allows them to build up a loyal customer base, who would stick more with their products. It is not easy for new entrants to "steal" those loyal customers away from the large firms.
-Morever, the large firms can fund the huge fixed costs (mentioned earlier) much more easily than those smaller firms with little capital.This will also deter new companies from entering the mkt as they would incur huge fixed costs immediately upon starting business. Sometimes, these are not just fixed costs. They are "sunk costs", which cannot be recovered should the firm close down, or cannot be easily transferred to other uses. There is a high risk of entering and high risk of failure, which will deter potential entrants.
-Also, the substantial EOS reaped by the large firms in the oligopoly can be translated to lower pricing, which new entrants cannot match up to, thus preventing them from entering the industry.

However, it is still possible for new entrants to brk into the mkt share of existing firms, if they come up with creative, feasible or even daring business strategies. For example, the passage mentioned about No 3 mobile operator SoftBank has invaded into incumbent NTT DOCOMO's mkt share by bringing prices for voice calls down. KDDI, another smaller player, has lured subscribers with better mobile handsets and being first-to-market with multimedia download services. These new firms differentiated their products from those of the existing firms' and thus produced a niche mkt for themselves.

ah, now i can slp in peace wif no more worries abt econs blog.

Yu zheng

What Spurred the Run on Rice

2008-05-20T22:10:00.006+08:00

Sherry's post!

At the Costco (COST) in San Francisco, rice is all the rage. Not long after the 10 a.m. opening on Apr. 24, the warehouse club was well on its way to selling out the day's supply of Thai jasmine rice. Real estate broker Mary Jane Galviso managed to snap up two 50-pound bags—the limit imposed by this particular store. "This is very frightening," says Galviso, a Filipino-American who made the more than 200-mile trip from her hometown of Orosi, in California's Central Valley, where her local grocery was out of Thai rice.

Rice, a lowly staple, has suddenly turned into a hot commodity. Some Costco and Wal-Mart (WMT)-owned Sam's Club stores have begun limiting purchases of premium varieties, such as Thai jasmine and Indian basmati, in response to panic buying from individual shoppers and restaurant owners.

The rationing is but one manifestation of the global food crisis. Around the world, prices for rice are starting to hit record highs: Thai rice, the benchmark, is hovering at around $1,150 per metric ton, compared with about $320 at the end of last year. That's puzzling since worldwide rice production was up in 2007, with Vietnam, Thailand, and India all logging bumper crops.
What has actually sent rice prices spiking in recent months are artificial shortages. Countries such as India and Vietnam, the world's No. 2 and No. 3 rice exporters, have imposed limits or outright bans on rice shipments in order to shield their populations from the effects of soaring food costs. That in turn is hurting net importers of the grain, such as Iran and the Philippines. On Apr. 15, the Philippine government tried to buy 500,000 tons of rice in the global market but managed to get only 320,000 tons. The news sent shock waves through the wholesale markets.

With rice prices climbing ever higher, there's plenty of incentive for everyone from traders to millers to store owners to stockpile the stuff. "You've seen a lot of speculators coming into the market and making things even worse," says Chookiat Ophaswongse, president of the Thai Rice Exporters Assn.

At the Chicago Board of Trade, the traditionally sleepy market in rice futures has been jolted awake. Says Tim Hannagan, senior grain analyst at Alaron Trading in Chicago: "I've never seen a rice [futures] market until this year in my three decades of trading grains."

With Tom Giles in San Francisco and Frederik Balfour in Hong Kong
Gogoi is a contributing writer for BusinessWeek.com.

EVALUATION:
Rice prices for premium and basic brands have gone up by up to 14% in recent weeks, caused by a surge in global demand for grain, poor harvests and increasing cost of production.

However, the author claims that the main reason behind the price hikes in rice are artificial shortages. I feel this is true to a certain extent as factors such as speculation on the market has led to consumers rushing to buy rice in anticipation of further increases (panic buying). It brings a new perspective to this issue, that maybe people are making a mad scramble for nothing.

Indeed, this is what someone posted on the forum at BusinessWeek.com:

Dave May 2, 2008 1:08 PM GMT

There is no shortage of anything, just manipulation of supply to demand more of a price increase from everyone else.

Jared Lorz May 5, 2008 6:21 PM GMT

There is no food crisis, there is no impending doom. This is just the latest Y2k Rapture load of crap the media is selling to manipulate the stock market.

Personally, I feel that the speculation has a large part to play in driving up prices. With increased quantity demanded, the price in rice will then be expected to increase. However, this speculation is not without basis, as there have been reports about how droughts have affected agricultural output, and hence led to a decrease in supply.

This is something we can all ponder over.

Sherry

2008-05-20T21:44:00.002+08:00

THOUSANDS of protesters rallied in the Indonesian capital and other cities on Tuesday against a government plan to raise subsidised fuel prices by as much as 30 per cent.

Around 1,000 people clogged the main street in Jakarta demanding the government cancel the plans and reduce the cost of food and other commodities which have soared globally.

'We will march to the (presidential) palace to reject the price hike and demand the government reduce food prices. The people's budgets have reached breaking point,' demonstration spokesman Masinton told reporters.

Separately, thousands of students and labourers rallied in Samarinda on Kalimantan island and in the city of Solo in Central Java, state-run news agency Antara reported.

The government has said it is considering a fuel price rise of up to 30 per cent, which would see the cost of gasoline in Southeast Asia's biggest economy climb to 6,000 rupiah (90 cents) from 4,500 rupiah.

President Susilo Bambang Yudhoyono says the government has no choice but to slash fuel subsidies despite the political cost ahead of elections next year, as record world oil prices threaten to blow out the budget deficit.

To compensate the poor his cabinet is planning to transfer more than 1.5 billion dollars in cash handouts to millions of low-income families.

There have been almost daily protests against the plans, most of which have been peaceful, but some fear unrest on the scale of 2005, when the last fuel price hike of 126 per cent triggered mass demonstrations.

Tensions are already high amid the anniversaries of independence from the Dutch as well as the May 21, 1998 end of Suharto presidency, when a fuel price rise sparked a mass protest movement.

Populist politicians have seized on the issue to rally support from the poor even though most of the subsidies go directly into the pockets of relatively wealthy car owners.
The subsidies also outstrip Indonesia's total social spending and capital investment, according to the World Bank. -- AFP

Learning points:

1) type of tax imposed : specific/per unit tax
à in this case, an increase of 1500 rupiahs per litre

2) since demand is relatively price inelastic, the decrease in subsidies (or in another light, increase in taxes) would be borne more by the consumers

<3 MEL!

GP HOMEWORK (don't sigh!)

2008-05-20T00:28:00.007+08:00

okay finally sth that's non- econs -- a very impt msg from ms ng:

Dear all,

Holidays are coming. I know you're going to have great fun, but to 
prevent any human tragedies during the Blocks, I have to prescribe 3 
sets of homework for GP.

