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[wednesday12econlive]

Opportunity cost of studying internationally

On this earth, of 70%water and 30% land, and on this 30% lies so much that a person can explore. As a student studying in a foreign country is one of the things that can give me first hand experience in exploration of education in a different land, culture, and style. I chose to do undergraduation in USA than in India, where I am from. Looking at this thing from an economic and from simply the point of view of life.

How people make decisions

People make decisions after a lot of research, be it by attending seminars by going to places or online by the help of internet. For me, looking for colleges and universities abroad was a bit easier because of websites that the colleges had put up as a profile.

People face trade offs

I had to choose between an established education system in America which is widely acclaimed, the education is elastic, people choose from a wide variety of degrees, has better opportunities predetermined or the heavy-duty grind education in India where the race to grab opportunity never ends, it is more inelastic when it comes to variety of degrees offered, and the competition never stops.

2.

The cost of something is what you give up to get it

If we look at the cost of attending college in America to that in India then the factors vary.

We have to keep in mind that what we put in is what determines what we get, be it money, labor,or education.

Description

India (In)

America (Am)

Est. Cost for (4yrs of Ed)

(In)  $23,055.00

(Am) $280,000.00

Feasibility (jobs)

(In)  Durable

Am) Successful

Predicted outcome (10-20yrs)

(In)  Average

(Am)  Very Good

Though I was giving up more than I would have anticipated, a well known neighborhood, culture, state of mind, comfortability, and family.

3.

Rational people think at the margin

In the end it’s about rational thinking about marginal benefits. My education anyways was being sponsored by someone, so why not use this opportunity. Thinking about the marginal benefits of doing under graduation instead of graduation in America which was predetermined that I would be doing in near future. It is more about supply and demand. The more spots universities supply to meet the needs or demands of people and the market.

4.

People respond to incentives

World acclaimed education

A growing environment

Better and stable economy

Land of innovation and research

All these things are incentives and I responded to them.

How people interact.

5.

Trade can make everyone better off

This trade between leaving India and coming to America to get higher education will lead to earn estimated double the amount as I would have earned and due to a better education I can give back to society by making others choose a better trade off when it comes to education. I am paying 4 times more than a local student, making the university better off. It will be a great path for others to follow, so I will be leading many more students to get higher education with my own experience.

6.

Markets are usually a good way to organize economic activity

The websites that universities create and how well they help other students explore fields, guiding then about future possibilities, and by providing a friendly environment creates a market of education as a good to invite more people and organize economic activity. The admissions department is more like a business. It is a monopolistic competition.

7.

Governments can sometimes improve market outcomes

By allowing a fraction of seats for international students, the government can sometimes improve market outcomes, like the way UC system is a public research based university and it acts like a input of revenues by the government to make it feasible for local students to achieve their goals. Education is slowly turning into a public good by governments incentive of making it non rival and non excludable.

How the economy as a whole works

8.

A country’s standard of living depends on its ability to produce goods and services

The economic growth due to providing education which leads to new ventures, generating revenue in addition to increase in employment. The growth in betterment of lifestyle in whole due to economic growth and application and research of new government policies of an efficient cycle of goods and production with international trade. The cycle started with providing international education.

9.

Prices rise when the government prints too much money

The reason why price of education is lower in India than in America is also due to printing of money. There is a difference between the currency of USD and INR. Goods are comparatively cheaper in America than in India due to the amount of taxes and tariffs levied on goods of import and export.

10.

Society faces a short run trade-off between inflation and unemployment

In India there are more consumers, less producers, and the market is inefficient compared to the market in America. India is a developing country and in the coming years it may catch up with America. Changes in government policies determines trade of between incentives due to future inflations and unemployment. The way that the recent government policies changed in America when it came to immigration and H-1B visa, there was a decline in international student that came to America and there will be future decline in new ventures started by international people in America.

This class of Economics 20A taught me to see things from a broad and economic perspective to things that I would generally look at as jus plain existence or emotional judgement.

International center deals with international students in UCI.

Riya Singh

18898136

[wednesday12econlive]

The Cost of a Custom PC

My brother and I have had the hobby of assembling custom personal computers since we were in high school. We found it fun, and with a lot of friends requesting that we build them one, our leisure time back then was often spent browsing the internet for parts and simply putting them together. It was no business; we never charged them for more than the parts or shipping would cost. We simply enjoyed doing it, and it was relatively easy. With his job and me having gone to college, assembling a computer together is out of the question. Recently, we both decided that it would be nice to build one this coming break for our youngest brother’s birthday.

Assembling a PC as opposed to simply buying one has quite a few different opportunity costs, obviously. If we were to go to a Best Buy for one, we would get an immediate price tag, but with an already assembled PC as well as an operating system already installed. Assembling our own would require research into which parts we want, waiting for said parts to ship, allotting time out of our schedule to assemble it, and then buying the operating system. The important opportunity cost here is a lot of time, but at the benefit of a lower monetary price than the store’s alternative.

Knowing this, we decide to go through with our plan until we need to buy a graphics card. As our brother loves playing PC games, a decent graphics card is almost necessary. That was when we noticed the prices. Graphics cards that would usually go for around $100 to $300 for a decent low-end piece. All of a sudden they were either sold out or had only doubled in price if we were lucky. A quick Google search explains to us that with the recent wave of new cryptocurrencies, cryptocurrency “miners” have all of a sudden been buying the cards in bulk, for the sake of mining.

A quick search through any economics textbook can reveal more. It is a simple case of supply and demand. These miners have single-handedly raised the demand for graphics cards for an unprecedented use, shifting the demand curve to the right, increasing the cost, and leaving many previous customers unwilling to purchase them at their current price point.

This single, major inconvenience was enough for us to go with the standard store-bought PC. After all, the monetary costs of assembling our own was no longer low enough to exceed the high opportunity cost of time.

