Hair StraightnerVending Machine

Concept: One innovative UK company has released a form

of vending machine tahat allows (predominantly women?)

users to straighten unruly hair with the device. Perfect for

women's bathrooms everywhere.

Strengths:

• New idea
• Very useful for women especially in clubs, restaurants etc.
• Can locate anywhere: gym, clubs, restaurants etc.

Weaknesses:

• Quality of machine

iPod Vending Machine

Concept: A company specializing in "automated retailing" now offers iPods through vending machines. They also sell Elizabeth Arden cosmetics, digital camera and other electronic products via sophisticated vending machines.

Strengths:

• We don't need staff


• Can located in big stores


• Easier to use it

Weaknesses:

• Cost of machines

Binge drinking

a) How does binge drinking represent a market failure?

Drinking is a demerit good because it has negative effect

on your health also drinking can be negative externality.

It means that drinking has negative effect on third parties

as well. For example if somebody gets really drunk they will

do something very bad such as murder, theft etc.

As we know negative externality and demerit goods cause

market failure.

b) What are the new proposals?

The government wants to ban free drinks for women also

they want to put particular alcohol messages on each

table where alcohol is sold and pubs' staff should be trained

according to new regulations

c) To what extent do you believe any one, or the combined proposals,

are likely to be successful?

I think that banning free drinks for women is not a good idea.

If government ban free drinks people will buy them but anyway

it will not solve the problem because people are addicted.

Training staff should help to this problem. If people get drunk

they will persuade them to do not drink anymore or something

like that.

The last proposal is to put special message about alcohol on

each table. I think it will not help at all. Everybody see

the same message on cigarettes but they still buy it. The

same situation with alcohol. I think people will not pay any

attention on this messages.

Electronic cigarettes

a) What is the information failure in the electronic cigarette market?

At first we should know what does information failure mean.

Information failure is a type of marker failure when consumer or

producer has wrong information about product such as quality,

negative or positive effect of a product, demand on product etc.

Producers of this cigarettes says that this product absolutely

safe and it will not affect on health of smokers but specialists

in The World Health Organisation said that this information can't

be true because it wasn't tested and proved.

So the main problem of this electronic cigarettes is a lack of

information about external costs or benefits.

b) Does this represent asymmetric information in the market?

Asymmetric information is another type of market failure.

It happens when a part of consumers or traders have

more correct information than the others.

In this case electronic cigarettes can be assymetric information

in the market because consumers don't know real information

about this product but producers definetly know more.

c) What is the outcome in the free market of this information failure?

People buy this product because they think it will help them to stop

smoking usual cigarettes and also they think that electronic cigarettes

are less harmful then usual cigarettes. Smokers can smoke electronic

cigarettes in public places because it is not against the law.

So that is why demand on electronic cigarettes is high even if price is

high as well. If The World Health Organisation test it and find something

dangerous for health demand for this product will be lower.

d) What actions could government take to reduce/eliminate the market failure?

I think that government should test every new products such as electronic

cigarettes and it will not be an information failure.

Also they can ban smoking any types of cigarettes in public places.

Negative externality in China

About 450 people have fallen ill in southern China after

drinking contaminated water. Industrial waste from a

metal company has been blamed. Water included really

dangerous element such as arsenic. (BBC News)

a) Explain why the people falling sick is an example of a

negative externality?

Well, negative externality is a negative effect on third parties.

People who live near to that factory are third parties.

Factory produce something and they pollute water

and it affects to people who live in that village.

So thats why it is an example of negative externalities.

b) Suggest 2 courses of action the government could

take to try and reduce the possibility of such an incident

happening again.

I think that government should create special committee

that will check and fine if they will pollute environment.

The other way is to put really big tax on that factories

and spend this money to clean water.

Also they should make them to build new filtres which

will clean all dangerous things.

Smoking as a Market Failure.

First of all I'd like to talk about article about smoking

problem in the UK.

