Getting rid of US Penny

Institution

Student’s name

Extra assignment 6

What are some of the arguments against a movement to get rid of the U.S. penny?

Pennies have been termed as expensive to produce and not of any use to the economy. Stephen Dubner a U.S economist says that the price of the metal used to produce the pennies is rising exponentially. He continues to say that it costs about 1.6 cents to produce just a single penny. The government is estimated to be losing about $ 11 million every year in the production and distribution of the pennies. Pennies are also a frustration to most businesses and consumers in business transactions (Weise, 2012).

How would you react if the U.S. government decided to get rid of the penny and you had to round everything? What do you think would be the impact on businesses?

Since it cost much more to produce the nickel, I would rather the pennies stay. Rounding off would mean that I pay extra cents for some commodities since most will be rounded up, not down (Weise, 2012). Businesses will stand to gain in some way since they will receive extra pennies while rounding off.

One industry analyst claims that the airlines are not chasing market share, but focusing on profits. Why is focusing on profits (versus market share) important for the airlines?

Considering the rapid increase of crude oil prices, it is logical that airlines will now have to focus on profits rather the market share. Rise in crude oil prices have increased the costs of operations (Bachman, 2012). So airlines have to find means of countering this to maintain their profits.

Why does increasing the passenger load result in higher profits for the airlines?

The airlines will make few trips while carrying more passengers. This means that the cost of the extra flights that could have been undertaken is cut off thus increasing the profits.

Why don’t the airlines just open up more seats on additional flights?

Instead of increasing capacity and aiming for a higher market share, the airlines have opted to reduce the carrying capacity and increase airfares due to the artificial demand caused by this move (Bachman, 2012). This will enable the airlines to cut on operating costs and increase their profits.

Summarize this article. Must be minimum of 8 sentences

U.S automobile industry recorded the highest sales this March than any other March since 2007. This is despite the gas prices still being rather high at $ 4. Both small and big cars made good sales but it was the small cars which took a larger share of the market. The sale of cars is expected to continually improve this year if the gas prices go a little bit down. The increase of automobile sales will be a positive step towards economic recovery. It is also set to create many jobs in other industries. This will greatly improve the economy and the livelihood of many people. It is also worth noting that the only hindrance towards buying new cars is not the high car prices, but the gas prices. So if the gas prices go down, the old cars will be easily eliminated thus saving the country a lot of money (Durbin, 2012).

References

Weise, K. (2012). Why the U.S penny won’t die like Canada’s just did. Bloomberg Businessweek.

http://www.businessweek.com/articles/2012-03-30/why-the-u-dot-s-dot-penny-wont-die-like-canadas-just-did

Bachman, J. (2012). Forget gas prices- Airfares are getting more painful. Bloomberg Businessweek.

http://www.businessweek.com/articles/2012-04-02/forget-gas-prices-air-fares-are-getting-more-painful

Durbin, D. A. (2012). Us automakers post best monthly sales since 2007. Associated press.

http://news.yahoo.com/us-automakers-post-best-monthly-sales-since-2007-215941274.html