Econ Live Tuesday @5

Before coronavirus cases became rampant in the United States, I worked on campus as a cashier. The demand for dining workers at UCI was at an all time low. As on campus activity started dying down, there was less of a demand for workers to cater to students needs. Hours were being cut so I earned less and less. Finally as campus was shut down that essentially marked the end of first job for the year 2020.

After moving back home to San Diego, I was left jobless for several months, but fortunately I did not have to pay for rent. Throughout those months the demand for essential workers had greatly increased. I applied to many jobs, until eventually I was hired at a local supermarket. I worked there for several months, saving as much as I could.

dababy rulezzzzzzz

lessssssssssssss goooooooooo

The year 2020 will no doubt be remembered for its constant roller coaster of events, one of which is known as the Coronavirus Pandemic which swept not only across America but many other nations as well. With this pandemic came economic changes in many markets around the nation and the markets which are going to be discussed include the market for toilet paper and restaurants. 

Toilet paper during the pandemic became huge, demand increased and whenever families would take a trip to the supermarkets, empty isles of where toilet paper once was was a very common sight. Those who got their hands on a roll were considered lucky. So why did the pandemic cause such an uproar on toilet paper? Many people had the notion of because of a lockdown they would need to supply in order to last for however long the lockdown lasted. Demand for toilet paper skyrocketed to where major firms who produced toilet paper could not keep with the heavy demand on the item as their spare storages ran dry. Toilet paper was considered a necessity so even after price increased, people kept buying the product. Many would claim the sudden increase to the demand of toilet paper would be put on the people’s panic buying of the product as people weren’t too sure just when the lockdown order would be removed.

Another market affected by the pandemic as well as the stay-at-home order was the market for restaurants. With the order in place, both the demand and the supply of restaurants dropped to the point of whether the restaurant, smaller ones especially, decide if to shut down or even exit the market as the pandemic took away their source of revenue. Until June 2020, the order was finally lifted off the market did supply as well as demand increase. Supply increased by restaurants finally opening up again and resorting to take out only which is seen in many states and demand went back to normal as consumers now had restaurants available for buying their products. 

Joshua Ochoa (#62462397)

How I Build My Daily Schedule Using “Opportunity Cost”

As the coronavirus began to affect all aspects of business. A particular business that was greatly affected was the car business in the sense that when the coronavirus began, the price of cars at the auction lowered. This was beneficial to the people in this business since they were now getting cars for cheaper as myself. However, as the coronavirus continued along a people began to receive stimulus checks, the opposite occurred, the prices of cars started to raise since people had extra money to spend if they maintained their job. The coronavirus at the begging shifted the demand cover to the left, lowering the price of cars but when people began to receive stimulus checks the demand curve moved to the right increasing the price of cars.

My Experience as a K-Pop Fan in the Middle of the Pandemic

For a couple of years now I have been a k-pop fan, and although not ideal I follow various groups and solo artists from the industry. In fact I had worked hard to buy tickets to a concert that would have taken place during last summer, but that for obvious reasons was called off. At the time I was still a high school senior very much unaware of the changes that were about to be brought upon us. My priorities and responsibilities were very different then compared to now.

As a first year college student I have come to identify my most valuable resource to be my time. During the pandemic I have followed the CDC recommended guidelines to stay at home and avoid going outside, even when moving to live in the dorms at UCI. This means that the amount of “free” time I had has dramatically increased.

From the start of the Fall quarter I have had to find a way to pace myself accordingly in order to keep up with all of my classes and still give myself a break to enjoy my hobbies and complete other day-to-day activities (such as doing laundry, or vacuuming and cleaning my dorm room).

Unfortunately for me, as finals have approached this quarter, many of my favorite artists are having comebacks and other activities. This leaves me facing a trade-off for my free time. I can spend a few hours enjoying the content these artists are releasing or dedicate those hours to studying for my upcoming finals. The obvious opportunity cost here is the time I spend doing one thing, I will give up on and cannot get it back in order to fulfill the other. Looking at a total opportunity cost I am also giving up on the happiness I will feel if I were to just enjoy the content at the time it is being released. (Attached some of the comebacks I have delayed watching in order to focus on school.)

Vanessa Santos

id# 61557694

In this post I will go through the 4 principles of microeconomics that concern individual decision making in order to explain my experience babysitting for my older sister during this pandemic.

People Face Trade-offs

When my sister asks me if I can babysit my niece (4 years old) and my nephew (3 years old), I have to choose to make a trade off with my time. Every hour I spend babysitting is an hour I will not spend doing homework, working, talking to my friends, exercising, or watching something I want to watch- it’s all Moana, Toy Story, Coco, or Big Hero 6 with them. The main trade off is between being personally productive and relaxing or being helpful and spending bonding time with my niece and nephew. If I watch them I cannot do homework or relax because they are young and energetic and need supervision or else they’ll write on the walls. My work, studies, and relaxation are important to me, so I need to manage the trade off of giving time to babysitting well.

