Ch 2: The Operation of a Market

http://www.bloomberg.com/apps/news?pid=20601103&sid=azppdIrUGSi0

Summary: This article explains how Mexico's Wal-Mart, known as Walmex, is earning profit during the recession. The store is offering products and cheap prices. The world bank forecasts that this will increase poverty in Mexico by more than 4 million by the end of the year. In August, Mexico's unemployment rate increased to 6.3%. According to an equity strategist, Walmex is "capitalizing on people who want to trade down, people living day to day" which means that Walmex is earning a lot of profit on people who earn minimum wage and also depend on buying cheap quality goods. In Walmex's third fiscal quarter for the year increased profits by 20.5% and by 45.8% during the past 12 months.

Connection: Chapter 2 of the textbook talks about supply and demand factors and hints of these factors can be found in the article. Since Walmex is decreasing their prices they are increasing demand for their cheaper products, which will earn them more profit through a greater number of sales. More workers are being laid off because some other businesses can't afford to compete with Walmex so that's why unemployment rates surged during Walmex's prosperous fiscal period. Unfortunately for Walmex, since unemployment rates have increased, it means a lot of people have no income coming in. This causes the quantity demanded of Walmex's supplies to lower slightly. Income and price and the factors of demand involved in this situation.

Reflection: It's a tough decision to decide whether or not Walmex's way of operating is good for the market. Walmex is slowly lowering its competition because its taking advantage of the recession. I believe that Walmex is doing a great job being successful during the recession. If I were a resident in Mexico, the obvious choice of where I would want to get my groceries or daily necessities would definitely be Walmex. Unfortunately, there is a downfall to Walmex's success. I think if they continue their way of putting other businesses out of business, the unemployment rate would rise astronomically, resulting in less customers that can afford goods.

Food Scarcity to Bring Down World Governments

http://www.naturalnews.com/026996_food_food_scarcity_food_shortages.html

Summary: This article begins warning of how large the threat of food scarcity is to the globe. It warns that states and governments will continue to collapse one after another. It is predicted that, eventually, global civilization will collapse too. The deteriorating state of the environment like the rising temperatures, falling water tables, and eroding soils contributes to the outcome of this prediction for the worse. Grain consumption has surpassed grain production in the past 6 of 9 years and the pace steadily grows. As the shortage of food depletes ever lower, prices will rise accordingly along with outraged citizens. The process to fix our ever growing problem would take time and there isn't a quick way to fix the predicament.

Connection: The topic that is related in this article to chapter 1 in the textbook is scarcity. With the food crisis progressing rapidly, sooner or later, everyone will be affected. Whether you are a high class business man or a lower class citizen, the problem will find its way to you. Companies will find that their expenses are sky rocketing and that they are forced to raises sale prices of their products in the same fashion. Depending on what kind of resource is scarce, the situation could become very dire. Given time, if society doesn't allow the resources to replenish, the scarcity problem not only reach food industries, but they'll soon cause problems to other industries in the same way.

Reflection: I agree that there are many ways that we are harming the environment. Water is also a major issue among scarcity among our society and as one of the top countries in the world to use this much water, I think we have a responsibility to preserve this precious resource. Upon reading this article, it's not that shocking to find out that the world we are living in is heading towards a problematic future. Ignoring the warnings of green house gases and global warming won't contribute to putting our future back on track. I think this article and its prediction is very accurate to how our futures will shape up. In the future, there will be global chaos, just as predicted.