Credit

This week in class we've been focusing on Credit. I thought this was extremely interesting because I'm going off to college next year and in the future I might need a credit card and this information might become useful. I have already started getting letters in the mail from credit card companies. This Summer my mom is signing me up for a debit card, but I know in the future I might have to consider credit cards. I think that I'm going to wait until I'm at least 21 to get a credit card. This is because of all the horror stories I have heard with college kids and credit cards. Also we learned this week about all the costs that come with credit cards. These includes, being able to easily spend money one doesn't have. Also there are a ton of fees that come with credit cards and interest if you don't pay your bill in time. There are also limits on how much you can spend on a credit card. Credit cards are also very prone to theft and fraud. Luckily, most companies catch the problem before it grows. Overall, I've enjoyed learning about credit cards and credit and what not to do with them. I don't believe I'll get a credit card until I need to. 

Budgets. Budgets. Budgets.

*Warning. This was wrote after taking an AP exam. Post may not make sense or appear disorganized. This was a result of an exhausted and drained Maria*

This week in class we continued to keep up with our bills and payments. On Monday we received our second paycheck, which helped replenish some of the classes bank accounts. Also during this week, we learned about a new concept of budgeting. Budgeting is essentially an outline of the money you receive and what you do with it. You can create a monthly or annual budget. For the sake of this post, I'm going to discuss budgets on a monthly basis. For your budget, you first have to figure out how much money you are making each month. Then you subtract your monthly bills from that income. Then comes insurance and transportation. You also have to pay for food, and entertainment. Whatever is left (if there is any) should be placed in savings. To introduce budgets, we discussed saving. Saving should be important to EVERYONE. We talked about how saving is a habit that needs to be developed. We should set aside money each month in savings. This is so if there is an emergency or an unexpected payment, there is money available so one doesn't go into debt. 
I personally feel that budgets are essential to maintain your  money. Without a budget, you would be spending money without knowing how much you had left. With a budget there is a less chance of you going overboard with your money. Budgets also are useful in showing you what you need to cut back on, maybe it's going out to eat every night, or spending too much on groceries. Without a budget you are less likely to maintain and control the amount of money you have and save. 

My First Experience With a Check

On Thursday, Mrs. Weser walked us through a lesson about how to write a check to pay a bill. I actually knew how to write a check before Thursday's lesson. When I was 7 or 8 my mom would take me with her to run errands. Most of the time we went to the bank first. My mom either had to deposit her pay check or would use a check to withdraw money from her account. At that age though, all I knew was if Mom had her checkbook, it meant the lady at the bank was going to give me a lollipop. However, on one of our trips to the bank I asked my mom how one piece of paper got her actual money. She showed the check to me and explained what the different parts of it meant. Some details she didn't mention like drawing a line after the amount you're withdrawing or depositing and how you have to write cents out of one hundred. I knew for the most part what was supposed to be filled in. 
I'm glad we're focusing on banking in the personal finance part of our class. I think it's important to know how to have and maintain a bank account and learn how to use it in the best way possible. Learning about the different types of accounts and the ways that interest plays a part is important as well. It's good to learn responsibility with money, so that we don't overspend or overpay. I also think that in today's world it's imperative that we learn about how to protect our money from fraud and theft. To wrap things up, I'm grateful that we're learning about banking and how to manage our money, because I think that will be very beneficial in the future. 

Business Structures and Indicators

This week we focused on business structures and business indicators. Business structures include sole proprietorship, partnerships and corporations. A sole proprietorship involves one person owning a business. They can keep the profit and set their own work schedule. A partnership is when two or more people a business together. This is nice, because one person who is good at math and business can keep the book while the other cooks, writes or does whatever the business is. Within a partnership, there are general, limited and limited-liability partnerships. A corporation is when many people own a business or own stock. This is good because the business gets many resources and has a good mixture of products. Business indicators have to do with GDP, inflation, standard of living...etc. GDP stands for Gross Domestic Product and it measures the market value of all goods produced in a given period. Inflation has to do with the increase in price of goods when there is a decrease of buying power. Standard of living is the material comfort one has with the goods and services available. 
All of these concepts related to each other. For the most part I understood the business structures, but had a challenging time understanding the business indicators. After reviewing and watching a few videos about GDP, standard of living, unemployment and such I understood some of this stuff more. However, the concept I am still stuck on is inflation. I've read the definition over and over and still don't quite get what it is or how it happens. I think i'm just looking for different and easier ways to explain it. I am determined and will keep trying.