The Cost of Something Is What You Give Up To Get It

To help manage the trade offs of my time, I have to consider the opportunity costs of every option available to me in order to analyze the costs and benefits of each. Usually if I babysit- unless it is sprung on me last minute and my dad tells my sister I will in which case I do not get to negotiate for money- I will get paid anywhere from $50- $200 depending on if its overnight or what hours of the day it is. Usually it is only $50. If I do not babysit and I go to work, I will be paid anywhere from $60- $120 for a day of work. In this comparison, I will get more from working and if I choose to babysit the opportunity cost of working is higher than what I get babysitting. 

However, there are also implicit costs of every opportunity. If I work during a pandemic- which I work at a grocery store and interact with a lot of customers everyday where I do carts and help bag or clean- then I risk my health and the health of my family members by potentially catching COVID-19. But, at work I get to get out of the house which does not happen as often because of quarantine and I can interact with coworkers which is good for my mental well-being. However, sometimes customers are rude and staying long hours on my feet at work physically tires me out. When it comes to babysitting, I have to watch my niece and nephew and lose out on watching shows I like or talking to my friends. I love my niece and nephew though, and feel warm when we have good moments and bond. It is less costly now that they are potty-trained than it was when I would watch them when they were younger. I also give up time I could work on assignments because it is hard to concentrate with them- but that is the case at work too and to keep it simple I am just comparing working or babysitting rather than free time.

Usually I think the opportunity cost of babysitting is worth it because I love my niece and nephew and sometimes like a break from standing or walking at work all day even though I get less money from babysitting. 

Rational People Think at the Margin

For this I will compare the physical, mental, and financial cost of another hour working versus another hour babysitting. Physically, another hour of work is more draining than another hour babysitting because I might have to push carts in the parking lot all hour or walk around sweeping or bag and carry groceries. When I babysit, I can sit down and watch shows with my niece and nephew or take a nap with them so it is less physically draining. Mentally, I can get similar but different kinds of drained. At work I may get tired of doing the same tasks or if it is busy I want a break from customers. Another hour can seem daunting at times and I just want to go home. While babysitting I may get tired of the same movie- because they like to watch the same movie again right after we just finished it and they’re all movies I have seen many times. Or they have so much energy and are hard to keep up with. Overall, another hour babysitting is not so bad because I am more comfortable at home anyway. Financially, I do not make more for another hour babysitting but I do for working. My sister pays me a fixed amount ahead of time and is often later than she said she would be- if she even said what time she would come back. In this case, the marginal cost of babysitting another hour is much higher because I get paid less per hour the more I work since the payment is fixed. When I choose to babysit instead, it is because I value the marginal cost on me physically and mentally more than financially- mostly because I pay for things for myself or services I get but I live at home and my parents pay those bigger bills.

People Respond to Incentives

Here I will discuss financial incentives for working versus babysitting. I need an incentive to babysit- again, unless my dad takes my sister out and assures her that I will watch the kids and only tells me as they are walking out the door. If my sister asks me to babysit, I usually say no. Then she offers me money and incentives me and I say yes. I am also incentivized by food because often times if my sister and I are on good terms she will buy me food somewhat regularly, and babysitting so she can go out keeps us on good terms. However, if I am asked to work a holiday it sucks because I want to be with family on holidays. In order to get people to choose to work on these days when most people don’t want to, companies have to pay more so the cost is offset by the financial gains of working holidays. In this case, I do work holidays and am excited by the bigger checks. 

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This economic decision making has been pretty similar since before the pandemic, with the biggest difference being the added demand I have for being outside my house and having interaction as well as the added cost of being outside my house which makes it a health risk. In the end, this added benefit and cost to working has mostly cancelled out for me and I usually would still choose to babysit my niece and nephew rather than work- which is what I do. I request Wednesdays off of work so I can babysit on Wednesdays because of all these reasons listed above.

What many grade school students thought was a lucky extension to their spring break, almost a year ago to this day, turned into a harsh transition to online learning. Schooling became online distance learning where zoom calls replaced classrooms, apps replaced turn in baskets, and watching videos replaced hands-on learning. While teachers and the education system as a whole have tried their best to still provide an education to students during the pandemic, there is an obvious challenge, now more than ever, to provide students from under-resourced communities with the education they need.

Trade-offs of closing schools

In Economics, people face trade-offs when making decisions that require them to compare the costs and benefits of the alternative courses of action. These costs and benefits do not have to have monetary value; they are any situation that is valuable to an individual or society as a whole.