Kevin Barrera

ID #: 29793394

[wednesday12econlive]

ECONOMIC CONCEPT The Concept of Scarcity The scarcity of Clean Water In most the developing countries, it is estimated that scarcity of water causes more than 80% of diseases. These diseases are linked to poor sanitation and other factors that are directly related to water (The Water Project, 2017). It is also estimated that more than a third of the global population has no access to water and sanitation facilities. At any specific time, more than half of the beds in hospital are used by patients who have been diagnosed from water-borne diseases. In every four reported deaths, one is contributed by water-borne diseases in children under the age of five years. In lest developed and developing countries, women and girls, who are considered water collectors for their families, walk for several miles on daily activities to fetch water using different items such as cans and pots (The Water Project, 2017). In economics, this challenge is a clear manifestation of the concept of scarcity. The basic commodity, water, is in limited supply and therefore, does not satisfy the limitless wants. This makes people choose allocating the resource efficiently among the competing ends to maximize their utility. The economic water scarcity is a severe form scarcity. The condition persists because of lack of good governance and lack of compassion. Economic water scarcity is experienced when people do not have monetary capabilities to facilitate their access to water. This factor is contributed by unequal distribution of resources across the world, which gives the different distribution of access to water in different parts of the world. In some regions, such as Sub Saharan, Horn of Africa and some countries in the Middle East experience ethnic and political turmoil which are directly related to scarcity of water (The Water Project, 2017). Economic scarcity of water is a global challenge that can be solved efficiently and quickly. Access to clean water can be facilitate by practices such as building small dams especially in tropics where the weather is favorable and constructing community reservoirs. Another water scarcity is physical scarcity. This form of scarcity is limited, which is experienced when the ability of the land to hold water is low leading to physical water scarcity. This condition is experienced in most dry regions, arid and semi-arid regions of the world. However, in some parts, this form of scarcity is contributed by human actions. An example is the Colorado River in the States. The basin is an abundant source of water that is being over-managed, and overused leading to critical water scarcity downstream. The Concept of Opportunity Cost America and North Korean Conflict The relationship between North Korea and America has been hostile over decades. The conflict is traced back to the Korean War. In the recent, the relationship has been made sour by North Korea testing six of its nuclear weapons as it persistently threatened the United States and a close ally of America, South Korea, which is an immediate rival for North Korea (Posen, 2017). There is no formal relationship between North Korea and America, a factor that has been aggravating the rivalry. North Korea has continued to remain as a threat to South Korea, a matter that has pushed America to intervene on behalf of the allies since the country has a military base in South Korea, and a substantial population of Americans works in the country. The management of the conflict provides America with two alternatives. The first alternative is holding a dialogue with North Korea with the aim of negotiating on the interests of each country and reducing the tension. The second choice is leaving the situation and probably going to war with North Korea. The opportunity cost of dialogue is war. America has an option and capacity for launching an attack to North Korea and destroy the nuclear weapons, but the opportunity cost for this move would be global ridicule and critics, which would take decades to clear the reputation of America. The country had succeeded in dropping what was referred to as a mother of all bombs in Afghanistan, and the success of conquering North Korea is a high probability (Feffer, 2017). North Korea, had, on the other hand, announced that war was a fact that had been established and was only determined when the war would be staged. Most of the Americans were ready and advocated for a war with North Korea especially to oust the leader. However, war, the opportunity cost of dialogue would have significant effects. The war would yield environmental costs such as the destruction of the environment by bombs, human cost, and significant economic loss. The country would also be held accountable for the aftermath of this attack, which would include an attack on the American military base in South Korea. The complexity, cost, and risk of military action against North Korea are too high (Posen, 2017). The opportunity cost, which is dialogue is the favorable option since it will avert all the possibility of war. This is a real-world representation of the economic concept of opportunity cost. The American and North Korea heads of state will be meeting to implement the dialogue process, the opportunity cost of war. References Feffer. J (2017) North Korea: The Costs of War, Calculated. Foreign Policy In Focus. Posen R. B (2017). The Price of War With North Korea. The New Yolk Times. Accessed on 14/03/18 from https://www.nytimes.com/2017/12/06/opinion/north-korea-united-states-war.html The Water Project (2017). THE Lack of Clean Water. Root cause of many problems. by：Tassy Hao ID：80012988

[wednesday12econlive]

I wrote a spoof of Moana’s “How Far I’ll Go” to show the trade-offs I experience every day, even if I don’t realize it, as well as what opportunity costs there are when I make decisions. If I choose to study, I’m trading that with time I could have spent sleeping. If I choose to go to a social event, I’m sacrificing time to do work. Also, since I walk through UTC every day to go to school and back, it’s hard not to get a drink or some snacks pretty often. The opportunity costs of buying something one time may be small, but it can really add up if I go too much. I could have saved that money on something I really need in the future, or even for dinner so I don’t have to cook. After taking Econ 20A, I know now that all of the choices I make have trade-offs, and I should be more conscientious about the decisions I make.

http://straightfromamovie.com/moana-movie-review/

What Should I Do

I've been staring at the ‘x’ of my browser

'Long as I can remember, never knowing what to do

I wish, I could be the perfect student

But I come back to this browser, no matter how hard I try

Every time I say, I’ll just watch one more

Netflix plays the next without any pause

And I really don’t, want to do homework, so I keep watching.

What are benefits if I choose to watch Netflix?

It’d be fun, I’d forget my stress

But I remember what I learned in econ ‘bout trade-offs

So I’ll stop, ‘cause I’ll lose sleep and my good grades if I don’t

I know, that I shouldn’t buy this boba, since I’ve already been here

Like seven times this week

I know, but I still buy the boba, though my conscience warns me

That I will soon regret it

I convince myself that I need this drink

To destress from school and to help me think

But the voice inside mentions what I learned

From Professor Branch

The cost of this drink is more than what you think

You could have saved it, and bought some dinner

Then you wouldn’t have to cook so you’d have time

To finish homework, and I wouldn’t have to feel guilty,

When I go back to watching my fave show on Netflix.

Oh! I know, it’ll be incentive

If I finish my homework and study then I’ll go

Back to Cha, for boba.

Shionne Matsuda

14495992

[wednesday12econlive]

Super Smash Bros. Melee

Super Smash Bros. Melee (SSBM) was a fighting game released in November 21, 2001 by Nintendo. Upon release, SSBM had huge success and became the first Nintendo game to sell over a million copies. Over a decade later, SSBM has maintained popularity and continues to be played all over the world. Last year, we tried looking into buying another copy of Super Smash to relive our childhood memories playing this game, however, we found that the prices of a single copy had skyrocketed to $60-$70 for a used disc. Why was a decade old game seeing a resurgence of demand? One could assume that collectors or video game enthusiasts were buying this as a “vintage” game, but upon further investigation the price fluctuations may have been caused by the booming competitive gaming scene.