1) Time Tunnel (Please complete ALL exercises)
2) Issues and Ideas (To be distributed this week)
3) Data Bank --> Please collect 8 articles. Highlight/extract facts. 
Would be best if you process the information into usable bites for 
your essays. I also advice you to work on your pet topics (about 4)

That's all! Please pass this message around.


- renice(:

Singtel-Starhub duopoly

2008-05-17T14:54:00.005+08:00

The more the merrier
Sun, May 11, 2008
The Straits Times

Broadband users who complain about slow speeds and high prices here often point to one thing - the SingTel-StarHub duopoly.

The two dominant telecoms operators own almost all the cables here that carry our phone calls, Internet data and pay-TV programmes.

Every company that wants to offer an Internet service will most likely have to route traffic through the two telcos, and as a result, pay a part of the earnings to them.

Some service providers have tried building smaller networks and tapping onto SingTel and StarHub's when needed. But all they ended up with, if you asked Pacific Internet, were often meagre pickings after paying off the big boys.

Why not build a rival new network? Until now, that was too expensive for a new entrant.
As events unfolded last week, Singapore came a step closer to a new network that will be shared by many providers at a fair price. For users, it means more competitive offerings.

Two groups of companies, made up of both old hands and new players, put up their bids to build Singapore's new cyber highways last Monday.

Both plan to lay fibre-optic cables, which can carry an almost infinite amount of data for decades to come, to homes. They will deliver a myriad of services like high-definition TV, 'life-like' videoconferencing and tele-medicine.

The technology has already been rolled out in Japan, Hong Kong and other well-wired places. Singapore will be next, in as early as the next two years.

More importantly, emerging along with the newfangled technology is a seismic change in the market. More competition has already come in the past two years, after the Government injected funds into projects like Wireless@SG.

The free Wi-Fi hotspot project cost $30 million in public funds, but has given users thousands of places to surf for free.

Even more ambitious now are the new cyber highways, dubbed Next Generation National Broadband Network and costing up to $1 billion in state funds.

In exchange for financial help, no single telecoms operator can own the entire network, in an 'open access' arrangement. One company will lay the cables, another will operate the switches, and others will sell services to users. While there are only two bids for the first part of the project - to lay the cables - what is heartening is that there are newcomers to the game, with new ideas.
Leading the OpenNet group is not SingTel but Canada's Axia NetMedia, which has teamed up with SingTel, Singapore Press Holdings and SP Telecommunications.

Axia is known for its work in Canada, where it runs a similar open access network that grew out of a government plan in 2001.

Then, in Alberta, Canada, there were only a few service providers. Now, after an open access network was set up, there are 91 service providers hooked up to Axia, serving 242 communities, including some which had only dial-up Internet previously. Schools, libraries and even hospitals can now tap into this network, called Alberta SuperNet, to videoconference or to share ideas on 'remote' whiteboards where information is sent over the Internet.

There is another important outcome of the bid. SingTel, the largest telco here, will not dominate the market like now, even though it has a 30 per cent stake in OpenNet.

If it wants to deliver its mio TV service, or any other service, over the network, it will have to pay the same amount as any newcomer to the market.

The hope is that small firms, like the ones offering online games or niche TV programmes, can use the network to deliver their services. In the past, they would have had to work on SingTel and StarHub's terms.

If Axia has the expertise of running an open network, then City Telecom has that of laying fibre-optic cables in high-rise Hong Kong apartment blocks that are not unlike those in Singapore.

While rivals are still stuck with speeds of about 25Mbps, City Telecom has zoomed ahead with offerings of 1,000 Mbps.

Hong Kong has always been held up by users here as a model when it comes to broadband services. With the fastest broadband link there, a movie takes just minutes to download. Here, we're talking about hours.

From what has unfolded so far, the stage seems set for an opening up of the market like never before.

Even if SingTel or StarHub, should they lose in their bids, resort to setting up their own ultra-fast networks, measures are being put in place to prevent them from returning to their old dominance.

Just last month, the Infocomm Development Authority proposed new rules that would put the same 'open access' restrictions on a network funded and built by StarHub or SingTel.

This means they will be forced to open up that network to rivals despite spending their own money. Even before the rules have come to pass, they are already having some effect. SingTel Singapore's chief executive officer Allen Lew said last Monday that telcos should be looking to a future when they earn their revenues from services, instead of holding on to infrastructure to dominate the market.

There will be problems, certainly. There will be people upset by the hassle of wiring up their homes, just as there were when cable TV was introduced more than a decade ago.

What will people do with the speed? Will they stick to existing broadband services? For now, there are no sure-fire answers.

Speeds will be faster - 10 times faster for a start - and prices will fall with more players joining the fray.

After years of having little to choose from, that is indeed good news.

Broadband users who complain about slow speeds and high prices here often point to one thing - the SingTel-StarHub duopoly.

Alfred Siew
siewtha@sph.com.sg

Indeed, currently there exists a Singtel-Starhub duopoly in Singapore. These two companies are enjoying great monopoly power in the internet service market. Furthermore, the internet service market is crucial in the economic growth and the running of day to day activities. Hence, the reliance of the both the country and the population on the Singtel-Starhub monopoly gives the two giants enormous power and freedom in the way they run their business.

Why is this so? The most obvious reason to the Singtel-Starhub duopoly in Singapore is the huge amounts of startup costs. This means that the barriers to entries an industry such as this one is extremely high. This is especially so since it is expensive to run cables throughout the island such that every household is able to enjoy internet and television services. High barriers to entry also indicates high barriers to exist. Should a company start up and realize that they are unable to compete with the two existing teleco giants, folding up might consume a great amount of asset. Hence, companies would think twice before entering the boardband industry. This gives Singtel and Starhub their monopoly power.

Also, these two companies are able to enjoy Economies of Scale(EOS) such as technical EOS. This is so because the equipment that they use can serve two purposes at the same time, hence reducing costs greatly. For example, Starhub uses its cables that it has setup island wide to provide both Cable TV services and boardband services.

This is especially important since this industry has a LRAC curve whereby MES is high. Hence, small firms that just start up are unable to compete on equal footing. For instance, Pacific Net’s business is unable to flourish in Singapore because they have to route their service through the two big telcos and pay them part of their earnings. Hence, it becomes much less profitable for smaller companies such as Pacific Net. Also, the two large companies enjoy government support to a certain extent, hence they are almost impossible to compete with.

Many have started to criticize both companies for the services they provide as they pale in comparison to services in Japan and Hong Kong. The question is: Are they really suffering from X-inefficiency because of their duopoly power?

This may be the case because of the relatively slow speed of boardband service that Singaporeans have excess to. As the article writes “With the fastest broadband link there, a movie takes just minutes to download. Here, we're talking about hours.” In a fast pace society like Singapore, such inferior services in the boardband market is unacceptable. Technology for fast and inexpensive boardband services has already been available to the market for some time, hence there is little excuse to continue providing the conventional boardband service to Singapore users.

However, both Singtel and Starhub have been engaging in fierce competition , and this very obvious and transparent to the population. With simple glace through the weekend newspaper, the handphone advertisements would enable any reader to see that both companies have been putting in considerable amounts of effort into improving service standards and reducing prices. In fact, not too long ago, Starhub provided free 1000mbps upgrade to a majority of its users. Hence, it might not be so that service standards are not comparable to those which other countries enjoy because of X-inefficiency.