As distance learning approaches its’ one year mark, the costs of online education are coming to light. School, especially at the grade school level, does not just educate children on basic topics, it is also an environment that can build a child’s social and problem solving skills, provide stability for students who have stressful responsibilities in other aspects of their lives, and overall prepare them to becoming high-functioning adults. In the long run, missing a year of in-person school due to COVID-19 can have harmful effects on the younger generation. Economist Michael Strain at the American Enterprise Institute found that “keeping kids home for another semester after the spring shutdown represents a loss of over $30,000 per decade in future earnings.”

Many students, especially those residing in lower income communities or are a part of a family affected by COVID-19 face even greater, immediate trade-offs. Many of these families have been affected by the economy, losing their jobs and struggling to acquire basic necessities. In these households, education is either not a priority or not a reasonable option for them at this time. Students may have to choose whether to spend 8 hours a day doing school and homework or spending those 8 hours helping their parents work and managing their home. Technological trade-offs also pose a barrier to their education; should a student use electricity to charge their computer for school or limit the amount of energy used to lessen the bills for their parents?

While these trade-offs may not be an issue to some students, they are very real to others. That being said, the other end of the trade-off would be to continue in person schooling which has its own set of costs including putting students at risk to contract the virus. In the case of education during the pandemic, the cost of a trade-off is not obvious or clear at first, but the longer schools are closed, the greater the lasting effects will be on individual students and society as a whole.

Demand for tutors

With the challenges students face in online distance learning, there has been an increase in demand for free tutors in low income, struggling families. Many students who can and want to learn still struggle to get the help they need in an online setting. In a zoom classroom filled with 20+ students, it is hard for teachers to recognize which students are struggling and need more help than others, and even then, jumping from breakout room to breakout room to help them isn't effective in the short amount of time they have with each other.

Tutoring is in high demand because it provides students with a one on one learning environment. Online tutors gives students the opportunity to learn at flexible times, in the comfort of their own home, while receiving the attention they need to learn.

In this supply and demand diagram for tutors, both the supply and demand have increased, or shifted to the right due to the shutdown of schools from the Coronavirus. Although the supply of tutors has increased due to more online tutoring programs available, there is still a greater demand for tutors than there is a supply for tutors. Since the demand curve increases more than the supply curve there is an overall increase in ‘price’; however, in this scenario it is difficult to define the price since many online tutors are providing free services. Price in this scenario can reflect the value of tutors in the education system so as the demand exceeds the supply of tutors, the value of tutors in the education system also increases.

My Contribution

Recently, I began volunteering with Step Up tutoring, a non-profit organization that provides free online tutoring to students in under-resourced communities specifically in the Los Angeles Unified School District. As a tutor I work with the same student over a period of time to help improve their academic performance and encourage their engagement in their education.

While I myself am fortunate enough to have the resources to continue my education, many students of all ages struggle to acquire the basic necessities to learn. My goal as a tutor is to minimize the barrier that underprivileged students face when it comes to online learning during COVID-19. The trade-off of spending 2 or more hours a week to help other students learn instead of using that time to study for my own school or work at a paying job is worth it; the benefits outweigh the costs.

Sources

Gorcey, Ryan. “Demand for Tutors Skyrockets as Pandemic Lays Bare Inequalities in Education.” Daily News, Daily News, 10 Aug. 2020, www.dailynews.com/2020/08/10/demand-for-tutors-skyrockets-as-pandemic-lays-bare-inequalities-in-education/.

Pethokoukis, James. “The Terrible Tradeoff of Keeping Schools Closed.” American Enterprise Institute, Https://Www.aei.org/Articles/the-Terrible-Tradeoff-of-Keeping-Schools-Closed/, 6 Aug. 2020.

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Leilani Samson-Bona

Once the World Health Organization declared COVID-19 as a global pandemic everything changed. School is now virtual and I had to go back home. This was a horrible change for me. First of all, most of my classes were asynchronous, meaning; I can learn at my own pace and complete my work or watch my lecture videos whenever I have time. As a student who struggles to stay focused and gets distracted easily, this was probably the worst possible outcome for me. Everyday it was a challenge for me to start my work.

I was faced with the hardest decision everyday, do work or spend time doing hobbies I enjoy. For instance, I could put off my work and watch movies, play card games with my mother or read the endless amount of books I have instead of doing my school work, but the opportunity cost would be time spent studying and good grades. An opportunity cost is something you give up when choosing an alternative choice. We use the concept of opportunity cost in our everyday lives.

Another example of this would be not spending time with extended family over the holidays. Since there’s a pandemic going on we decided to stay home for Christmas and New Years, the opportunity cost here would be spending time with my family that live in Mexico. 

