I did my Econ Live post on the economics within booktok and how it has affected the book market with an increase in sales. As well as the increase in demand for books specifically Fourth Wing by Rebecca Yarros.
The Impact of Tuition Fees on University Externalities and Public Goods: A Comparative Analysis of the United States and China
Wenxin Lyu
Student ID：79048292.
The role of tuition in shaping university-generated externalities and public goods is a topic that has received much attention, especially when comparing different education models such as those in the United States and China. Tuition not only affects access to higher education but also has broader economic and social implications. This paper explores how tuition affects positive and negative externalities and the provision of public goods at universities in the U.S. and China, providing insights into the social impact of these educational giants.
Tuition is an important source of revenue for universities, sponsored operations, research, and scholarships. In the U.S., high tuition combined with a robust financial aid system places greater emphasis on a market-driven approach to private investment in higher education. In contrast, Chinese universities, which are primarily government-funded, charge relatively low tuition, reflecting a model that views higher education more as a public service. Chinese students can choose their preferred schools more freely than their U.S. counterparts and have less student loan burden.
Positive Externalities and Public Goods Positive externalities occur when an activity benefits a third party not directly involved. In higher education, these externalities can be significant.
In the U.S., high tuition may foster a competitive environment by selecting only the highest-achieving students or those from wealthy families. This high-competition, high-standard model can push universities to excel in research and innovation, leading to new technologies, processes, and knowledge that benefit society, such as medical breakthroughs improving healthcare globally.
In China, the government subsidizes tuition, making education more accessible. This can raise the overall education level, producing a more educated workforce that increases productivity, social mobility, economic growth, and stability – classic positive externalities.
Negative Externalities Negative externalities occur when an activity adversely affects a third party.
The highly competitive U.S. environment has notable downsides. High tuition and stringent criteria can lead to unequal educational opportunities, restricting opportunities for talented but underprivileged students. High tuition also increases debt burdens, causing long-term financial stress. The high-pressure environment may negatively impact students' mental health and promote an overly competitive mindset at the expense of well-being.
While the U.S. system promotes innovation through competition, it introduces negative externalities regarding equity, financial burden, and mental health that require policy adjustments to maintain competitiveness while lowering barriers and reducing detrimental effects.
In China, the intense competition for the make-or-break university entrance exam (gaokao) may seriously affect mental health, exacerbate inequality, and lead to social tensions – negative externalities not reflected in education costs.
In summary, both the high-tuition, market-driven U.S. model and the low-tuition, centralized Chinese approach produce notable positive and negative externalities that shape their educational and socioeconomic impacts in distinct ways.
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Starting from the pandemic, people’s demand for services and goods has increased. Due to the impact of the pandemic, many restaurants shut down because of the negative profits they experienced. This has led to a problem in my hometown; there are not enough restaurants to meet the demand for dining out. For the businesses that survived the pandemic, they now have lines of customers on a daily basis. This has attracted more businesses to try to open restaurants in this city. My family is one of them, attracted by the opportunity to open a restaurant due to the significant profits brought about by the post-pandemic influence.
My mother, as the restaurant owner, decided to establish this as a breakfast restaurant, the first and only restaurant around the neighborhood. She discovered numerous job opportunities in the vicinity, and the locals had a penchant for having breakfast before heading to work. Given that my family already owned the premises and didn't need to pay rent to start this venture, the fixed costs were significantly lower. In light of this advantage, my mother opted to set menu prices similar to those of another breakfast spot in a nearby city, although is slightly higher. With no competition around the area, it makes this breakfast place popular and most people would still come even after slight price increases. Since the breakfast market in this city is limited, customers faced with the choice between driving 30 minutes to a neighboring restaurant or paying slightly more at our location generally opted for the latter. For many workers in the area, the opportunity cost of traveling to a distant breakfast place outweighed the extra expense at our store. Consequently, they preferred to stay and have breakfast at my mother's establishment.
However, even though this is a free market, my mother wasn't the only one who recognized the profitability of operating a breakfast place in the city. After three months, a new breakfast establishment opened just three blocks away from my mother's restaurant. Consequently, the market became competitive, with customers selecting their breakfast spot based on price. The two businesses now compete on menu prices, with the one selling at a lower price attracting more demand from customers and making more money. Initially, my family managed to earn a profit from the business because their prices were higher than the average total cost. However, with the entry of another firm into the market, they began to engage in price competition, driving prices down close to our average total cost for daily operations. After four months of competition, my family found themselves operating the business at a zero-profit line, where sales generated no profit for us. Despite this, my family chose to persevere, hoping that another business might exit the market. Nearly a year later, more breakfast places had opened in the city, and most were selling at similar prices. By this time, the breakfast market had become a free market where individuals cannot impact the market price. However, due to inflation in ingredient costs, my family was now experiencing negative profitability from the business. Another two months later, my family made the decision to close down the business because they couldn't find a way to cover the costs of inflation or compensate for the loss of customer demand if they raised prices for breakfast. The opportunity cost of exiting the market includes the potential future gains of the business and the equipment costs invested in the store if those haven't been recouped by the time of closure. On the other hand, if they choose to continue operating, the opportunity cost becomes the potential negative profit they might incur and the monthly operational expenses of the business. My family's decision serves as a clear illustration of the workings of a free market, where if the incurred losses outweigh the potential profits of sustaining the business, exiting the market becomes the rational choice. Consequently, the market ends up populated only by businesses earning zero or positive profits.
