Economics is everywhere
Harry Potter may seem like he lives in a world where wizards have a wand1 and receive instant gratification, but that’s a view that needs to be demolished by the Womping Willow2.
Scarcity exists in the magic world just as much as in the Muggle3 world. There are a limited number of tickets to the Quidditch4 World Cup, magical creatures only shed so many feathers or hairs to go into wands, and not everyone has an invisibility clock.
J.K. Rowling’s fictional world … has its own central government (the Ministry of Magic), owl postal system, jail, hospital, news media, and public transport, not to mention Gringotts Bank and a special wizard currency. There are enough institutions to make Adam Smith salivate5.
With scarcity and a monetary system, the Harry Potter series should be a case study for any economics course.
1wand – чарівна паличка
2Womping Willow – Гримуча Верба
3 Muggle– Магли – люди, які не користуються магією
4 Quidditch– вигадана гра, де гравці літають на мітлищах
5salivate – виділяти слину
Points for discussion:Do you agree with the author? Can you give any examples of economy from books, films, and your environment? Create an imaginary country or island with its own economics: describe all the details. (Hints: You find yourself on a deserted island and you must survive – what to start with? Or: There is a country named … and the life in the country … Use your imagination!)
Supplementary text B
BREAKING INTO NEW MARKETS
Complete the article with the following words in the box.
| acquisition |
A business model for e-commerce?
eBay, the world’s leading online auctioneer, has a business model that definitely suits the Internet. Thanks to many clever search features, it can match up sellers and ______ of even the most unfamiliar items. And because of its smart cost and revenue structure (it charges a modest commission on each ______ and does not store goods), eBay has been one of the most consistently profitable e-commerce businesses. In the first quarter, its net ______ more than doubled, to $104.2 m, on revenues of $476m. This was partly due to eBay’s ______ of PayPal, a payments business, last year. Taking out the effects of that deal, ______ were up by 56% over the previous year. One of eBay’s greatest strengths, however, is also one of the biggest ______ it faces. Its business, like any marketplace, is a natural _____ , and so once it is established, it is pretty hard for a newcomer to challenge it. This has already aroused the ______ of America’s Department of Justice. It took no action after an ______ a couple of years ago, but some think it will be tempted to take another look as eBay expands.
Exercise 56 Read the article about eBay again. Are the statements true or false?
1. eBay is regarded as the top online auction company. 2. The company buys goods and holds them before reselling them. 3. It makes a large profit on every deal. 4. eBay has only just started to make profit. 5. eBay had recently bought a payments business. 6. The US Department of Justice has tried to stop eBay trading.
Exercise 57 Would you like to become an expert in e-commerce and know more about? Read the following recommendations.
What do you sell?
Products sold through catalogues and other direct channels usually do well on the web too. Some services, such as travel planning, are also suitable for online sales. Below is a list of types of products and services that might sell well online and those that may not.
Easy to sell online:
- Products which can be sent easily through the post.
- Services or goods which customers don’t need to see or touch before buying.
- Things you need and have to buy often.
- Technology products.
Difficult to sell online:
- Products that are difficult to ship.
- Services that can only sell in a local market.
- Products which customers may want to customize to their own tastes/needs.
Are your customers online?
The most important e-commerce question to ask is: Do your customers use the Internet? Do they go online to buy the kind of products and services you plan to sell? For example, if your customers have busy lifestyles, the time-saving advantages of shopping online may appeal to them.
Are your competitors online?
It’s a good sign if your main competitors are already online. But you need to make your website different! For instance, if you want to sell children’s toys online, it may be difficult to compete against the e-commerce efforts of national toy store chains. Look for a niche market such as educational toys, or toys based on book characters – you may be able to compete more successfully.
Exercise 58 Project. a) Have you ever tried buying or selling on the Internet? Share your (your friends’) experience and give advice as to the usage of eBay auction. Use supplementary sources to know more about eBay auction.