The government in Singapore is now hoping that through the “Open access” system that they plan to put into place, they are able to control the monopoly power that huge firms have over the smaller ones. Hopefully, monopoly power of the two large firms will be reduced such that the market will become more “healthty”.

By Derrick

Mr Cool

2008-05-11T23:01:00.015+08:00

Mr Cool!

Ok while we admire his handsome features, lets start to ponder over some economics!

What Would a Combined Microsoft-Yahoo Look Like?

Erick Schonfeld

Microsoft’s $31 a share offer for Yahoo is made possible by Yahoo’s slumping shares (Yahoo’s stock was trading at about $31 a year ago). While Yahoo has rejected Microsoft’s entreaties in the past, with Terry Semel stepping down as chairman of the board yesterday, things might be different this time. I ran some quick, back-of-the-envelope numbers to see what a combined Microsoft-Yahoo would look like financially, and how it would compare to Google.

* Microsoft figures are trailing four quarters and headcount is from June. Search figures from comScore.

Those headcount numbers and operating expenses could be cut significantly. Microsoft says it can shave at least $1 billion from operating expenses in a merged company.

The real impact to Microsoft, though, is not visible in these numbers because Yahoo represents a new growth opportunity for Microsoft in advertising revenues and online services. During the last four quarters, Microsoft’s revenues for its online services (MSN, Windows Live, aQuantive, etc.) were $2.8 billion and it lost $949 million. So just combining Yahoo with that business, you get revenues of $9.8 billion, but Microsoft would still be showing a net loss for that business of $289 million.

But this is an advertising play for Microsoft. It wants to combine the scale of its recently acquired advertising networks with that of Yahoo’s, along with Yahoo’s vast consumer reach (which is appealing to advertisers, who see all those eyeballs as valuable inventory).

On the conference call explaining the deal, Microsoft CEO Steve Ballmer general counsel Brad Smith points out with glee that, while other companies may make competing bids for Yahoo, one company that clearly can’t is Google. Citing a 75 percent market share in the paid-search advertising market worldwide, Ballmer asserts, “Google is prevented by antitrust laws from buying Yahoo.” (He should know, he does have some experience with antitrust laws). At the end of the call, CEO Steve Ballmer said that another driver behind the acquisition is to move Microsoft towards a more Web-based software-as-services company:

The Windows user wants to be live. There will be a Windows Live. There will be an Office Live.

Yahoo clearly has some strengths in this area, with its continued evolution of Yahoo Mail, acquisition of Zimbra, and other initiatives.

Update: Here are some numbers from Hitwise on the combined traffic reach of Yahoo and MSN properties. Together, they have a 15.6 percent market share of Internet traffic in the U.S. , compared to 7.7 percent for Google properties. But Google still has double the market share in search of both Yahoo and Microsoft combined.

But if we consider only search volume, the picture is very different. For the four weeks in January 2008, Google accounted for 65.98% of all executed searches in the U.S., while combining executed searches for Yahoo! Search and MSN Search would amount to 27.84% of executed searches for the same time period.

While the deal would have limited impact on Google's continued dominance of search, the combined content of Yahoo! and MSN properties yields an impressive list of top sites by industry category. In the table below, we've listed where Google, Yahoo! and MSN properties appear within the top five positions by industry category for U.S. Internet visits for the week ending January 26, 2008.

Source: http://www.techcrunch.com/2008/02/01/what-would-a-combined-microsoft-yahoo-look-like/

------------------------------------------

Evaluation

In the recent years, Google Inc. has experienced phenomenal growth in the Information Technologies sector as it edged out major market players like Yahoo Inc. and Microsoft Corporations to dominate the search engine industry, holding a significant market share of 54.9%. This has resulted in the creation of a monopoly and it is posing serious competition to her rival firms.

Hence, in order for Microsoft to remain competitive, it has decided to acquire Yahoo Inc. to increase its market share translating to market dominance and power in order to increase its revenue from paid advertising. The decision comes at a crucial time as Yahoo Inc. is currently facing slumping share prices, rendering a lower market value for its company hence making it more cost-efficient for potential acquisition of Yahoo Inc. by other firms. Furthermore, due to anti-trust laws that restrict Google from acquiring Yahoo, as it could result in a complete monopolizing of the search engine market and seriously threaten the survival of other firms in the industry, Microsoft is now in the best position to acquire Yahoo Inc.

Furthermore, Microsoft says it can “shave at least $1 billion from operating expenses in a merged company”. This probably implies that internal economies of scale can be reaped through the process of this horizontal integration. Through merger, administrative costs can be reduced and managerial roles can be maximized to enhance productivity, translating into lower variable costs for the company.

Also, “Yahoo represents a new growth opportunity for Microsoft in advertising revenues and online services”. This can be accounted to a larger market share which would render its advertising services more price-inelastic since companies would want to reach out to a larger market and not cut costs but advertising through a company whose services do not reach out to a large market even though they may charge lower prices. Hence, Microsoft will then be able to increase prices charged for its paid advertising services, thereby increasing its total revenue. Furthermore, marketing economies can also be reaped as advertising cost can be reduced when the advertising is done at a larger scale.

Lastly, “another driver behind the acquisition is to move Microsoft towards a more Web-based software-as-services company”. Therefore, since “Yahoo clearly has some strengths in this area”, a merger will likely result in the reaping of technical economies by Microsoft, whereby newer technologies can be researched and specialization can occur, thereby raising productivity and lowering unit costs.

Yet, even though the combined market shares of Microsoft and Yahoo Inc may not surpass that of Google in the search engine market, the merger will undoubtedly render Microsoft the biggest player in other services like games, sports and music services (as seen from the table above). Hence, it is indeed a wise move for Microsoft to acquire Yahoo Inc.

Therefore, with the potential market changes at stake, the possible merger between Yahoo Inc. and Microsoft Corporations will definitely be a hot topic for contention amongst various major IT firms as it could result in the birth of a giant player in the IT industry.

ZHI JIE

Whatever this is.