It says that smoking costs to NHS billions. Only in this

year it costs £2.7 bn compared with £1.7 bn a decade ago.

It is really huge government spending and the government

is trying to control smoking.

The first way of controlling smoking is to putting tobacco

products under the counter so customers can't see cigarettes.

I think that it is a good idea because the first thing that

customers see is a lot of cigarettes next to a seller and

of course it is remaind them about smoking. So I think

it will help.

The second way is to removing branding and logos from

all tobacco packaging. Young people prefer to buy cigarettes

with beautiful packaging with different colours and with words

such as `smooth` etc. They think that this cigarettes

are less harmful. So maybe if government band all logos and

branding it will help to decrease number of smokers.

The third way is to band all cigarette vending machines

It is really good idea because it is easier to use vending

machines and everyone will buy it also they are everywhere.

So why smoking is a market failure? At first we know that

smoking is a negative externality because it has negative

effect on third parties.

Also cigarettes are demerit good because it has negative

effect on your health. The main problem is that we can't

measure this negative effect and can't include it in price of

this good.

a) What is the economic argument for banning smoking in

public places?

As I said before smoking is a negative externality thus it

effects on third parties. For example if I'm non-smoker

and I stay with somebody who smokes it will affect on me too.

b) To what extent do you think a £50 fine for being caught

will reduce the market failure?

Well I think it will help because people will not smoke in

public place rather than pay £50 fine. Of course it will not

refund externel cost that society pay for this negative effect

but still it's better than nothing.

Fully Retractable Umbrella

Concept: The Lotus 23 is a self-cleaning (think rainy water), fully-retractable umbrella with flexible ribs that allow it ton flow with the wind. It is also cheaper to manufacture and move durable than a conventional umbrella.

Strengths:

• This product solves every problems that normal umbrella has.
• It is cheaper than normal umbrella
• High technology
• New idea

Weaknesses:

• Competitors

Portable Espresso Maker

Concept: From the ever-expanding world of high-tech camping equipment comes the Handpresso Wild, a lightweight espresso maker that only requires hot water in order to work.

Strenghts:

• Portable
• Early adopter
• Can buy on internet
• Can sell accesorises with the main product

Weaknesses:

• Price
• Quality of coffee

Credit Crunch

Nowadays we can often hear about credit crunch.
This is the main problem of our time.
So at first we should understand what does "credit crunch"
mean. Credit crunch is an economic condition in which
it is difficult to get investment capital. Banks and investors
become wary of lending funds to corporations, which drives
up the price of debt products for borrowers.
So the main reason of credit crunch is collapsing of
housemarkets. Few years ago prices for houses was really
high. Then started overbuilding during boom period. It means
that there were built a lot of new houses which weren't so
necessary. 
After that housing bubble was burst. When houses were so
expensive it was useful for banks. People gave their houses
if they couldn't pay back money that they borrowed. So
banks sold their houses and made profit from it.
After the decline of house prices it was impossible to
refinance mortgages.  It was affect on the situation in
banks because they started to loss. Thus bank capital
levels reduced.  It caused to bank failures. This happened
with a lot of banks such as Lehman Brothers, Warchovia,
Washington Mutual.
If banks fail it is harder to get loans and interest rates
for loans are  although higher. So it will affect to the business.
If it is affect to the business so it will be risk of increasing
unemployment, business investment although declines.
So as you can see collapsing of housemarket affected
to the financial market and finally government tryes to
solve this problems by decreasing interest rates to motivate
people to invest their money.

Freakonomics

I've read "Freakonomics" by Steven D.Levitt & Stephen J.Dubner.
It is rally interesting book. It is new vision of economic through
the modern life. There are a lot of unusual question in this book.
For example:

• What do schoolteachers and sumo wrestlers have in common?
  
• Why do drug dealers still live with their moms?
• What makes a Perfect Parent?

