Looking at the top two percent of people financially, there
is a minimum wage earnings of $6169.15 and a maximum of $52879.44. This means
that not everyone in the top two percent of Jordan’s population have incomes of
$30,000 per year, and such be able to buy a car. This means that there is small
potential market in Jordan
for cars. The demand for cars in Jordan is even smaller. The
Jordanian competitive profile of cars states, “[t]he Jordanian market, however,
is rather limited in the capacity it offers to automotive manufacturers,
contributing… into fewer than 15 thousand cars demanded annually”. This shows
that in the already limited market for cars, there is not a high demand for
cars. Because of this and the very slight upward trend in Jordan’s GDP, the market for scooters is the
most viable market in Jordan.
Thursday, May 10, 2012
Tuesday, May 8, 2012
Some Markets Have Some Bazaar Items for Sale
John McMillan's fourth chapter of Reinventing the Bazaar: A Natural History of Markets is a fascinating chapter about the correlation between the spread of information and economics.
a. The passage I found most interesting was about how, in India, vendors would water down their milk and how this caused a 25% decrease in sales. Because it was impossible for the average consumer to tell the quality of the milk they were purchasing, they were not sure if the milk they were purchasing was good quality or bad. This lead the consumer to only want to pay a small amount for their milk, they just had to assume most of the vendors were selling bad milk. This lead to all of the vendors that were selling good milk to go out of business; receiving the bad milk's pay for their milk wasn't enough to keep them open. This lead to 100% of the vendors selling bad quality milk. This apparently happens a lot in India, there are tons of bad quality goods that could even poison the unlucky consumer. I found this fascinating.
b. Transaction costs are any cost that come from shopping within a market. These include the actual price of the item, along with hidden costs, like time and effort. An example of this is trying to find a job. Because searching for a job is very time consuming and requires a lot of effort, unemployment becomes an issue; it's not because there aren't any jobs, it's because you may take a week to apply to five jobs that fit you, only to be rejected and have to start over. You could be doing other things instead. The 'transaction' of getting a job has tons of transaction costs.
c. Imperfectly distributed information leads to overpricing of goods. Because you do not know you can get the same quality (or even a better quality) good for cheaper, you will be more inclined to pay more because the search costs to find these items may make them more expensive. This discrepancy helps the seller of the good because they are able to charge above market price for a good and hurts the buyer. The lack of information also leads to an inefficient market because transactions can occur between the wrong people, you may end up buying something that is not as suited for what you need compared to another product in the market, or not even happen if the search costs are too high.
a. The passage I found most interesting was about how, in India, vendors would water down their milk and how this caused a 25% decrease in sales. Because it was impossible for the average consumer to tell the quality of the milk they were purchasing, they were not sure if the milk they were purchasing was good quality or bad. This lead the consumer to only want to pay a small amount for their milk, they just had to assume most of the vendors were selling bad milk. This lead to all of the vendors that were selling good milk to go out of business; receiving the bad milk's pay for their milk wasn't enough to keep them open. This lead to 100% of the vendors selling bad quality milk. This apparently happens a lot in India, there are tons of bad quality goods that could even poison the unlucky consumer. I found this fascinating.
b. Transaction costs are any cost that come from shopping within a market. These include the actual price of the item, along with hidden costs, like time and effort. An example of this is trying to find a job. Because searching for a job is very time consuming and requires a lot of effort, unemployment becomes an issue; it's not because there aren't any jobs, it's because you may take a week to apply to five jobs that fit you, only to be rejected and have to start over. You could be doing other things instead. The 'transaction' of getting a job has tons of transaction costs.
c. Imperfectly distributed information leads to overpricing of goods. Because you do not know you can get the same quality (or even a better quality) good for cheaper, you will be more inclined to pay more because the search costs to find these items may make them more expensive. This discrepancy helps the seller of the good because they are able to charge above market price for a good and hurts the buyer. The lack of information also leads to an inefficient market because transactions can occur between the wrong people, you may end up buying something that is not as suited for what you need compared to another product in the market, or not even happen if the search costs are too high.
Thursday, May 3, 2012
Fez
In the prologue of A Fez of the Heart, Jeremy Seal depicts his voyage through Pomegranate, Turkey.
A. I found the passage about the fez incredibly interesting. In Turkey, wearing the fez is illegal but in Pomegranate, a popular tourist area, they are sold and worn to travelers. Even though fezes are legal to wear for attracting tourists, it still made the locals feel uneasy. I find this a fascinating example about how quickly tourist attractions can lost their culture. Before, wearing a fez was a sign of power, of strong sultans and now it has degenerated into a tourist trinket, something to be purchased and then placed in a closet to forget.