2008-05-11T01:16:00.002+08:00

From BBC:

Alarm at Google Yahoo partnering
Regulators in the US are being urged to investigate any potential online advertising and search partnership between Google and Yahoo.
The call by a coalition of 16 American civil rights and rural advocacy bodies comes despite the fact no firm deal has actually been announced.
"We all suffer in such mega mergers," Gary Flowers of the Black Leadership Forum told BBC News.
The justice department is examining a trial the companies did in April.
It has been widely reported that it is looking into the anti-trust implications of last month's two-week test.
However, the department says it has no comment on the coalition's demands because there is no definitive agreement between Yahoo and Google at the moment.
But reports say that the two companies are presently hammering out the intricacies of a future potential advertising and search agreement, and are sharing their plans with antitrust regulators.
At Google's shareholder meeting on Thursday, Chairman Eric Schmidt said: "If there were a deal [with Yahoo], we would anticipate structuring the deal to address the anti-trust concerns that have been widely discussed."
'Never positive'
This assurance is not good enough for the coalition which is made up of the League of Rural Voters, the National Black Chamber of Commerce and the American Agriculture Movement.
It also includes the Black Leadership Forum, an umbrella group of 36 civil rights organisations including the NAACP and the National Urban League.
In a letter to Assistant Attorney General Thoma Barnett, head of the Justice Department's anti-trust division, the coalition argues that such a deal would give Google almost 90% of the search advertising market and strengthen its influence over internet users' access to information.
"We face a possible future in which no content could be seamlessly accessed without Google's permission," the letter states.
The effect Mr Flowers says of such large partnerships is never positive and would for the black community, as for other communities, "condense competition, increase prices and limit new business opportunity on the internet".
'Do no evil'
League of Rural Voters' executive director Niel Ritchie claims that the do-no-evil mantra may no longer apply in today's marketplace in which Google's reach is apparently without bound, touching more and more aspects of our everyday lives.
"We believe the government should give this agreement very careful scrutiny," he says.
Mr Flowers says:
"Google has already exhibited a pattern of violating privacy, engaging in anti-competitive conduct and using its monopoly power in the search market to drive internet users to its affiliated services and its viewpoints on policy matters.
"Any joint combination with Yahoo could dramatically worsen these problems."
The Centre for Digital Democracy, a consumer advocacy group, is also willing to push regulators to block any deal and wants European consumer groups to raise concerns with European Union officials.
"You can't allow Google to operate a portion of its leading competitor out of its back pocket," Jeffrey Chester executive director of the CDD told the Associated Press.
There has been no comment from Yahoo or Google.

http://news.bbc.co.uk/2/hi/technology/7393486.stm

Reminds me of our recent econs test. But I'm too lazy to analyse this since i don't even know what anti-trust laws are. Or why the justice department is involved. But still, REMINDS ME OF THE ECONS TEST WHICH I THINK I AM GOING TO FAIL. okay that's all.

Boyang

JOKES!

2008-04-27T21:52:00.003+08:00

This blog post consist of so-called "jokes" about economists. According to boon pin, we have to differentiate our blog posts from others in order to reduce the cross-elasticity value. Thus, i decided to look for "inspirational" jokes about economics since it's the ECONOMICS WEEK! Are we excited or what? =D

DISCLAIMER: NO OFFENCE TO ANYONE, ANY ECONOMISTS AND ANY ECONOMICS TEACHER

A civil engineer, a chemist and an economist are traveling in the countryside. Weary, they stop at a small country inn. "I only have two rooms, so one of you will have to sleep in the barn," the innkeeper says. The civil engineer volunteers to sleep in the barn, goes outside, and the others go to bed.
In a short time they're awakened by a knock. It's the engineer, who says, "There's a cow in that barn. I'm a Hindu, and it would offend my beliefs to sleep next to a sacred animal." The chemist says that, OK, he'll sleep in the barn. The others go back to bed, but soon are awakened by another knock. It's the chemist who says, "There's a pig in that barn. I'm Jewish, and cannot sleep next to an unclean animal." So the economist is sent to the barn.
It's getting late, the others are very tired and soon fall asleep, Bu they're awakened by an even louder knocking. They open the door and are surprised by what they see: It's the cow and the pig!

Three economists and three mathematicians were going for a trip by train. Before the journey, the mathematicians bought 3 tickets but economists only bought one. The mathematicians were glad their stupid colleagues were going to pay a fine. However, when the conductor was approaching their compartment, all three economists went to the nearest toilet.
The conductor, noticing that somebody was in the toilet, knocked on the door. In reply he saw a hand with one ticket. He checked it and the economists saved 2/3 of the ticket price.
The next day, the mathematicians decided to use the same strategy- they bought only one ticket, but economists did not buy tickets at all! When the mathematicians saw the conductor, they hid in the toilet, and when they heard knocking they handed in the ticket. They did not get it back.
Why? The economists took it and went to the other toilet.

An economist is someone who doesn't know what he's talking about - and make you feel it's your fault.

Experienced economist and not so experienced economist are walking down the road. They come across a pile of horse manure lying on the asphalt.
Experienced economist: "If you eat it I'll give you $20,000!"Not so experienced economist runs his optimization problem and figures out he's better off eating it so he does and collects money.
Continuing along the same road they come across another pile of horse manure.
Not so experienced economist: "Now, if YOU eat this I’ll give YOU $20,000."After evaluating the proposal experienced economist eats it and collects the money.
They go on.
The not so experienced economist starts thinking: "Listen, we both have the same amount of money we had before, but we both ate horse manure. I don't see us being better off."
The experienced economist replies "Well, that's true, but you overlooked the fact that we've been just involved in $40,000 of trade."

Value of human capital

Engineers and scientists will never make as much money as business executives. Now a rigorous mathematical proof that explains why this is true:

Postulate 1: Knowledge is Power.
Postulate 2: Time is Money.

As every engineer knows,

Work
---------- = Power
Time

Since Knowledge = Power, and Time =Money, we have

Work
--------- = Knowledge
Money

Solving for Money, we get:

Work
----------- = Money
Knowledge

Thus, as Knowledge approaches zero, Money approaches infinity regardless of the Work done.
Conclusion: The Less you Know, the more money you Make.

An economist is someone who gets rich explaining others why they are poor.

Q: Why is advice so cheap?
A: Because supply always exceeds demand.

FOREVER LOVED GP REP,
KOKMAYMAY.

Inflation explained

2008-04-27T21:46:00.001+08:00

This is a really cute video i found on youtube. And if you think you just learned about inflation by watching it, think again! HAHA. Alright, this video is a misconception people have of inflation.

Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service. Inflation has little to do with supply and demand. More money in the economy decreases purchasing power of the currency therefore prices "go up". An example would be the more money the SIngapore government createsand put into the system, the less the value of each individual monetary unit.

The value of a dollar does not stay constant when there is inflation. The value of a dollar is observed in terms of purchasing power, which is the real, tangible goods that money can buy. When inflation goes up, there is a decline in the purchasing power of money. For example, if the inflation rate is 2% annually, then theoretically a $1 pack of gum will cost $1.02 in a year. After inflation, your dollar can't buy the same goods it could beforehand.

The video was merely an illustration of price elasticity and maybe monopoly. It has little link to the concept of inflation so be careful of what you watch on youtube! It's better to collaborate different sources to check for the credibility (AQ test is on tuesday!).

your super cool ct-mate,

MAYCHEW

A break from econs!

