Fore!!!!

At Bethpage Golf Course in NYC, a public golf course, there is a shortage of tee times. As the demand of tee-times increase for avid golfers in a highly populated area, supply stays constant. The Golf Course has tried to ration off the scarce tee-times but the allocation has only resulted in the emergence of a black market. There are about 70,000 golfers trying to play the limited 35,000 rounds a year. The nygolfshuttle.com has been able to play the system and created a business of supplying tee-times to golfers for a very expensive price. This rationing system gives the tee-times to people who can afford it and not always to the persons who most value golfing. Bethpage has tried to deal with the scalping of the tee-times but the shuttle company operates under totally legal procedures. Bethpage has tried to institute rules to prevent scalping and people who go around the rules but has failed. Look I admire the shuttle company. Sure they are a horrible scalping company who is making money where they shouldn’t in a system much like rent control, but they are a good middleman and deserve to profit for being smart enough for instituting the shuttles and scalping system.

1.  Is there a better rationing mechanism for the tee-times? Can we give the tee-times to people who really value them and can’t purely just afford them?

2. Can we fix the system? Is there a way to eliminate the shuttle company and scalping system? Should we even fix it?

3. Is the shuttle system a good or bad thing? Is it ethical?

Supply cannot meet the increase in demand so a shortage emerges. Because of this a black (secondary) market develops as well.

End of the Semester....Need......Food!

So as we get closer to the end of the semester all students are facing one issue: we have very little declining left!

Look at the beginning of the semester I had $500 in my declining balance and used it without hesitation through the months. I have as of today $64 left in my declining balance. Now this is probably just enough to make it through the next 14 days I am here at school especially with my ability to use unlimited at Douglas and Danforth. However, I have noticed some things over the past week or so.

As people start losing declining and notice that their balance is getting under $100 or so they start spending less at the Pit and Starbucks. This has lessened my late night trips, study breaks, and just boredom to go get some Panda Express or coffee. And it could not have come at a worse time.

Look Danforth and Douglas are great, they have edible unlimited food, but it never changes and I'm sick of it, but the Pit has varieties and stuff from the "real world."Coffee is becoming more of an essential as finals near and I am up late writing papers or studying. So when I need my declining the most, I see I have the least available.

So people have responded. People buy less. They use declining less often. People (yes I have seen it) steal. And the Pit and Starbucks have done NOTHING! As a company, these restaurants should be ashamed. Here's what I say: We should have a system where we save about $50 for finals week when we want to use our declining the most. Also turn off the light up screens that say our balance when we check out. We can easily have a system where we check a price online if we care that much and we just get a bill at the end of a semester telling us how much we owe for our declining spent. This way people won't stop their spending in a time that spending is most encouraged and companies will prosper.

Class 38 - Minimum Wage and Rarity

The world needs no regulation...what?

Minimum wage
Companies respond to increases in minimum wage - hire less.

Rarity and Scarcity
Rarity is something we don't have a lot of (absolute concept)
Scarcity is something that is not enough to go around (relative concept)
Rare but not scarce or scarce but not rare.

Surplus and Scarcity
In a surplus, Qs > Qd. Scarcity means there are tradeoffs to get things. Surpluses describe how much supply and demand there is at a particular price.


Making things illegal:
1. Producers keep making the goods. You make a lot more when its illegal - inelastic.

Class 37 - Rent Control

There are things in our world that are unearned and we shouldn't profit from them. Unearned rent is rent that people pay to you that isn't a result of your own productive activities.

Rent control - price ceilings

Consequences of Rent Controls
1. Reduced availability and goods are harder to get - still have competition/rationing
2. Lower quality
3. Money is paid other places - black markets
4. Misallocations - people who want goods don't get them
5. Impact other markets
6. Fairness
7. Discrimination
8. Monitoring/Enforcement Costs - costs associated with regulating leads to costs
            -intrusions reduce incentives to keep apartments in the long run and the supply curve shifts/flattens
            -monitoring doesn't produces goods/services
            -raises taxes

Class 36 - A World of Prices

People economize because of prices so when rationing, only people who want goods get them.

Centralization vs decentralization
Central planner decides the producer, who gets the good, and how much to make. But no one has all the information for this.

Price Fixing
A good's price shows what is happening in the economy. Buyers hate high prices/sellers hate low prices. Price changes.

When gas prices go up it is price gouging. When prices go down, they are exploiting workers and competing. When prices are equal the companies are collaborating.
Price fixing = rent control