Statistics show that the popularity and price of the game are related to each other. For example, EVO 2016 (Evolution 2016), one of the biggest fighting game tournaments in the U.S., had a record breaking 2,372 entrants in its SSBM tournament bracket. Professional players from around the world attended this tournament for a chance at first place and $20,000. The top matches were broadcasted online for everyone to watch. 2016 is also when the price of Super Smash Bros. Melee was at an all time high of around $140 for a new disc and around $50-60 for a used disc.

I seems as the popularity of tournaments and competitive play had shifted the demand curve for the individual market for SSBM discs, which drove prices up. Numbers of buyers increased drastically as competitive tournaments were becoming more popular to watch online. Because SSBM is a 16 year old game, the supply curve is decreasing somewhat due to the fact that Nintendo stopped production of the game at some time. The combination of decreased supply and increased demand is what causes the prices to increase. Not only has the price of the game itself gone up, but complementary goods have also been affected by the rise of competitive SSBM.

Demand for Melee and it’s complements, GameCube  controllers, consoles, and old CRT TVs, increases due to competitive play. As big fighting game tournaments like Evo or Genesis happen, hype for the game is increased and many consumers rush to buy Melee so they can play at their own home casually or competitively at local events. It is important to note that Melee is an 16 year old game and requires specific equipment to play such as GameCube controllers, appropriate Nintendo console and an old CRT TV to reduce lag in game. As a result when the demand for Super Smash Bros Melee disks increases, so does its complements.

The demand for Melee cannot increase forever due to factors such as substitute goods which reduces the demand for SSBM. Some examples of substitutes for SSBM would be the newer Super Smash Bros. games released after SSBM such as Super Smash Bros. Brawl (2008) and Super Smash Bros. 4 (2014). As SSBM gets older, the demand should slowly decrease as the competitive scene for Super Smash Bros. 4 gains popularity. One can assume as the next Super Smash Brothers game comes out later this year, the demand for SSBM will decrease even further because consumers will want the newest version of their favorite game.

How this affected us personally:

Dohyun: I tried buying a copy of SSBM during the height of EVO and tournament popularity which slightly frustrated me because I did not have the funds to buy it as a first year college student. It intrigued me, though, that such an old game could still be popular among gamers in today’s society where graphics and story usually are the main selling points of newer games. SSBM was so simple to learn, but hard to master in a sense that there is a lot of technical skill involved in playing at a high level. At this point in life I do not think paying over $100 for a 16 year old game is worth it. I also think the new Super Smash Bros. 4 will become as competitive as SSBM because Nintendo is still producing the game, the game is easier to buy, and has newer graphics and playable character which may appeal to a newer audience.

Chaz’s Perspective: I have played video games for years, but didn’t run into the scene of SSBM till 2014. I was blown away that a game had been around for 12 years and was still going strong. The price at the time for the game was $59.99 online, not completely unreasonable for a popular game at the time. I also found I would need to get my own controller, TV, and console if I wanted to even play the game. These complements along with the disk itself added up to 120 dollars! But the game turned out to be worthwhile, as I still played it countless hours. Now I have many times thought of selling my whole set up in times of need, for at this point in time I can earn as much as $180 for selling all my equipment. That’s 60 dollars of profit along with all the hours of gameplay I got out of playing the game along the way.

Dohyun Park 48943054

Charles Sommer 53928067

[wednesday12econlive]

Economics of Student Housing

As a second year, I’ve started the long process of looking into apartment living for my third year in college. Especially in UCI, housing can be a stressful ordeal for any student in choosing where to live, what type of living situation to be in, availability of choices and other factors important to the individual student. Being from Sacramento, I thought I should start looking at the options early on for the upcoming school year to make the best of my home away from home. Being in an economics class it’s given me a unique opportunity to see how principles of economics are applied in the student living and the housing market, for both the firm and the household.

1. Trade-Offs, Opportunity Cost, Incentives, Comparative Advantage:

For any student there are factors that need to be taken into consideration before making a choice about what housing option to choose. After researching and scoping out my options, the two main choices that I was dealt with was between living in VDC Norte for $850 rent per month for a June to June lease in a single room or in UTC for $750 rent per month with a September to September lease for a double room. In making my decision I looked at the opportunity cost that accompanies either choice. A key decision maker for me was knowing that I wouldn’t be in the apartment for the summer from June to mid-September. In choosing VDC Norte my opportunity cost would be losing more money from paying more rent per month compared to UTC, including the 3 and a half months rent for the summer, and time/convenience to go to campus since VDC Norte is further away than UTC.

Otherwise in choosing UTC my opportunity cost would be losing my privacy since I’d be living in a shared bathroom/room (double), and time/money to buy furniture. In looking at these two choices it made the decision for to choose UTC much more realistic in terms of the price and other factors that I valued, since the opportunity cost of living in UTC was far less than living in VDC Norte, for me personally. As a buyer in the market, certain incentives that UTC offered compared to that of VDC Norte also made it more enticing choice since it was a lease plan that I preferred, a lower rent per month, and closer distance to campus. Taking all these factors into account I could see that UTC offered a comparative advantage to what VDC Norte was offering because it was able to provide a housing plan that had a lower opportunity cost than VDC Norte, hence the decision to live there next year was a clearer answer.

This shows how some of the key principles of economics are applied here in making even everyday decisions. In decision making people do face trade-offs, to see if the cost is worth the benefit and how it can be compared through opportunity costs. This same principle is applied from small scale decision making liking leasing an apartment to even buying a home.

2. Excess Demand

Another interesting factor to consider when looking at housing prices is to see how the firm is responding to increases in demand. With the increase in admission, we can observe that there will be an anticipated increase in demand to what there is already in housing, hence there is an excess demand. When a shortage occurs in the in the housing market, there are too many buyers and not enough quantity to be supplied, resulting in sellers raising prices without losing buyers. With this increase of price, the quantity demanded falls and quantity supplied rises. These changes can be observed in the graph below with the movements along the supply and demand curves and the market eventually goes toward the equilibrium.

As illustrated in this graph we can see that the difference or shortage is the amount the consumer wants to have, and the amount that the actual supplier can supply. So, keeping this in mind firms drive the price back to the equilibrium by increasing it.

This practice also brings in the concept of the law of supply and demand in which the price of the good adjusts to bring the quantity supplied and the quantity demanded for the good into balance. So, the firm shifts along the curve, hence why producers typically increase prices in markets that have a shortage.

