BS Revision time! ^__^

ok, I've become sooooo lazy for the last couple of days! I sleep almost 15 hours a day -___-
need to do some work. I have already done some maths stuff but it was obviously not enough.
New Year is coming! yaaay! I love New Year! (: I need to buy some presents for you guys (:

okok, now moving on with my BS revision.
Here is Top 20 Terms for A grade BS Revision:

1. Analyse - to break a topic down into it's component parts. This should help to identify the causes and effects of the issue and to explain the process whereby the causes bring about the effects. This encourages more depth of study. It implies a writing style that uses continious prose in fully developed paragraphs. Bear in mind the word "why?" when analysing.

2. Bias - a facto that causes data or an argument to be weighted towards one side. Statical bias occurs when a sample has - by chance or by mistake - an overweighting towards one subgroup (e.g. too many pensioners within a research sample). Personal bias occurs when a decision-maker consciously or subconsciously favours one side over another. Scientific decision-making methods such as investment appraisal or decision trees are supposed to avoid bias. In fact, the results they produce will depend upon the assumptions made, which may be biased.

3. Business cycle - the regular pattern of upturns and downturns in demand and output within the economy that tend to repeat themselves every five years or so.

4. Capacity utilisation is the extent to which the maximum capacity of the firm is being used, i.e. actual output as a percentage of maximum potential output.
FORMULA: (actual output per period/full capacity output per period)*100

5. Change - a constant feature of business activity. (ohh, there is a lot to retype.. uhh.. see page 33 in your A-Z BS books)

6. Corporate objectives - the goals of the whole enterprise. Among the most common corporate objectives are:
to ensure long-term, stable growth in real terms

• to spread risk and achieve griwth through diversification
• to concentrate upon the firm's core skills
• to maximise market standing
• to add value through continious technological innovation
• to achieve profit maximisation in the short to medium term

7. Evaluate - this vital term means to weight up evidence in order to reac judgement. In the context of an essay, you will have to present that evidence (pros and cons, perhaps) before reaching a conclusion. As the term invites yout judgement, do be willing to state your opinion within the conclusion, e.g. "In my view..". It can be helpful to keep in mind the phrase 'to what extent...?' 

8. Market economy - an economy which allows markets to determine the allocation of resources through supply and demamd.

9. Marketing - the all-embracing function that links the company with customer tastes to get the right product to the right place at the right time. Marketing decisions are made through the marketing model, based on the findings of market research, and carried out through the marketing mix. At all stages in the marketing process, the firm needs to work closely with the production department and research and development, to ensure that what is promised is delivered. 

10. Marketing model - a framework for making marketing decisions in a scientific manner. It is derived from Taylor's method of basing decisions on scientifically gathered research evidence. The model has five stages:

1) Set the marketing objective (usually based on the company's objectives)

2) Gather data (quantative and qualitive data is required)

3) Form hypotheses, theories about how best to achieve the objective

4) Test the hypotheses (through market research or by test marketing). After results are evaluated, a decision can be reached on how to proceed 

5) Control and review (the means of implementation will be via the marketing mix)

11. Objectives - the medium to long-term targets that can give sense of direction to a managerm department or whole organisation. Objectives form the basis for decisions on strategy. 

12. Operational gearing - measures the extent to which a firm's costs are fixed in relation to output. If fixed costs form a high proportion of total costs, the firm has high operational gearing. This is risky because a fall in demand and therefore revenue will have little impact on costs. Therefore, profit can turn to loss quickly. 

13. Opportunity cost measures costs in terms of the next best highest-valued alternative foregone.  

14. Productivity is a measurement of the efficiency with which a firm turns production inputs into output. The most common measure is labour productivity, i.e. output per worker. This is important because output per worker has a direct effect in labour costs per unit. The higher the productivity, the lower the labour cost per unit.

15. Product life cycle - the theory that all  products follow a similar course of conception, birth, growth, maturity and decline, although products pass these stages at different speeds.

16. Short-termism - a phrase describing the state of mind of managers for whom rapid results are the top priority. Such an approach can be contrasted with the Japanese pursuit of long-term goals such as total quality and technological superiority. 

17. State your assumptions - in a numerical question, tell the examiner the decisions you have made when there has been some uncertainty about the correct figures. To gain a mark, your assumption must be based on uncertainty and must be logical. Do not confuse an assumption with a conclusion. 

18. Strategy - a medium- to long-term plan for how to achieve an objective. The plan itself would include not only what is to be done, but also the financial, production and personnel resources required.

19. Tactics - the measures adopted to deal with a short-term opprotunity or threat. Although managers would want to adopt tactics that fit in with the long-term strategy, there may be occasions when this is not possible. 

20. Uncertainty - the situation that underlies every business decision. This is because decision-making concerns changes that will have an effect in the future, and the future can never be predicted with certainty. An important issue is that stems from this is that uncertainty increases over time. In other words, a forecast of next year's sales or costs has a lower chance of accuracy than an estimate of the figures for next week. Therefore decisions that rely upon circumstances in the distant future are subject to very great uncertainty. Examples of this include commercial failures such as supersonic aircraft and nuclear power.

everything is taken from A-Z BS book. -__-

a helpful resource

hey guys I found an interesting revision resource on BS and Eco. it's not for a specific exam board but covers all the topics needed (and even more!)

enjoy

yeah, I would like to motivate you guys a little bit

check this out
I've been predicted 4A's for A2 Maths and all three sciences, having obtained 5A's for AS, applied for mech engineering to Imperial (AAA), KCL (AAB), UCL (ABB), Warwick (ABB) and Bath (AAA)..and ALL have rejected!! not even an interview

in brackets he wrote usual conditional offers from those unis. so, officially, only 3 A2s needed to get there. that guy is taking 4 A2s and still is rejected

GCSE's were all A* and A's. As for my personal statement, I did get it checked by my tutor as well as my study skills mentor who made us draft about 5 times over. EC's included things like being in the cricket team, playing for local tennis club and done some karting in my junior years.

some universities like to check GCSE's (they are years 10 and 11, i think, before A-levels, which are years 12 (AS) and 13 (A2)). I heard that LSE wants at least 7 A's at GSCE. no doubt oxbridge is taking them into account as well. you can enclose your equivalent grades into your UCAS applications if you want to, though it's not necessary; however, some unis can give you a rejection if you don't mention your GSCE's in some subjects.
Personal Statements are extremely important. I wonder when we are going to write ours, because some of us are applying to oxbridge, so we need those to be finished by 15th of October 2009. That guy is saying, that his PS was Ok and I believe him. Even if he failed to write something outstanding (i doubt that he did), he still has many other advantages and he mentioned sports interest, which is also a good thing in an application!

he could have got at least one offer, but I think his mistake was that he picked only top unis. well, maybe he thought that Kings College Uni and Warwick were good insurance.. that's the point - it's really dangerous to send off applications only to top unis, you need to have real insurance.

still not convincing?
read this

only A's. rejection from Cambridge, Nottingham (!!) and Bristol (!!!).


have a nice day (:

one more!

based on this article.

another pre-budget report mind map

this time based on this article

the return of the Mind Maps!

a mind map based on this article

Charity

Yesyesyes, I know I am very late, but in Russia we say "Later is better than never". ^^
aww, it's my personal homework)

The point is that people who do not spend their money on something, preferring to keep the money, leave the things they haven't bought to some other people. So the world gains from those people. So, if there is more supply (because miser people don't spend their money on the goods) with demand staying the same, the price will go down, so more people will be able to afford it.

