Libraries, Economics, Why?

This blogging project has been interesting. I have been able to tie my interests along with economics. This assignment helped the class learn that sometimes you don't need guidelines. The assignments were to take the topic, run with it, and produce a piece of writing.

This assignment also stressed thinking outside the box. This will help us as we expand our knowledge. We must remember that we won't always have guidelines, and we won't always have assignments that make sense. Libraries and economics aren't always tied together because libraries aren't often associated with money. Thinking outside the box made this project easier for me, and other blogs that have subjects that are not associated with money.

Although it got tiring constantly stating, "libraries use fines as a form of income," and other repetitive statements, I learned more about libraries through comments from other students studying economics, and researching about libraries for my blog.

One thing that I would have changed is the style of the blogs. Typically we would take a chapter from a textbook and blog on our topic, using key terms and main ideas from that chapter. That got boring after a while. The terms changed, but the blogs got repetitive. Every so often the teacher could have the students do a blog that is not out of the textbook. The teacher could have an assignment like, you own a store based on your interest that you are blogging about. How would you set up your business, how could you turn it into a franchise, how would you get customers to come to your business, and would your employees be a part of a union, why/ or why not? These questions could help budding entrepreneurs start a business, and give regular students a more in depth look at their interests, whether it be sports, music, or books. There is potential here.

The main thing that made the blogs seem boring was the repetitiveness of the blogs. With some variety in the assignments, the students will stay interested. Also, I think that we should continue to use the pen and paper. Writing notes can help reinforce our knowledge. We can find a happy medium with blogging and notes.

Another thing we have been using is wikis. These wikis are good for creating study sheets, but not so good for a class of 20 working on a study sheet all at once. These wikis can only be edited by one person at a time, making less homework for a few, and quite a bit more homework for everyone else.

This was an interesting experience that works on our writing skills, while we are learning about a topic that we are truly interested in.

Economics Assignment 4, (Chapter 9)

Part three of three. Remember, feel free to comment on any economics blog, the advice is welcome. As you remember from the blog on chapter 7 and 8; the assignment was to read a chapter, take the main ideas and key terms of economics and tie it in with our interest, in my case libraries. If this intro is familiar, I am sorry. I lack the creativity to think of a new blurb for each topic.

Wage rate or price of labor is used in almost every business, including libraries. Labor can also be known as librarians, pages, and anyone else employed by libraries. The rises in minimum wage and the number of employees can affect a library system's budget. Minimum wage was created through the minimum wage law. As one can probably tell by the term, minimum wage is the lowest hourly wage a worker can be paid.

If there is a demand for a new library to be opened in a location that doesn't have a library, there would also become a demand for librarians. This demand is called a derived demand. A derived demand is a demand created by a demand for something else.

Since librarians are county employees, they can join the county worker's labor union. Libraries aren't a closed shop, an employee doesn't have to be a member of a union in order to have employment at a library. This is probably because of the Taft-Hartley act. This act banned closed shops. Libraries aren't union shops either; they don't require employees to join a union after being hired. The right-to-work law doesn't affect libraries; the right-to-work law makes union shops illegal.

If some librarians believe that they are being treated unfairly, paid the amount they deserve to have, or have the job security that they need, they can go on strike. But the librarians have to give notice, and by the time that the notice is approved, the issues have been worked out. There aren't many cases of librarians going on strike, but as a government employee, they have that right. (but they have to give notice and go through the paperwork first.)

Key Terms to be Used in this Blog;
Wage Rate, Derived Demand, Minimum Wage Law, Labor Union, Closed Shop, Taft-Hartley Act, Union Shop, Strike, and Right-to-Work Law.

Economics Assignment 3, (Chapter 8)

This is part 2 of a 3 part series. Feel free to comment on any economics blog, the advice is welcome. As you remember from the blog on chapter 7; the assignment was to read a chapter, take the main ideas and key terms of economics and tie it in with our interest, in my case libraries.