Knowing this, we can see why the price of student housing has increasingly gone up every year in housing due to this shortage, the firms are increasing their prices to go back into balance.

3. Competitive Market and Substitutes

I think being in this class I’ve become much more aware of the factors that not only the household takes into consideration, but also the firm. Looking at UCI housing prices, recently there has been a surge in the demand for apartment living that has caused the general increase in demand, as first year’s transition into student housing. Students have been looking for outside housing options such as Parkwest or OC housing, which are substitutes for on campus or ACC housing. With these new substitutes there is much more of a competitive market for firms in student housing, since the product offered by these various sellers are similar, but not the same. Looking at different types of markets, we can see that the housing market at UCI would be considered an imperfectly competitive market.

Since the firms are competitive in nature and have some form of market power. This makes it an imperfectly competitive firm. This interaction between firms can illustrate how the pricing for certain housing options are higher or lower than other. Since these firms compete by increasing prices slightly from the competitive level they do have some market power since one firm increasing their price can decrease the demand for the other firms. These markets also can compete with incentives or advantages that other firms have in order to lower their price as an incentive. Imperfect competition can illustrate how these firms compete and interact in the market to be the price setters.

These principles are also applied in UCI housing as well, since they are in imperfect competition, firms such as Parkwest offer lower prices for similar goods compared to ACC, hence their decrease in price can cause a decrease in demand for ACC. This gives them market power but not enough that they are a monopoly since ACC can still offer more incentives or even decrease their prices to compete with Parkwest. This constant competition can influence the prices set and what firm can have a comparative advantage in the market.

Seeing not only how economics is played for the buyer but the seller as well it gives an interesting perspective on how the market functions with the introduction of new firms and how this affects the buyer.

Carol Varkey

ID #: 30739004

[wednesday12econlive]

Econ’s Hand

Phillip Pham (84463404)  and Vivek Satish (14549846)

Parody of “God’s Plan” by Drake

Yeah they pushin' and pushin' and pushin' and pushin'

They pushin' on me, yuh

I been movin' along, don't start no trouble with me

Tryna make it equal ain’t so subtle for me

Don’t price down at 6 dollars to hustle with me

Adam Smith made this to describe social benefits

Stated that people are best left on their own

The government’s aid is not as efficient

We are motivated by self interest

I’m gon' tell the story, how this workin on me

Econ's hand, econ’s hand, yuh

It will guide, sometimes it won't, yuh

It do good, sometimes it don't, ay, don't

Avocados goin’ up, ay, up

Might go down to buy a smoothie, yuh

Prices too high and I leave, yuh, peace

I make sure that I don’t drink it

And still

Tastea

Want a lot of Tastea

That they pushin' and pushin' and pushin' and pushin'

They pushin' on me

Cravings

Got a lot of cravings

That they pushin' and pushin' and pushin' and pushin'

They pushin' on me

Yuh, ay, ay

It say, "Do you want me?" I tell it, "Only partly"

I’d rather have thai tea and boba, yeah, I'm sorry

50 cents, I even got it in my wallet

‘notha $1, don’t think I got that kind of money

And you know me

Turn the 2 into the 3, dog

Without me, there’d be no E.Q.

Imagine if supply never shifted, yeah

Econ's hand, Econ's hand

I do this on my own, ay, own, ay

Gov ain’t watchin' this ish close, yep, close

I've been me since 1776, ay, Smith, ay

I control the economy, yeah

Demand go up and down cuz of me, ay

I make sure that prices regulate

And still

Cravings

Got a lot of cravings

That they pushin' and pushin' and pushin' and pushin'

They pushin' on me

Yeah, yeah

Cravings

Got a lot of cravings

That they pushin' and pushin' and pushin' and pushin'

They pushin' on me

Yeah

LYRICS ANALYSIS:

Yeah they pushin' and pushin' and pushin' and pushin'

They pushin' on me, yuh

I been movin' along, don't start no trouble with me

Tryna make it equal ain’t so subtle for me

Don’t price down at 6 dollars to hustle with me

Adam Smith made this to describe social benefits

Stated that people are best left on their own

The government’s aid is not as efficient

We are motivated by self interest

The invisible hand is concept of how the free market regulates itself, given that there is no interference from any external sources. The economy runs at the most socially efficient point whenever the market reflects what the consumers want and how much they are willing to pay for it. We talk about how the market is often best left on its own since it will adjust to reflect the needs of the consumers and how the market will change based on the self interests of consumers and producers.    

I’m gon' tell the story, how this workin on me

Econ's hand, econ’s hand, yuh

It will guide, sometimes it won't, yuh

It do good, sometimes it don't, ay, don't

Avocados goin’ up, ay, up

Might go down to buy a smoothie, yuh

Prices too high and I leave, yuh, peace

I make sure that I don’t drink it

And still

Tastea

Want a lot of Tastea

We provide an example of how the invisible hand works in real, everyday life by using the boba shop, Tastea, as an example. We talk about how if prices go up for their products (boba), for instance, the avocado smoothie due to the rising prices of avocados, then, we will not buy it until prices fall. This is an example of how the invisible hand will regulate the demand for boba, relative to prices rising or falling.

Yuh, ay, ay

It say, "Do you want me?" I tell it, "Only partly"

I’d rather have thai tea and boba, yeah, I'm sorry

50 cents, I even got it in my wallet

‘notha $1, don’t think I got that kind of money

And you know me

Turn the 2 into the 3, dog

The consumer is willing to pay for boba before the increase in price. They may even be willing to pay for it if it increases by 50 cents. However, once prices increase by a dollar, the consumer is not willing to buy boba anymore and would rather go to another shop than pay for the extra dollar.

Without equilibrium, there’d be no me

Imagine if supply never shifted, yeah

Econ's hand, Econ's hand

I do this on my own, ay, own, ay

Gov ain’t watchin' this ish close, yep, close

I've been me since 1776, ay, Smith, ay

I control the economy, yeah

Demand go up and down cuz of me, ay

I make sure that prices regulate

And still

The invisible hand is what helps the supply and demand curve reach and maintain an equilibrium in a market. Without help from Adam Smith’s invisible hand, the market would not be as efficient as it could be. Government interference stops the invisible hand from regulating the economy and therefore in most scenarios it is not as efficient as it could be. Though we know that the invisible hand is very general and may look over many small details within many markets, we can see and notice the effects that take place in the boba industry from a consumer point of view. Throughout our lives, there have been many instances during which rising prices caused people to go to certain stores less, and we noticed this, but we never realized why. It’s pretty interesting to realize now that the invisible hand was behind the effects for these markets!