1. People don't spend their money and yet demand stays the same. Why will price fall?
Uhm. Well, first of all, if people do not spend their money on goods that means that producers don't have profit. But people actually have the money (but they keep this money as savings) and don't buy the goods. So the demand in this case is latent. To attract people, they will cut prices or advertise goods.
But, as I remember the book, miser people don't buy things which are actually produced for them. So when they don't consume those goods, they enable those goods to be consumed by someone else, therefore, it will be a shift of the supply curve to the right. Ceteris parabis, extension of the demand curve, new equillibrium price is lower than the original one.

2. if demand falls why will there be more supply, not less?
I'm not sure about this one, but I'll try..
People prefer to keep their money as savings, which means that it is not involved in the circular flow of income, therefore, it is not shown in the demand curve. As more people prefer to increase their savings, the demand curve will shift to the left. But, as I said, people who keep money as savings actually just don't consume the part of goods that were supposed to be consumed by them. Those goods are now available for others - more supply.

3. How can it be charitable NOT to support charities?
Supporting charities means giving money to someone to spend them instead of you. There is no guarantee, by the way, that those money will actually be spent on the charity.
But the point of that chapter was that miser people are the most charitable. How can it be? I will explain.
So, as I have already said, savings are out of circular flow of income, as savings are one of the so called 'leakages'. The other two leakages are taxation and imports, but that's not the point. As those money are not into the actual economy, that means that there is less money in the economy - the value of each currency has now increased. So poor people have now become a little bit richer as the value of their money they own has increased.
That's how miser people actually help the poorer ones.

More relaxation from my revision workbook

"Sell a range of soap bars that float so they don't get lost in the bath. One obvious way of making floaty soap - other than choosing ingredients that are less dense than water - is to add air bubbles to each bar during the manufacturing process." Would this sell well?

Well, it depends on many things.
First thing to consider - in which country it is going to be sold. Because in the UK people are trying to save water because they have to pay for it, therefore, British are more likely to take a shower instead of taking a bath. Or, according to the data I read in Cosmopolitan 3-4 years ago, French women would rather take a bath than a shower. Russians, hehe, don't pay for every litre, so we are for sure taking a bath more regular than the British people. So why British will consume much less than Russians and French.
Then competitors should be taken in account. If a famous company from the market is going to sell it, let's say 'Lush', the product would sell well. If the product is introduced by an unknown producer, then the product should be advertised very well to be able to compete with its substitutes for consumers' money.
The price is very important. The demand for this product will definately be price elastic, because a floating soap is not the thing that will be bought at a very high price level. The costs of production of this product will not be bigger than the costs of production of a usual soap, that means that the most profit will be made at the same price level with a usual soap.

A little break from working on my revision workbook..

"Produce CDs that sit in the CD player of rental cars so that, when a new driver gets in, the CD can tell them about the car, the local area, driving laws, etc. It could also feature advertising for local businesses." Would you invest in this product idea?

Well, the idea sounds fine to me.
CD will give most of the information the consumer needs and, possibly, advertise some local businesses. The information about the car or local area will save the time of people who work for this rental company, which means they will be able to increase their productivity, therefore, have more cars rented and increase company's profit. The information about driving laws or, for example, safety rules, will decrease the possibility of an accident which means less spenditure on car fixing. Finally, local businesses will pay for advertising on these CDs, which means more money earned by the rental company.
However, we can't be sure that consumers will actually listen to CDs - they might just remove it from their CD player and put there some music or audiobooks.

Actually, I wouldn't invest in this idea, because I'm not so close to car rental businesses and I might not now some details of this market.

+3 Mind Maps

Websites evaluation

ok, let's move on with homework.

soooo.. websites evaluation! first of all, I want to point that actually they are not websites, it's just webpages.
as we can see, there are four links: an article on Christmas rants site, an article from "Telegraph", a question from Yahoo!Answers and an article from TDI (they deserve it) website.

1. Christmas rants.
"Your Entertaining and Impassioned Guide to the Christmas Season", says the subtitle of the webpage. Well, my first impression, when I saw the page, was that the site is really boring and not attractive at all - the layout is pretty simple, traditional Christmas colours (red and white) are used, but it looks not professional at all. So there is nothing that could be attractive to potential users of the site. Also, the navigation and the content seem to me completely unsturctured, which is also a great disadvantage. Advertisements are placed awful, they distract from reading and annoy users.
The article is absolutely unhelpful and even useless - except for the idea that teachers do deserve a present on Christmas. Four examples of presents for teachers, two of which are definately unmatchable with words "a good present for a teacher" and are chosen only because of author's taste. I mean - come on, how gold is connected with a good present for a teacher? Basing on the quality of the article, I came to the conclusion that the site would never be a success. But, who knows, some people believe in everything they read and don't care about layouts.. By the way, check the date of the article..

2. Telegraph article
'Telegraph' is known as one of the most popular and most successful newspapers in the UK. Their website no doubt is well designed and introduced to the public and great articles should be expected there. Telegraph's website succeeds almost in everything - as it is a very developed project, every detail is taken in account: layout, navigation, picture connected with the topic, very interesing content of the article.
The article is really touching and interesting, it shows to readers a range of possible ways to make your teacher happy with a Christmas present. The author gives examples of excellent presents but warns about some of not successful experiences. I've learned a lot from this article.
All these things, of course, attract new consumers of 'Telegraph', which means more sales and more profit. So, if you can offer a great quality, you will not fail with your business, watch and learn from this example.

