Chapter 5

Chapter 5
Article: http://www.cbc.ca/news/business/story/2011/03/04/f-canadian-food-prices.html

Summary:
This article is about the general price increase within supermarkets. George Weston Ltd., has announced that prices in their products will increase by 5 percent in April 1. This price increase is directly in relation to the inflation of wheat, oil and sugar. In fact, prices are expected to increase by five to seven percent within the next year. This inflation isn't exclusive to Canada though, it is an inflation on the global scale. However, Canadians will have much less to worry about because our dollar is still strong. Lower-income families will ,however, have the biggest impact of all as five to seven percent will be a big chunk of their budget.

Connection:
Price increases in our supermarkets is a cost-push inflation. This is because of the occurring price increases of wheat, sugar, and oil. Its going to cost companies much more money to produce their food products and ship it out, so naturally they're going to have to increase prices in order to make a reasonable profit. The cost of oil is likely to be a result of the Libya crisis, which impacts the everyone around the world and should result in much more cost-push inflation. The food industry won't be the only to suffer from these price increases, so will many other industries. Oil is indeed a valuable asset that affects everything.

Reflection:
Inflation is a good economic indicator, but its not the best. This is because inflation is mostly based on predictions and guesses. It might discourage people from buying goods fearing that it'll increase in price in the future. The inaccuracies of these predictions may actually cause more inflation because people won't be investing in those goods, which will cause chain-reactions to other markets. Prices in oil will affect the food market, you need something to fuel the trucks that are shipping these around, right? Anyways, inflation is better seen as an economic hardship. The worst the increase the harder times will be.

Chapter 2 Blog - Demand and Supply - NFL ticket prices climb higher in 2010

Article: http://money.cnn.com/2010/09/24/news/economy/NFL_ticket_prices/index.htm

Summary:
This article explains the changing prices of NFL tickets, the average NFL ticket increasing 4.5% this year to $76.47. However, 15 out of 32 teams have same or lower prices. So how is the average increasing? 9 out of 32 teams have above average ticket prices. The New York Jets having a 38.1% boost because the team plays in a $1.6 billion new stadium. How the team performs also affects the price of the tickets, seeing as tickets to New Orleans Saints games have increased 264%. The Tampa Bay Buccaneers having to offer discounts on tickets in order to sell seats.

Connections:

This article provides a good example to many economic factors. The increase in New York Jet prices may have to do with the building of the new stadium; this is a production cost as the tickets increased prices help pay for the new stadium. Tampa Bay tickets have to be discounted in order to sell more seats, this is an example in decrease of demand; demand goes down and so do the prices. Tickets to the New Orleans Saints increased in price due to their Super Bowl victory. This is an example of increase in demand; more people want the tickets so an increase in prize maximizes profits.

Reflections:

This article perfectly demonstrates supply and demand; it has improved my understanding of Chapter 2, supply and demand, showing use of many factors. It has taught me that the price of a ticket can drastically change right after the end of a single game, the Super Bowl. Some NFL tickets are very inelastic as many fans are willing to pay $400+ to see their favourite team. However other tickets aren’t that elastic seeing that some teams have to decrease prices in order to sell enough seats. I now realize that economics is really a sensitive subject, reacting to every factor and changing within a few moments.


- Michael H