[wednesday12econlive]

Supply and Demand of Boba

Supply and Demand has been applicable in my daily life. Recently, I’ve been trying to cut back on the amount of boba that I drink. This is primarily meant for me to save money. I’ve determined that at a price of $4.25, it isn’t worth it for me to buy a large boba drink more than once a week. This means that when a large cup of boba costs $4.25, I would demand a quantity of only 1 cup per week.

Lollicup has been making it difficult for me to demand only one cup of boba a week because of a couple of fliers that I’ve received. When presented to the cashier, this flier allows me to have another drink for free. For a price of $4.25, I’m now receiving two cups of boba per visit. Knowing that Lollicup is offering such a great deal for a limited amount of time, my desire to utilize this deal increases my demand for boba. Now, at an aggregate price of $8.50, I’m demanding a quantity of 4 cups of boba per week.

Mathematically speaking, I’m technically paying about $2.12 for 1 cup of boba. Since I’m not the only person utilizing these “buy one get one free” fliers, the quantity of Lollicup boba demanded would increase. To meet this demand, Lollicup would have to increase their supply. Ultimately, supply and demand is in effect even if I am not actively thinking about it while enjoying my boba.

Kevin Cheng

39648453

[wednesday12econlive]

THE OPPORTUNITY COST OF 3 TEAMS

 The picture above shows three teams that I have considered in attending these past two quarters. The three teams that I had the conflicts of choosing was:

-       The Spirit Squad of UCI

-       Common Ground Dance Team

-       Gravy Babies

Now, through these three teams, I’ve already decided on which dance team to stay on based on looking at the opportunity costs of my past experiences on the team.

 So, starting off with The Spirit Squad at our school. Above, I listed that they practice on Wednesdays and Sundays from seven to ten o’clock at night. Out of all the other teams, the time is counted as fixed because the practice time never changes for anyone. Having my busy days on a Wednesday troubled me and with this dance team, it was a huge opportunity cost to using the time for my homework. I would be losing lots of time just for homework, because of the unexpected games that are held. Practices were at school, therefore, I could just walk there. If practices were ever productive then I wouldn’t have wasted my time dancing during practice. I was only able to make a few friends on the team because everyone had their own group of friends already. We had to pay a one-time fee of $250 for uniforms and gear, but I ended up being forced to return most of them anyways when I decided to take a break and focus more on school. Therefore, they were making a profit out of the one-time fee when we leave the team.

 Next, we have Common Ground. The practices usually end late, but it never really had any conflicts with school because I didn’t have any classes on a Friday this quarter. The only shift that I should worry about is time. Once hell week starts for the team, I need to completely get all my priorities done first before practice. The studio that we practice at is fairly close to our school, so it’s not a big problem at all. I have also made a lot of friends that have helped me through my struggles of life. I feel as the key factor of loving this team so much was because all my team members we close and always there for each other. Therefore, my demand of going to practiced increased compared to my eager to go to Spirit Squad. The opportunity cost of joining this team is also using all of it for homework and sleep.

 Lastly, I was thinking about rejoining a junior hip hop team, Gravy Babies. Even though I was almost too old for the team, their directors wanted me back because some of my college friends joined and my old friends were all there too, including my very own sister. For practice times during hell week, I would think of that as a variable because it is constantly shifting due to the demand of how many more practices we need including the previous practice days. I feel that with the increase of monthly studio fees, and gas money led to me hesitating if I wanted to be a part of this team again or not. Even as a junior team, the amount of money I have to spend here is more expensive than Common Ground. Of course, my opportunity cost for Gravy Babies is the time for my homework and my money.

 In the end I’ve decided to join the Common Ground Dance Team. This was because it didn’t conflict with my schoolwork. The trade-off would be my sleep, but I still don’t have school on Fridays, so I still had the whole day to work on my homework. I felt as if the random game times of Spirit Squad would affect my own schedule of planning when to do homework and just traveling super far just to practice for Gravy Babies was too much. Most importantly, I made a lot of friends that are my age or older. They are the ones that can give me guidance in the future when I need it.

Florrie Ku

11018924

[wednesday12econlive]

The Inelasticity of Epipen

Throughout my life, my sister’s allergies played a great amount importance in how my family allocates our money.  For people with allergies, it is common for them to carry around an epinephrine auto-injector, a device that is used in case someone injected an allergy to prevent an allergy attack. All her life, my sister carried an Epipen, the brand named version of the device. Because nuts and eggs—the food that she’s allergic to—can creep up in any meal and threaten her life with a swelling neck, having an Epipen is something is always needs to carry. Having an Epipen could save her life and my parents are willing to pay any price to have that “safety net”.

Thus, Epipens and other medical devices/medication are typically known as inelastic goods, or goods in which a price increase will not greatly affect the demand of the product. 2007, Mylan bought out Epipen; because their patent is set to expire in 2025, Epipen is a monopoly. When I was a kid, Epipen cost a little over $100; however, after the acquisition, it costs $600 for the same amount of the same product.  Since it has a shelf life of around one year, my family is paying an extra 500 dollars every year for the same product.  Epipen was the first epinephrine auto-injector to be placed onto the market, and because of its name and its positive success, many consumers, like my family, greatly trust the company.  Only recently, my parents found out about the generic CVS brand, Adrenaclick, that entered the market after receiving permission by the Epipen company.

It costs $100 for the same amount with the same shelf life, and since they have the same purpose, they are almost identical products.  This means that they are substitutes for each other.  Because there was previously only one supplier, the epinephrine auto-injector monopoly ruled by Epipen switched to a monopolistic competition.

My family was faced with a tradeoff. If they choose the Epipen, the opportunity cost would be having extra money for things like school supplies. However, if they choose Adrenaclick, the opportunity cost would not be having 100% trust and experience in the product.  Another option would be not buying either products and save money, but the opportunity cost would be my sister potentially suffering from life threatening allergic reactions with no cure.  The last option is to buy a foreign version of the Epipen.  In the UK, the Epipen is only $69, (USD) which is much cheaper than the American equivalent. However, because it is an international product, America will place tariffs or taxes on imported goods, thus increasing the price of that once cheap product, if it was allowed to enter the US.  Eventually after weighing out the cost, my parents decided to switch to the generic brand and use that extra $500 to buy us more school supplies for the year.  Conclusively, economic topics like these are very important to my life and the people around me.