3. Yahoo! Answers
Yahoo! Answers is a very popular service where everybody can ask any question they want and get many different answers, which can be helpful, interesting and informative but there also will be some pointless, absurd and not-so-clever ones. You should be aware of that. But, in general, this is a really helpful resource and a great number of people, who are ready to give you their point of view. And if you see the question in the different angles, you will probably understand it better and find an appropriate answer or solution.
The layout is simple and that's exactly what is needed for a forum like this.
As we can see using this example, the problem has many different solution and Yahoo! Answers service is really helpful when you need an advice or an experienced point of view.

4. TDI Site
Another website, a competitor of the first one, I suppose. 'They Deserve It' is a website which spesialises in giving advice about presents. The main page, by the way, has impressed me with a nice design and with the fact that the site is available in many launguages. But, when I saw the 'Christmas Presents for Teachers' sector, I was surprised - it looked like a totally different website! The layout looks like it was made by a newbie, and the number of advertisements per one page completely hit my brain! Yes, I know that they need something to earn money on, but because of that the site looks like a commercial fake.
However, the article is not so bad if you ignore all the ad links. Of course, it could not be compared with the Telegraph one, but at least it does not offer to buy some golden goods for a teacher. I can't say that the site or article are attractive to users, but I can't say the opposite as well.

In Russia we celebrate Christmas on 7th of January, but for me 25th of December is a great day anyway cuz it's my mum's birthday. Russians celebrate New Year and give New Year presents instead of Christmas ones. And we don't have Santa Claus, we have Grandfather Frost! :D I will ask him for a big box of Red Bulls this year)

A product extension strategy?

"Make all car windshields out of photochromic glass that darkens to a moderate sunglass tint when exposed to sunlight. This innovation would improve driver comfort and safety, especially when traveling into the blinding glare of a rising or setting sun."

Well, first of all, I should mention that 'product extension' can be considered as a part of a product life cycle. The main aim of the product extension strategy is to make a product to stay in the market for a longer period of time, to make more profit and don't let the sales revenue start decreasing.
I don't think that this is an example of a product extension stategy. It's about cars as a whole technlogy, there is no brands mentioned. I think it is just a development of technology that will make cars better. Cars will be used until a new way of transportation will be found, therefore cars as a techology don't need product extension strategy.
If it was about a particular car, we would be able to call it product extension strategy.

Talking mugs

"Introduce mugs and cups with special sensors that would give a voice alert like 'This is your third coffee today', 'Your coffee is getting cold', 'I am empty; refill me if you want', and so on." - would these sell well at Christmas?

UUUH, I don't know about the others, but I would love that cup!!! I think it is the best present for coffee maniacs like me.))

But seriously...

well, this is a great business idea on the first site. Talking mugs with sensors, how unusual and how impressive! However, I can't deny that there are some disadvantages in this product:
- sensors and voice alerts in a mug will cost extra money.
- once the sensor is broken, mug loses it's originality (or goes to rubbish bin)
- people may use it not only for coffee. when you drink water and suddenly the mug says to you 'heeey, u drink too much coffee!'.. there should be different types of mugs I think.

But the advantages are:
- the product is unique - there is no such thing in the market
- it will be really popular over the holidays and will bring big profit to the producers
- a new way of using technolgy means further technology development
- you won't have cold coffee ever again!!!

'I'm not feeling lucky' Google Button

"Add an 'I'm NOT Feeling Lucky' button to Google that would automatically take users to a random webpage that would NOT be the topmost return for their query. This option would complement the 'I'm Feeling Lucky' button, giving the search process a creative twist." - would this be popular? Would this increase Google's revenue?

Well, first of all, let's start with "I AM feeling lucky" Google button. This buttom makes the search process easier and faster, though it is not effective sometimes. If you type something into Google search and then press the 'I'm feeling lucky' button, you will get on the page of the first given result of the search. However, according to a study by Tom Chavez of "Rapt", this feature costs Google $110 million a year as 1% of all searches use this feature and bypass all advertising.
I can't see any point in creating a button like 'I'm not feeling lucky' - it won't give a customer an expected result of a search, it won't be used at all, it actually misses up all the idea of online search - just gives you a random website! I mean if you wanted to get on a rendom website, it's not a good idea to use this button - you might get on a site with a porn (yeah, porn is everywhere, eww) or some virus site. It won't be popular - even 'I AM feeling lucky' button isn't popular. Me and Lex had know idea what is it until I looked up Google FAQ.

dixi.)

ASOS homework

a. possible reasons for the success of ASOS
as we know, the firm has reported about a huge growth in sales in profits in October. It seems very strange to me because I'm not interested in fashion stuff. But I think that the point is that most of the women are interested in fashionable clothes, so the demand on celebrity 'As Seen on Screen' clothes might increase because of the decrease in income. Because of current economic situation, people cannot afford some brand products such as Gucci or Prada, but for sure they want to look well. ASOS clothes is fashionable and much cheaper than brands. So when income level has fallen, many consumers has switched from expensive clothers to cheaper substitutes.

b. who the main competitors are
well, I think main competitors are still fashion brands and modeliers.

c. strengths/weaknesses of their products
strength: cheap, quality of the products is for sure good and demand is always high.
weaknesses: it is an online business, so there might be imperfect information about the products: wrong sizes, the product might look different on a picture compared to the real look etc;
also it is really difficult to be in touch with latest fashion changes if the business doesn't want to lose customers.

d. what steps can they take to ensure continued success?
I think the business should be run 'offline' as well - it will attract more customers and they will be able to buy more, because, as we all know, we want what we see.
What else? They can also introduce a line of male ASOS products - nowadays many men care about their look not less than women.
They also should think about complements - why don't they also offer some accesorise to the ASOS clothes?

Inflation MInd Map

Review for As Unit F581 Revison book

First of all I want to say that in my opinion book completely does not fit in its purpose. However, I can't deny that there are some advantages.

The structure of the book is a very important thing. When you learn something, you should do it step-by-step, going from the key points into the details. In this book many topics are split in small pieces which are situated in diffetent parts of the book. A good example of this is how the authors introduce the demand curve, the supply curve and the price equillibrium topics. When the main topic is demand, the consumer surplus is also explained. Yes, we can't deny that they are close connected to one another, but still - demand is basics, the consumer surplus is not. I think that basics (e.g. demand, supply and opportunity cost) should be explained first. Other things like surpluses should have their own topic which will be hepful in understanding the AS. Elasticty, one of the most important topics in this Unit, is also misstructured.
Some of the definitons are given not from economic studies point of view, they are just explained clearly so noneconomists can understand what it is about. Still, when you are taking an exam you are required to define terms using economic terminology.
Another disadvantage of the book is the number of excersizes. We can take the production possibility curve topic as an example. They ask to draw the PPC for 5 times! As a student, I really think that this is wasting of my time, because the opportunity cost is not so difficult topic, which needs so much practise. Also I can say that the authors ask to write too many definitions which takes your time when it's easier just to read it and remember it.
Sometimes the extra data is given, but you don't need to remember it. They intoduce demand as a function of price, prices of other goods, incomes, tastes and fashion, the level structure of the population, advertising and expectations of consumers. Seriously, do students need all these things to understand what the demand curve is?

