DB 2 Reply
1.
Netflix and their increasing fees
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The article by Neya Thanikachalam titled Netflix prices rise, but subscribers stay discusses how the streaming service increases prices periodically in small doses to keep members but at the same time increase their revenue (2018, para 2). As well the point was made that there are substitutes to Netflix but most members feel that these substitutes are more inferior such as one member saying that “If I couldn’t use (Hulu or Amazon Prime) I wouldn’t feel that much of a loss” (Thanikachalam, N., 2018, para 14).
I feel that the economic principal that this article is referring to is that of elasticity. The article mentions how “Netflix is one of those things that once you’re on it, you can’t really get off” which hints to that meaning that Netflix is a necessity more than a luxury (Thanikachalam, N., 2018, para 5). As well the article brought up the idea that there are substitutions to Netflix in Hulu or Amazon Prime, many do not use these substitutions. This would indicate that Netflix is more relatively inelastic while its substitutes would be valued more as a relatively elastic good.
I can agree with this article in that Netflix hooks you in. I have had an account for so long and I have seen every price increase Netflix has implemented and I am still using them. Their service they provide, I feel, is hard to beat anywhere else. Yes, I can get almost everything they offer on Amazon Prime but for some reason I agree with the article that I would rather have both services then cancel one for the other. In this, I believe that Netflix and any other streaming service that can offer original content or ideas first can grab onto customers and keep them through changes that normally would scare most people off.
A verse that comes to mind with the slow and steady increase of fees is Job 8:7 which says, “And though you started with little, you will end with much” (Bible: NLT). The reason I thought of this is that when Netflix started out their fees were small but with time, they increased their fees and will earn more and more. I believe that as long as the fees are manageable, they are fine because Netflix realizes the value of the entertainment they provide through movies and their original content.
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2.
Felony Frank's
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The Chicago Tribune article “Oak Park trustee closes Felony Franks, restaurant known for helping ex-offenders,” is about a man is who both a trustee for Oak Park Village and a restaurant owner of an establishment named Felony Franks. Felony Franks is a family owned business which moved locations and was known for helping ex-convicts by giving them employment and a second chance at life. Felony Franks closed its’ doors due to externalities in the form of paid sick time off requirements, higher taxes, signage problems that lead to an expensive legal battle, and the lack of business due to having to raise the prices of the hot dogs. The owner ends the article by stating that he is going to try to convert the business to a catering style business but then he mentions that he is looking to sell the business.
The economic ideas within this story are willingness to pay and externalities. The externalities involved in this situation are internal because the owner of the restaurant is having to comply with new regulations for paying employee sick time and a new minimum wage. He states that now he is paying two people to cover one shift. He also states that sales are down because customers are not willing to pay the higher prices for his products (willingness to pay) and higher property taxes. These are basically the only things he is attributing to why he has closed his doors for business.
My thoughts concerning this situation are that he did not really want to be in this business. If he had been serious about Felony Franks, he would not have taken a position as a trustee for the town. Being a trustee for the town takes up a lot of time, time he should have been spending at his business. He was already paying more than the minimum wage (Uribe, 2019) so the fact that he had to pay sick time pay is a weak excuse – how many people are actually calling in sick on a regular basis?? He could have researched diversified marketing, social media, add a few higher dollar items to the menu and he should have been working the business – hands on. (Sandlin, 2007) A successful business owner knows all the aspects of the business and works more than full days until the business becomes profitable enough to hire a manager. (Sandlin, 2007)
The Christian response to this situation is that the business owner was putting all his time and effort into works rather than works and faith. “For by grace you have been saved through faith, and this is not from you; it is the gift of God; it is not from works, so no one may boast.” (Ephesians 2:8-9, NABRE)
3.
More than 70% of Mexico’s population is overweight or obese. In an effort to combat the high rates of obesity, Mexico passed a sugar tax. The sugar tax introduced in 2014, is 1 peso (equivalent to $.05 US) per liter of sugary drink. Considering that 70% of the added sugar in the diet comes from sugar-sweetened drinks, making it costlier to buy sugary drinks should reduce consumption. In reducing consumption their hope is that it would potentially lower the rates of obesity-related diseases and type 2 diabetes. An analysis of sugary-drink purchases after the tax was implemented has found a drop averaging 7.6% over the two-year period. This tax has paved the way for other countries to implement similar sugar taxes. This shows that the tax not only has a national impact, but also a global impact.
The laws of supply and demand as well as tax revenue and the internal and external costs are three economic ideas contained in the tax on sugar. The obvious economic idea is the laws of demand and supply. When a tax is imposed, it increases the price of the good. When prices increase, the quantity demanded decreases. Secondly, the revenue from the tax is used to fund programs. According to Dr. Rivera, “Between 2014 and 2015, the sugary drinks tax produced more than more than $2.6 billion US in revenue, a portion of which was used to fund water fountains in schools and public places, and implement obesity prevention programs” (Rivera, 2018). Lastly, the economic impacts of internal cost to one’s health with the high risk of obesity and type 2 diabetes and the external cost of higher costs of healthcare are huge economic factors.
That idea that individuals require a tax on an item in order for them to reduce their consumption seems outrageous to me. Unfortunately, society is so engrained with the ‘do what makes me happy’ attitude, that the majority of individuals do not think of the consequences of their actions. Because of this selfish attitude, I agree with imposing taxes on drinks with needless added sugar. This is why product reformulation rather than the long-standing notion of individual responsibility is used in favor of collective strategies to promote health (Gostin and Roache, 2017). Individual responsibility would seem to be the issue in this situation, yet producers of sweetened drinks should have a responsibility to make products that are not going to endanger the health of the consumer. The sugar tax may seem ridiculous, but it is having an impact on the decrease of consumption as well as reformulating drinks to healthier versions. Hopefully in time the impact will grow larger as individuals realize their responsibility for their health and producers will continue to make healthier drinks. As Christians, our response should be to remember that, “…your bodies are temples of the Holy Spirit…You are not your own; you were bought with a price. Therefore, honor God with your bodies (1 Corinthians 6:19, New International Version). When we remember that we are not our own, we will take better care of our bodies by paying more attention to what we eat and drink.