Apple's dual iPhone strategy in doubt?

The WSJ ran a story which suggested that Apples decision to introduce the iPhone 5c. It is a good introduction to the problems firms face when offering multiple versions of a product. 

FYI: Apple thinks that the story is inaccurate and based on conjecture rather than fact.

Here is a summary and questions.

SUMMARY: Apple hoped to broaden its appeal with a cheaper version of the iPhone. But that effort appears to be faltering after a few weeks.

CLASSROOM APPLICATION: Students can evaluate Apple's strategy of second-degree price discrimination, in which the company is offering a price-quality menu. Two interesting issues are whether Apple mispriced the two phones or set too small of a quality difference between the phones.

QUESTIONS:
1. (Introductory) Why are the sales of the iPhone 5S doing well while the sales of the iPhone 5C are not? Discuss the quality and price differences of the two phones?

2. (Advanced) Evaluate the statement: "The reduced orders could indicate weak demand, or could signal that Apple wanted to ensure adequate supply of the 5C so that potential buyers, who were more likely to be switching from competing phones, didn't have to walk out of a store empty-handed." Is empty-handedness is the driving force of the greater inventories of the 5C? If so, would Apple have done better by producing more 5S models and fewer 5C models?

3. (Advanced) What is second-degree price discrimination? By offering both the 5C and 5S models, is Apple practicing second-degree price discrimination?

4. (Advanced) When introducing the 5C, should Apple have changed the price of the 5S?

Capitalsm and growth

This account states that a recent UN report links economic growth with free markets.

Two cheers for sweatshops

This account describes the advantages of sweatshops in less-developed countries.

College major and earnings

Here is a story from NPR on the most and least lucrative college majors. Here is the full report from 2009 which prompted the story. Notice that Business Economics has the highest median earnings for Business and Economics has the highest median earnings for Social Sciences. The story points out that employees consider a number of factors when choosing a major or job besides salary - salary matters but salary is not all that matters.

Colleges Try Cutting Tuition

This article might be a good way to talk about price discrimination, game theory, strategy, and behavioral economics. It discusses the recent decisions by some colleges to reduce simultaneously nominal tuition rates and financial aid offers. Doing so may leave the net tuition equal for many families. The hope is that the simpler process will attract more and better students. The article points out that families may not respond rationally to lower net prices.

How Obamacare wrecks the work ethic

Here is an opinion that is critical of the impact on marginal effective tax rates of implementing Obamacare. It mentions the impact on labor market decisions and the possible impact on the macro-economy.

Maine to Allow Prescription-Drug Imports

Here is an article I might use to introduce price discrimination. It is an account of a new law in Maine that allows for the re-importation of drugs produced in the US. It mentions the effect on prices and quality control.

What makes an instructor good?

This essay from WSJ argues that instructors who follow eight principles help students achieve.

1. A little pain is good for you.
2. Drill, baby, drill.
3. Failure is an option.
4. Strict is better than nice.
5. Creativity can be learned.
6. Grit trumps talent.
7. Praise makes you weak...
8. ...while stress makes you strong.

This article points out that the incentives at a growing number of colleges may induce instructors from following these principles. An implication is that student evaluations should not be viewed in isolation from the grades students earn in the course.

Here is another opinion that relying on evaluations does not promote learning and does promote higher GPAs.

Here and here and here is a two-part post on what evaluations measure.