Now I'm going to talk about the advantages of the book.
One of them, surprisingly, is extra data like the types of scarsity ot types of industries. These things will be helpful if are considered at exams and they also give you a wide view on economics.
Another thing is past papers which show a student what will he need to know.
Some of the topics are presented really well with not so many helpful excersizes, which is good for revising. I really like how the market failure topic is presented, though there are things that I would change.

So, it is obvious that the book has more disadvantages than advantages. Actually, I would call this book "AS Unit F581 for Dummies", but not a revision book. Definately.

Entrance requirements for the universities I'm interested in

London School of Economics (BSc Economics):
AAA, one of which should be Maths.
I also have read the Students Room and surprisingly found out that they admire people with AS in Phychology.

University of Oxford (Economics and Management):
AAA, Maths is strongly recommended

Warwick University (Economics):
AAB + AS level B (or C as a fourth A level) or A level AABB for successful applicants taking 4 A levels inc. Maths and Further Maths. Applicants are encouraged to avoid combinations of subjects with significantly overlapping curricula such as Economics and Business Studies.

University of Southampton (BSc Economics):
A levels: AAB
AS level: mathematics at grade C required, if not offered at A level

University College London (BSc Economics):
AAA including Mathematics

University of St Andrews (Economics):
AAB

I also wrote to LSE a letter asking for further information on entrance requirements.

When Markets Collide by Mohamed El-Erian

Mohamed El-Erian is one of the most famous investors of our days and a author of many economic and financial oriented books and articles. So there will be no surprise for you that his latest book, When Markets Collide, had a great success.

The author deals with the problems of present and future markets, making an accent on the investment and analyses the main reasons for the markets to collide. With all these events happening nowadays it's difficult to build up a realistic picture of modern and future markets. However, Dr. El-Erian does that in his book, using his experience and observations on the markets.

A huge part of the book explains the current situation with markets. If I was discribing in one sentence the main idea of what I have read, I would say something like that: "The dynamic changes in modern markets cannot be ignored and should be used for your benefit". The author is talking about the changes in US economic positions - in a few years this country has changed its status from a creditor to a debtor. On the other hand, emerging markets, the countries, which used to be low developed, are now growing and have a great potencial. Markets collide right here - on the edge of past and current situation. Macroeconomic situation will be restucturing more and more. The 'transformation' topic continues these ideas.

Taking as a base all this market knowledge, Dr. El-Erian gives lots of advice how to invest successfully. The author talk about the main mistakes of investors - the so called 'mainstreaming', where people invest in those things, which are invested by the majority. Instead of using their own mind and intuation, investors fail or become 'data depended'. They think that they avoid the risk investing in something that other people also invest, but really the should consider the 'noise' to understand how market situation looks like now. There are also general advice like how to protect your portfolio, what the investors should do first of all etc.

The launguage of the book contains finance and economomic terminology a lot, which underlines the target auditory of the book - finansists, economists and investors. The book came out only 5 months ago, so there is no old data information. And some things were even predicted by the author, and this leaves no doubt that Mohamed El-Erian knows what he writes.

how we were doing Kirill's homework!

"More Sex is Safer Sex" by Steven E. Landsburg

The name of the book represents one of the main statements that the author gives to the reader, discusses it and then represents it from economics point of view. It is true that the AIDS virus would spread less quickly if there were less monogamy, chasity and other forms of conservativity in sex. Because if uninfected people will have more sex that means that the possibility to have a partner with AIDS reduces. Nowadays there are many AIDS-infected people in the world (including those who don't know that they are infected), who still have sex with different people, and, at the same time, many uninfected people prefer to be monogamic to avoid the illness. So, people don't care about doing bad things and causing negative externalities but only seldom there are volunteers to do good things (which will cause positive externalities) without being payed and rewarded.

Through the first part of the book the author continues developing this idea, giving other, more complicated and less evident, statements. For example, did you know that the most charitable people support the fewest charities? Rubbish, you say? No, it isn't.

Everything in this world is somehow connected with economics; every action has its spillover effects, which sometimes cannot be predicted or be taken in account - even a birth of a baby.

People relationships and competition with each other are also a good example of how Mr. Landsburg represents some economics statements to noneconomists. Why do people want a promotion? To get a new status or to increase wealth. But why, when people reach a particular level of income, when it is enough money to live, buy good quality things and even travel n times a year to diffetent countries with their families, they don't stop and still want another promotion? The answer is simple and obvious: because 'that guy from the office' has a bigger car and a better house. It's people nature - we compare our wealth to the wealth of the others and, unfortunately, very often are not happy with the results. But if people don't know that somebody lives better, they are happy with their wealth.

All those things and many other interesting questions are explained in the book "More Sex is Safer Sex".

Dr. Mohamed A. El-Erian

Dr. Mohamed El-Erian, 48-year-old world famous economist and financist.
Got an undergraduate economics degree in the University of Cambridge in 1980, then completed his master's and doctorate degree in economics in the Oxford University in 1985.

Since 1983 he was working in the International Monetary Fund through the "Economist program" for fifteen years, by the end of which he had reached the rank of deputy director and had gained some experience by teaching at the Harvard Business School.
In January 1998 he started working in Saloman Smith Barney\Citigroup in London, where he was managing director.

In 1999 Dr. El-Erian joined PIMCO as managing director. The Pacific Investment Management Company (PIMCO), founded in 1971, is a famous company, which runs the Total Return Fund, the world's largest bond fund. As of Sempember 30, 2008, in total this company had $790.3 billion assets under management. Now Dr. El-Erian is a co-chief executive officer with William S. Thompson and a co-chief information officer with Bill Gross, also he is a senior member of PIMCO's portfolio Management and Investment Stategy Group.

He left PIMCO for two years though: in September 2005, he became a head of the Harvard Management Company but then re-joined PIMCO, where he is still working now.

Dr. Mohamed El-Erian is a member of the International Center for Research on Women, the Peterson Institute for International Economics, the US Threasury Borrowing Advisory Committee, the International Monetary Fund's Capital Markets Consultative Group and also many other organisations. He chairs Microsoft's Investment Advisory Committee.

Many of his works on finance and economics topics were published and were successful, he also writes monthly market analysis and has publications in the Financial Times, Finance, Reuters and other financial media.

