Economics of College Football

As we've learned, college football is a large business bringing in millions for their respective schools. Thousands of people flock to the stadiums or to their couches to watch games on Saturdays. Thus, some colleges value their college football team heavily and will spend a lot of money on them. For example, the top 3 schools that spend the most money on their college football team is Alabama, Florida State University, and Auburn. Each of these schools are football powerhouses with each of them consistently being ranked in the top 25 of the country or close to the top 25.

However in order to pull in millions of dollars as revenue, colleges need to maintain high attendance at their stadium and on TV. This has been hard for any school outside of the Power 5 conferences (Pac- 12, ACC, SEC, Big 10, and Big 12) as they aren't as big of names. Even schools in these conferences aren't guaranteed success therefore, team success becomes important for increasing revenue because no one wants to watch a 0-12 team when there are so many other successful teams out there. Therefore, recruiting and bringing in top football players are important in order to improve to team.

High school players do need some incentive to choose specific schools especially highly rated players who have offers from multiple schools. Therefore, many players look at the things such as the coaches, facilities, academics, and more. Thus schools must be willing to maintain and improve these factors in order to pull in players.

However, the opportunity costs of spending so much money on one single sport is that other sports get less attention and thus worse facilities and/or coaches. This may affect players of other sports as they may feel less valued and therefore unhappy. Another opportunity cost is that there is less money to spend on other things that relate to the academics side of universities. This may mean that classrooms aren't as well maintained, teachers aren't as good as they could be, or less educational opportunities in general. These opportunity costs are important to schools and teams that pull in less money from football yet continue to spend large amounts of money on football.

Economics of Holiday Shopping

As Christmas time approaches, and we look back on our purchases from Black Friday and Cyber Monday, it is important to recognize the economics behind these holiday deals. As many of you are aware, many gifts and products will go on sale during this time of year, supposedly allowing customers to get the "best" deal on presents and gifts for loved ones. Yet, these sale items are not all they seem to be.

Let's first start with some background information on basic goods. Let's say a company sells a t-shirt for $30. Obviously, some of this money goes towards paying workers and buying new materials to manufacture more clothes, but what about the rest of it? An average t-shirt costs about $5 to make, which means the company is overcharging the customer $25 for a single shirt. Once you take out some money to pay workers, let's say another $5, the company still profits a significant amount for only selling one shirt. That being said, what happens when that t-shirt goes on sale?

Now, let's assume the t-shirt still costs $5 to manufacture, but the shirt is now on sale for 50% off! (WOW!) If you think anywhere remotely to how I do, this sounds like an amazing deal. In fact, the company HAS to be losing money if the shirt is priced this low! However, it might not seem as great as you originally thought. Running through the same process, we subtract the $5 it takes to make the shirt and another $5 to pay workers. However, with the initial cost being only $15 this time, the company still profits $5 from that shirt.

Taking a step back, this situation is similar to that of a monopoly setting prices for their good. We can assume that the full-priced shirt is the point above MC = MR. As we know, this is extremely expensive, and it more than covers the total cost needed to continue running the company. Now, we take the sale price, and we start to become more efficient in our spending. Now, let's assume the price is where price is equal to MC, or the point of allocative efficiency. While the price is significantly less than the original price, the firm is still profiting off of each sale. Granted, this profit is less, but it is still a profit nonetheless. So, next time you go shopping for a Christmas present, and you see that sale sign outside your favorite clothing store, remember that a sale is not as great of a deal as you might first assume...

When Culture Becomes a Product

In the “The New Rules of the Game pt. 2” documentary, we noted how, with the help of technology, globalization has led to changes in jobs, lifestyles, entertainment, education, and communities.

When celebrated and exchanged respectfully, commodifying culture has the potential to continue opening up opportunities and new doors—like it has in the past with new fashion styles, music genres (kpop), and impacting the inside and exterior of buildings with interior design furniture as well as architecture. It’s also heavily transformed the food industry, from Boba milk tea to falafels. 

The tourist industries of many countries such as Bali, Peru, Africa, India, Hawaii, Cambodia, and Jamaica rely on foreigners buying their goods. Natives and indigenous make a living on the basis of travelers wishing to enhance their authentic experience or remember their trip through souvenirs. In order to financially support themselves and their families, they intricately weave fabric such as carpets, tapestries, or embroidered pillows using their artisan skills. Others specialize in Chinese pots and ceramics, jade antiques, as well as scroll paintings. Loose elephant pants are another popular product sold in Thailand.

Culture becoming products is a way to package, share, and easily disperse or distribute. It has the power to enrich and evolve our tastes, but can also merge into mainstream culture where…the ethics behind this could also be debated—as the monetization, commercialization, and capitalization of culture has devalued and trivialized some goods. 

Applying Economics - Cutting Class

       We have learned many interesting economic concepts this year such as marginal utility and ouportunity cost. I decided to take a look at these economic concepts in a place beside the economy. What better place to apply these concepts then the classroom.
     As seniors, I believe we are very lenient with what we do in class time. Often a study session means watching Netflix, and a bathroom break turns into a "short trip" around the school. In extreme cases, we would rather sleep an extra hour than show up for AP Micro. For these cases, the opportunity cost of wasting time is being educated and learning. When we are in the moment, we often don't think about the opportunity cost of these decisions. If we did, we could clearly see that it does not always add up. 
       We could say that in the short term, the utility we get from wasting class time is greater than that of studying. However, in the long term, this changes. We may end up stressed for exams as we never studied, or because we were not in class while a topic was covered. Furthermore, we may need to make up assignments, therefore the time we waste in the past will only catch up to us in the future. We can see in the long term, we would have more utility from studying than from wasting time. 
      Applying economics in this manner could definitely save us some stress in the future. Considering the potential opportunity cost of watching Netflix in class, and comparing the short term and long term utility gained from taking a nap rather than paying attention could end up saving us big time. I hope the next time you consider sleeping through economics, you do yourself a favor and apply what you learned in that class to make the rational decision.