Pepsico

This Wednesday we watched a movie in class about the billion dollar company, Pepsi-co. The movie was very interesting and well done and I found myself surprised at a lot of the information I was getting from it. I had no idea that Pepsi owned all of those brands and products. Before watching the video I thought that Pepsi just sold soda. In actuality Pepsi sells a lot more than just soda. The company owns popular products such as Lays, Gatorade, Aquafina, Kraft mac & Cheese and many more. In the Coke vs. Pepsi debate, we all know that Coke ranks number one. An interesting fact that I learned from the movie was that in actuality, Coke is number one, Diet Coke is number two and Pepsi is number three. The Pepsi company made a big deal about not being number one, but I say they don't have a reason to feel this way. Just because they aren't number one in the great soda battle, doesn't mean they aren't successful. They've made millions of dollars. They own more products than Coke does and their number one in countries like India. I think that is something to be proud of.

SUPPLY

This week in class we learned about supply. Supply is what producers are willing to sell because they have the ability and willingness to do so. Producers are willing to make more of their product for a higher price. This is obvious to us, because the reason producers are making their product is to make money. This concept is also called the law of supply. We also talked about all of the factors that move a supply curve. Some of the factors are input; meaning the cost to make a product, labor productivity, technology, government actions, producer expectations and number of producers.
I think the two that are the most important are government actions and technology. Today in the news we hear all the time about government regulating businesses, taxing or providing subsidies. The government can either help or hinder producers. Technology is also very important. Our society is constantly growing and coming up with new ideas. The amount of technology we use today even on a daily basis is pretty impressive. I'm sure there will be new and innovative technology to come in the future. I think all of these factors are equally important to understanding the role of supply in economics.

Elasticity

This week in class we focused on elasticity. Elasticity is how consumers respond to changes in price. When something is elastic,  the change in price has had a large effect on quantity demanded. When something is in inelastic, a change in price has a small effect on quantity demanded. When we talked in class about in-elasticity we talked about insulin. I have Diabetes, so this was an example I could relate to! For Diabetics, insulin is necessary to keeping them alive. So if the price for insulin increases, a Diabetic is still going to purchase the same amount. If the price for insulin decreases, the person with Diabetes isn't going to stock up and buy more, because insulin expires. Therefore insulin is inelastic.
I think this concept of elasticity is extremely important to understanding Economics. Elasticity basically shows us how to make more money for ourselves. Without it, we wouldn't be able to figure out why people buy more of products when the price is lower. We wouldn't be able to increase our total revenue. Elasticity also tells us in what situations we should keep the prices the same or that we can raise prices and not lose sales. Overall, I think this concept is very important to studying economics. 

Demand

Even though we had two days off from school this week we were still able to learn about Demand. One concept that stuck out to me was Change in Demand and the 6 factors that affect it. A Change in Demand is when something causes buyers to purchase a different amounts at every price. This cause the entire demand curve to shift. There are six factors that can cause this. The first is income. People may have more or less money to spend and this might occur because a promotion or a loss of a job. The second factor is consumer taste, which is when the popularity of something increases the demand. Market size is also a factor, because it the number of potential buyers changes. Consumer expectations are also important, because it's the prediction of future prices affect the present buying. An example of this is when people know a hurricane is going to happen so they purchase and stock up on water and food. The fifth factor is complementary goods. This is when some products are used together. For example, butter and bread. If the price for bread goes down, the demand for butter might increase. The last factor is substitute goods when products are interchangeable. An example of this could be white bread costing$2 while wheat bread costs $3. Most people are going to buy the cheap white bread.
The factor that most interested me was Market Size. I thought it was interesting when Mrs. Weser explained why ketchup isn't the leading condiment anymore. Salsa is. She explained it's for two reasons. The first is that America's baby boom generation has gotten older and their taste buds are duller, so salsa excites their taste buds. The second is that our country has had an increase in our Hispanic population and Salsa is seen as a Hispanic food. So the market size for Salsa is significantly larger than the market size for ketchup since salsa is now the most popular condiment. 

Tax Relief needed in Nebraska

http://www.starherald.com/opinion/opinion-property-taxes/article_55314028-9f64-11e3-a0e3-0019bb2963f4.html

Currently in Nebraska, property owners are ready for a tax relief and it's up to the lawmakers to see that this is done. The State cash reserves are predicted to be $726 million this year, which means it's time for tax relief. Since most citizens of Nebraska have complained at meetings about property taxes and they fund most of the local governments, the legislature gave them some options for bringing it down. It can help schools which will lower local taxes. It can reduce land valuation or it can put money into the Property tax credit fund. The article discusses some of these options. The money wouldn't help the rural school districts, because of the distribution formula that helps mostly urban area schools. The idea to lower the valuation of land would require the moving of property taxes to homes and businesses and there wouldn't be the same tax relief to farmers. Recently the funding of tax credit hasn't been able to keep up with the rising land prices. 