As everyone knows, libraries a famous for lending out books. One book entitled Hitchhiker's Guide to the Galaxy, was often checked out often, because of the movie that came out with the same plotline and title. In one of the books in the series, a creature is described, the perfectly normal beast, which sounds similar to perfectly competitive market. Unlike the creature, the perfectly competitive market didn't receive its name because it is perfectly normal or competitive. Perfectly competitive markets have many buyers and sellers, all the firms selling identical goods, and all relevant information is available to buyers, and there is easy entry and easy exit into the market. This type of market is common, so it can be seen to us as perfectly normal. This is also the same way that a library functions. Using online databases, a patron can see what library has the book that they want. Each library has a materials budget to try and get new materials in order to appease the patron, and all of the libraries have books, music, computers and other resources. The only part of perfectly competitive market that doesn't apply to libraries is easy entry and exits into market. This barrier to entry keeps the market controlled by the government. Libraries are run by the government, they can't be opened by a random person looking to make a profit.

Entry and exit into a market also applies to market structure. Market structure is the setting that a seller finds itself in. Libraries are in a market with a limited competition. This is because no company can survive selling a product for $0.

Price takers cannot sell below the equilibrium price. Libraries are price takers because the "equilibrium price" is so low. ($0) Since the equilibrium price is $0 for libraries, libraries can be considered a price searcher because of the fact that if they need to raise money, they can manipulate fines in order to raise money. Libraries can also sell books that are no longer in circulation. The libraries have complete control of the price that these used books are sold for.
They can go above and below equilibrium price in order to sell books. This is because they aren't competing with franchise bookstores, they are only competing with used bookstores that no one knows about.

Just as the library can be compared to a perfectly competitive market, the library can be compared to a monopolistic market. This is because the library system are the only group that provide books at a price that consumers dream about. No other book store could survive selling goods for free. Libraries control the market for borrowed books. All of the substitutes cost money, which the consumer sees as too much for that goods.

Libraries are a public franchise. They are run by the government and have the right to provide goods and services for free or at a low cost. They are not competing with other corporations, because they are protected by the government. If the government didn't provide funding for libraries, the libraries would have to raise fees, and would be considered a natural monopoly. This is because it would be making just enough profit to survive in the market.

Antitrust laws were drawn up in order to prevent monopolies, but libraries don't hurt anyone's business. They provide used books to borrow. Libraries are techniquely not a business. If a person wanted to buy a high quality book, and take their time reading it they would go to a book store.

A library cannot be considered a monopolistic competitve market. This is because of the fact that there aren't many buyers and sellers. The only "sellers" are the library systems which provide the same product. There is no other seller that provides goods at the same price. Book store provide slightly different products, which would qualify as a monopolistic competitve market, but it isn't because of the fact that all book stores provide the same product in the same way. It is also very hard to enter and exit the market. Libraries are controled by the government, and book stores are mostly franchise businesses.

The oposite of a monopolistic competitve market is a oligopolistic market. An oligopolistic market is a market structure that is characterized by few sellers, (the only people in a market are other libraries in the library system), the production and sale of identical products, (as stated earlier) and signigicant barriers to entry. This supports all of the statements stated earlier.

Since no store attempts to challenge libraries, there is no need for a cartel agreement. A cartel agreement is where businesses act in a coordinated manner in order to eliminate any competition.

Also since libraries charge nothing for their goods, (the borrowing of books), there is no price discrimiation. Price discrimination is where a seller provides different prices to different buyers.

Key Terms to be used in Blog assignment;
Market Structure, Perfectly Competitive Market, Price taker, Monopolistic Market, Barrier to Entry, Price Searcher, Public Franchise, Natural Monopoly, Antitrust Law, Monopolistic Competitive Market, Oligopolistic Market, Cartel Agreement, and Price Discrimination.

Business Operations of a Library; Economics Assignment 2 (Chapter 7)

This blog is the first of 3 parts. The assignment was to read a chapter, take the main ideas and key terms of economics and tie it in with our interest, in my case libraries.

A library is like a business firm, this is because a library is an organization that provides goods to the general public. Although the libraries only gets profits from the general public through fines, the library can still be considered a business because it provides goods at a very low cost. (Nothing!)