His latest work, 'When Markets Collide: Investment Strategies for the Age of Global Economic Change', came out in May 2008. In this book the author deals with the problem of emerging markets, total changes in the structure of global markets which will have a great impact on the whole economic system. Dr. El-Erian also warns investors to take all those changes in account to achieve success and avois failure. Then Dr. El-Erian analyses emerging markets and predicts that there will be increase in inflationary pressure for the US and that the US's debt is likely to grow. Many of the things he said has happened in real life.. he actually has seen the credit crunch from the beginning - in many interviews, which were before the total collapse of banking system all over the world, he said that it would happen.

Economic efficiency Mind Map

Productivity Mind Map

Information failure mind map

Public\Private goods Mind Map

Economics video definition!

The wordia site hates me and doesn't want to connect my wordia account with my youtube account.
So I post my video here.
Happy Halloween!

+ 2 Mind Maps

17 Mind Maps are done. less than a half left.
good night everyone ^^

Today's podcast!

I hate my voice >_<

Half term revision course - 28/10/08

Today's topic: Elasticity. Consumer and producer surplus.

I'm really happy with today's lesson - I explained everything I wanted to explain, nobody interrupted the lesson and we've passed all the difficult situations with surpluses when demand or supply are perfectly elastic. We have also learned how to say whether a good is normal or a giffen or just inferior or shob etc.. I feel like my preparation for this was worth it. Thank you guys for coming.

No photos, I have to say. 

Wendy will do some homework ^^. 

Economics half term revison course - 27/10/08

Today's topic: basics.

We are going to look through the following subtopics and questions:

• What is Economics?
• Scarcity and choice
• Goods and services
• Factors of production
• Production possibility curve
• Demand and supply curves. Price equillibrium.
• Main economic targets
• Monetary, fiscal and supply-side policies.

there also will be homework for some students.

I'll meet you at 12 am in the Cherwell building. :)

even more mind maps!

MORE MIND MAPS MWAHAHAHA

mindmapsmindmapsmindmaps!!!

2 Mind Maps (only 20 left)

4 Mind maps

6 more will be in the morning.. to tired to upload them/////

Market failure and Government failure test.

Answers:

320. b

321. a

322. b

323. a

324. d

325. d

326. c

327. a (not sure)

328. c

329. a

330. b (???)

331. a

(Elvi has just came in and brought me some pizza, nice!)

332. b

333. a

334. d

335. b

336. a

337. d

338. c

339. d

340. c

341. c

342. d

343. a

344.  a

345.  a

346. d

347. d

i think i've failed

Electronic cigarettes

a) What is the information failure in the electronic cigarette market?

first of all I need to define the information failure. The information failure is a type of market failure when consumer and\or producer has inaccurate or wrong information about different things such as demand on a product\quality\externalities\etc.

In this case the information failure is presented by lack of knowledge about external benefits and costs of this good - people are told that electronic cigarettes are harmless, but this information isn't proved and even some specialists think that the information, which the customers are given, is totally opposite to the reality. One producing company even says that electronic cigarettes are good for health according to the World Health Organisation, but a man from the WHO told that the product is completely untested.

b) Does this represent asymmetric information in the market?

Asymmetric information, another type of market failure, occurs when a part of consumers or traders have more accurate information than the others. I think we can say that it's also an asymmetric information about this product, because consumers do not know anything about negative externalities of the product, but producers (or creators) definately know more.

c) What is the outcome in the free market of this informatio failure?

People are not aware of negative externalities of this good, they think it will help them to smoke in public places, because it isn't said in the law tha electronic cigarettes mustn't be smoked in public places. So the demand on the product is really high even though the price is high. The government can intervere, but for now it does nothing. The World Health Organisation wants to check this product on harmfullness.

d) What actions could government take to reduce/eliminate the market failure?

Prohobit any type of cigarettes in public places.

or..

Make a full research on all the new things like this product in market to avoid negative externalities which will definately cause market failure.

Ban on free drinks for women :(

a) How does binge drinking represent a market failure?

First of all, alcohol drink are demerit goods which have a negative impact on people's health. also we can call drinking a negative externality in consumption, because when people are drunk they do a lot of stupid things and also can vormit somewhere in a public place or commit an act of vandalism. As we know, both demerit good and negative externality are types of market failure.

b) What are the new proposals?

- put a ban on free drinks for women.

- pubs' staff should be trained according to new regulations

- special sensible alcohol message on each table where alcohol is sold

c) To what extent do you believe any one, or the combined proposals, are likely to be successful?

I can't see the point in putting a ban of free drinks for women.. yes, maybe demand for drinks will decrease a little bit, but I think that demand for drinks is inelastic, so the change in demand won't be so big. also lots of women are more addictive to alcohol than men, so if free drinks are banned, they will still buy alcohol.

Training staff is a good idea - they will be able to help drunk people or just not sell drink to people, who are already too drunk, using special phycological skills. traind staff will also be able to solve some problems in public places like fighting etc.

I don't think that messages on the table will help - people will just ignore them like the messages on packs of cigarettes.

Negative externalities in China

a) Explain why the people falling sick is an example of a negative externality

People who fell sick are the third party - they haven't participated in the process of production or consumption. The only thing that connects these people with the company, which has caused these illnesses, is location. The factory was near the villages and polluted water and air in that area, people were affected. So there is a negative externality in this case.

b) Suggest 2 courses of action the government could take to try and reduce the possibility of such an incident happening again

- maybe some special comissions to check the filtration systems of the factories should work more effectively. if there had been such comission in this case, they would have noticed the problems and do something and people would not have been affected.

- I think taxation won't really solve the problem - factories will just pay more but not reduce pollution that they cause.

- the government should not let factories to be built so close to villages and places were people live.

Market failure. Smoking as a market failure

First of all, I would like to sum up everything from this article.

In the beginning we learn that smokers' costs have increased by 1bn pound in a year, from 1.7bn to 2.7bn pounds. It is possible that in the future this number will reach the point of 3bn pounds.

Every year British smokers pay 9bn pounds only for TAX on tobacco products. it this is only tax, imagine how much money are flowing through the tobacco market! just unbelievable! well, it is quite obvious, but still.. well yeah, when you're addicted you don't care about your health and money. no, I can't stop thinking about it.. if a pack of Malboro gold costs 5.79.. let's consider that 1 pound is a tax.. aaah, so much money!

The government tries hard to prevent people from buying cigarettes. It has different ways to influence on the tobacco market, but smokers and tobacco companies don't want this changes to be realised. 

