Dow down 416pts!- Why?

In China their stock markets went up so high it was unbelievable! Later the market dropped so much that it effected the US stock market and made all the stocks go down a lot and many people lost money! We lost money because we invest in their stocks and they invest in our stocks. So many people began to sell their stocks and from everyone selling at the same time it made the sock market go down from the over whelming amount. All of this leads to a 9% drop in the stock market. This caused so many people to lose money and made so many people upset and nervous from the big drop.

Opportunity Costs

When economists talk about opportunity costs they are looking at two situations and their trying to decide which one to choose and if they pick one what will be the result of not picking the other one. Would they lose money because they didn't pick the other one or would they gain money with the option they picked? They are talking about the "what ifs"! What if ..... this happened?

Opportunity cost is the cost we pay when we give up something to get something else! Choosing one over something else.

Some examples of opportunity cost will be if a major company is deciding to pick to have paper towels in their bathrooms or blow dryers. If they pick the paper towels they have to pay to have the towel dispenser put in, and pay to add on two more janitors to make sure the bathrooms stay clean, and giving the janitors benefits the total cost of this installment is $150,000. But if they install the hand dryers they don't have to higher more janitors and just have the regular janitors install the hand dryers and the total cost of this is $100,000 . You save $50,000 and the blow dryers save you money each year and you can use it for something else.

Some modern day examples that we could relate to is your sister asked you to babysit your two nephews and she'll pay you $20 an hour and she'll be gone for 4 hours. On the other hand your boyfriend want to take you out on a date to see the latest movie and you really want to go and you guys decide that he'll get the tickets and snacks if you pay for the dinner, and the food came out to be came out to be $45. Now you can go with him and spend $45 or babysit and earn $80. You can reschedule but he'll be upset. Which one would you pick?

Or even a company wants to advertise they could sign up for myspace and advertise threw there or pay to make a commerical on NBC. Which one would you pick?

Types of Economic Systems

Traditional Economies
Traditional Economies are found in rural and no develop countries like Africa, Asia, South Africa, and the Middle East. Technology is not used for traditional economies, the economic activities are mostly towards family or a specific ethnic group.
Centrally Planned (Command) Economy
An economy that is planned and controlled by a central administration, as in the former Soviet Union.
Market Economy
Also known as a free market economy. It is an economic system that produces and distributed of their goods and their services. It occurs threw mechanism of free markets it's a free system.
The customers decide what they will produces and buy instead of the government planning it.
Mixed Economy
A mixed economy is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state-owned enterprises.

What is the difference between communism and socialism?

Communism is the idea that society should not have classes and socialism is the idea that the working class produces the profits, the wealth, the cars, houses, planes, steel, should take over and run things collectively, democratically, for the benefit of the nation.

Investments in Companies

$50, 000 will be invested and I thought about it over the weekend which companies I would like to invest in well a couple of them are Target, Apple, Corinthian Colleges, Coca Cola, Pepsi soft drinks, and an oil company or that company that teacher invested into that made him so much money. The companies that i am thinking of the most they cost is like $60 -$65. The reason that I picked Pepsi because I remember that Pepsi is on a lot of college campuses and they make tons of money off of college students. Also if the companies I choose wont make a lot of money than I'll trade it. Also my sisters job company Price Water House Coopers.

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