Name: Jocelyn Aguiar

Tesla’s share price has increased up to 8-fold since the beginning of the COVID-19 pandemic. 2020 was the electric car maker’s first full year of profits, which were negligible relative to the boom in share price. Tesla’s P/E ratio is 172.41 and its PEG ratio was 4.52 as of 3/11/2021. Most economists would tell you to run, but people keep buying. What in the world happened? Well here is how Tesla is playing chess while every other car manufacturer is playing checkers. 

Elon Musk proved to the world that an effective widespread EV charging infrastructure is possible. Tesla’s Superchargers / in-home charging systems are arguably the greatest automotive innovations since the internal combustion engine. So is the optional “Autonomous Driving” feature found in Tesla vehicles and the sub-3 second 0-60mph time. However, many Tesla owners are dealing with QC problems, exploding batteries, faulty electric door actuators (children stuck inside hot cars) and the list goes on. Aside from the innovative charging infrastructure, Tesla makes a subpar vehicle. Hyundai and Nissan have better “autonomous” driving capabilities (Tesla’s “self-driving” feature is nothing more than adaptive cruise control and lane keep assist found in a well-equipped Honda Civic), Porsche makes a faster and better-handling zero-emissions EV, and almost every other car in the world is built with lower QC tolerance levels. So why is Tesla still a successful car manufacturer?

Green Credits

Although most envy Tesla’s success, car makers need companies like Tesla so they can purchase their regulatory credits and sell their internal combustion vehicles to the public, as they are too far behind Tesla to produce a successful EV. Last year, Tesla sold $1.6 billion worth of permits. This keeps Tesla in the EV business and helps slow the production of competing EVs by other car manufacturers. In addition to Tesla’s exclusive charging infrastructure, this allows Tesla to control 80% of the electric car market in the United States. In fact, the Tesla Model 3 was the best selling car in California (Q1 2020), beating the Honda Civic and Toyota Camry.

Hype Marketing

Although Tesla is the only automotive company that doesn’t have a formal advertising department, it uses one of the most effective advertising strategies today, hype. When Elon tweets about a new feature in a Tesla that allows you to play any sound with your horn, demand goes up. A short 5 second clip of a prototype Tesla Roadster accelerating into a convention center that went viral poured in preorder deposits for the company’s future flagship supercar. The outlandish design of the Cybertruck and a video of it pulling an F150 uphill surely boosted share price as people rushed to buy low before the release of such a capable truck. Tesla’s market is driven by hype, making it a tech company (hence the listing on NASDAQ) rather than an automotive company. This explains why the poor end product the consumer receives does not affect Tesla’s value, giving the company a serious upper hand in the car world. 

Mini Monopoly

Tesla’s power has completely transformed the car industry. A decade ago, consumers would purchase a car based on its dependability, brand reputation, and build quality. Now, consumers make their vehicle purchase decision based on the presence of tech gadgets, driving aids, and quirky gimmicks. Following the radically minimalist interior design of the Tesla Model 3, Lexus buried their climate control buttons into a screen, Porsche replaced their center console buttons with Haptic Touch screens, Mercedes replaced steering wheel controls with mini screens. Tesla’s innovations determine the progress of the rest of the car industry, those who don’t conform will suffer greatly (Infiniti, for example). Tesla overly differentiates their product, putting their vehicles, which serve the same function as any other car on the road, in a market of its own.

Lying

In 2017, Elon Musk said the Tesla Roadsters would start rolling out by 2020. $50,000 minimum deposits were required and people were given the option to pay the full $250,000. Tesla is sitting on an estimated 1,000 Roadster preorders, practically scamming people of up to $250 million. The Cybertruck was driven by Musk on the street and hyped up with a bizarre design. This truck was preordered by well over 500,000 people at $100. DOT experts suggest that the design alone wouldn’t make the Cybertruck street worthy. The headlights project to high and the A pillars are slanted too far back to survive a front-end collision. This is another $50 million 0% interest loan for Tesla. 

This is how Tesla eats and grows during the pandemic while small businesses and competing car companies suffer. 

Jun Jung

Introduction: 

Prior to Covid, I was hesitant to build a PC as I felt it was unnecessary, thinking I would be on campus for the School Year. A few months later I caved in and collected all the parts necessary to put together a gaming PC, but at a premium. 

Background:

A key component in building a Gaming PC is a GPU (Graphics Processing Unit) which is what's doing most of the work inside the PC. NVIDIA - one of the two major tech companies known for producing GPUs - has released multiple iterations of this component each better than the last, with their most recent lineup - the 30 Series. 

COVIDS Impact on the market for GPUs:

To put things in perspective, a more baseline GPU would be an RTX 3060 and a higher quality GPU would be a RTX 3080. If I were to purchase a GPU prior to the pandemic, the price for a RTX 3060 would be $329 while the RTX 3080 would be worth $699. In today's market for GPUs, the 3060 goes for about $700+ and the 3080 about $2000+. Since the start of lockdown, demand for GPUs started to grow exponentially with many people getting into building PCs and Bitcoin Mining as we were all stuck at home. Concurrently, the lockdown also resulted in a decrease in supply as factories weren’t able to function at 100%. The increase in demand and decrease in supply led to a shortage in the market of GPUs as even other competitors could not keep up with the demand. 