- the government wants to ban advertising of tobacco products. well, we know that advertising market is full of money, so advertisers are not so happy as well - imagine hom much tobacco giant companies pay them! and I'm not sure that it will work - Iceland and Canada did that, but this action didn't reduce the number of smokers. 

- one more suggestion is more nice and I think it has the point - make shops hide tobacco products. what do you see first when you enter a shop? yeah, right - a shelf filled with different cigarettes right behind a salesman, near the cashmachine. one of the principals of good selling - if a consumer sees a good, he will probably buy it. if a consumer doesn't see a good, there is a possibility that he won't remember about it or just won't want to buy it. so I think that may help

- and this is really strange suggestion from the government - plain packaging. that means that packs of cigarettes won't have any brands or words on them. the government think that this will help with teenagers' smoking problem - it's not a secret that most teenagers start to smoke just because they want to show off by smoking some 'cool' cigarettes. particular brand of cigarettes attracts customers more and makes them spend more.  

all this ways to improve the current situation have at least one disadvantage - it will be hard to understand where legal market ends and the black market starts.

ok, now I'm going to explain you why smoking is a market failure. well, let's start with cigarettes and tobacco which are demerit goods and have a negative effect on the consumer. this negative effect can not be counted and that's why it isn't included in the price of these goods. in this case market fails when it's imposible to measure external costs. smoking is a negative externality which has a negative effect on the third party. the third party hasn't participated in the proccess of production or consumption but still is affected. market fails because of inability to influence on this negative externality except for complete banning smoking.

a) What is the economic argument for banning smoking in public places?

as I already wrote, smoking is a negative externality which affects the third party, the non-smoker part of the public. harming health of other people by demerit good and\or negative externality is a market failure. 

b) To what extent do you think a £50 fine for being caught will reduce the market failure?
well, I don't think that 50 pounds can compensate all the external costs in this case, but it is a good example if reducing market failure - to the price of cigarettes you add a 50 pound fine which is more close to the social cost than just price of cigarettes. if this practic of fining people for smoking will be developed, in future the market failure could be avoided.   

some article to read

hey, this article will be partly included in my externalities chapter of the booklet.
it's a perfect example of negative externality. and it's real - I felt it myself - my ex-host family lives nerarby the railway:
Residents' anger over train fumes

this night me and Aidana ordered a pizza. we believe it will help in our studies and save us from hunger :)

Land, Labour and even more!

The main topics on yesterday's session were land and labour.

We started with a small revision of what we did on the previous meeting: 7 levels of Social Structure. This time we learned that the family level is based on a system of gifts. Usually members of a family don't offer each other deals like "I'll pay you 40 pounds and you'll cook a great dinner for me" or "I'll do this only if I get some benefit from it". No, we can say that in a family our actions are similar to a particular gift - mum is going to cook breakfast without any minimum wage and children are going to clean up their rooms without any exchange for that like a new skateboard.

It used to be true that communities also had a system of gifts instead of traiding. Communities used to be like a big family, where everybody's aim was not a gaining something from a deal. But it was a long time ago. Let's take Oxford city nowadays as an example of community. Imagine, you enter a shop and ask "Can I have I bottle of Red Bull please?". The salesman will ask you for money to exchange them on Red Bull - he won't give it to you without money, obviously.

Then we were talking about a few aspects of market economy and after that we started, in my opinion, a very interesting topic - connections between Supply, Demand, Land and Labour. I think this can be called one of the basic things in economics - this is where a price is set. But I'll talk about prices a little bit later.

Coming back to Land, Labour, Supply and Demand.

First, land supply doesn't respond to demand. Well, it's obvious, but still sometimes people forget about it. If demand on land increases that doesn't mean that there will be more land because it's limited. This is called fixed or limited supply. I'm talking about Land in general, but if we take a particular territory, let's say some land near London city, the situation will be different. There can be more supply of this land but only if supply of some other land will be less. So, if there is a forest near London, there can be built some suburbs, but there will be no forest anymore. So opportunity cost in this case is a forest, which will be cut off just to be replaced with some houses.

Second, there is a competition in labour market between people who want to get a job. Once again, I'm talking about general things - usual jobs. There are lots of lawyers, for example. They all want to get a job. But because there are lots of qualificated lawyers, employers can set up really low wage - there will be some people who will agree to work for this wage. Others, who deny this low wage, just won't get a job, so next time they will have to agree to work for a small amount of money.

And now... prices!

What we can say about price? Price is an equillibrium point, where supply and demand curves intersect. This price is set not just because producers supply people with exact number of particular good which is going to be bought.

There is a so called 'bottom price' for the producer - it equals production cost of a good. If price is lower this point, than the business in useless - you'll spend more on production than you'll get for this good. If producer sells a good at a bottom price, he will just get the money that he spent on production back.

There is also a 'top price' - it's the highest price that could be reached without decreasing demand, a consumer still buys a good, but if the price is set up higher, a consumer will not buy this good. 

The optimum price is called "exchange price" where both consumer and producer are happy with what they get after exchange.

A rule of exchange:

Each party must want to get something more than it wants to give.

Both consumer and producer have two values:

- a value of what they have

- a value of what they want to recieve.

So there are four values in exchange of two people.

One thing is very important - price itself is not a value, price is just an amount of money.

Now I'm going to tell you about circle of land. Think about any good that we have. It's all produced by using land. There is no good which was produced without using land. Not neceserally that land was used directly.

So, the circle of any good looks like this:

LAND - Natural Resources (you must have knowledge about it and access to it) - Extraction - RAW MATERIALS - Processing - INTERMEDIATE GOODS - Manifacture - FINISHED GOODS -Distribution - GOODS IN USE - Depreciation - OBSOLESCENE - Dissolution - LAND.

Think about it - it happens to any good: starting with your laptop and ending with a can of Red Bull.

That seems to be all. 

Good morning! Mind Maps!

I have just finished doing my homework with Aidana. 

It's pretty cold in the residence yard right now, but my 57-year-old roommate won't be happy if i start using my laptop right now in our room. There is still no wi-fi connection in Aidana's room, so outside it the only way to post my mind maps. 

I don't want to sleep at all!

Beware - HUGE MIND MAPS! Mwahahaha!

'The Credit Crunch' - a waste of the monetary policy?

While mind maps are on their way to full completion (Wednesday hasn't come yet, has it?), I've decided to read some articles about current crisis economics situation also known as 'the credit crunch'.

To my great luck, I've found very interesting and detailed article at economist.com.

It seems that 'the credit crunch' could have been predicted if somebody have looked at the situation carefully - these things, according to the article, were unseen so banks and companies could borrow huge sums of money without even thinking about any possible following problems. 