2008-04-27T14:51:00.020+08:00

this is pretty funny:) LOL. anyone in the cls with blood type AB?

haha.

anyway, can we take a cls photo one day so that i can design a blogskin?

one last thing, please support harmonica concert! thank you! xD. haha

huiming

2008-04-26T23:12:00.004+08:00

hello. i realised that everyone is really working hard for econs now!!! hahs. okays. heres a interesting video in line with our current topic on monopoly. its abit long but i hope this helps everyone to know more about it! =)

Natural Monopolies:
http://www.youtube.com/watch?v=7PDHa-LRVRA&feature=related

-debbie-

2008-04-22T18:15:00.005+08:00

US firms' profits shrink as sales dwindle, costs of raw material soar.
-April 22, 2008, The Straits Times
http://www.straitstimes.com/Money/Story/STIStory_229811.html

Companies are more pessimistic, and more plan to cut hiring and investment: Survey

WASHINGTON - THE combination of slower sales and soaring expenses for raw materials is taking a harsh toll on companies in the United States, an influential survey has shown.

For the first time since 2003, companies reporting falling profit margins outnumbered those with increases in the past three months, according to the National Association for Business Economics (Nabe).

Almost two-thirds said they paid more for raw materials in the first quarter, the most since 2004.

US companies also grew more pessimistic in the first quarter, as the intensifying credit crisis and slump in housing weakened sales, the survey found.

Six per cent of the firms said demand improved last quarter, down from 20 per cent in the previous three months and the fewest since the 2001 recession.

The report, which also shows more companies planned to slow hiring and investment this year, reinforces concern that the US economy is in, or may slide into, a recession.

'Companies have pulled in their horns,' said Mr Ken Simonson, the chief economist for the Associated General Contractors of America and point man for the business group.

'They are finding it hard to pass through higher materials costs, and profits are getting squeezed,' he added.

Almost 40 per cent of the businesses reported they were hurt by stricter borrowing rules compared with just over a quarter in the prior survey in January.

Seventy per cent of the firms said their annual forecast for the year had dimmed. The Nabe survey, taken between March 24 and April 8, included responses from 109 members of the business economists group.

While employment still increased, fewer companies planned to add workers in the next six months compared with the January survey, and more businesses planned to reduce staff, the report showed.

The outlook for investment also remains soft.

About 28 per cent of the firms planned to increase capital spending in the next 12 months, down from 40 per cent in the January survey.

A majority of firms said the government's fiscal stimulus program and the Fed's rate cuts would have no effect on their business, the survey showed.

Sixty-nine per cent of the survey respondents said the Fed's moves to reduce borrowing costs and improve access to credit have no influence, the report showed.

'This is a warning sign that we may not get the quick pickup that people are looking for in the second half,' Mr Simonson said.

Thirty per cent of those polled predicted the economy would contract in the first six months this year, up from one out of 10 in January.

Bloomberg News

As we can see, this article show one of the many effects the rising prices of commodities such as oil has on firms.

First, let's have a look at the price elasticity of oil.
Oil may have substitutes such as natural gas. However, many companies still rely on equipment which use oil, and natural gas cannot be mass produced to meet the need of these firms at the moment. Hence, to these firms, oil has no substitutes. Also, due to the large consumption of oil, supplies of oil are drastically decreasing.This also means that there is an almost vertical supply curve, as supplies of oil are very limited. These factors lead to oil being price inelastic.

Since we know that oil is price inelastic, the prices of oil will gradually rise as the supply decreases unless new resources are found.

So, why are firms making less profits as oil prices rise?
With the steady rise in oil prices, firms have to either cut down on the quantity of their goods produced, absorb the price increase or transfer the price increase of oil to consumers.
In the first case, producers will be producing less goods, resulting in a decrease in toatal revenue, and hence a decrease in total profits.
In the second case, producers produce the same quantity of a good at a higher price, and therefore will experience a decrease in total revenue with an increase in total costs, leading to a decrease in profits.
In the latter case, demand for the goods decreases due to the increased price, hence leading to lowered total revenue, which may translate to decreased profits.

This can also be explained using External Diseconomies of Scale (Higher Input Prices).
As the industry expands, the demand for factors of production rises resulting in much higher input prices, due to the supply of raw materials and oil being price inelastic, leading to higher costs of production.

There is also the issue of stricter borrowing rules. These have caused increasingly limited funds available to firms, and hence a decrease in the amount of capital firms have. Hence, many firms are hurt by the limit placed on the amount of money they can invest in production, as shown in the survey (40% of firms surveyed).

Due to this decrease in profits by firms, firms will have to retrench workers to cut costs, employ less new workers or decrease salaries of workers. Therefore, this may lead to a recession as many firms are affected by the spiralling price of oil and other raw materials.

Please correct me if there are any errors in my post. Thanks!

-yichen

2008-04-21T23:34:00.004+08:00

Article from The New York Times, dated April 21st 2008

In 1999, the price of oil hovered around $16 a barrel. In the fall of 2007 it began to approach the $100 a barrel mark. The reasons for the surge ranged from the relentless growth of the economies of China and India to widespread instability in oil-producing regions, including Iraq and Nigeria's delta region. The prospect of triple-digit oil prices has redrawn the economic and political map of the world, challenging some old notions of power. Oil-rich nations are enjoying historic gains and opportunities, while major importers — including China and India, home to a third of the world’s population — confront rising economic and social costs.
Managing this new order is fast becoming a central problem of global politics. Countries that need oil are clawing at each other to lock up scarce supplies, and are willing to deal with any government, no matter how unsavory, to do it.In many poor nations with oil, the proceeds are being lost to corruption, depriving these countries of their best hope for development. And oil is fueling gargantuan investment funds run by foreign governments, which some in the West see as a new threat.Countries like Russia, Venezuela and Iran are flush with rising oil revenues, a change reflected in newly aggressive foreign policies. But some unexpected countries are reaping benefits, as well as costs, from higher prices. Consider Germany. Although it imports virtually all its oil, it has prospered from extensive trade with a booming Russia and the Middle East. German exports to Russia grew 128 percent from 2001 to 2006.
In the United States, high gas prices produced steady grumbling, but little sign that drivers were making fundamental changes in their behaviors. Small car sales did rise, but in many cases those represented were Car Number 3 for families that parked them beside the sports-utility vehicle, rather than getting rid of the gas guzzlers.— Nov. 7, 2007

Review of article
(a) with reference to theory of demand and supply
From 1999 to 2007, the price of oil has increased from US$16 to US$100 per barrel. This is because the demand curve for oil has shifted to the right following an increase in demand for oil due to the following factors; oil is a normal good so the quantity demand for it will increase when consumers’ income increases, especially in richer countries with booming economies. Also, there is a change in consumers’ expectations as consumers believe that oil prices will continue to rise in the years that follow. All these have caused the demand curve to experience a rightward shift. At the same time, the supply curve experiences a leftward shift as the supply has decreased. This is because of the widespread instability in oil-producing regions and since oil is considered a scarce good, producers will tend to change their price expectations as they hold back current production output as oil prices have been expected to rise in future. The simultaneous shifts in the demand and supply curves have caused the equilibrium price to increase, which accounts for the surge in oil prices.