Supply and Demand:

                                           (Market for GPUs)

The market for GPUs is a prime example of applying the concept of Supply and Demand in today's markets. COVID putting a lockdown led to a significant increase in demand for GPUs and as a result, NVIDIA could not meet expectations leading to a shortage in the component. This can be seen in the graph as quantity equilibrium went down (Q1 to Q2) while price equilibrium went up (P1 to P2). 

With demand for the component relatively high and a massive shortage in GPU production, many resellers were able to flip the component for massive returns. 

Opportunity Cost: 

The concept of Opportunity Cost refers to the loss of potential gain from an alternate decision as a result of the decision made. As a result of me waiting out on building a PC until the middle of Covid, I had to pay the premium on the GPU whereas I could’ve purchased a higher quality one at the same price if I had built one prior. 

Lattes are gone. Frappuccinos have left the building. Nobody could order their non-fat, no foam, one pump sugar-free vanilla latte. It’s the end of the world!

Hi! My name’s Unity Aldaco, and I have been working at Starbucks for about two years now. In my experience, I’ve seen a load of crazy events transpire but not as bizarre as the Covid-19 pandemic. To start off, my Starbucks Drive-Thru store had always been busy, so we always sold a good amount of drinks for a reasonable price.

However, due to the outbreak and the stay at home order, we had closed down for a week as the state had required almost all businesses to do. This brought down our supply of all breakfast items and pastries as well as the ingredients needed for drinks and, of course, our demand for Starbucks as the store was not open for business.

We did reopen a week later as Starbucks was deemed an “essential business”, but that didn’t mean all workers were expected to come back. Because of the stay at home order, any employee could stay at home or they could volunteer to work in the store (in which they would receive more money). Workers who stayed at home would receive their bi-weekly pay based on the amount of hours they were scheduled to work for those two weeks. However, the workers who volunteered to come in would be given more hours on top of the bi-weekly pay since the store was short staffed, and they needed all the help they could get.

Here, I was faced with a trade-off (more or less an incentive) where I could stay at home, get paid, and not risk the chance to develop Covid, or I can go to work (my escape from home), catch more shifts which would give me more money, and still have some connection with the outside world. I felt like Starbucks was giving me an incentive to work as they offered to, essentially, give the volunteers more hours, which meant more money, and as an 18-year old girl who needed to save money for college, I went with the choice that helped me do that. Although my opportunity cost was being safe at home and less exposed to Covid, I had made the decision to do what was best for my financial situation.

When I went back to work, I noticed that customers were rolling in with their orders once again, but many of my coworkers were not there to volunteer. I also noticed that our daily supply of pastries and goods weren’t shipped, leaving us a limited supply of food we could sell. We were short staffed and short on ingredients and food, decreasing the supply of drinks we could sell as demand for coffee increased since the government allowed Starbucks to reopen. As one Starbucks store, we could not change the price for the drinks, so shifting the demand curve as well as the supply curve would always cause a shortage. This caused a shortage in the Starbucks firm.

Eventually, the stay-at-home-pay ended for my store so my coworkers had to come back to work if they wanted to get paid. Starbucks got back up on their feet as my coworkers were coming back to work, and our suppliers were delivering our food and ingredients on time. This increased our supply which met the consumers demand at the market equilibrium price.

I didn’t realize how much economics is a part of my daily life, but doing this project allowed me to see that I can apply these concepts to my occupation, my decisions and how I make them, as well as my future financial situations. Like Starbucks, we faced a decreases in our supply, shortages at the beginning of the pandemic as workers were limited, goods were limited, and customers were still demanding Caramel Frappuccinos and tall Vanilla Lattes with Soymilk. As employees who were given options to work or stay at home, we faced trade-offs and opportunity costs. However, with us working hard to rebuild the Starbucks foundation, we eventually made it back onto our feet.

Unity Aldaco

Supply and Demand Scenario

Earlier this year, the Walt Disney company fired actress and martial artist Gina Carano, who portrayed the character Cara Dune in Star Wars The Mandalorian. Due to this decision, Disney ordered various toy companies to stop the production of various Cara Dune related toys and action figures for a future restock. All of a sudden, there was a cut in supply and demand increased dramatically. For example, the Hasbro toy company produced a Cara Dune 6 inch action figure in their “Black Series Line.” When this figure was originally released, its retail price was $19.99. It’s aftermarket price on websites such as Ebay and Mercari right before Disney fired Gina Carano was around 30 dollars. Once Disney announced that the production of Cara Dune related toys would stop, the price of this action figure skyrocketed. At its peak price, the action figures sold for upwards of 150 dollars on Ebay. At the moment, the price has fallen to around 90 to 100 dollars. This scenario concludes that this Cara Dune action figure is an elastic good and has elastic demand, as there was a substantial increase in demand when an economic factor was changed. I was able to take advantage of this situation as I had multiple figures I had acquired from a friend. I was able to sell each of them for six times the price I had bought them for, and make some extra money for myself. In conclusion, this was one supply and demand scenario that has occurred in my daily life.