Fiona Louie

60278853

[wednesday12econlive]

Banh Mi For You and Mi

Linh, a dedicated intern of UCI’s Vietnamese Student Association (VSA), sells boba and banh mi at the VSA booth on Ring Road every Wednesday. Her booth is part of the market that follows supply and demand, depending on several factors.  Anna, her hallmate that passes through Ring Road every day after class, sometimes stops by Linh’s booth to check it out.

Picture of the amazing Banh Mi Booth with model Tam (President of VSA)

Here’s How Factors that Shift Demand Applies to Banh Mi Boothing:

1. Because the demand for banh mi and boba decreases when the income of the consumers decreases, banh mi and boba are normal goods.  If they were inferior goods, their demand would increase as the income of the consumers decreases.  If Anna worked a part-time job, she would be more willing to buy banh mi or boba because her income is higher.  However since she is not working at the moment, she will probably pass by the booth without buying anything for now. 

2. The rival booth, which sells bulgogi tacos, always seems to be setting up right next to the VSA booth.  Banh mi and bulgogi tacos are substitutes because as the price of banh mi decreases, the demand for bulgogi tacos decrease, and vice versa.  Banh mi and boba are complements because as the price of boba decreases, the demand for banh mi increases, and vice versa.  If the rival booth is selling tacos one day for a discounted price, Anna would be more likely to purchase a taco than banh mi.  If VSA’s booth decides to lower their price of boba for a day, Anna would more likely purchase banh mi because banh mi and boba go well together.

3. Obviously, consumer tastes plays a big factor in the demand for banh mi and boba.  Buyers like Anna love the taste of boba so they will always be more likely to purchase it than buyers who think it tastes bad.  On the other hand, Anna is not the biggest fan of banh mi so she will be less likely to buy it than people who love the taste of it.

4. The expectations of consumers also make a difference.  If Anna expects the weather to be rainy soon, she will probably not stop by the booth to buy some boba.  However, Anna checked the weather earlier and saw that it was going to be hot for the rest of the day, so she buys some boba to cool her off.  Also, if Anna expects to start working a part-time job soon, she might be more inclined to make a purchase at the booth.  However if she expects to set aside $70 this month to invest in a new pair of sneakers, she will probably not purchase anything at the booth. 

5. The number of buyers play a role in shifts in demand in VSA’s market for banh mi and boba.  If Anna invites the rest of Anna and Linh’s hallmates for a banh mi party at the VSA booth, the market demand for banh mi will increase. During midterm and finals seasons, the number of buyers are expected to decrease because most students will choose to use their time to study rather than buying banh mi or boba.

Picture of model Tam next to the beautiful VSA menu consisting of $4 banh mi, $2 boba (from Almond Haus), and the wombo combo of BOTH banh mi and boba for just $5! 

Here’s How Factors that Shift Supply Applies to Banh Mi Boothing:

1. Setting up a booth and selling banh mi and boba on Ring Road requires investing in supplies, or inputs.  As the price of an input increases, the supply of banh mi and boba will decrease, and vice versa.  If boba manufacturers raised their prices and charged more for boba, the VSA booth will supply less boba drinks.  If the bread of the banh mi became cheaper to buy, the booth will buy more of it and make more banh mi.

2. Technology is always advancing to make people’s lives more convenient.  If Linh decides to invest in a boba sealing machine, the boba-making process will become faster and more efficient, allowing her to supply more boba for buyers like Anna.

3. Just like the expectations of consumers, the expectations of suppliers makes a difference as well.  If Linh expects it to rain tomorrow, she will supply less banh mi and boba because less people will probably stop by her booth to buy it.  If Linh expects it to be sunny all day tomorrow, she will supply more boba because the hot weather will make buyers crave boba more.

4. Similar to the change in number of buyers, a change in the number of suppliers matters.  If badminton club decides to start selling banh mi and boba at their booth on the same day, the number of suppliers increase and the supply of banh mi in the market increases, which will result in the decrease of the price. Linh will have to charge less for banh mi if she wants buyers like Anna to buy banh mi from the VSA booth. 

Basic economic concepts like supply and demand helps Linh decide how much banh mi supply she needs and how well she will sell every Wednesday. Applying the econ concepts to boothing helps Linh reel in more loyal banh mi customers like Anna and continue the VSA tradition of selling banh mi every week! 

Ngoc Linh Tran 50594966

Anna Kim 65936397

[wednesday12econlive]

Applying Economics to K-Pop

My favorite genre of music since I was in 8th grade is Korean pop music, also known as kpop. The kpop industry’s influence is extensive and its eminence is growing rapidly into markets throughout the world. After analyzing the industry, I observed that it has a monopolistic competition market structure.  Monopolistic competition is a market structure characterized by many sellers, product differentiation, and free entry and exit. There are a large number of firms which are represented by kpop groups, each with a different concept and style. For example, SHINee is a contemporary R&B five-member group while Seventeen is a thirteen-member group that experiments with funky pop-rock. Despite the monopoly the firms have over their own songs, they constantly compete for the same consumers. With a variety of concepts and styles to choose from, consumers have a choice of which group to support. In a monopolistic competition market structure, there is free entry/exit. Resources such as idols or studios to produce music are not collectively controlled by one firm and there isn’t any government regulation preventing new firms from entering. Overall, the kpop industry is an excellent example of a monopolistic competition market structure.

SHINEE - Dream Girl

Seventeen - Pretty U

Despite the enjoyment and happiness this genre of music brings me, being a fan can be very time consuming and costly due to the seemingly never-ending abundance kpop merchandise and concerts. I often face the same conflict every time one of my favorite kpop groups announces a tour in Los Angeles. For instance, GOT7 will be coming this summer for a concert. A ticket costs $100 and the concert will last for about 3 hours. If I have to arrive at the venue 2 hours before the concert starts, I will be forfeiting $50 worth of salary from my tutoring job. In addition, I will have to pay $13 for transportation to the concert. Thus, the total opportunity cost will be $163. With $163, I could get at least 40 boba drinks, or buy myself a new camera lens. If seeing GOT7 perform live is worth $170 to me and buying 40 bobas is worth $160, I would have to choose to attend the concert. The total cost of the ticket, transportation, and time is worth watching GOT7 at a concert and exceeds the worth of buying 40 boba drinks.