(b) with reference to elasticity concepts
Oil is considered to be a price inelastic good. It has almost no substitutes and is considered to be a basic necessity (eg: travel, cooking etc). Also, the time period after the change in oil prices is short, with oil prices rising at an alarming rate every year. All these make oil seem to be a price inelastic good. Hence, when there is a 1% change in the price of oil, there will be a less than proportionate change in quantity demanded. Oil-producing countries will make use of the situation to increase prices of oil as this would increase their total revenue since oil is price inelastic. Oil-rich nations are thus enjoying historic gains and opportunities. Oil also has a positive income elasticity as it is considered to be a normal good so when income of consumers increase, the quantity demand for oil will also increase. It is also income inelastic as a 1% change in income leads to a less than proportionate change in quantity demand for oil. This is because oil is considered to be a basic good and the producers tend to produce more oil as this is a time when the world economy is booming.

Benjamin Tan 08S6P

I love economics 2

2008-04-20T20:31:00.002+08:00

Yes it is me again and this is my second post on economics today. Completely shows how much i love economics.

As everyone can see, there is a sudden surge in number of posts today, after we all realise the importance and usefulness of class participation points. However, this leads to inflation, which means my post is worth less relatively, and my market share also decreases.

Furthermore, as all our posts are roughly the same( based on reviews of articles), i can say that our products are homogeneous. Thus, i would be forced to engage in a post war in order to gain an advantage. This is not feasible as it takes up a lot of time. Thus i decided that i should differentiate my product(post) so as to reduce the cross elasticity value of my product.
Hence, as you can see in this post, i decided to move away from the usual posting of videos and reviews of articles to integrating economics concepts into our everyday lives.

This can make economics even more interesting and fun.

Boon Pin

2008-04-20T19:43:00.003+08:00

THE fragrance of rice hits you once you step into the warehouse.
Here, in Kaki Bukit, are sacks and sacks of rice from around the world, piled almost two storeys high.

The concrete-floored warehouse is one of three which stockpile rice, enough to last three months. The others are in Pasir Panjang and Senoko.

There is no shortage in Singapore now, importers said, although supplies are getting more difficult to come by as some rice-producing countries have imposed export controls.

Mr Jimmy Soh, managing director of rice importer Chye Choon Foods, said his shipments of rice have arrived from Thailand without a hitch.

Although concerned that Thailand, Singapore's biggest supplier, may restrict exports, importers have been quick to secure contracts, even at a premium, to ensure a smooth flow.

Two days ago, rice importer Goh Hock Ho paid US$820 (S$1,130) per tonne for Thai rice although he signed a three-month contract for US$570 per tonne last month.

Said Mr Goh, managing director of Saga Foodstuffs Manufacturing: 'If we refuse the new price, the exporters will stop supplying us. Last year we signed contracts where prices stayed constant for three months to a year. Now we have to top it up.'

Despite the price rises, Senior Minister of State for Trade and Industry S. Iswaran assured Singaporeans at the weekend that the rice supply is adequate.

In the Philippines and Thailand, however, efforts have begun to stop hoarders and illegal traders from driving up prices.

The Philippine authorities yesterday ordered police to arrest hoarders and illegal traders, while the Thai government has released rice from its stockpiles to ensure supply to the poor.
Although Singapore has not had to dip into its stockpile, supermarkets and provision shops are reporting brisk sales.

At NTUC FairPrice - the biggest chain with 80 outlets - rice sales went up 50 per cent over the weekend, after it raised the prices of its cheaper house brands by 10 per cent to 15 per cent, said a spokesman.

At FairPrice's Ang Mo Kio Hub outlet, staff are now restocking shelves twice a day, instead of once.

Buying three 10kg sacks of premium Song He rice for about $60 yesterday was 63-year-old retiree S.P. Chan.

'Prices are increasing and everyone's buying more, so I thought I'd better get a spare bag for myself in case they're sold out soon,' he said in Mandarin.

'I'm getting another bag for my daughter because her favourite brand at her local supermarket is sold out already.'

There is no need for frenzied buying of rice, said Mr Seah Seng Choon, executive director of the Consumers Association of Singapore (Case).

Case officers who visited supermarkets in the last two days found them well-stocked.
'There is sufficient rice to go around,' he said. 'It is not advisable to hoard. The more you hoard, the more you are artificially boosting demand and prices increase even more.'

Evaluation:

Reasons for increase in price

- Supply is decreasing. However, decrease is minimal as Sinagpore gets its supply from various sources such that even if one country decreases supply to Singapore, supply will still decrease only slightly.

- Demand is increasing. This is not due to more people wanting to eat more rice. But more due to speculation. There is speculation that there will be severe rice shortage soon, and that prices will increase soon. Thus, people are rushing out go to buy more rice, which increases demand.

thus, as showcase by the graph

<3 Melinda

2008-04-20T15:30:00.003+08:00

TITANIC

A ticket for the Titanic's ill-fated voyage that belonged to the last survivor with memories of the disaster sold to a collector from the United States at a British auction on Saturday. Lillian Asplund, who died in 2006 at the age of 99, was the last remaining survivor with memories of the Titanic's sinking. Others had been too young at the time of the sinking to recall their experience.

Asplund was 5 years old when the Titanic hit an iceberg and sank during its maiden voyage from England to New York. Her father and three siblings were among the 1,500 people who died.

Asplund's ticket sold for 33,000 pounds ($65,772; euro41,500), auctioneer Andrew Aldridge said.

Another key item sold from Asplund's collection was her father's pocket watch, which reportedly stopped at the exact moment the ship sank in April 1912. Aldridge said the hands of the watch were stopped at 2:19 a.m., when Asplund's father Carl fell into the North Atlantic and seconds before the Titanic disappeared beneath the waves. The watch was bought by a Swedish collector for 31,000 pounds (US$61,786; euro38,974), Aldridge said.

He said most of Asplund's collection of 364 items, which included rare photographs of the Titanic and post cards printed to mark the voyage, had been sold at Saturday's auction. The lots were previously kept at Asplund's home in Massachusetts, in the U.S., and have never been seen before in public, he said. Her collection is ``one of the most important of its type to be offered in recent years,'' Aldridge said. Asplund's parents, Carl and Selma, and their five children were traveling on the Titanic as they headed from their home in Sweden to the U.S. to make a new life in Worcester, Massachusetts, Aldridge said. Lillian, her youngest sibling, Felix, and their mother, Selma, all survived the sinking. Before her death, Asplund was the last American survivor of the disaster. Aldridge said he could not disclose any further details about those who purchased the items.

WOW. Can you imagine selling your tickets and watches at such a high price?

What exactly are the reasons for this?
1. There is only 1 SUCH watch and possibly only a few of such tickets. Thus, supply will take the form of a vertical straight line, instead of the normal postive curve we usually see.

2. Demand, on the other hand, is the normal negative curve we usually see. Since those that bought these items are collectors, it means that it is like a habit/addiction for them to buy these items, thus, no matter how high the price goes up, these collectors will still fork out the money to buy these items. Thus, this means that demand is price inelastic.

Thus, due to a restricted supply and a price inelastic demand, the prices for these goods are very high.

hope i didnt make any mistakes!

<3MELINDA

2008-04-20T10:44:00.002+08:00

Hello (: Here are more news and information regarding the food crisis our world is facing currently.

