Assignment on the United States Micro Topics

Assignment on the United States Micro Topics

Topic: Change in supply or demand

Source of Article: CNBC News

Date of Article: February 16, 2023

Title of Article: A New Inflation Warning for consumers coming from the Supply Chain

Summary of the article

The article informs how the disruption of the global supply chains contributes to rising inflation and impacts consumers in the United States. For instance, it has highlighted significant aspects such as shipping delays, shortage of raw materials, and labor shortage as the leading factors to increased costs of business which are then passed on to consumers in the form of high prices of goods and services. It has indicated that inflationary pressures continue to exist where demand exceeds supply in 2023, notably in the domestic parcel, labor, and warehousing throughout most of the United States. The absence of new facilities entering the market contributes to the imbalance between warehouse supply and demand. Finally, the article has cautioned that supply chain disruptions and resulting inflationary pressure will likely persist in the near term, posing challenges for both businesses and consumers.

Microeconomic Effects and Potential Impact on Consumer

From the analysis of the article, it is clear that the change in the supply chain cause inflation which has negative effects on the microeconomic curve because it causes the prices of the products to rise and the quantity to decrease. From a microeconomic standpoint, this suggests that customers may have to pay more for products and services due to rising costs for suppliers and manufacturers. Consumers may need to modify their spending patterns and financial plans to account for price increases. As a consumer, I would need to reduce their discretionary spending or substitute less expensive options for certain items, for instance. Also, it is clear that inflation can affect macroeconomic effects by lowering the buying power of money, changing interest rates, and maybe triggering economic booms or recessions. Thus, I must be educated about these trends as a consumer so that I may modify my financial goals and investment portfolio as necessary.

Topic: U.S Antitrust Cases 

Source of Article: The New York Times

Date of Article: April 3, 2023

Title of Article: F.T.C. Orders Gene-Sequencing Company Illumina to Divest Acquisition

Summary of the article

The story details how the “Federal Trade Commission” compelled Illumine, a gene-sequencing business, to sell its acquisition of cancer detection startup Grail. The possible anti-competitive effects of the purchase on the gene-sequencing business have drawn the attention of the F.T.C. In addition, the article has shown how Illumina, a leading company in D.N.A. sequencing technology, acquired Grail in 2021 for $7.1 billion, but F.T.C has raised concerns that acquisition by the company could reduce competition in the gene-sequencing market leading to higher prices and reduced innovation for customers. The article has explained how the F.T.C. ordered Illumina to sell Grail to a buyer it approved within 10 days after receiving the commission's order to sell it. The F.T.C. has the power to appoint a trustee to oversee the divestment if Illumina refuses to comply. It has also noted that Illumina and Grail have voiced their dissatisfaction with the F.T.C.'s ruling and may file a legal challenge.

Microeconomic Effects and Potential Impact on Consumer

The article on the Federal Trade Commission's (F.T.C.) directive to gene-sequencing firm Illumina to sell its acquisition of Grail may have a number of microeconomic repercussions and possible implications on me as a customer. For instance, the divestiture of Illumina's acquisition of Grail could reduce competition in the gene-sequencing market. There may be fewer innovations, fewer customer alternatives, and possibly higher costs for gene-sequencing services or goods if fewer competitors exist. The sale of Illumina's Grail purchase might impede current research and development projects, thereby delaying the development of new technologies for gene sequencing. It may impact future access to cutting-edge genetic testing products and services, which might indirectly affect me as a customer.

Topic: Government-imposed Price Floors

Source of Article: CNBC

Date of Article: February 24, 2023

Title of Article: Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago

Summary of the article

The article has provided an overview of the latest data on the Consumer Price Index for January 2023. It shows that inflation rose by 0.5 percent in January, which was higher than anticipated. Moreover, inflation increased significantly by 6.4 percent from the same month the year prior. The probable effects of these figures on the economy and consumer spending are highlighted in the article. More importantly, it has informed factors contributing to inflationary pressure. For instance, it mentioned the cost of energy, specifically gas and housing, as the significant contributors to the rise in inflation. Further, it notes that preserving profitability and managing expenditures may provide difficulties for firms. Customers might also need to change their buying patterns because rising costs can make buying things harder.

Microeconomic Effects and Potential Impact on Consumer

As a consumer, the 0.5 percent increase in inflation in January and the 6.4 percent increase from a year ago, as indicated in the article, might have various effects on me. These consequences may be observed on a microeconomic level, impacting my specific purchase choices, as well as a more general macroeconomic one, affecting the state of the economy as a whole. The issue of inflation contributes to the high prices of products and services. Thus, as the consumer, this implies that I may need to pay more for everyday items such as housing, gas, and groceries. It may make purchasing the same products and services more expensive, lowering my spending power and maybe my life level.

Topic: Inefficiencies Associated with U.S Tariffs on Imports

Source of Article: The New York Times

Date of Article: February 7, 2023

Title of Article: America's Trade Deficit Surged in 2022, nearing $1 Trillion

Summary of the article

From the analysis of the article, it is clear that its focus is to inform the growing trade deficit by indicating a substantial imbalance between the value of U.S. imports and exports. It has described a number of variables, such as rising consumer demand for imports, disruptions in international supply chains, and the effects of economic policy, that have contributed to this trend. In addition, the article has informed the potential consequence of trade deficit on the U.S. economy, including inflation, job loss, and national debt. More importantly, it emphasizes the importance of the U.S. government and officials addressing this alarming trend and its potential consequences. Also, it showed how critical it is to identify ways to increase local production, lessen dependency on imports, and deal with the root causes of the trade imbalance.

Microeconomic Effects and Potential Impact on Consumer

The microeconomic implications of America's trade imbalance, which increased to around $1 trillion in 2022, may affect me as a consumer in a number of ways. The fact about the U.S. trade deficit is that the country is importing more goods and services than it is exporting. It is clear that it can cause an increase in demand for imported goods, which can drive up their prices. As a consumer, I will experience higher prices for goods because the imported goods would become more expensive. Also, the availability of some goods and services on the domestic market can decline if the trade imbalance widens further. If the imported items become rare or expensive, this can result in fewer consumer selections, which might restrict my options as a customer. 

References

Swanson, A. (2023, February 7). America's trade deficit surged in 2022, nearing $1 trillion. The New York Times. Retrieved April 18, 2023, from https://www.nytimes.com/2023/02/07/business/economy/us-trade-deficit.html

Cox, J. (2023, February 14). Inflation rose 0.5% in January, more than expected and up 6.4% from a year ago. CNBC. Retrieved April 18, 2023, from https://www.cnbc.com/2023/02/14/consumer-price-index-january-2023-.html

LaRocco, L. A. (2023, February 16). There's a new inflation warning for consumers coming from the supply chain. CNBC. Retrieved April 18, 2023, from https://www.cnbc.com/2023/02/13/a-new-inflation-warning-for-consumers-coming-from-the-supply-chain-.html

Lohr, S. (2023, April 3). F.T.C. orders gene-sequencing company Illumina to divest acquisition. The New York Times. Retrieved April 18, 2023, from https://www.nytimes.com/2023/04/03/business/ftc-illumina-grail-divest