Economic News Investigations

By: Nicole Kalina

Relaxed Rules On Cuba

NPR has reported on an article stating that the United States has finally relaxed the rules set on Cuba. America is making it easier for money, people and goods to be sent in and out of Cuba. Along with those changes, U.S. companies also got the go-ahead to start providing internet and communication services to citizens in Cuba. Since Cuba is already getting 30% of its imports from the U.S., it only makes sense for America to make sure that cargo gets to Cuba in a quicker and cheaper fashion. There's a bonus for America too though, along with it being easier to access Cuba by ships, it's also easier for America to get it's products from Cuba like sugar and citrus. Since the definition of goods and services is the outcome of human efforts to meet the wants and needs of other people, I think this article shows that process completely. The US relaxed the rules on Cuba so that it will be easier to import and export goods in and out of either territory.

Norwegian Salmon In Japan

In Japan, salmon has been repulsed among the citizens, that is until Norway helped changed their views on the pink fish. NPR reported that over 30 years ago Norway had an unusually large supply of salmon. In economics, 'supply' is defined as the producers willingness and ability to supply a given good at various price points. Since the supply of salmon was so intense at this time, Norway sent a representative to Japan in hopes of selling the largest sushi consuming country in the world a large portion of the Norwegian salmon. The representative soon learned that there was no demand for salmon in Japan because of the lack of parasite or poison in it. In economics, the word 'demand' is referred to as a consumers desire and willingness to pay a price for specific good or service. Americans may find this strange, but Japanese don't tend to eat fish that aren't dangerous; they see it as a challenge to eat a fish that's poisonous or has a parasite. Finally, realizing that the Japanese weren't going to buy the salmon (since it was neither poisonous nor parasitic), the representative made a deal with a massive food company in Japan. The company agreed to buy 5,000 tons of salmon and sell it in grocery stores marked as sushi. People didn't seem to notice or care since this particular kind of "sushi" was cheap and tasty. Now that the Japanese are open to salmon as an edible fish, the demand for it has also gone up, which seems to be a good thing in the eyes of the Norwegians. I personally think this article is both interesting and cool in the fact that Japan can help Norway out in the process of both countries profiting immensely from the supply and demand thats taking place over salmon.

Drone Externalities?

NPR reported that based on many recent studies, a FAA official says close to a million drones could be sitting under peoples christmas trees this coming holiday as result of a price decrease. Officials say that they will be conferring with Wal-Mart salesmen and any other department stores about warning drone buyers of the safety precautions that come with purchasing the drones. Along with issues about who should be allowed to purchase the drones, government officials also have to sort out issues involving air safety, personal privacy, and national security. These issues are looked at as negative externalities to buying the drones (one party is being hurt by another party's actions). A positive externality though, would be the satisfaction between the buyer and seller of the drone (both parties are benefitting). The definition of a positive or negative externality is based off the reactions it causes towards a third party. I think that this article is interesting because it shows a small sliver of the constant battle between whether or not the government should ban certain objects or not. I think it's important to look at both the positive and negative externalities and try to weigh out which one has less consequences; then go from there. This article is related to what we have been learning in class because of its ties with positive and negative externalities and their impact on the consumer, producer, and third party.

EpiPen Acting As A Monopoly

The name EpiPen is a shortened term for epinephrine autoinjector. When EpiPens are stabbed through the skin, they inject a measured dose of epinephrine into the body to help stabilize an allergic reaction. Right now NPR newsroom reported that EpiPens seem to be the only product in its category that's able to stop an allergic reaction. Since EpiPens are considered a monopoly in this case, the company has decided to increase their prices. A monopoly is a situation in which one company or group owns all or nearly all of the market for a given type of product or service. Since there is no mechanism in control over how much drugmakers can sell their product for, the owners of EpiPen have increased their price on EpiPens, because of the lack of other companies to contend with. In 2007, the price of an EpiPen was $57.00. Today the price of two EpiPens (packages now come as doubles because of new laws), is about $415.00. Along with increasing the price of EpiPens, the company is working out deals to get the pens into schools, restaurants and other public places. As mentioned in the article, the company is trying to build this model "where EpiPen becomes an essential life-saving tool thats widely distributed and readily available and so people, patients and potential patients down the road know the brand." Basically, the EpiPen company is trying to get their name out there to all of the public in order for their revenue to increase as the popularity of their name increases. I think this article was interesting to read because of its tie of lies into the medical system. If you really think about it, how many peoples actual goal is to help you get over your cold, help you overcome the allergy, and overall, help you truly get better? Most likely when it's all said and done, it all boils down to whether you have money. No money, no treatment. I think it's sick how the EpiPen company is taking advantage of their monopoly by increasing the prices. I can't help but think of all the families who need that EpiPen but can't afford it because of someones avarice.

Cost Demand Decrease & Grocery Surplus

In Boston, NPR news reports that a local grocery store named Trader Joe's has started saving its 'close to out of date' grocery items and selling them in a new store that stocks the items but cuts the price immensely. Salad, the owner of Trader Joe's said he was tired or seeing almost out of date (but still perfectly normal) food being dumped in the dumpsters when he knew many family were going hungry because they couldn't by the steep price for groceries that the rich are used to paying. Many of the shoppers who have started buying from this new cheaper super market are happy with the results. The shelf stocker checks to make sure the food isn't completely out of date before stocking it as a product, and most of the customers also check the date before they buy the product. I think this article is relevant to what we have been learning in economics because of its close ties with efficiency and surplus. The definition of efficiency is an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency. Surplus is defined as the amount of an asset or a resource that exceeds the portion that is utilized. In this article, there was a surplus of 'almost out of date' food that was being thrown away because no one would buy it when it was stocked in the rich super markets. When the food was being thrown away, that action could be called an inefficiency of the super market. By throwing the food in the dumpsters, Trader Joe's wasn't using their resources to serve each person in the best way while minimizing waste; they were promoting inefficiency. I find this article especially interesting because it provides a profit for both the supplier (Trader Joe's) and the consumer (the poor). I think it's interesting to see how inefficiency can be solved for the betterment of the lower class of humanity.