Applying Economics

I. Principles of Microeconomics

Some real world interesting examples of concepts discussed in class...

Sprint and T Mobile Merger Anti-Competitive?

This isn’t a case of going from 4 to 3 wireless companies — there are now at least 7 or 8 big competitors in this converging market,” Legere said at the time. “And in 5G, we’ll go from 0 to 1. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G. We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country.

T-Mobile CEO John Legere

Of course, T-Mobile CEO is likely to support the merger and try to convince the regulators that the merger will benefit the US consumers. Think about the incentives of the CEO (who are often paid large amounts of compensation in stock options). Likewise, independent authors may have financial incentives to support / oppose the merger. Thus, it is no surprise that that authors have to sign a disclosure policy when submitting their analysis to keep the public well informed.

Daniel B. Kline has no position in any of the stocks mentioned.

Elasticity Applications in Public Transport:

1. What will happen to demand for bus rides under the fares? Transit Price Elasticities and Cross-Elasticities report, Impact Analysis

2. What will happen to demand for taxi-hail services under the new fares? Uber & Lyft cost the MBTA $20 Million a Year, a New Study says.

3. How will people who cannot change their commuting habits react? Vandalism and #UnfairHikes social media posts .

Labor-Capital Substitution in Restaurants.


What about robotic cars? Massachusetts Governor Charlie Baker signed an executive order in October 2016, “To Promote the Testing and Deployment of Highly Automated Driving Technologies.”

Future of UberEats? Replacing drivers with autonomous vehicles?

Public Good: Boston Pops Fireworks Spectacular (July 4 celebrations)

Minimum Wages Debate

Would a $15 minimum wage help or hurt low-income workers? A new CBO report concludes that the proposed hike would boost the incomes of 17 million workers who currently earn less than $15, and cost 1.3 million low-wage workers their jobs.

The Unintended Consequences Of Raising Minimum Wage To $15:

Employers, especially small family and midsize businesses, with razor-thin profits will be forced to raise prices to make up for the addition labor costs. With the increased prices, customers may elect to take their business elsewhere. Large corporations with big budgets will weigh the increased labor costs and elect to invest in technology to displace workers. This trend will soon become prevalent in the food service industry, hospitality, retail, construction and manufacturing. Amazon recently opened up several prototype Amazon Go stores that are self described as “a new kind of store featuring the world’s most advanced shopping technology. No lines, no checkout—just grab and go!”

While some people may benefit with an increase in their hourly earnings, other employees will be let go to save costs. Employers may elect to cut hours across the board for everyone. Whichever way the employer goes, some of the workers will be in a worse situation. Seattle’s move to $15 an hour, a few years ago, resulted in workers given fewer hours and experiencing a net loss in pay.

Statistical Discrimination vs Taste based Discrimination...Some info for students interviewing for jobs.

II. Principles of Macroeconomics

Some real world interesting examples of concepts discussed in class...

Hyperinflation in Germany

Financial Times: US Democrats should remember, ‘It’s the economy, stupid’

Haynes vs Keynes Rap Analysis.