Name: Perry Chen

Student ID: 32726338

Background:

          Buying college textbooks is a necessary but annoying part of every student’s undergraduate experience. I myself am no exception; I’ve spent hundreds of dollars on mandatory class materials over the three years I’ve been enrolled at UCI, and have often found myself wondering: if students unanimously agree that textbooks are far too expensive, why haven’t textbook publishers lowered the prices? Why is it that some textbooks cost over a hundred dollars, while others only cost a fraction of that? After taking Economics 20A, I now have a better understanding of basic microeconomic principles and how to apply them in the following analysis of textbooks from three recent classes I have taken at UCI: Writing 39C, Econ 20A, and Mgmt 102.

Writing 39C – The Anteater’s Guide to Writing and Rhetoric:

           So why is it that students don’t just learn the course materials somewhere else? Because the cost of any action is measured in foregone opportunities. For example, my course Writing 39C is about how to write research papers; there exist dozens, if not hundreds, of college-level textbooks which explain how to do exactly that. But the opportunity costs, which include the time and effort taken to find and acquire a substitute good, the extra effort needed to learn the material by myself while the rest of the class is provided page numbers, and the cost of borrowing a textbook from a classmate for homework which requires specific information found only in the book, in total exceed the $27 price that The Hill offers for the Anteater’s Guide to Writing and Rhetoric. It is easy to see why markets are an efficient means of organizing in this given example: as much as we like to complain about it, the trade of textbooks results in a mutual benefit.

           But in that case, what is to stop the UCI from setting the price to $1000? For one, there are many buyers and sellers in the market: students may have friends who took the class in a previous quarter and are willing to sell it to them, they may find a seller on Facebook or Reddit. This is an example of imperfect competition, because UCI’s price is somewhat affected by the market, but UCI is also large enough to exert influence in a few ways. One way it can do so is to decrease the usefulness of substitute goods by publishing and requiring a new edition of the textbook with updated content, new practice problems, and an entirely different size of font to throw off the page order. That way, when the professor says, “read page 51 and do the accompanying practice problems” from a 6th edition textbook, a student cannot use a 3rd edition book inherited from his older sibling. 

Economics 20A – Cengage Mindtap:

          Demand for textbooks is very inelastic because the quantity demanded of the good barely changes even as prices rise. It wouldn’t matter if Cengage Mindtap costed $1 or $100, because if students want to pass Econ 20A they have no choice but to buy it. All things considered, the demand for Cengage Mindtap within this course is almost perfectly inelastic, and the price elasticity of demand is 0.

          In a market for Mindtap made up of only Econ 20A students, Cengage is virtually a monopoly because it is a sole seller of Mindtap, which doesn’t have any close substitutes in this class. It is a price setter, not a price taker, and it engages in practices that monopolies often engage in, such as price discrimination. 

          One way Cengage does this is through Cengage Unlimited: students who subscribe to Cengage Unlimited are able to rent up to four hardcopy textbooks for $7.99 each, but students who don’t must pay the full price if they wish to rent a physical textbook. The same good is sold at a different price to different customers, as shown by the preceding images.

Management 102 – Course Reader:

           In another course I am currently taking this quarter, Mgmt 102, my actions as an individual disrupted the typical textbook market. I had previously learned in Writing 39C that the UCI Library offered free access to many journal articles, including the Harvard Business Review. 

          Under this system, these articles are a club good because while they have high excludability (they can only be accessed by a UCI student through a UCI VPN), they are also nonrival in consumption (one student’s use of the online library does not diminish another’s use). 

          The $163.35 course reader required by Mgmt 102, on the other hand, is paperback to prevent piracy. Since it may only be possessed by a single user and realistically can only by consumed by one person at a time, a physical book is both excludable and rival in consumption and thus is considered a private good.

Name: Alexus Malabanan

Student ID #: 74299037

Throughout quarantine, I have found myself more and more attracted to video games. This may be due to the increased amount of time that I spend on a computer or to the lack of physical socialization that I have had in the past few months. Everyday, I play around 3 hours of games on my computer to combat loneliness, and I am not the only person to do so. The online gaming industry has seen a substantial increase in the amount of people playing their games. This is because video games were a recommended way to spend time with friends instead of going out to museums or escape rooms. In an economic sense, video games are a substitute good for out-of-home social activities. Below is the demand curve for both video games and their parts.