I found this article surprisingly intriguing. I thought it was interesting how the legislature was trying to decide what to do with the money. I personally would want the money to go to the schools, but I can see how it would only affect the urban schools and the rural area schools wouldn't get anything. I see the other options as just causing more taxes for the other tax bases. I think the state should focus on other tax cuts instead of property tax relief. Sales tax cuts might be a good idea, but the state would have to give up most of it's revenue. Income tax is another possibility but it'd be more beneficial to high income taxpayers. So in my eyes there really isn't a perfect solution. I guess the citizens of Nebraska will have to wait and see what happens.

No Money. Live Worse. Walmart.

http://www.huffingtonpost.com/2013/05/31/walmart-taxpayers-house-report_n_3365814.html?utm_hp_ref=tw

In an article published by the Huffington Post, a study was released last year by the Democratic staff of the U.S. House Committee on Education and the Workforce found that since Walmart's wages are so low it's employees rely so much on the government's help. The study compared it to costing a taxpayer $900,000 at one Walmart in Wisconsin. Many employees rely on food stamps and other public assistant from the government. Last year Walmart had the highest amount of employees in the state healthcare system. The study stated, "When low wages leave Walmart workers unable to afford the necessities of life, taxpayers pick up the tab." The taxpayers essentially have give money to support the employees, that Walmart cannot. Walmart became defensive and said that every month more than 60%  Americans shop at Walmart and more than 75% of their managers started out as hourly workers. 

This article honestly made me feel awful. The reason why 60% of Americans show at Walmart is because the prices are significantly lower than most stores. The reason the prices are so low is, because they barely pay their workers. I don't think it's fair that the government and the taxpayers have to give up their money to support people who work for a company that doesn't support workers themselves. I feel bad for the people who work at Walmart. I know sometimes they have no choice of where to work, but they would honestly be better off working somewhere else. I think that Walmart should pay their workers more so that the government can help those who don't have a job at all. 

This relates to what we've been doing in class lately, because just adds another aspect of Walmart. One of our arguments in class was that bringing Walmart to Weserville would create more jobs for our citizens. Yes our citizens would have jobs, but would they be worth it? They still would have to get help from the government and wouldn't be happy working long hours for little to no pay. 

Circular Flow Model

This week in class we read and learned about the Circular Flow Model. It provides an overview on how markets work and the idea of supply and demand. Essentially, using a smaller diagram, it shows us the "big picture." If we ignore the government icon in the middle, this is what it looks like.

Say you're trying to produce sandwiches. The house holds provide the factors of production (Resources). The house holds give bread, fixings and workers to make the sandwiches to the businesses. The businesses use these resources to make their product, in this case a sandwich. The product then goes to the house holds. The resources and products go counterclockwise around the model. The money starts with the money and gives it to the households for their labor making the sandwiches. The house holds then use that money to purchase the product; the sandwiches, from the business. The cash flow moves clockwise around the model. 

At first I thought this concept was difficult and challenging to understand, but once we went over it in class and practiced it several times I began to understand it. Once I understood it, I realized that the model is actually pretty logical and easy to follow and understand. We are definitely going to expand on this model as class go on. I think it serves as a basis in order to understand other aspects of economics. I definitely see why it is so important and imperative that we learn this model if we want to be able to comprehend economics.

Types of Economies: Traditional Economies

       This week we discussed and learned about the different types of economies: Traditional, Command and Market. We talked about the advantages and disadvantages of these economies and how people are affected by them.  We were introduced to Karl Marx and Adam Smith and were assigned a project in which we had to write a dialogue pretending we were these men. This involved lots of research and time spent learning about these two brilliant men. When we discussed Traditional economies we learned that they are centered around tribes, clans and families. Their ultimate goal is survival and most of their decisions and actions have been handed down from generations before them. Normally, the good of the group takes precedent over any individual. There is no one person in charge. Everyone has a set role or job in the society. There really isn't any changing around jobs, since as stated before the good of the group is the top priority. 
        I personally like the idea of a traditional economy, but I don't think it would completely work for everyone. I like how the good of the group is more important than one person's individual desires. I also like the thought that what they do has been done before in the past. However, there a couple flaws to this economy. First is that there is still a chance that one person or a small group within a clan could take over. Second, if people have to keep the same job they may be stuck doing something they aren't good at or enjoy doing. Third, nothing changes in a traditional economy. They are less productive, because they do the same things without trying anything new. This typically causes a lower standard of living. This topic may relate to other topics covered in this class, because we will probably discuss how they spend money and make the decisions in the economy. We may also talk about supply and demand and the role of labor in this economy. This may relate to current events in the news as they may report on the problems relating to traditional economies in the world today and how they may want to fix them. 

Practice

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