These findings, if proven correct, will motivate the movie producers to make the necessary changes in the final product to garner the PG-13 rating. However, producers will only cut out the least amount of content necessary to receive this rating to maximize the profits afforded to being as close to an R-rating as possible.
The result of the PG-13 movie demand curve shifting to the right is causing a forward shift in the supply curve from movie producers who are taking advantage of the shift in demand to produce higher profits and revenues. Also, because the profitability increases even more if the PG-13 movie increases in elements and material more like an R-rated movie, the differences in material between the PG-13 and R-rated movie will continually shrink.
The article stated that 55% of movies are R-rated and 35% PG-13. The percentage of PG-13 movies will increase in the future. Is this study conclusive evidence that movie makers should abandon making all R-rated movies? I do not think so. I assume that the movie industry will want to ensure the facts in the study are correct and that the findings are true due to the conservative nature of the school producing the results and other articles reviewing the same study but reporting different numbers.
Looking at the demand for cigarettes in this case we can see that the people realized there would be a price increase and therefor a reduction in the quantity that could be purchased. Also, considering the inelasticity for the demand of cigarettes these people would still purchase cigarettes even if the price were increased. So, to save money, these consumers started stock piling cigarettes to save some yen.
One consumer purchased 100 cartons and saved approximately $1,300 in potential taxes. Many others are buying what they can with 30 cartons being the norm. This hoarding effect will cause a future drop in sales but things should return to a normal level after the stock piles are smoked. Once this consumption does return to a normal level you should see the quantity demanded decrease from the consumption level that existed before the tax announcement but not by a third, it should be less due to the inelastic nature of cigarette consumption.
Due to the “housing bubble” and perceived “good times ahead,” mortgage lenders were frantically closing home loans for anyone who applied; regardless if the applicant was qualified. Even though closing loans for unqualified borrowers is bad business, the problem becomes worse as lenders habitually “fudged” on the paperwork by not adequately completing documents or filing them properly.
To compound matters further, the lending industry relied on Fannie Mae’s digital overlay system, known as Mortgage Electronic Registration Systems (MERS), to create images of their paperwork. MERS would serve two purposes. First, they would digitize the agreements and thus businesses would not need to keep hard copies of their files. Second, MERS would become the “third party that would foreclose if a borrower stopped paying.”
The major problem with MERS, however, is their system was unable to keep up with the flow of agreements. As a result, a number of contracts were never scanned and thus became lost or accidentally destroyed. Of those contracts which were digitized, a number of them were not correctly filled out and thus the agreements were not legally binding.
According to the article, due to the recession, between $2 trillion and $6 trillion in “U.S. mortgages and home-equity loans that were securitized during” 2005 and 2007 are “likely to go into default.” In other words, those individuals who should not have received loans but did are now unable or unwilling to make their monthly payments and thus the banks need to foreclose.
However, due to the problems of incomplete documentation or un-scanned (lost) contracts, banks are having a difficult time proving they have the right to foreclose on said individuals and thus, it appears, they have no legal rights to reclaim their properties.
From and economic standpoint, this article brings to light major flaws within the mortgage industry and foreshadows more difficult times in the future. Who will bear the expense of the losses if banks are unable to reclaim their properties? Will the Government, once again, feel compelled to “bail out” the banks? If that were to happen, taxes would unavoidably increase. Will the banks find a way to prove ownership and thus evict tenants? If that were to happen, the supply of houses for sell will shift to the right and thus home prices will continue to fall and citizens nationwide will continue to see their wealth deplete.
From any angle one approaches this news, it is apparent, in the near future, home values will continue to fall, banks will lend less, and the Government may very likely raise taxes. Hold on to your wallets!
One of the most important parts of Karl Marx’s economics is to describe value and how money works in this system of assigning prices/values to objects. Money serves society by performing various tasks. Namely it provides the means by which exchanges of goods can be made in an efficient manner. I believe that when a price is given to a good or, as Karl Marx would say a commodity, it represents the value that the market is willing to pay for such a good or service. This is a free enterprise and capitalistic way of looking at the value of a good/commodity and one which Karl Marx opposes. Rather his is the view that, “but what is the value of a commodity…the objective form of the social labor expended in its production. And how do we measure the quantity of this value…by the quantity of the labor contained in it” (Marx Das 255). Simply put in Karl Marx’s terms, “price is the money-name of the labor realized in a commodity” (Marx Das 79). Especially, in today’s automated manufacturing and service oriented businesses the price of a good or service definitely doesn’t represent the labor that goes into it. I think this is one aspect of economics that Karl Marx got very wrong.
Nevertheless, Karl Marx did use his thoughts on the exploitation of labor to identify how capitalists use such labor to create surplus value and combined with greed establish a wealthy class in society. I have attempted to piece together Karl Marx’s idea of how capitalism works in the following; “the capitalist buys labor-power…that…labor may reappear in a commodity… capable of satisfying a want of some sort” (Marx Das 143). This object of want which needs to be sold for a profit, or rather at a surplus value above the capitalists expenses, so “the rate of surplus value… (Is) the degree of exploitation of the labor-power” (Marx Das 174). This surplus value adds to the profits of capitalists “who extracts unpaid labor directly from the laborers, and fixes it in commodities” (Marx Das 280). Then the capitalist becomes greedy and “becomes a hoarder of money…gold and silver thus become of themselves social expressions for superfluity of wealth” (Marx Das 109). This social class of the wealthy becomes ever more lustfully greedy, “the expansion of value… becomes his subjective aim…ever more and more wealth in the abstract becomes the sole motive of his operations” (Marx Das 124-125). I agree that this cycle does take place in capitalist societies, but I disagree that it becomes each capitalists’ sole purpose and driving force in life. Bill Gates, Warren Buffet, and other wealthy capitalists whom start and fund charitable foundations that benefit society and humanity are examples of the utopia that can come from capitalism. Karl Marx would have never have fathomed such benevolent philanthropy from the wealthy capitalist class of society.
Some are questioning WalMart's decision in lowering their prices in the first place. The decision to lower their prices to spur revenue would have been a wise decision, had the overall economic well-being of our country been healthier. Since people are still hesitant to spend money on unnecessary items, their strategy backfired. Instead, WalMart should have taken a different approach, such as cutting the prices on some of the large ticket items, while maintaining a reasonable profit margin on complementary items to those large ticket items.
There are few modern businesses in Southern Utah. I am increasingly surprised how many business majors are unaware of the advantages GoogleApps provides and the number of small-business owners who have not yet harnessed it. Google’s Internet-scale cloud computing framework accomplishes economies of scale that yield considerable cost savings for customers. With over 3 million users and 3000 organizations signing up each day, Google’s marginal cost is incredibly low, therefore it is able to offer the service at just $50 per year per user. This service is valuable to me because it is scarce. Few companies offer such efficient and user-friendly cloud software at a reasonable price. If I were to create it on my own I’d have substantially higher costs with a much lower rate of success.
Sellers- The commercial real estate market has been hit hard by the economic recession. CRE values have declined due to the bad economy. If the proposed changes occur, sellers should expect some stabilization of value due to an increase in demand.
Lessors- The changes will impact the lessors financial statement, but more importantly, will impact the terms of the leases. Lessees will desire shorter-term leases due to the reporting factor.
Buyers- It is already a great commercial real estate buyer's market and with the extension of the SBA fee waiver there are even more reasons to buy now.
The impact of the proposed accounting changes may not have a huge effect in the stabilization of the commercial real estate, but it should help provide some incentives for buyers. This is what the commercial market desperately needs in order to recover.