This is a great example of  the 'dark side' of monetary policy - not rational use of interest rates has led to worldwide crisis. Monetary policy is fully dependent on the banks. In this particular situation banks are not a tool of fixing economics problems, they are a problem themselves.

Uh, wait, I've forgotten one more thing - If i'm talking about monetary policy and interest rates, I should explain some details. 

There are six main types of monetary policy - each is used for it's own target. Types of monetary policy are usually called monetary regimes:

1. Inflation Targeting.
2. Price Level Targeting. 
3. Monetary Aggregates
4. Fixed Exchange Rate
5. Gold Standard
6. Mixed Policy

find out more on the Wikipedia. 

Monetary policy uses different tools, but would they help with 'the credit crunch'? I'm not so sure.

- Monetary base. In the current situation monetary base won't help at all - banks are not controlling the money circulating in the economics anymore.

- Reserve requirements. I can't say anything about this one.. except I don't think that bank are going to reserve any requirements while they are busy with their own problems.

- Discount window lending. Yes-yes-yes, now it happens. The ECB (the European Central Bank), the Bank of England and the Bank of Japan, the Federal Reserve agreed to lend a further $620 billion on September 29th for fixing the crunchy situation in the US. President Bush wanted to give the same amount of money from the budget, but this idea was rejected by the Congress. Maybe it will slower the crisis and some analitics will find a solution before the big default boom.

- Interest rates. Uh, I think that's the thing that is out of any control now.

'The credit crunch' may cause the rise of unemployment rate, which will cause less spending, which means demand will decrease dramatically.

On the other hand, the companies will have less money too. The strongest companies will survive, of course, but it can lead to a monopoly. A monopoly means high prices, no competition and other scary stuff.  Supply will decrease. 

uhm.. so, mind maps will be soon :)

you will never guess what!..

Today I woke up at 5 a.m to catch a bus from Kennington at 05:46 (the next one would be only at 06:38), then, in the city centre, approximately at 06:15 I got on a bus to Headington. At 06:30 I'm in the residence already just to write one very important post (which, of course, will not improve my grade, but anyway..)

What is this very important post about? That't the most interesting thing! It's about economics courses, on which I started going yesterday. Yes, I was there, unbelieveable.

The lecture (or maybe it's better to call this a discussion) was interesting, but still there were lots of disadvantages. Such as:

1. The main idea of the course is to view economics from very complicated point. What I mean by this? At the lecture we had a diagram which showed us a triangle. In the centre of this triangle there was a human world. Two angles, Humanity and Universe, were connected with Natural Laws. The third angle, which was called Conditions at the point of Interaction, was like a result of Labour (which is produced by the Humanity) and Land (which is produced by the Universe). When I was thinking about it at the lecture, I thought "Hey, why do economists need all that?". Well, you can say that economists should take all these in account. Yes, I agree. But they don't need to know the details. They must have only general picture of the Universe and Natural Laws, but everybody already knows them - it's called experience. Of course, if it's flooding, I would understand that there will be no rice this year etc. So I think it's not so necessary, but we've lost 2 lectures already on that. (my money, my time!! :((( )

2. Division by primary and secondary factors of production. Yes, I agree that structured factors are much better. But still, who is here to judge which factors should be primary and which factors should be secondary! As for me, I think, that capital should be primary factor of production and land is secondary. Why? Well, as I see it, nowadays we produce MUCH MORE by capital. Yes, we use Land as well, but we use Land not only for production.. At the lecture there was an example of building sandcastles. Nobody will benefit from that, it's not a production, it's a game! It's just for fun not for making money! But Land is used.

There also were very useful things. Such as:

1. We started discussing 7 levels of social structure (which is a part of Capital). By the way, it will be useful for everybody:

7 levels of Social Structure:

- Family

- Community

- Society

- Nation

- Culture

- Civilisation

- Humanity

2. Now I know more on the Capital and Capitalism topic. 

3. The people there are really nice and like sharing their thoughts and ideas.

I understood nearly 90% of what was said there yesterday. I also will go to the philosophy class on Monday.

That seems to be all.

some thoughts

Why is studying economics is so important for many people and for me as well?

That's very difficult question. 

Economics is the key social study nowadays, everything and everybody depends on the economics and I feel that this is the most interesting subject for me right now. With very high level of knowledge in economics I will be able to understand many complicated financial things and be able to improve some aspects of economics life (of course, if I work somewhere in government).  It's also important because the today's world situations, that could be solved only by economists, are the central problems. I'm not talking about solving ALL the problems right here and right now, but still, some improvements and positive changes in economic situations will have a huge influence on the living standards of billions of people all over the world. Economics growth of some countries will help other countries to become better too.

Some people may ask something like "hey, wait, why are you talking about this kind of problems? what about education, medicine, science?..".

Well, everything in this world is close connected with the economics. If the economic situation of particular country is very good and well developed, the educational system, as well as medicine and science, will be much better compairing to some other countries with not so good economics situation. People will be smarter and healther, their life will become as nice as the famous "american dream". 

I'm not going to tell about other aspects of our life like relationships. No, they are not connected with economics at all, because, as my mum always says, "where there are money, there are no soul". Economics can improve people's material life, anything else depends on ourselves. 

Is it efficient for people to share the bill when they go to a restaurant?

Actually, it depends on the situation.

Let's see. You invite friend to a restaurant and order only a ceasar salad for yourself, while you friend takes a soup, a salad, some hot dish and a dessert. If you share the bill, you will pay more than you ate and your friend will pay less than he ate. It's good situation for your friend, but not for you.

Or if you're on a date, it's likely a boy will pay all the bill (if he's a nice boy). The bill can be shared in this situation though, but only in case if a girl ate a little more than a boy (once again -if a boy eats more than girl and they share their bill, it's unefficient for the girl).

In which situations a bill can be shared? Good question. Maybe when there is a huge company of friends and they are just spending time together, why not to share the bill instead of counting how much everybody should pay for themselves. 

If there are only two of you going to a restaurant you can pay for the dishes you ate and it will be ok.

Conclusion: there are situations where it will be efficient to share the bill, but still - sometimes sharing a bill will take from you more money than you have to pay. 

Why do theatres discount prices on spare tickets just before a perfomance whereas airlines and rail companies raise prices for last minute customers?

Monday topic is too difficult to my brain to understand.

So yaaaay for Tuesday topic!

Let me think.

Demand for plane and train tickets is much more higher, because there always will be people who will need to get somewhere very quickly. The price for travel tickets is inelastic, because people sometimes HAVE TO travel even if they don't want: to pick up your grandmother from another city because she doesn't feel well and you have to look after her; to go to another country on special business meeting, about which you heard only this morning etc.