At the first time we think what is the relationship between this
questions and economics?
Well, this author tryes to tell about economics by the riddles of
everyday life— from cheating and crime to sports and child-rearing.
The main idea of this book is how to get something that you need,
even if other people need it as well and it is scarce. They look at
the secret side of every day life.
For example, in Chicago there was a law that the government
will give 25,000$ to a schoolteacher whose pupils will pass
exam with the best results.
Actually, it is good motivation to schoolteachers, but unfortunately,
they started to cheating. So they did everything to get something 
that they need.
So it is quite interesting book. It is a new way of looking to economics.

Night Study...

I'm trying to concentrate and do all my homework untill this morning...
Is it possible? I hope so... As usual my night study co-worker is Mary =)
I should do a lot of homework. Oh, it is so hard. One thing that motivates me is
Mr.Sivewright's news that "will change our life". What is it can be?
I have no idea, but I hope something really interesting =)
Ok, It was just a few minutes break. I will come back to my homeworks!

Organising our work

This is a post about our review work on OCR Economics book. As long as David is not responding on our telephone calls, we (me, Mary and Bibi) have decided to divide all the work by ourselves to start it today. So read carefully, what you need to do:

Me:
Chapter 6: Externalities
Chapter 8: Government intervention and government failure
Chapter 16: The international Economy

Bibi:
Chaptr 3: The nature of supply
Chapter 10: Aggregate demand
Chapter 11: Aggregate supply and macroeconomic equillibrium

Nastya:
Chapter 1: Introducing economics
Chapter 4: Using the demand and supply model
Chapter 9: Measuring economic perfomance

Dima:
Chapter 12: Balance of payments and the exchange rate
Chapter 13: Macroeconomic policy objectives
Chapter 15: Macroeconomic policy instruments

Mary:
Chapter 2: The nature of demand
Chapter 5: Prices, resource allocation and market failure
Chapter 7: Other forms of market failure
Chapter 14: Economic growth

The cover must be designed by any student who studies ICT (Bibi, Mary or Anastasia)

What do you need to do with your chapters:
1. Read it carefully, write a detailed review.
2. A mind map on each chapter
3. Also you should put a vocabulary list on each chapter
4. Don't forget about book reviews!!!

Each of you must read the introduction and two reviews sections in this book. Index will be also useful for you. If you don't have this book, Mary has got one and Anastasia probably has it too.

deadline is Wednesday, by this day you should give your reviews to David and he will check it by Friday.

we meet tomorrow at 11 in new cafeteria. don't be late.

and a little notice in russian:
если опоздаете, вам будет фигово (русская и казахские девушки вас отпинают).

Apologise

I'm trying to be a "good student", but it is difficult!
I was late for class for 4 minutes, I know that it is not
good but everybody sometimes can be late, so do
Mr.Sivewright... I'm realy sorry about that.
Next time I will try to do not late for classes.
And I'm sorry that me and Bibi was doing faces in
window even if Mr.Sivewright asked us to go away...
Sorry that we disturbed all class!
And I want to apologise that I wrote that BAD things
on my profile. I just coppied it from somewhere.
I didn't read it. So sorry. Next time I will be careful
about that... Now I've changed it. I've changed photo
as you can see.
So I hope that I will learn on mistakes that I've done.

Gold/Gemstone Prospectors Store

CONCEPT: A specialized store for amateur/semiprofessional gold or gem prospectors. Many individuals enjoy this pastime as an outdoor hobby and are willing to spend considerable sums on getting the right equipment – dredges, metal detectors, sluices etc. One variation is to set up the business as an online store, possibly within eBay, even as a stepping stone to a ‘real world’ store.

Strengths:

• Quite cheap
• Can buy it on Internet
• Fun

Weaknesses:

• Not a lot of customers. Only people who inerested in this kind of hobby

Old-Fashioned Barber with Cheap Men’s Haircuts

CONCEPT: Men (especially older ones) want cheap, fast, no-frills haircuts. Even barber shops are franchised in today’s franchise-mad small business world! Also consider variations where attractive women are the ‘barbers’, like the ‘bikini car wash’ business model as a point of difference.

