ECONOMICS

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Fall 2011

Changes in Supply or Demand

The Fort Worth Star Telegram, October 25, 2011, “Airlines continue to raise airfares for the holiday travel”

Article 1 attached in Appendix

Summary

This article explains the mechanism of Supply and Demand with the example of different airlines. Thanksgiving and Christmas are occasions which generate huge profits for the airline industry as people go to their home towns to celebrate these evens with their close relatives. The demand for airline tickets increases and the supply of available seats declines. This prompts the airline companies to increase their fares and take advantage of the opportunity. The article compares the rates of U.S. airways, American Airlines, and Delta airlines in the peak season.

Economic Incidence of a Tax

The Fort Worth Star Telegram, November 30, 2011, “Amazon, eBay face off over state sales taxes”

Article 2 attached in Appendix

Summary

The article talks about the phenomenon of tax on online sales and its implications on the different state governments. Amazon.com and eBay holds conflicting perspective in this regard. Ebay is of the opinion that businesses with sales of about USD 30 million should be exempted from state collection of sales tax. However, the Amazon officials argue that the exemption should be limited to sellers with annual revenue less than USD 500,000. It has been proposed and under study by the law, that states should be authorized to make their own laws regarding the collection of sales tax from online sellers.

Antitrust Cases

The Fort Worth Star Telegram, December 1, 2011, “American Airlines bankruptcy filing”

Article 3 attached in Appendix

Summary

This article is the abridged summary of the online chat of Reporter Andrea Ahles about the bankruptcy filed by the American Airlines. American Airlines is unable to pay its creditors and has filed for bankruptcy. The people who will be highly affected by this bankruptcy would be the retired employees of the company and the share holders. When a company files for bankruptcy, the assets are liquidated, with proceedings as payments made to the creditors. The remaining amount, which is very insignificant in most of the cases, is divided among the equity holders.

Externalities

The Dallas Morning News, November 20, 2011, “Micro lending to the little guy takes off in U.S.”

Article 4 attached in Appendix

Summary

The article talks about the micro financing and its impact on the external world. This method of financing is becoming increasingly popular in the present economic scenario, with financial institutions on the brink of bankruptcy, unable to pay high interest on the principle amount. The article has explained the benefits of micro financing and its impact through different examples and success stories. These include the case of Manuel Godino and the project financed in Ugandan village. Micro lenders have supported small entrepreneurs all over the world, who were unable to raise seed capital for their business ventures.

Tariff on Imports

Business Week, October 20, 2011, “U.S. Solar Manufacturers Request Duties on Chinese Imports”

Article 5 attached in Appendix

Summary

The article talks about the disadvantages, to the U.S. manufacturers, of low import duty ...