In addition, there is a great deal of tradeoffs from buying a physical or digital version of the album. A digital copy would be convenient and cheaper. I could easily purchase the album online without taking a step outside my door. I can immediately transfer the songs to my phone and listen to them instantly, while the excitement is still palpable. However, a physical album includes photo cards, posters, and a photobook that I can treasure. When deciding which version to buy, I have to consider the tradeoffs. If I were to buy the digital copy, my tradeoffs would be photo cards, posters and a photobook. If I were to buy the physical album, I would have to give up on time and convenience. In conclusion, I will use what I have learned in Econ 20A to make careful decisions about my purchases in the future.

Sample of an EXO Album

Michelle Phung

88359222

[wednesday12econlive]

Trade offs. Drive home or stay on Campus?

My life is an eternal dilemma. I don’t live on campus so I have a one and a half hour commute to and from campus every day. My job is about twenty minutes from campus. My schedule never works out perfectly so that I can maximize my time at school and my time at home. And as a struggling college student, I face constant trade-offs between time and money.

Take my Friday schedule as an example. I only have two classes on Fridays so I am only required to be on campus from 8am-10am. If I didn’t have a job, I wouldn’t think twice about going straight home after class, but that is not the case. On Fridays, my shifts at work usually start around 6pm, which means I have an 8-hour gap between class and work.

This is where the dilemma comes in. I have to decide whether I want to stay on campus or go home during that gap. Going home would mean, free food that my parents provide, and time to do things around the house. It would also mean I would be able to spend time with my family. The thing is, going home would require a 1 ½ hour drive home and then a 1-hour drive back to work, which would be 2 ½ hours that I could use for something else.

If I were to stay on campus, I would save myself those 2 ½ hours, but I would have to spend at least $15 on food. (Let’s keep in mind that I am not considering the price of gas because I don’t even get a choice in that.)

So then every Friday I have to ask myself whether I should stay on campus or drive home before my shift? Should I spend 2 ½ hours driving $15 on food? My answer each week has come down to the variances of the week. Maybe one week I spent too much money, so I would rather drive home and save me the $15. Or maybe one week I pulled an all-nighter for a Friday final. I would be willing to spend those 2 ½ hours driving in order to get some sleep in before my shift.

This tradeoff will have a different opportunity cost each week based on the choice that I make.

Alejandra Pulido

72073107

[wednesday12econlive]

The UC System Market

As college undergraduates, we recently had the opportunity to experience the college application process. It’s interesting growing up with a southern California mindset because we don’t realize how applying for schools can be considered a economic market. Each school is essentially competing with each other for being the best ranked and for the most profit from the students they admit each year. The ranking of each school is ingrained in our minds and we barely take a second to think of the implications.

What kind of market does the UC System represent?

Over the past twenty years, the University of California’s eight undergraduate campuses have experienced a harsh drop in admission rates due to the rapidly growing number of applicants each year because more people are recognizing higher education as a positive externality. The UC system is a highly respected institution for higher learning so it is no wonder admission rates can go as low as 17% in 2018 (UC Berkeley). Even though the UC system is considered a prestigious college system, there is still competition between each school. The competition between the UC schools is not a perfectly competitive market because although each school provides a similar level of education, each school offers different programs and curriculum. Therefore, the UC system could be considered a monopolistic competitive market There are three main characteristics of a monopolistic competitive market: having many sellers, product differentiation, and free exit and entry. An example of free exit and entry is UC Merced. A recent addition to the UC school system, Merced became a college campus 12 years ago in 2005. 4In 2017, UC Berkeley received 85,016 applicants for the upcoming fall quarter, 17,165 less applicants than UCLA’s 102,181 applicant pool.

Applicants, Admittance, and Enrollees by Campus

Above is a graph that shows the total number of applicants, admitted students, and enrollees that applied to the UC schools. As you can see, there are more students that apply to UCLA than any other UC school but it also has one of the lowest acceptance rates. This is attributed to the reputation that UCLA holds as an institution. The mere name of the school attracts more students to the campus because the name is more trusted than the other UC schools. UC Berkeley is the top ranked UC school, but UCLA still has more applicants. UCLA focuses heavily on their alumni and advertisements through sports and media. Students around the world are more inclined to apply to UCLA because of these factors.

As UCLA continues to rank upon one of the top public schools in the nation, the number of applicants increases because hopeful students become more eager to apply. Universities are private goods because they do not have free entry and exit and colleges can control the price for enrollment. While all UCs technically offer the same quality of education, many consumers view each individual college on different levels because of product differentiation and the varying reputations each institution has. This is an example of brand loyalty because when applying for colleges, most applicants have the tendency to continue buying from the same brand (or in this case, apply to the same institution) because they perceive that the level of education and resources at a college like UCLA will differ greatly than from its sister school UC Irvine.

Each UC school is a monopolistically competitive firm and not a perfectly competitive firm because each individual school has a different marginal revenue and marginal cost. Although the price to apply is the same (around $70 per application), schools like UCLA and UC Berkeley earn a higher marginal revenue because more students apply there due to the reputation they have. The demand line for the monopolistically competitive firm graph in this example will be the student’s want for admission acceptance. Average Total Cost will be the same between both markets because colleges obtain the same amount from government funding to run their schools, but because some name brands are more trusted than others, the demand is greater.

Conclusion:

In conclusion, we learned that the UC system is not a perfectly competitive market due to brand loyalty, competition, and product differentiation. We learned that the UC system is actually a monopolistic competitive market that includes many sellers (Universities) with varying educational programs. And each school is a firm that can be modeled after the Monopolistic Competitive firm graph. We also learned that within this market, UCLA is a brand name school that attracts more students and is trusted by families worldwide.

Sources: “Institutional Research and Academic Planning.” UC Student/Workforce Data | UCOP, www.ucop.edu/institutional-research-academic-planning/content-analysis/ug-admissions/student-workforce-data.html.

Tim Truong 93341190

Leann Lu 32718727

[wednesday12econlive]

Gym Memberships and Elasticity of Demand

I have recently made some personal lifestyle changes to be the best version of myself. They say that weight loss and fat loss happens “in the kitchen” meaning it is dependent on your diet. I have really gotten the stride on what works for me and lost a considerable amount of weight so far. However, they say fitness happens “in the gym”. While the kickstart of my weight loss journey has fueled me to start the fitness portion, one thing that sparked a little hesitation was the price of a gym membership.

