Chapter 6

Retail sales
It's all about the customer
By Peter Hadzipetros, CBC News
http://www.cbc.ca/news/background/economy/retail-sales.html

According to the owners of Loblaw Cos. Ltd, one of Canada’s largest retail grocery chains, everyone is categorized into six different types of shoppers. Within these six types of shoppers there is only one category with a male name, Bernard. The type of person classified as a Bernard are the type of shoppers who do not enjoy spending large amounts of their time looking for great deals, in other words, they don’t care much for bargains. Those classified as Lynne on the other hand are the shoppers who are “young stylish bus is on a bit of a budget.”
Loblaw’s is currently planning to spend many millions of dollars to promote certain brands of products. They are also encouraging feedback from its customers.

Relation

This article relates to chapter 6’s Underconsumption theories under The Business Cycle. If products are being produced at a much faster rate than they are being consumed, it could create a variety of problems. Some of these problems, such as a build up of supply can result in layoffs. Because Loblaw Cos. Ltd is taking time to take in any feedback from its customers; they can promote the products that need to be bought in a way that would make the items seem much more tempting to buy. The result of these promotions can appeal especially to those classified under Lynne; a large group of shoppers. Lynne shoppers are on a budget always, so making products seem attractive can change their minds on what they’d like to purchase, thus preventing under consumption. Conducting surveys helps Loblaw’s understand how most customers feel, learning about their likes and habits can influence the way they operate so that they can sell their products more efficiently. I think that Loblaw’s made a very good decision when they decided to take an interest in what their customers think. The information gathered does not only help them sell their products easier, the money that is used assists money in circulating the economy.

Chapter 5

"Unemployment hits four:and:a:half year low"
http://www.nzz.ch/2007/04/10/eng/article7701904.html


Currently in Switzerland, the unemployment rate is at an all time low. For the first time in about four and a half years, the level of unemployment is at three percent. The reason for these decreasing rates is due to Switzerland’s thriving economy. This article mentions that unemployment just dropped another 0.2 percent in February (117,915 unemployed to 8,500), and that the amount of jobs obtainable rose to over 13,000.
According to financial analysts, the falling number of people without jobs did not come as a shocker because there was progress in all sectors (especially the service sector). Because economy is doing well, and there is an abundant amount of work to be found, it would not be a surprise if the unemployment rates continue to fall; in fact, the rate is estimated to continue dropping.

Relation to Chapter 5

This relates to chapter 5 because Switzerland’s economy is able to demonstrate the effects of unemployment. Since the economy is improving, more people are able to find jobs, leading to a decline in the rate of unemployment. When unemployment goes down, the economy keeps on doing better and better and thus avoiding demand - deficient unemployment. This article also proved that the citizens of Switzerland have steered clear of structural unemployment because jobs in Switzerland are becoming easier to attain. Seasonal, natural and insurance - induced unemployment may still occur however, because of the booming economy the chances of rising levels of unemployment are very slim.
I think it is wonderful that Switzerland’s economy is doing very well. If things are great there, than other parts of the world may soon begin to do well also. Because Switzerland is associated with other countries, there’s a chance they’ll boost those economies.

Chapter 4

"'Survivor' Winner To Plead Guilty"


Millionaire Richard Hatch, the season one winner of Survivor was found guilty of failing to report his income tax on his winnings won from the show, in addition to another $321 000 from appearances on a Boston radio station. Hatch was charged with filing a false tax return. On top of omitting his winnings on his tax return he also did not repot rental income from properties he had ownership over, and the car won from the reality show Survivor. He was found guilty of tax evasion in Rhode Island in 2006, sentenced to 51 months in prison and an additional three years of supervised release after those 51 months.

relation to chapter 4

People with higher incomes are expected to pay higher taxes than people with lower incomes. This is the case with a progressive approach to taxation. Rhode Island is one the many places that goes by the progressive tax, it also is the location of where Richard Hatch was sentenced to many numbers of months in jail for filing a false tax return.
According to our textbook (working with economics) “there may be less tax evasion if paying taxes were less onerous and less costly. “. Meaning that more people would pay their taxes fully if it didn’t end up taking so much of their hard earned income, and wasn’t such a burden. Everyone is expected to pay retail sales taxes, income taxes, and property taxes along with several other taxes. Wityh all these taxes I wasnt surprised that Richard Hatch evaded his.