On the other hand, people are now buying the required devices to play free-to-play games. This would be personal computers and their parts. The tariffs and lack of supply of graphics cards and how many players must experience a trade off of instant gratification for a less ideal device vs. waiting for a better experience. Since those are complement goods to video games, there would be an increase in the price of games. Cyberpunk 2077 retails for $59.99 on Steam and has sold over 13 million copies. This is because there was a demand to buy a better graphics card to play games of this quality. Making it economically smart to increase the price of the game. The demand curve for graphics cards will be shown below.

Since I have talked about the video game industry as a whole, I will go more in depth with two examples of Valorant by Riot Games and Counter-Strike: Global Offensive by Valve. Both are first-person shooter (FPS) games and primarily have the same mechanics. However, these goods are not identical, meaning that the market for FPS games are a monopolistically competitive market. Since the introduction of Valorant to the video game industry in May 2020, Valve has experienced their first decrease in demand since October 2019. Since they are substitute goods, but aren’t exactly the same, the short run and long run prices of Valorant would be shown using the diagram below. Profit is positive and Valorant will remain in the market.

Throughout the pandemic I’ve spent a lot of time at my girlfriend’s house and one of the main things we do together is watch tv. She has a Disney+ account, which of course is not the only reason that I’m dating her but it’s a large factor. The other day I saw the new princess movie, “Raya and the Last Dragon” on the home page and asked her if we could watch. She said that it was still in its early release and would cost $30 to watch right now. That’s when I realized two things: Disney is a monopoly that practices price discrimination, and I needed to get a new girlfriend. Disney’s asking price of $30 makes sense due to the demand they have among larger families who likely see $30 as a reasonable payment, as if they were going to the movies. Disney+ members who don’t feel like paying for the movie now will have to wait four months before the movie is released for free, at which point these more casual fans will have paid $32 if they keep their membership. If people only wished to watch Raya and the Last Dragon and nothing else, they would still have to $7 to become a Disney+ member. This still doesn’t net Disney in perfect price discrimination optimizing welfare since I exist as an example of the free rider problem. 

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In March, when the pandemic began, officials instructed everyone to stay inside. It is necessary to understand the many trade-offs involved at that time. Some society, and some for the individual citizen. As an individual, the main trade-off was weighing the risks and benefits of going outside and exposing yourself to COVID. On one hand, going for a walk may seem like fun, but you are, hence, exposed to increased infection risk.

For trade-offs concerning society, mostly revolved around the idea of balancing the interests of various groups with different opinions. However, an entangling factor was the existence of externalities. As such, one of the main rules that police makers gave our communities was social distance. Some people decided not to respect that. They thought it was more important to party or gather with their friends.

When deciding to socially distance, some individuals didn't think about the effects of their choices on others around them. There is a high chance of transmitting the disease not only to your neighbor but also to all the people they interact with as well. Hence, social distancing as self-protective behavior has positive external effects. Protecting yourself means protecting your community as well. That is the only way to combat this horrific disease.

A few months into lockdown, many people weren't able to afford rent, food, or other necessities. That is why the government decided to create incentives such as stimulus checks for COVID 19. The 2.2 trillion dollar stimulus bill that officials passed was intended to aid struggling Americans affected by the pandemic. The checks were worth $1,200 for individuals with gross income below $75,000 and $2,400 for couples earning below $150,000.

Even though many government officials claimed that inflation was low, the cost of living has only increased since the start of the pandemic. The rate of inflation was higher than expected during the first three months. The US Consumer Price Index understated the inflation rate because it did not adequately reflect the pandemic-induced changes in consumption habits. Using the updated stats, it was estimated that, as of April 2020, the inflation rate in the US was 1.06%, not 0.35% as first reported by the CPI.

In the early weeks of the pandemic, demand for particular sectors such as grocery stores increased. The trend of consumer spending on food was significantly reversed as a result of the lockdown. Consumers loaded up on groceries and other supplies, resulting in a 29 percent increase in revenue compared to the previous year. Supply and demand were both greatly affected. As a result, many grocery stores have switched from this to this.

All of this led to our country's economic crisis. The pandemic disrupted lives, caused a global economic shutdown, and ultimately generated demand, supply, and financial shocks. Trade is critical to saving lives in an ongoing global health crisis, and international cooperation is needed to keep the trade flowing. However, this was and continues to be a challenge at a time of trade tensions.

We've finally arrived at a point where the vaccine has been made available. Vaccines are, in general, an investment in a country's human capital. They boost public health, increase life expectancy, and maximize work performance while lowering government spending on disease prevention and control.

All of this means that we can soon get back to our regular lives. However, there is still work needed to be done. The key strategy is to contain the virus entirely. Right now, the COVID policy is an economic policy. Until the virus is gone, it will be challenging to create a strong economy.