Situation
- Risen to record-high levels across the world (risen by 30 per cent within the past 3 months)
: Premium Thai rice has spiraled in price from about 9600 baht a tonne last December to 10,500 baht a tonne
today
: In January in the Philippines, a standard sack of rice was selling for 720 pesos. In March, it has risen to 1,100
pesos

Reasons for rise in rice prices
Tight global supply of rice
- Wastage and loss of rice lands have created a recurrent shortfall of around 10 to 15 per cent
- Natural disaster and adverse weather
i. Erratic weather (perhaps due to climate change in grain-producing countries)
ii. Severe 10-year drought in major wheat exporter Australia
iii. Harvests have been affected by drought and heat waves in South Asia, Europe, China, Sudan, Mozambique
and Uruguay
- More lands are being used for biofuel production instead of grain
i. Land used to grow biofuel feedstock is land not available to grow food
- Hoarding (storing of food, in this case rice)
- Curbing of exports by major suppliers
i. Vietnam, Thailand, India and Chinas have imposed restrictions to limit grain exports and keep more of their
food at home and guarantee domestic supply
- Poor governmental policies
i. Becoming complacent (precautionary inventories were allowed to shrink as they believe that countries
suffering crop failures could always import the food they needed)

Rising demand
- Rising affluence in India and China (growing number of people in emerging economies who are, for the first time, rich
enough to start eating like Westerners)
- People are buying more not because they fear supplies dwindling, but because they fear prices shooting up further

Rising production costs
Higher oil (persistently above US$100 per barrel) and fertilizer costs
i. Higher transportation costs

Policy neglect and decline of the agricultural sector

Policies taken to solve rice shortage problem
- Philippine government signed a deal with Vietnam to import more rice to boost the country’s reserves
- National Food Authority (NFA – Philippine) will sell subsidized rice for Filipinos with low incomes
- Curbed or halted exports to safeguard domestic supplies
:Suspended their rice exports
- Cambodia and China
- Egypt (world’s highest consumer of bread) has banned rice exports for six months on the back of worries over
wheat
- Ukraine to Argentina have been limiting exports in an attempt to protect domestic consumers, leading to angry
protest from farmers
- India has stopped exporting its non-basmati varieties
- Indonesia, Mongolia, Sri Lanka and South Korea have already dropped or reduced import tariffs on the grain
- Singapore
: NTUC giving out discount vouchers which gives 5 per cent discount to offset the 5 per cent inflation this year
: MCYS raise financial aid given to those on public assistance

Some interesting points of discussion we can note will be:
Should there be governmental intervention?
Against:
- Market will self-correct
- Becomes more expensive, farmers will find it more worthwhile to grow it (price will then come down)
- By talking too much about the rice situation, political leaders risk panicking the people more (push up demand for
rice even further – leads to price hike)

For:
- Rice is price inelastic to most Singaporeans, especially the lower income groups (as there are no cheaper
substitutes)
- Government need to intervene to ensure that these group of people will still be able to buy rice
- The situation today is very severe as the shortages are happening worldwide

Yuppyupp. This is the current situation for the rice crisis. Actually, today we are facing many other food crisis as well besides rice. Many articles on these crisis can be found on the newspaper, yup so do keep your eyes open for them.

Ok shall end here. Hope you guys have a great sunday :)

shimin

I love economics

2008-04-20T10:26:00.004+08:00

~~In view of my pathetic timed assignment 1~~ In view of my increasing interest in economics, I decided to post something on economics. And it has completely nothing to do with getting class participation points. Seriously. Although I wouldn't mind getting points for this too.

Oh yes, the post on economics. This is a further elaboration on the issue of oil prices.

“Oil reaches $117 for first time

Oil prices crossed $117 a barrel for the first time after a militant group in Nigeria said it had attacked a Royal Dutch Shell-operated pipeline.

Confirmation that production had been hit revived US sweet, light crude, which had fallen more than $2 to $112.7 a barrel earlier.

The initial fall was sparked by the dollar's recovery against the euro - a turn-off for oil's foreign buyers.”

· The increase in exchange rate value of the dollar meant that it was now less beneficial for foreign buyers to purchase the oil from USA. This meant that the demand for oil from the US dropped, and assuming that supply remains the same, the equilibrium price for oil dropped from $114.7 to $112.7.

This can be illustrated by a graph.

Both the demand and supply of oil are highly inelastic, thus both curves are steep.

Demand for oil is inelastic because in the short term, even if oil prices increases, once cannot easily switch to another alternative. For example, if petrol prices increases, the consumer cannot switch to another type of fuel easily. Similarly, one would not drive further and use more petrol when price of petrol falls, thus demand for oil is inelastic.

Supply for oil is also inelastic because it is not possible to increase supply easily as the length of the production period is high, thus supply of oil is also inelastic.

In this instance, the demand for oil dropped, shifting the demand curcve leftwards form D to D¹, thus pushing the equilibrium price down.

“But supply fears and uncertainty in oil-rich Nigeria erased those declines.

New York sweet light crude closed up $1.83 at $116.96, while London Brent finished up $1.49 to $113.92 - a new all-time high.

"The bulls still hold the cards," said Mike Fitzpatrick at MF Global in New York.

Currency correlations

“Nigeria is Africa's largest oil exporter and the eighth-largest oil-producing country in the world.

Rebel attacks since early 2006 on its oil infrastructure in the Niger Delta have disabled the country's normal output by as much as a quarter.

Violence and political uncertainty in key oil-producing nations have helped the oil price notch up a series of records since the beginning of the year amid fears that supply will not be able to meet rampant demand from red-hot emerging economies in Asia, most notably China.

But analysts believe the primary driver of prices has been investors piling into oil and other commodities as a hedge against the weakening US dollar, which also makes resources cheaper for foreign investors.”

However, due to a decrease in supply of oil, the equilibrium price of oil is pushed up to a record high. The decrease in supply of oil is due to several reasons. Firstly, rebel attacks in Nigeria, which is the eighth-largest oil-producing country in the world, meant that the output of oil from Nigeria has fallen.

The rise in price of oil could also be attributed to fears that supply of oil will not be able to meet the demand for rising economies like China. Consumers, fearing that the fall in supply and rise in demand in the future will push up prices, purchase more oil at the moment, pushing up the demand and thus contributing to the rise in oil prices.

It could also be due to the loss of faith in the weakening US dollar, so investors invest in oil to diversify their risks, increasing demand for oil and thus pushing up the equilibrium price.

Please correct me if there are any conceptual errors in this.The news article is taken from bbc.co.uk.
- Boon Pin

global food crisis

2008-04-18T22:20:00.008+08:00

hellosxD,

this is my first time blogging. yup, do correct me if i make any stupid mistakes.

haha. so i shall continue. I accidentally stumbled upon http://www.economicsnews.com/ which is a very interesting and informative website that updates new economic articles every single day.

wow. with such a COOL WEBSITE, all of you have no more excuses to say that you have totally no idea about the various major events related to economics:) "evil laughs"

well,let me share this news with you:

"THE Haitian capital was paralysed by food riots yesterday as the UN gave warning that soaring food prices were spurring unrest around the world."

you might wonder where is this so called "haitian capital' and no, it is not in china:/

It is actually a Latin American country located in the Greater Antilles archipelago on the Caribbean island of Hispaniola( got this from wikipedia)

this sounds so geography. but never mind.