Chapter 3

"Buying and selling real estate: On your way to the bank"
By David Barker 2007 January 20
http://www.freenewmexican.com/news/55557.html

This story first discusses how simple and easy the average person believes the business of flipping houses is. All potential investors think that there is little to it. The article then goes on to talk about two specific books written by experienced real estate investors that discuss important knowledge for beginning investors. The first book is named Buy Even Lower: The Regular People’s Guide to Real Estate Riches. It’s written by Scott Frank and Andy Heller, and it is about the rules that must be followed in order to have a successful sale. According to them, people interested in pursuing this type of work would soon find that “ real-estate investment is no quick and easy route to riches.” and that “it takes a lot of leg work”. Real estate investing takes determination, anyone thinking of going after this type of career must be dedicated to it.
The second book, written by Boaz Gilad and Suzanne Gilad, The Real Estate Millionaire: How to Invest in Rental Markets and Make a Fortune, is about real estate investing as well however, this book begins by focusing on inspiration to get past the harder times that occur during the purchase of the first few properties. After, the authors try to turn that inspiration into commitment, because “for the Gilads, everyone has the ability to be a successful real-estate investor”.

Relation To Chapter 3

People interested in the real estate market purchase books such as these to educate themselves. With this operation the authors (the sellers), as well as the individuals that purchase their books (the buyers), and the buyers of homes (third party) benefit. Authors make money by writing books, and when these books are sold, potential real estate investors are able to learn more. With more knowledge of real estate, those potential investors can purchase houses below market price, fix it up, then sell a more superior house at or above market price than one who has no knowledge of the rules described in those books. When these investors produce quality houses, homebuyers also profit from them. Not only do they live in a more comfortable home, it’s also more attractive which may lead to the market value to increase, which can then lead to an earning if they ever wish to sell their house.

Chapter 2

"Call for more taxis in Vancouver"
CBC News 2006 November 9
http://www.cbc.ca/canada/british-columbia/story/2006/11/09/bc-taxis.html#skip300x250

According to a city councilor, Vancouver needs many more taxis before next summer in time for the tourist season. According to city councilor Suzanne Anton, the shortage of taxi service is damaging to the image Vancouver has with tourists. People wait way too long for taxis to come, and this causes our reputation to be threatened. There are times people have to wait outside from anywhere between 45 minutes to an hour or more, even on a busy street like Robson. That proves that there is a problem with the service Vancouver is providing to the general public as well as the tourists; we’re suppose to make feel welcome.
Taxi drivers recognize that there indeed is a problem with the lack of services provided. Bryant Ibbitson, a taxi driver, claims the problem is that there are not enough people willing to work. Its one thing to be working during weekends, but not every worker is too keen on working Friday and Saturday nights as well. Ibbitson believes that the trouble is not that there are not enough taxis, but finding committed drivers. He believes that even with an increase of cabs, they will most likely just be sitting on the lot.

Relation To Chapter 2

This article is connected to chapter 2 because it refers to the price elasticity of demand. Taxi service in Vancouver can not be substituted with anything, and its inexpensive for most, therefore it is inelastic. People are willing to pay for a wait in the rain, or snow for a ride, this shows that they would pay even if prices were to rise. When the price increases, the total revenue increases, and when the price decreases, it causes the total revenue to fall, showing again that taxi service is inelastic. Over time taxi service will slowly become more elastic. This is because time gives the ability to find substitutes.
Personally, I think that it is unfair how the taxi industry in Vancouver does such a poor job on supplying services for paying customers. The tourists especially deserve to be shown how great services we offer are.

Chapter 1

"Adidas' High Tech Footwear"
by Marina Kamenev 2006 November 3 http://www.businessweek.com/innovate/content/nov2006/id20061103_196323.htm?chan=globalbiz_europe_more+of+today%27s+top+stories

This article talks about the new Adidas store in Paris that was designed to change the average customer into an Adidas customer for life. The store opened on the 25th of October with new technologies and options of customizing your own shoes. The store is located on the Champs-Elysées, a location Adidas spent five years waiting on. This is the largest Adidas store in the world at 1,750 square meters. This new store provides detailed information on Adidas products with a touch of a button thanks to new technology such as RFID, which is radio frequency identification and activated monitors. The store also provides an interactive black cube positioned in the center of the store with different functions on each side of it. One of the sides of the cube holds a “virtual mirror”. The mirror shows the potential customer in the shoes at different angles that they’ve designed on one of the other sides of the cube.

Relation To Chapter 1

Adidas estimates about 150,000 visitors a year, with as many as 105,000 being tourists partly, due to the location. Adidas chose to place this store in this location intentionally, after waiting for it to become available for a number of years. One of the opportunity costs for this decision would be losing out on the profits they could have made if the store was built earlier. Another opportunity cost would be the other customers they could have had if the store was located elsewhere (Canada, America…). The direct cost of their decision would be the cost of purchasing all the materials needed to build such a technologically advanced store. However, even though the price of buying such equipment would be costly, many more consumers would be attracted by the new technologies. Overall, I felt that the choice that the Adidas company made was for the better. Where they decided to place the store makes an impact on how successful the business is going. The type of store also was a good choice because when consumers go to visit the store they are not only shopping, they are being entertained.