Cavenzi Furniture's Basic Economic Problem

If we mentioned Designer Furniture, we would think that it will be expensive!

However, this company caters its market for the middle class buyers by charging reasonable prices. Like the basic economic problem of "For whom it is produced", the company is targeting a particular group of customers- MIDDLE CLASS!!

This is reported in the Star Online today

http://biz.thestar.com.my/news/story.asp?file=/2008/9/6/business/1964281&sec=business

Cavenzi is a homegrown brand by Cavenzi Design Sdn Bhd that fits this profile.

The company, which started exporting furniture 21 years ago, today has 43 retail outlets nationwide and, according to superboss Allan Ho, what makes the company tick is that it provides designer furniture at affordable prices.

“We let our prices do the talking so that now everybody can have designer furniture,” he told StarBiz.

Cavenzi sofa set

The company sells sofas, mattresses, armchairs, “everyday furniture” such as bedroom and dining sets, and even room dividers.

“We cater to the middle and low-end market and provide good value,” he said.

Budget Deficit

Budget was announced last week. One of the interesting feature is that Malaysia is suffering from a budget deficit. The government spending is larger than the tax revenue collected. The deficit accounts for 3.2% to 4.8% of the country's GDP.

What are the impacts resulting from the deficit?

1) Government would have to use its reserves to finance the deficit
2) Greater accumulation of government debts if the deficit is financed by foreign funds
3) Depreciation of RM against major currencies

It is reported here in the local online newspaper

The ringgit extended declines against the US dollar yesterday, whacked by a bigger-than-expected budget deficit unveiled by the Government last week.

Some analysts have raised concerns that the falling crude oil price will add pressure to the economy, as Malaysia will earn less from lower oil export prices.

The ringgit was last traded at 3.4264 against the US dollar yesterday, the worst level since late September last year. The market was closed on Monday for the National Day holiday.

The US dollar advanced against almost all Asian currencies yesterday, Bloomberg data showed.

Taxi Drivers on Strike

Read this article from Washington Post








Washington cabdrivers upset about the switch from zones to meters yesterday launched the first in what might be a series of weekly strikes aimed at getting the attention of Mayor Adrian M. Fenty and the riding public.



The 7 a.m. to 7 p.m. strike left some early-morning passengers waiting outside Union Station and caused others to rethink their transportation plans. But hotels met the challenge with fleets of limousines and other hired cars, and officials reported that the strike caused few disruptions citywide. It was unclear how many drivers participated.



Some drivers demanded double the price of a taxi ride or more, leading to cross words from some people who refused to pay.

Thoughts and Questions

Now, how does that affect the supply of taxi services in the city of Washington D.C?

Will the supply curve shift? or will there be a movement along the supply curve?

Clock

Warm Welcome

To all students taking ECNF01 of July 2008 Intake,

Welcome to my Economics blog.

Many a times, economics both Micro and Macro had not a good reputation with students as it had been (unfairly) labelled as a subject which is difficult to understand, impossible to master and generally uninteresting to explore.

Well, I am here to debunk the so called 'myths'..To me, Economics is a subject that helps us to basically understand the workings of the world we live in, combining the elements of sciences like business related studies as in accounting and finance, banking, human behaviour sciences as in sociology, psychology, mathematics and so.

It drills into us some sense as in how the markets function, how human beings react to various stimulations based on their self-interest, how firms/industries make strategic decisions and how government making important economic decisions like the hike in interest rates, monetary policy, change sin the taxation rates.By working together, it gives us an explanation that any changes in one market might cause ripples in others. It is an interwoven fabric that binds the elements.

Articles from various sources (print and internet media) will be included, and you are most welcome to query, question, discuss, analyse and offer a critique as a part and parcel of our learning process.

Please feel free to participate.

In the end , we learn.

Governor of The Central Bank

Despite her regular appearances in the mass media, most of the students are oblivous of who she really is.

In fact, her signature graces every ringgit note or notes of every denomination found in our wallets, purses or pockets.

She is our very own Governor of Bank Negara Malaysia (the Central Bank of Malaysia). Her name is Tan Sri Dato' Zeti Akhtar Aziz.

She was appointed as the Acting Governor of Bank Negara on 1 September 1998 after the resignation of her predecessor, Datuk Ahmad Mohd Don. On 1 May 2000, she was officially appointed as the 7th Governor of the Bank Negara Malaysia, the first woman to hold the post.

She holds the post until today.

Dr. Zeti received B.Sc in Economics from the University of Malaya and Ph.D from the University of Pennsylvania, United States specialising in monetary and international economics.

Anyone have any idea what role she is playing in charting the economic fortunes of this country?

Truth About Economic System In North Korea

We learnt about the difference between the Capitalist (Laissez-Faire) economic system and the centrally-command economic system in North Korea.
Found this article about the actual situation in North Korea at which the Government plays the role of resource allocator, wealth distibutor, sole employer of the labour, welfare guardian of the the people.
The excerpts of the article

The economic destruction of North Korea's economy by a result of decades of socialism. By turning all property over to the state, for over 50 years, the inhabitants have been suffering from extreme poverty.

Price increases by government typified the policies.
In order to increase the productivity of workers, wages were arbitrarily raised by 900 to 2,000 percent.
The government printed more money, and on one day this past summer, every North Korean worker received a 2,000 percent raise."

Also occurring with the wage increases was a rise in prices for almost every commodity. The price of rice, the staple of most Asian diets, rocketed by 4,000 percent, while the price of electricity rocketed 5,900 percent.


For further reading this is the URL:
http://www.mises.org/freemarket_detail.asp?control=440&sortorder=articledate


The article gave us an impression how life is like in a centrally command economy where the

state made all the economic decisions.
Is it a justification why we should turn to the capitalist economy? Well..it depends..