SOME ECONOMIC TOPICS MENTIONED:

- trade-offs

- positive externalities

- incentives

- inflation

- supply and demand

- world trade

- human capital

- economic shock

- consumer spending

GRAPHS DRAWN:

PROJECT DONE BY:

Nia Lazar Vlasic

Growing up in the Bay Area, I have been blessed to watch some great sports teams, whether it's the Warriors or Giants. I played baseball and soccer throughout my childhood, so sports became an integral part of who I am. I have become obsessed with watching the Giants and Warriors since I was a child, and it has driven me to work in sports. Not being able to watch sports for a couple of months, combined with being confined to my house was extremely difficult for me. It was the best of both worlds when the NBA and MLB announced they were going to play in late July. I truly enjoy analyzing the moves teams make in order to attempt to make their team better. In this blog, I will describe how the COVID-19 pandemic has affected sports organizations as well as principles have occurred within Bay Area organizations throughout the pandemic. 

People Face Tradeoffs:

With the unfortunate season ending injury to all-star guard Klay Thompson, the Warriors were forced to make a move for someone to replace Thompson for the season. In doing so they the Warriors were able made a move in acquiring Kelly Oubre from the Oklahoma City Thunder. However, the warriors did not acquire Oubre for nothing. The warriors had to give up a first round pick in order to get Oubre from the Thunder. Additionally, with the warriors already over the tax, the addition of Oubre bumps their luxury tax bill from 66 million to over 130 million. The trade-off the warriors faced was obtaining Kelly Oubre and his contract with potential to resign him after the season, knowing the organization would have to pay an additional 80 million in taxes for a 2021 first round pick

The Cost of Something is what you give up to get it/Trades can make everyone better off:

Right as the pandemic hit the Warriors were able to trade D’Angelo Russell to the Minnesota Timberwolves for Andrew Wiggins and a 2021 first round pick. The opportunity cost of acquiring Andrew Wiggins and the 2021 first round pick would be D’Angelo Russell. This is also an example of how trades can make everyone better off. The warriors were able to add a wing defender who can slash to the rim which fits nicely next to the splash brothers for years ahead. They were also able to add to their future with a 2021 first round pick from a potentially great draft class. The Timberwolves were able to add a shot creator to pair up with Karl Anthony-Towns for a developing young team. 

People respond to incentives:

Service time within the MLB is some that has gained a lot of attention in the recent years. For a player to earn a service time of “one year” they must be active on the roster for 172 days for that season. So if a player accrues 171 days, they have not earned “one year” of service time. You may be asking, why does service time matter? Well, if a player does not earn that first year of service time, the team/organization keeps one more year of control on their contract. However, if they were able to accrue 172 days on the roster, that year of control will vanish. Essentially, teams will keep their best prospects in the minor leagues until they can keep their prospect for the extra year. The Giants were able to do this with their best catching prospect Joey Bart, where he did not accrue more than 172 days on the active roster, which will give the giants an extra year of control under contract at a significantly lower price, than if he were to reach free agency. 

The Effect of the Pandemic on the Golden State Warriors Organization:

The Coronavirus Outbreak has hurt many NBA teams, but the Warriors have been hurt significantly. Not being able to have fans in the arenas is what is hurting organizations the most. Most regular season games would bring in about 2 million dollars in revenue through ticket sales, concessions, etc. Additionally, playoff games would bring in about 3 million dollars worth of revenue. Unfortunately for the Warriors, they just finished building a 1.6 billion dollar arena to open the season. Even now as many other arenas are allowing fans into the building, California governor, Gavin Newsom, is yet to allow fans in all of which continue to hurt the Warriors organization. Joe Lacob, the Warriors owner has said that without fans the Warriors have lost 70% of their revenue combining both this season and last season. 

The Effect of the Pandemic on Super Bowl tickets:

This Super Bowl this year had some great talent, and many people wanted to watch it in person, but due to COVID-19 many people elected to watch it on their couch in their respective homes. Tickets were sold to only 32 out of the 50 states in the United States. Comparing that to other Super Bowls, that is a relatively low number. Although the average ticket price for the 2021 was higher when compared to some of the Super Bowls of the past decade, price did take a dip from the 2020 Super Bowl to the 2021 Super Bowl, likely due to the lack of demand from fans.

References:

https://www.yahoo.com/now/warriors-losing-70-revenue-covid-194414026.html

https://www.cbssports.com/nfl/news/super-bowl-2021-how-covid-19-affected-ticket-prices-sales-for-buccaneers-vs-chiefs/

https://www.mercurynews.com/2020/04/01/coronavirus-could-cost-nba-1-billion-and-warriors-roster-flexibility/

Lorenzo Bartalotti