I assume, as a consumer, that I am not the only one that experienced hesitation seeing as the number of closing clubs have increased. This is dependent on how necessary a gym membership is perceived in competition with increased prices in other goods such as gas and rent - both things that are necessary spending as a college student. The trouble with pretty consistent prices for a membership and increasing prices of other goods is that gym memberships start to look like a luxury good in comparison with these other necessary goods. I myself took on this mindset initially and wondered why club owners wouldn’t think about lowering membership prices. Would that not make sense to combat the number of customers they are losing?

Here’s why it doesn’t:

Elasticity of demand is a measure of how responsive consumers are to price changes. Consumer spending = price x quantity. If a good has an elastic demand, a decrease in price will increase consumer spending and the percentage increase in quantity would be larger than the decrease in price, bypassing economic loss. 

For instance, a club has a total of x amount of memberships at which they charge y dollars per month. In normal conditions, this club will experience a decrease in memberships per year. Replacing those members with new members who pay the same monthly fee of y dollars will result in an internal revenue for the club and allows the maintenance of the  level of services and equipment they provide. Decreasing the monthly fee actually increases the amount of memberships the club has to replace to retain the same amount of internal revenue. That is, the proportion of increase in quantity is actually larger than the proportion of decrease in price. This will lead to lowering the level of services and equipment provided and ultimately an even further decrease in active memberships. 

While lowering monthly fees are not economically maintainable, gyms are combatting this by becoming a little more strategic in offering deals such as initiation fees and offering free months.

Many people may see a gym membership as a luxury good and something that is not necessary pertaining to their spending habits. However, I personally see my gym membership as an investment in myself and my health and also the services that are being provided to me. Budgeting and finding ways I can save money that also contribute to my lifestyle changes (such as cooking healthier meals at home instead of going out to eat multiple times a week) frees up that money that I can justify spending towards my health and supporting my local gym club. 

Frances Alilain

60706929

[wednesday12econlive]

Minimum wage laws

Last week I was walking around the campus and want to find a part time job in the campus in order to broaden my experience and for a little extra cash. When I am inquiring and calculating how much could I earn by part time job, I started to notice minimum wage laws in the US.

 I am a international student in China and we have minimum wage laws as well, but our minimum wage is much lower than minimum wage in the US. As I learned more about minimum wage law, I understand how difficult it is to set up the minimum wages in a State and even in a Country.

 Minimum wages dictate the lowest price the employee must pay to the labor decided by the federal, which is essentially price floor in microeconomics theories. In order to understand minimum wages, it is important to understand the labor market. In the labor market, the product is labor offer by workers who is also the producer in the labor market. Consumers are companies that in need of hiring workers. Workers decide the supply of the market and firms decide the demand in the market.

 Without the application of minimum wage, the labor market equilibrium is shown in the left side (graphs from textbook). After the government apply the minimum wages law, the situation and change of the labor market is shown in the right. The quantity demand decrease due to the laws and the quantity supply increase. In the new market equilibrium, the quantity supply is more than the quantity demand, which would result in a surplus in the market.

  The minimum wage is binding if the set of the price is higher than original market equilibrium price. The result of a binding minimum wage is that many workers could not find jobs and the problem of unemployment. The minimum wages law would increase the wage of workers who have job but decrease the income of workers who cannot find a job. More importantly, the minimum wage laws would have the greatest impact on teenage workers. The laws would not influence highly skilled workers because the market for them is highly above the binding price. However, teenage workers are paid the wages around the minimum wages. Thus, teenagers are influenced by the minimum wages law greatly.

 Thus, it is very hard for governors to determine the value of minimum wage laws since they have to consider so many factors and consequences.

[wednesday12econlive]

Opportunity Costs in Mock Trial

One extra curricular that has taken up a large portion of my life for the past few years has been Mock Trial. Since my junior year of high school when I first joined my school’s mock trial team, I have learned and grown so much through this one activity, to the point where I joined the UCI Mock Trial team to compete at a collegiate level as well. Mock Trial, essentially, is the simulation of a real life trial, in which teams are given a fictional case and members are assigned roles between attorney and witness. Having done Mock Trial throughout fall and winter quarters, I can’t imagine my life in college without it. In connection to economics, this made me think about the opportunity costs that come with doing Mock Trial.

The biggest opportunity cost with this activity, like any extra curricular, is time. Almost all my weekends were occupied by tournaments in different places, from San Diego to Santa Barbara. This took up the entirety of my Saturdays and Sundays, days without classes that many other students utilize in other ways. By going to tournaments, I sacrifice time that could have been spent relaxing, studying, going out with friends, or many other activities I would not otherwise have time for during the week. By missing out on these tournaments during the weekends, however, I would give up learning more by competing against different teams, as well as the opportunity to expanding my network to meet new competitors and win awards. Similarly, with time, the Mock Trial program at UCI often meets up from 7-9 pm on Thursday nights for practices. These two hours could also be spent in other ways; by skipping practice on Thursday nights, I can stay home and study for my quizzes on Fridays for math, or go to hall dinners. What I would sacrifice by missing practice, however, is an opportunity to go over material with my teammates collectively and improve my material for upcoming competitions.

Another major opportunity cost that comes with being a part of the Mock Trial team is money. There are several costs that go into being on a team like this, including club dues, money for food while travelling, money spent on professional clothes, and travel. This quarter, I have spent close to $100 on clothes alone, money that could have been spent on other clothes of my choosing. I have also had to spend a lot of money while travelling on eating out, sacrificing the amount of money paid towards my meal plan at the Anteatery. The set cost of club dues is money that could have gone towards paying my fees, or staying collected in my savings.

While there are many opportunity costs that go into being part of the Mock Trial team at UCI, the biggest sacrifice of all would be giving up something I love. The opportunity cost of not doing Mock Trial is giving up the chance to do something I enjoy while making myself a better person. Without Mock Trial, I would not have the chance to improve my public speaking skills, expand my network, and explore potential career choices for my future. I would give up being part of a team and the solid friendships I have made, as well as the safe space to go to when I am feeling stressed or overwhelmed. Though many factors go into participating in such an activity, I would not give up being a member of this talented team for the world.

Rhea Jandu 

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