"Rioters returned to the streets in Port-au-Prince a day after UN peacekeepers had to fire rubber bullets to prevent hungry Haitians from storming the presidential palace. Columns of thick smoke rose over the city as demonstrators, demanding that the Government take action over the rising price of foodstuffs such as rice, beans and oil, set fire to barricades made from tyres. Protesters compared the burning hunger in their stomachs to bleach or battery acid. The unrest provided dramatic evidence of the destabilising effect of accelerating food inflation around the globe. Food prices are surging because of increased demand from emerging markets such as China and India, a drought in grain-producing Australia and competition with plant-based biofuels. "

as the saying goes, a hungry man is an angry man:)

this suggests that the rising prices of food can not only result in a decrease in quantity demanded of the good by the consumers and also a deadly social unrest!

but what are the reasons for the surging price of foodstuff?
the demand has increased basically due to :

1. emerging markets such as china and india
China and India are developing in a super fast pace. Therfore, they have to import and produce more food to feed their hungry citizens so that they can contribute to their country's growth more efficiently.

2. a drought in grain producing australia( issue on global warming )
With numerous failed crops, australia has barely enough grains produced for sale, resulting in a leftward shift of the supply curve. Expecting the prices of grain to rise rapidly,consumers increase their demand for grains so that they can store them(non-perishable).

3. competition with plant based bio fuel
This is a diagram that i painstakingly drew at 12a.m. As you can see, the demand curve will shift to the right ( not a movement down the demand curve) due to changes in non-price factors. The supply curve moves to the left(australia's failed crops). The shift in the supply cuve is much smaller as compared to the demand curve. As a result, the equilibrium price of the food will increase from P1 to P2 when the demand increases and supply decreases. Get the idea?

As food is a necessity, its price elasticity of demand is generally price inelastic, bringing about a less than proportionate change in the quantity demanded when the price changes.
"Haiti, the poorest nation in the Western hemisphere, is particularly vulnerable to food inflation because close to 80 per cent of its nine million people live on less than $2 (£1) a day. "
In addition, the small proportion of income spent on the good by the people further support the fact that PED is price inelastic.
Therefore, the demand curve will be a steep sloping one. When the prices of food increases rapidly, the quantity demanded will only decrease by a relatively small extent as people depended on food for survival. In the end, it all boils down to whether the people can afford it.
As the citizens of haitian capital cannot afford it, they have no choice but to carry out riots to "force" the government into controlling the high prices of foodstuff.

"The UN says that global food prices have risen 65 per cent since 2002, with grain rising 42 per cent and dairy products 80 per cent in 2007 alone. The UN Food and Agriculture Organisation (FAO) said in a recent report that Burkina Faso, Cameroon, Egypt, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal have all seen unrest in recent weeks linked to food and fuel prices. “There is a risk that this unrest will spread in countries where 50 to 60 per cent of income goes to food,” Jacques Diouf, the FAO director-general, said yesterday in Delhi."
observe how horrendously the global food prices has increased. I wonder how much more will the prices increase:/ and of course, it does relate to us as the prices of the canteen food may increase when the unit costs increases as the store owners still need to continue making profits.
haha. yup, do enjoy the current food prices while it lasts!
phew, what a long post. i am deadbeat.

thats all for today,

huiming

reference: http://article.wn.com/view/2008/04/18/Anger_grows_in_global_food_crisis/

ENONOMICS IS LIFE.

2008-04-18T20:51:00.006+08:00

OMG LOOK AT THIS!

OIL HOVERS NEAR $115 RECORD HIGH!

Can you believe it? Omgosh just imagine the economic impacts this is going to have on our world!

Okayy I bet by now all of you are damn curious and simply dying to know why. Fret not, there's this! And being the nice guy I am, I shall break this down for you guys as well.

Main reasons for high oil prices:

1. Fears that the conflicts between the USA and Iran could interrupt oil supply
As we all know, when supply decreases, the supply curve shifts to the left thus price rises.

2. Increasing oil demand from China and India
China and India are the world's 2 fastest developing nations. Since development often requires the usage of large amounts of fuel, the demand oil increases. This is also due to the fact that China and India are very large countries and thus are able to significantly impact the oil prices. Thus, demand curve shifts to the right, and prices naturally go up.

Decreasing supply + Increasing demand = Significant increase in prices! :O

So now I'm sure everyone has a better understanding of the rising oil prices and also furthur strengthened your economic concepts right? And guess what?

It's all thanks to me. And Mr Foo cos he does wonderful tutorials (:

Boyang

2008-04-18T19:23:00.003+08:00

haha. i totally decided to follow shanni and blog something on econs xD

Demand and Supply 1
http://www.youtube.com/watch?v=qdOqAWo8vFw

Demand and Supply 2
http://www.youtube.com/watch?v=U6O5XdGipD4&feature=related

AND EVERYONE! HAT THAT IS TMR [:

<3MELINDA

2008-04-15T16:23:00.002+08:00

Hi 6P!

here's some random videos about economics i found on youtube xD

Profit maximisation:
http://youtube.com/watch?v=a4YuY79IVFo

Deadweight loss due to monopoly:
http://youtube.com/watch?v=Uyq7srTy7Zg

Opportunity cost:
http://youtube.com/watch?v=pWE7WDZC-lQ

Supply and demand:
http://youtube.com/watch?v=3rKV0jcPZ8Y

shanni

YO! 6P~

2008-03-19T21:48:00.005+08:00

hey guys (and gals)!!!!!

YOU ALL MISS ME??? i know you do~ haha!!! anyways, it's term 2 alr.. everyone must jia you and work hard, k!!?? no more pon-ing lectures (esp for the TANs! ) must finish all ur tutorial leh!!!! haha~ jia you everyone!

Love pea forever~ 08S6P rocks!!!!

-amy the cutest girl XP

p.s. all the best for those who r running for council~

OMG.. e teachers actually come here one ah...........

hey hey!

2008-03-15T21:36:00.002+08:00

hello0 everyone! hahs. i wanted to tag but then i'll be after many people alr cos of YLTC. hahs. so i shall enter the third post instead! hahs. just want to tell everyone to jiayou for term2! hahs. AJA AJA FIGHTING! do post more instead of tagging mah! more meaningful :) hahs. and we must have more class outings k! JIAYOUS!

debbie:)

HELLOOO

2008-03-11T17:18:00.019+08:00

Our class blog is finally done! thanks to debbie for getting the url and everyone else for voting for your favourite blogskin! :D
and sorry for the delay in setting it up.

Everyone, feel free to post on our blog anytime!:D

Here are some of the pictures from our JTS on 1st March at PizzaHut (:(:(:

Your infocomm rep,

shanni (:

2008-03-08T00:24:00.000+08:00

Testing testing testing! :D