Theaters understand that possibility of buying tickets will not rise just before a perfomance starts (in general, I'm not talking about some really popular plays like Cats or something), so they have to low the price. If they low the price, the demand will rise and they will get some more money. If they don't low the price, the demand will fall and they won't get any money at all.

I'm so clever, aren't I?

Why are brown eggs more expensive than white ones, even though the two types taste the same and have identical nutritional value?

To answer this question I had to call my mum in Russia - in her childhood she used to live in a countryside and she helped her parents with chickens.

Hen, which produces brown eggs, eats much more food. More food means more money to spend on it.

That's why brown eggs are more expensive.

that's all.

Why is there a light in your refrigerator but not your freezer?

I have no idea. Maybe you just don't need a light in a freezer?

Ok, let's start from the beginning. Why do we need a light in a refrigerator? I don't need that, because I always can turn on the light in my kitchen. But some people are too lazy or stupid or just don't want to wake up anybody, that's why they use light in their refrigerators. Ok. Usually need light when it's dark outside - at night. Why do people go to the kitchen at night? To have a snack: some apples or a yougurt (did I spell it right? I'm not so sure).  Who keeps yougurts and apples in a freezer? Nobody. Who would have any snack from a freezer? Nobody!

And there are also these points of view, which I've found:

1. Because the temperature in a freezer is much lower than of a refrigerator, a much more expensive shatterproof bulb would have to be used. In fact, if you put a common household bulb in the fridge, it will be fine. But put it in the freezer, and it should crack after a few hours (or days, depending on the temperature you freezer operates at).

2. Because there is less demand for illuminated freezers and yet midnight snacking almost exclusively demands a refrigerator lamp, lamps are often only fitted on the higher end models.

3. Standing freezers often use closed-off pull out drawers. In order to effectively illuminate the entire fridge, a lamp would be required behind each shelf. Each of these would need to be shatterproof…

That's the points. 

And people.. don't eat anything from a freezer as a night snack!!! Ew! Take an apple!!  

Why are colour prints so much more expensive than black and white?

I couldn't find the right answer in the world wide web, so I'm thinking about this one only on my own.

Let's see. What is the difference between black-and-white prints and colour prints? You can express more with different colours, show anything you want and point at something by just using some special colour. In black-and-white you have to deal with just black colour (because we usually print on white paper). Colour prints are more useful in business and demand on them is much higher. You can use colour prints in many way and they will look much better than just black prints. 

So, the demand on colour prints is much higher. I'm not quite sure, but we can call colour prints and black-and-white prints close compliments, because if the price on colour prints rises really high, the demand on black-and-white prints will rise, because lots of people would have to switch to them.

What explains the different package sizes for DVDs and CDs when the discs are the same size?

Everybody knows the difference between DVD and CD discs, we watch movies and some video on DVDs and we listen to music on CDs (well, actually, now people prefer mp3 for music listening, but, for example, I still buy CDs).

So, to underline this difference, manifacturers have decided to have different package sizes for DVDs and CDs, so customers won't be confused. When DVDs were something brand new for people, they could easily put DVD disc into their CD players thinking that it would work. So the size of package prevent people from using discs in the wrong way.

3 posts more and I'm done for this week.

Finally! Mind Maps!

and now I'll continue doing my economics homework. 3 topics will be posted today.

Why do 24-hour convenience stores have locks on their doors?

Interesting question. 

According to their working hours, these stores should never be closed. 

But in which case the doors can be locked?

First of all, there is a human factor. Every store is runned by people, so there can be some situations when they need to leave the store for some time: visit WC or something.

Second, in case of robbery or some need to protect the store the doors can be locked.

Third, there is a special rule for the workers. They usually work for 7-12 hours and then the second worker comes to change the first one. If the second worker doesn't come, the first one has the right to leave but not forget to lock the door.

(i've decided to do another entry for today) 

Why do the keypad buttons of drive-up cash machines have Braille dots?B

The questions seems to be really stupid when you read it for the first time. Seriously, can anybody tell that he or she saw a blind man driving a car, then stopping at the drive-up cash machine and use Braille dots to read what is written there? Ok, no-one can say that. What about blind drivers? All car drivers MUST pass the eye test to prove that they are able to see where they are driving. So the conclusion is - no blind man can possibly be a driver. It's dangerous for everybody.

But still, there ARE Braille dots on the buttons of drive-up cash machines! So what's wrong?

The answer is quite easy, but it's difficult to work it out. But I did it (thanks, Google!).

A.T.M producers make at least two types of machines: drive-up and walk-up machines. Walk-up machines are surely used by the blind, so it's cheaper for the company to produce these two types of machines with the same technology than have two different technologies (with Braille dots and without them).

So, the secret of the Braille dots on the buttons in the drive-up cash machines is reveiled!

donedonedone/

Why are prices in a hotel mini-bar so expensive?

There are lots of hotels all around the world. They can be really cheap and only with a few things like a shower and a bed included; or they can be really large and luxurious with lots of different stuff like a special bed for your dog or a satellite TV to catch programs from another planet. It's your choice in which hotel to spend your holiday or a business trip.

The thing is, that if we stay in a hotel we would probably use some of its features like mini-bar, wi-fi access or a phone to call someone. And we won't even think of the price of all that. Why? Because the mini-bar prices in the hotels will be the last thing we will think about on holiday, won't they?

Yes, that's right, and the administrations of the hotels know that very well. That's why they make everything in the hotel rooms much more expensive than it is in real life. This is a sort of a charge that exists but we don't see it. Or we just don't think about it. It is just another way for hotels to earn some money on too relaxed customers.

Done-done-done for today!

Why do female models earn so much more than male models?

Ok, this is a good one.

Let's see - for what do we need models? For advertising.

Why do we need advertising? For selling goods.

What goods are sold by using advertisments with models? Clothes, mobile phones, accesorizes, some times food or some other stuff. 

Who spends more money on buying these goods - men or women? Of course, women. 

So, demand on female models is much higher - women would like to see how clothes\accesorize will look on them. Also, female models are really popular among men.

There is one more thing - fashion. Men are not so interested in fashion, so usually modeliers create clothes and stuff for women. Who will show these new collections to the world and earn millions? Female models.

That seems to be all for today. :)

the topic ot the day

Why did Japanese kamikaze pilots wear helmets?

Oh, that's so easy! In their helmets there were special headphones, which connected them with other pilots, so they could know where they should fly. it was not a security helmet.

I have done my topic for today. yaaaaay for me, let's drink red bull :)

by the way, this is my DeviantArt account, but I update it not so often (because I'm busy with economics homework):

http://marytrouble.deviantart.com/