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Why Ghana's gold miners are giving up

Why Ghana's gold miners are giving up | Microeconomics | Scoop.it
Tom Weston's insight:

For many years, Ghanaian's have been making a living from mining small amounts of gold and selling it to cover their expenses and feed their families. However, as global economies are recovering, the price of gold around the world is decreasing (as gold is traded more when global economies are failing, as it is a more stable currency). The price of gold is expected to keep falling, and already Ghana's gold miners have seen their earnings fall sharply, meaning that it has become unsustainable for them to mine this gold, forcing them into taking up a different profession.

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Apple in major Chinese iPhone deal

Apple in major Chinese iPhone deal | Microeconomics | Scoop.it
Tom Weston's insight:

By signing a deal with China Mobile, Apple has given itself far more exposure to the Chinese market, meaning that their demand will have increased by a huge amount (China Mobile has over 760 million subscribers). As Apple products will remain expensive in price, the iPhone will be viewed as a luxury produc, however with incomes rising in China all of the time, Apple's share of the market will only increase in the future, bringing in much revenue for them in the coming years.

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Facebook revenue surges 60%

Facebook revenue surges 60% | Microeconomics | Scoop.it
Tom Weston's insight:

Facebook has taken advantage of its hundreds of millions of active worldwide users by increasing advertising on the site. Also they have made their mobile app a much more pleasant experience, encouraging more people to download it onto their phone, which will encourage people to spend more time on the social network, and ultimately giving advertising more exposure.

 

For companies, Facebook is one of the most attractive places to advertise on, due to its number of users and how it is able to target its adverts to the people who will be most interested, by using Facebook's large amount of data collected on what users have 'liked'. This means that Facebook can charge a real premium price for advertising space, maximising profits for Facebook.

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Apple's iPhone 5c Sales Are Doing Just Fine

Apple's iPhone 5c Sales Are Doing Just Fine | Microeconomics | Scoop.it
Worries about Apple's iPhone 5c sales are overrated. - Daniel Sparks - Tech and Telecom
Tom Weston's insight:

In the iPhone 5C, Apple have created a product that is on the market for $100 less that the flagship product, the 5S. There are many people at the moment who feel that the 5C's price should be lowered, as at the moment it seems that at a slightly lower price level, there would be far more demand (meaning currently there is excess supply). However with the holiday season approaching, it is in Apple's best interest to hold the price as the sales will pick up at around this time.

 

Also the 5C is a substitute product for the 5S, so if Apple were to drop the price of the 5C, its demand would go up, but it may also mean that people wouldn't justify splashing out another $120+ on the 5S. As the cost of production for both phones are fairly similar, this would cut into Apple's profits and so the idea of dropping the price is not justified.

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Political staple

Political staple | Microeconomics | Scoop.it
Padded with subsidies NOT even the most ardent reformers around Shinzo Abe, Japan’s prime minister, believed that he would dare to scrap the policy, known as...
Tom Weston's insight:

Japan's long standing subisidy policy to rice farmers has led to many of the farmers becoming reliant on the subsidy and becoming complacent in their methods. 98% of farms in Japan are smaller than 5 hectares and, as they are so small, are very inefficient in their methods. They use old methods of farming with very inefficient equipment, meaning their effiency is very poor.

 

This means that much of Japan's rice costs twice or more what rice does in other countries and so none is ever exported. A 777.7% tariff is in place on imported rice to protect their uncompetitive farmers and it is hoped by phasing out this subsidy, the price of rice will fall and this should encourage small landowners to hand over their paddies to be farmed by larger operators, who will bring greater efficiency, lowering the price of rice further. 

 

If the price of rice drops low enough, Japan will start to become competitive with other countries and could even start exporting rice, boosting their economy.

 

 

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The firms run from self-storage units

The firms run from self-storage units | Microeconomics | Scoop.it
A growing number of small firms across the UK are trading from storage centre units, as the BBC's Katie Prescott reports.
Tom Weston's insight:

Small businesses are benefitting from using self-storage centres as their own small warehouses, as the rental fee is far less than owning a large warehouse, and they do not have to worry about the council tax on the space, as it is all covered in the rental fee of the storage unit. The small rental fee lowers the cost of production, maximising profit margins.

 

One may assume that due to the small size of these storage units, there would not be much space for spare stock, making the PES quite inelastic, however the flexibility in being able to rent out another unit means that supply is not as inelastic as first thought. When the space is not needed, they can give one month's notice and stop using that unit, making sure that there are no unnecessary costs in production.

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You won't find an Apple under every Christmas tree

You won't find an Apple under every Christmas tree | Microeconomics | Scoop.it
A RAFT of new tablets was launched on October 22nd, including Nokia’s first Windows tablet, the Lumia 2520, and Microsoft’s Surface 2, both designed before...
Tom Weston's insight:

The entry of new products into the tablet market, previously dominated by Apple, will have a few effects: 
Firstly, as they are low-end options (at around £110), they will attract more consumers into the tablet market, shifting the demand for tablets in general outwards.

However it will test the cross-price elasticity for higher-end products such as the iPad - will people keep buying the product, or will the demand drop for them, in favour of cheaper products? The demand for iPads may even increase in the long run, as the newly attracted consumers to the tablet market may upgrade to the higher-end tablet over time if they've had a pleasant experience with their previous item.

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Netflix reports surge in profits

Netflix reports surge in profits | Microeconomics | Scoop.it
Tom Weston's insight:

A very reasonable price of £5.99 a month has led to a large demand in the Netflix subscription. It also has the largest choice of content when matched against its competitors, meaning that it is the most attractive to consumers, and so the demand is high. Netflix has also benefitted from a successful advertising campaign, shifting the demand for the product outwards.

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