Josh, Nathan, Jack, and I worked together for our Econ Live and decided to write about how economics plays a role in Mahjong. As Mahjong is something that we have all fell in love with this past quarter, we had lots of fun working on this project!
Hi everyone! My name is Maddie, and I'm a software engineering student here at UCI, as well as a part-time barista at the Med Ed Cafe. Wrapping up the end of the quarter, my life has felt busier than ever. But amidst the hustle and bustle of daily life, there is one constant: my morning cup of coffee! For my EconLive project, I thought it would be fun to delve into the economics behind this pleasure and explore how supply and demand curves intersect in my daily routine.
Let's set the stage. Its 6:30 AM, and I am walking in to work the opening shift at Med Ed Cafe. Thirty minutes later, the coffee is brewed, pastries are displayed, and it's time to open the doors. Students and faculty trickle in one by one, each with unique preferences.
Now, let's break down the supply and demand dynamics that are at play here. First, we'll look at the supply side. This is represented by me and my fellow baristas - we are responsible for brewing and serving the coffee. While there is an upper bound for time between brewing to ensure freshness, we can adjust the amount brewed to meet the demand of our customers. As the demand for coffee increases, so does our supply, illustrated in the following graph:
As the supply curve shifts right, so does the quantity, causing an increase in supply that is total to Q* - Q.
On the flip side is the demand. This is represented by the customers who frequent the cafe. Each customer has their own unique preferences in routine, frequently causing a change in demand. For example, there is higher demand in the mornings and around lunch time, with slower traffic in between. This shift in demand can be illustrated in the following graph:
Just like with increasing supply, as the demand curve shifts right, so does the quantity - thus causing an increase in supply that is total to Q* - Q. Should demand or supply decrease, we would see the inverse effect.
Frequent shifts in supply and demand can cause trouble for a small cafe like Med Ed. Ideally, we want to produce as efficiently as possible. Equilibrium is key - where the supply of coffee matches the demand perfectly. Sometimes we overestimate the amount of coffee to brew, thus supply exceeds the demand. This causes waste and inefficiency. Conversely, if we underestimate the popularity of certain products, the demand exceeds supply. This causes us being unable to fulfill the order of every customer, causing them to be unsatisfied.
What about the other less tangible factors that influence our coffee consumption? Perhaps a social aspect, like sharing a cup with friends. Or a study being published that urges people to reduce their caffeine intake. While these externalities, both positive and negative, cannot be captured in the tradition supply and demand curves, they play a crucial role in shaping our choices and behaviors.
There you have it! The economics of my morning brew. From the intricacy of supply and demand to the nuances of equilibrium and externalities, every cup of coffee carries a deeper meaning as to efficiency and choice. As I continue both as a barista and coffee drinker, I will carry these economic principles with me and continue to observe the effect of these choices on the market!. Thank you for reading my post, and have a wonderful spring break!
Supply and Demand (Anteatery!) By: Pranay Macherla Student ID: 58662154 Winter 2024 Econ 20A Professor Branch
Hello! For my Econ Live Project, I decided to analyze the impacts of supply and demand in the anteatery. Through interviewing various students and conducting market research, I was able to understand how supply and demand affect the Anteatery! :)
Here is a video of us talking about how inflation and different economic terms like supply and demand, and making trade offs have affected the shoe market.
I wanted to cover the impact of duopolies in my daily life, especially by looking at sillier ones like Coke vs. Pepsi, but also analyzing the ones between, Apple, Android, and Windows, as the very device I used to even create this project falls under one of these duopolies.
“EWWW… Your texts are green?”: DUOPOLIES and the ILLUSION of CHOICE Angie Xetey (ID #44607973) ECON 20A ECON LIVE
Economics of Boba Beldon Lee ID: 12749259 Tuesday 8:00PM
Hello! For my Econ Live project, I decided to do it on Boba! Boba is one of my favorite drinks and the economics of running a boba business intrigued me a little bit. This project allowed me to buy boba as an excuse but also to dive deeply into what the economics of running a boba business may actually entail.
Hello class! I am Andrea, and I have created a pretty cool slide show presentation that talks about the topic of Opportunity costs and its effect on my own personal experiences. Go check it out :)
Amazingly Simple Graphic Design Software – Canva
Econ Live Tuesday @ 8 @tuesday8econlive - Tumblr Blog | Tumgag
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