Cute Ad that Stresses Low Price

Here is a video that I might use to introduce the relationship between advertising and pricing. It is cute and may make demand for elastic because if stresses low prices.

Harkin on Minimum Wage

In this editorial from USA Today, Sen. Tom Harkin argues that the Federal government should increase the minimum wage to something higher than $9 per hour, the current proposal. Here are some quotes two paragraphs near the end of the editorial.

• Raising the minimum wage is one of the simplest and most effective ways to help working families succeed.
• Contrary to publicized myths, research proves that increasing the minimum wage will not cost us jobs; in fact, our proposal would create at least 100,000 jobs through increased consumer spending.

An argument against a higher minimum wage is doomed to failure if his statements are correct. According to Harkin, a higher minimum wage helps "working families succeed" and creates jobs. His statements lead me to wonder whether he would support raising the minimum wage to $100 or $1,000; why not really help working families and create many more jobs?

Minimum Wage

This opinion from Forbes is a nice discussion of the drawbacks to increasing the minimum wage. Some highlights:

• "as the price of labor (the wage rate) increases, the number of jobs will decrease, other things constant. Moreover, the decrease in employment will be greater in the long run than in the short run, as employers shift to labor-saving methods of production."
• President Obama believes that increasing the minimum wage from $7.25 to $9 "'would raise the incomes of millions of working families.' If so, why not increase the federal minimum to $100 an hour and abolish poverty?"
• "The way to create jobs and increase one’s real wage rate is not to increase the minimum wage, but to increase one’s productivity."
• "The minimum wage is popular with many voters who want to express their sympathy for the poor and who don’t recognize the unintended consequences of 'living wage' laws. Unions also support the minimum wage but out of self-interest. A hike in the legal minimum wage helps protect union jobs by reducing competition from lower-skilled workers."

Hal Varian Answers Questions

Here is a transcript of questions for and answers from Hal Varian, Chief Economist @ Google. Read it if you enjoy reading how smart people think and write. It is also a plug for learning econometrics. 

Incentives to Attract Business

This article from the WSJ presents evidence that incentives offered by states to attract new businesses may be bad investments. It can be a good introduction to prisoner's dilemma, rent seeking, and public finance.

A Brief History of CarMax

This article in WorkingWorld is a good short history of CarMax. It provides insight into its strategy - what it did to make itself unique to serve better its target audience.

5 Easy Pieces

This scene from 5 Easy Pieces is a good introduction to bundling.

Energy Markets

PJM coordinates day-ahead and real time electricity markets. It is a great example of real-time auctions and future markets.

Good to Great

This article from Wikipedia is a nice summary of Jim Collins's book, Good to Great. The links at the end of the article have nice critiques and show that many of the firms Collins identified as great in 2001 have fallen on hard times. It makes a nice introduction to a discussion of strategy and the difficulty of sustaining high rates of return.

Nascar Strategy

Here is a humorous clip from the Onion Sports Network discussing strategy in NASCAR.

DOJ Blocking Beer Merger

The article in Fiscal Times describes the DOJ's attempt to prevent Anheuser-Busch InBev from acquiring complete control over Modello. A nice description of implicit collusion and price leadership follow.

How to Fix Mircosoft

This article from CNN is a good way to prompt discussion about strategy.

Pricing Apple Products

The article in the WSJ is a good introduction to pricing, margins, elasticity, and related goods. Apples profits are flat despite selling more phones and the evidence indicates that different versions of the iPhone are substitutes but some iPhones and iPads are complements.