Strengths:

• Tradition
• Cheap

Weaknesses:

• A lot of competitors
• Staff
• Location
• I think it is more demand for modern haircuts than for old-fashioned Barber

$1/$2/$5/$10 Store

CONCEPT: This small business revolves around a discount store where every single item inside is under $1 or $2 or $5 or $10. This can be operated as either a standalone venture, which is harder given the need to source all of the cheap inventory, or as a franchise where that side of the business has been sorted out. The websites below have more information on such franchises.

Strengths:

• Cheap


• Everything in the store have the same price

Weaknesses:

• Quality of the product is lower


• A lot of competitors such as small shops or supermarkets


• Not a lot of types of product

Gourmet Ice Cream/Frozen Yoghurt Stand/Gelato Stall/Shop

CONCEPT: Gourmet Ice Cream stores appeal to impulse-buying behaviour and thus can do very well in high traffic locations. They also offer novelty appeal compared to other fast-foods that consumers feel jaded with.

Strengths:

• Fresh ingridients
• Different flavors
• Heathy
• Didderent types of serving

Weaknesses:

• A lot of competitors such as "Buskin&Robin's" and others

Economics. Market in action

Today I've read the book which is called 'Economics. Marketing in Action'. It is quite interesting and useful book but everything that I've read we have already discussed in class. So there is my review of this book.
Content guidance.

• The reasons for individuals, organisations and societies having to make choices.

The hersh fact that there are not enough resources to satisfy people's demands means that choices must be made. Consumers make choices that determine what is made by producers. This unit requires you to study the market as a system for allocating scarce resources to the production of goods and services.

• Competitive markets and how they work.

This requires you to understand the outcomes that result from the response of consumers and producers to changes in price.

• Market failure and government intervention. This considers the causes and consequences of why market may not work efficiently, including the market failures of externalities, public goods, merit goods, demerit goods and information failures. This part of the unit considers the ways government pursue their economic , social and distributional objectives to intervene and correct market failure through taxation, subsidies, price controls, state provision, regulation , information, provision and competition policy.

1. Opportunity cost is a measure of production or consumption in terms of the lost option or the forgone alternative. (The Next Best Alternative).

   Factors of production:

   • Land - the free gifts of nature
   • Labour - the people involved in the production of goods and services.
   • Capital - prodeced means of production
   • Enterprise - the ability to being together all the factors of production in an efficient and profitable way.
2. In an economy based upon a market system, consumers and producers interact in a market place. Consumer Surplus is money consumers are willing to pay to obtain a product but do not have to because they can demand all they want at one price. Producer Surplus is money received by producers over and above the minimum required to bring forth that supply of the product.

• more or less supplied or demanded at the same price is a SHIFT!
• more or less supplied or demanded at the different prices is a MOVEMENT!

Elasticity formula identifies the responsiveness of demand or supply to a change in price: PED or PES.

XED - measure the relationship between the change in price of one product and the quantity demanded of another product.

YED - measure the relationship between changes in income and quantity demanded.

Allocating efficiency means allocating goods to consumers such that their wants are satisfied in the possible way.

Market failure.

Private costs - costs incurred solely by the decision-makers.

External costs- incurred by third parties.

Social costs - total cost to society measured by adding together both private and external costs.

Private benefits - incurred solely by the decision-makers.

External benefits- incurred by third parties.

Social benefits - total benefits to society measured by adding together both private and external benefits.

Externalities and public goods.

Externalities - spill-over - third party effects.

An externality occurs if a third party (someone not directly involved) is effected by the decisions and actions of others. There are 2 types of externality: positive and negative.

Negative externalities is said to exist when the action of one person or firm imposes a cost on to a third party. This cost is known as an external cost.