B. This article shows how when trying to market a city, culture can easily be lost. Initially, Pomegranate was a city of strong Muslim beliefs, so much that they would stone people who entered the city in a bikini. Now, the key advertisement for Pomegranate is pictures of topless women. The citizens in Pomegranate realized that they could earn money by giving up their strict cultural beliefs. Now, their old culture is preserved and looked at like history pieces to show the contrast between then and now. Seal quotes a farmer's son, "'life used to be fun,' Halil told me. 'Now it's just business." In its twenty-year transformation, it seemed that Pomegranate had lost more than it had gained, and it was hard to see what could reclaim it". This statement is exactly the connection between culture and economics. Culture is lost when trying to make a city marketable for a larger audience. That's why when people travel to discover the true culture of a place, they don't go to the tourist attractions; they won't find what they're looking for in those places.
C. The two large travel destinations in Jordan are Amman, and Aqaba. Aqaba is a popular location for travelers because it is a beach city. In addition to beaches, Aqaba also borders the dead sea. The dead sea is a fun place for anyone to visit. There is so much salt in it that you float without trying! Not only is this a religious site, but it is a beautiful sea that has tons of spas nearby that advertise the healing effects of the dead sea salt and mud. In Jordan, they lack large quantities of water, so, this is the only beach location in the area. Amman is the capital of Jordan and one of the few large cities. Many people travel to Amman for religious reasons; to visit large mosques and temples. There are museums, and royal sites dispersed around the entire city. Another advertising point of Amman is that through the modern luxuries that you can find there, there is also the traditional and quaint stores that people can visit.
A. I found the passage about the fez incredibly interesting. In Turkey, wearing the fez is illegal but in Pomegranate, a popular tourist area, they are sold and worn to travelers. Even though fezes are legal to wear for attracting tourists, it still made the locals feel uneasy. I find this a fascinating example about how quickly tourist attractions can lost their culture. Before, wearing a fez was a sign of power, of strong sultans and now it has degenerated into a tourist trinket, something to be purchased and then placed in a closet to forget.
B. This article shows how when trying to market a city, culture can easily be lost. Initially, Pomegranate was a city of strong Muslim beliefs, so much that they would stone people who entered the city in a bikini. Now, the key advertisement for Pomegranate is pictures of topless women. The citizens in Pomegranate realized that they could earn money by giving up their strict cultural beliefs. Now, their old culture is preserved and looked at like history pieces to show the contrast between then and now. Seal quotes a farmer's son, "'life used to be fun,' Halil told me. 'Now it's just business." In its twenty-year transformation, it seemed that Pomegranate had lost more than it had gained, and it was hard to see what could reclaim it". This statement is exactly the connection between culture and economics. Culture is lost when trying to make a city marketable for a larger audience. That's why when people travel to discover the true culture of a place, they don't go to the tourist attractions; they won't find what they're looking for in those places.
C. The two large travel destinations in Jordan are Amman, and Aqaba. Aqaba is a popular location for travelers because it is a beach city. In addition to beaches, Aqaba also borders the dead sea. The dead sea is a fun place for anyone to visit. There is so much salt in it that you float without trying! Not only is this a religious site, but it is a beautiful sea that has tons of spas nearby that advertise the healing effects of the dead sea salt and mud. In Jordan, they lack large quantities of water, so, this is the only beach location in the area. Amman is the capital of Jordan and one of the few large cities. Many people travel to Amman for religious reasons; to visit large mosques and temples. There are museums, and royal sites dispersed around the entire city. Another advertising point of Amman is that through the modern luxuries that you can find there, there is also the traditional and quaint stores that people can visit.
Monday, April 30, 2012
Week 6 Jordan Blog
In the article Central bank cuts interest rates on loans to the industry, the author talks about how the central bank in Jordan cut the interest rates on medium-term loans for the industrial sector for one year. The cuts will decrease the rates to the interest rate the rediscount rate on the day a loan is extended minus a 2 per cent margin.
This is significant because decreasing the interest rate on loans gives businesses more incentive to use money towards investment in their companies. GDP= C+I+G+X-M. I will increase due to this rate decrease and such GDP will increase. Last year, the government did something similar to this and GDP increased by 22.4%.
In such a small and relatively poor country, this boost may be exactly what Jordan needs in order to become a stronger economic power in the world today.
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