One thing about the organization of a library. A library system is run by a board of directors, but libraries can also be considered a sole proprietorship. This is because the library recieves its funds from the government. The city/county/state government, (depends where you are), are often run by a mayor, executive, or governor. That official would be considered the sole proprietor, because they provide the libraries with funds. As stated earlier, the library is controlled by more than one director, the library can be considered a partnership. However, the board of directors don't receive a large percent of the profits. This is because of the limited amount of profit, and the fact that the profit from fines and the money from the government fund the operation of the library. Unlike a partnership, the board of directors are not responsible for debts. Well, not completely. If their decision brought about a deficit, they are responsible. The board of directors produce decisions that help the libraries function to the best of their ability. Since the directors are employees, they receive a salary.

Shirking affects a library. If a page or a volunteer doesn't keep up with their shelving duties, the other pages and volunteers are swamped with cartloads full of books. This negatively affects the patron due to the fact that they can't find a book they are looking for because the book is hidden behind the circulation desk. Shirking also affects story hour. Story hour crafts have to be prepared in advance. If a volunteer or a page cannot cut out the shapes in time, other volunteers and pages have to work hard to get it done. If the pages and volunteers don't finish, there is a stressed out librarian trying to improvise and many annoyed kids.

Libraries are not corporations; this is because libraries don't have stockholders. Libraries get most of their funding from the government. Therefore, the government inadvertently tells the library how to control its assets, because it is the supplier of funds for the library. The government has limited liability, similar to the stockholders of a large corporation. If the government needs money, it can lower the money allotted to the library system. When they do this, they don't have to worry about financial repercussions.

There aren't many franchises in the many library systems throughout the country. This is because of the fact that franchises wouldn't be successful in a library system because of the lack of profit. Even though libraries aren't a part of a profitable franchise, the library system itself can be considereda franchiser. This is because library systems are connected through a network, and they share books and their other goods through that network. The head librarian at a local library would be considered a franchisee.

Libraries have social responsibilities. A libraries social obligation is to provide books and other goods and services at an affordable rate. Without that obligation, we wouldn't have libraries as we know it. If libraries were motivated by money instead of that social responsibility, our society would be, (in my opinion) worse off. This is because some wouldn't have the money to buy a computer, or a book. Without these keys to help open the gates of knowledge, the poor couldn't attempt to advance their careers or even their lives. This scenario makes the rich richer, and the poor, poorer.

Libraries produce a good at a fixed cost this is because the goods are supplied to the consumer at the same price. The price never changes; this is because the books are free to the patrons. If a library system wants more money for a materials budget, and the government won't allot any more money to the library system, the library would have to raise the fines and fees. This fluxuation is known as variable cost. The total cost is equal to the fines, fees and the books, (which is nothing). In the grand scheme of things, the total cost can be viewed as just the cost of the fines and the fees.

Libraries don't have an average total cost nor marginal cost because libraries are a supplier of goods, they don't produce goods. These terms involve the factories that make the books and other products that the libraries provide to the public.

There is no marginal revenue in libraries, this is because libraries don't receive revenue from their patrons. Libraries provide goods that are borrowed and returned, not sold and kept. The law of diminishing marginal returns doesn't apply to libraries, because of the same reason that marginal revenue doesn't apply to libraries, libraries don't produce good to be sold, like a factory does. They receive no profit for each book loaned out. Libraries exist only to help the public expand their knowledge.

If you want to learn about these topics in greater detail, post a question in the comment section, or visit your local library. The nonfiction section should have some interesting books on this topic. Remember libraries are a unique part of society, they exist simply for the advancement of human knowledge, they don't exist to fight other libraries and library systems in order to get money.

Key Terms to be used in Blog Assignment;
Business Firm, Shirking, Sole Proprietorship, Partnership, Corporation, Stockholder, Asset, Limited Liability, Board of Directors, Franchise, Franchisee, Franchiser, talk about ethics and social responsibility, fixed cost, variable cost, total cost, average total cost, marginal cost, marginal revenue, and law of diminishing marginal returns.