Positive externalities is said to exist when the action of one person or firn benefits a third party. This benefit is known as an external benefit.

Public goods.

• non-rival - conscemption by one person doesn't diminish the amout of the good that is available for other consumers.
• non-excludable - once the good is provided for just one person it is impossible to prevent any other person from benefiting from the good.

Quasi - public goods.

Lies between these 2 extremes: it has characteristics that will some of the time - though not always - lead it to be close to a public good. Examples: national parks, beaches.

Information failures and merit gods.

Information failures. Markets will fail if consumers and producers do not have access to this perfect information.

Merit goods - one that is better for an individual than the person who consumers the good may realise.

Demerit goods is one that is worse for the individual than the person who consumes the good realises.

Methods of government intervention in markets.

Methods of intervention:

• regulation
• financial intervention (tax and subsidy)
• state production
• income/other transfers:

1. income - pay cash benefits to families on low income
2. in-kind - free goods and services to poor families.

Information failures

• provision of information - helps consumer make an informed choice
• controls and regulation
• financial intervention (tax, subsidy)

Redistribution issues

• redistributive taxation - high % tax from the rich
• redistributive social security payments
• benefits paid in kind
• subsidy of essential goods - make up a large proportion of a poor person's income but a relatively small part of a rich person's income.

Novelty/Fancy Dress Costumes for Kids (Online/Market Stall Sales)

CONCEPT: As mentioned in several new small business entries here, those ventures that can appeal to impulse buying spontaneity - especially with children - are usually on to a winning entrepreneurial formula. Look at coin operated gumball machines, an ancient technology, but
still profitable in 2008/9. Here, we are tapping into children’s love of costumes and fancy dress, especially through a market stall where children can see, touch, and try on dazzling costumes.

Strengths:

• Fun


• Pester Power


• Don't need any location or staff, we can sell it on Internet;

Weaknesses:

• Can sell it only on special carnavals such as Halloween or New Year

Philosophy

Today we discussed the philosopher's fundamental question: : "Who am I?"
The three centres: mind, heart and body, maintained in harmony by reason.
It was quite interesting. We discussed some questions such as "What is the love?"
Our teacher said that love is everywhere, in everything, in everybody. But is it true?
Next question is "What is the Truth?" Our teacher said that the Truth is something
that doesn't change. Love is the Truth. But does love not change? I think that Love
may change in time...
We should live in a present, not in the past or future. But does it mean that we
shouldn't have any dream? Yes, we should. So it's really difficult to understand
how we can live only in present....
The next interesting thing is "What exactly we want?" Sometimes it's really difficult to decide what we really want. We can dream about something but when we reach our dreams,
we don't enjoy it all. We just realise that it's not something that we really want...
So it's easier to do not think about it a lot.
So it is my opinion about abot today's lesson.

Waterless Urinal

Concept: ZeroFlush is a waterless urinal that - according to the manufacturer - can save over 150,000 litres of fresh water per year/per urinal. In a world running short of resources like water, products like this one have an obvious market.

Strengths:

• save water


• low bacteria levels in a waterless environment provide a superior hygiene solution.


• can sell it in a big stores or on the Internet, so don't need location.


• early adopter

Weaknesses:

• high price

The Instant Internet Income

I've seen a DVD about The Instant Internet Income.
It's quite interesting. It tells about how we can do a business on Internet.
For example we can sell e-books.
At first, we should think what about we want to write a book. It can be
anything. For example Fishing. If you can't write a book, you can find a ghostwriter,
who will write it for you for peanuts.
Secondly, we should find a market. Look for relatively large groups of people
who are passionate about something to the point of irrationality, who spend money.
And then find as much information as it possible about market you've chosen.
How to find an information? Look at magazine, keep your ears open - talk to any
fanatics you come across.
Look for conventions, clubs and associations, watch TV and look for "crazy" people.
And finally we can advertise it on Google, for example.