Opportunity Cost of the Flag Football Tournament

As we have learned in the past, opportunity cost is what you lose from one option when you choose other options. As some of you may know, there is currently a flag football tournament going on during lunch time this week. After participating it in, I realized the opportunity costs that came with this tournament.

The benefits of this tournament is that players get to play against other teams/grades and earn bragging rights over one another. Another benefit is the simple opportunity to play games of organized football with friends for fun.

Although this is a flag football tournament, there is still a lot of contact and opportunities of injuries when participating in this tournament given the nature of the sport. Players are still running full speed around the field whether it's to pull flags, catch the ball, defend a player and much more. Along with the fact that there are 18 players on the field at all time, there is a high possibility of running into someone. Therefore, one opportunity cost of participating in the tournament is that you risk your health and thus increase your chances of injuries. Without participating in the tournament, you have a much higher chance of staying healthy and not suffering an injury.

Another opportunity cost is that you sacrifice the time to eat a good lunch. Given to how the games are set up and the time required to play in them, most players are left with little time to eat lunch. Thus some players are forced to not eat lunch or not enough, which can affect someone's learning ability and health, or forced to eat school lunches or food that they have quickly thrown together that isn't appetizing.

Although playing in the flag football tournament may be fun to play with friends and earn bragging rights, one must be able to weigh the opportunity costs of participating in it and make smart decisions for the benefit of their own health.

Why the Olympics may be a poor economic choice for some athletes

Anyone who has watched the Olympics is familiar with athletes like Michael Phelps and Lindsey Vonn, people who have made fantastic careers out of their sports seemingly by going to the Olympic Games. Athletes like Vonn and Phelps represent the minority of athletes that have earned lucrative endorsement deals, generating the idea that all Olympians are well off and are able to live off of their trips to the games. In fact, many athletes are forced to take on odd jobs when they are training because out of all the funding that team USA has only about 81 million is designated specifically for the athletes. While this may seem like a lot of money when put into perspective and the number of athletes that it needs to cover this doesn't leave enough money per athlete to pay them a salary and their training and travel for the games.
                                              
Athletes that live at the training facilities have to pay to live and train there and even if they qualify for the games their airfare may not be fully covered, something that not all athletes can afford. This problem is especially bad for sports like Judo that don't have the fanbase of sports like skiing or gymnastics because they rely solely on the government to fund their trip whereas other organizations like USA water polo can help fund the training and travel costs of their athletes attending the games. Furthermore, even for those athletes that do win medals, which is highly unlikely, the bonuses they receive are not enough to live on with the payouts being $25,000 for a gold medal, $15,000 for a silver medal, and $10,000 for a bronze medal. With these payout amounts, very few athletes would be able to rely on them for their income. Taken together, the economic costs of being an Olympic athlete are quite high, with very few athletes making a living from these games, which is why it may not be a wise financial move to try and compete in these games especially if one's sport doesn't have the money that more popular sports do.

Sources
http://time.com/money/4428302/2016-rio-olympics-earning-side-jobs/

Why a carbon tax would be effective and why it matters

First of all, what is a carbon tax? A carbon tax is a tax on fossil fuels with the intention of reducing carbon dioxide emissions. A carbon tax is very similar to an emissions tax in that it requires emitters to pay a fee for every tonne of greenhouse gas released into the atmosphere.

Plenty of economists suggest a carbon tax as a good method for cutting down on carbon emissions. Some studies say that a $25 tax would cut carbon emissions by 10% per year. The reason for this is because of basic economics: a carbon tax disincentives companies from emitting a lot of carbon because they have to pay more and no one wants to pay more. While simple, it holds true. An analysis by Donald Marron, former acting director of CBO, finds positive change in the forty countries using carbon taxes.

The positive externality found with a carbon tax is an increased incentive for companies to go green. A study conducted by REMI found that with a carbon tax, coal could be phased out entirely by 2025. Economists predict that because the transition to green energy would be net less expensive in the long run than continuing use of fossil fuels, plenty of companies on the brink of transitioning would actually follow through. The New York Times reports that Ireland’s wind industry boomed after a carbon tax. Similarly, in Australia, renewable energy usage rose by 28%. A study by Copenhagen Economics found that a 1% increase in tax share leads to a 2.4% increase in patenting which indicates that green energy is a possible future.

The issue then is it fast enough? A recent IPCC study reported that we need to massively cut down on emissions by the end of the following twelve years. Moreover, the study reported that it would require an international effort, not just by the US but by multiple countries. Luckily, cherry-picking studies indicate we have some reminiscence of hope. Jerry Taylor, from  Niskanen Center, supports that countries representing 54% of the world’s emissions who have expressed support for a carbon tax but haven’t implemented one. This corroborated by the study that reports complete phase-out by 2025 indicates there still may be hope left.