Test tube baby

In my biology class some days back, we discussed the issues of having test tube babies. One of the issue which my teacher raised was the exorbitant cost of the procedure; a single IVF treatment easily costs upward of $5000, which is considered expensive even in developed countries such as the US, let alone countries like Pakistan. The argument that the procedure is expensive is pretty debatable. We have to consider the utility that consumers (i-e couples) get from the product. A childless couple wants nothing more than a baby in their house. Mostly, they are willing to pay their entire saving to hear the cries of their own baby. The psychological and physical torment of being childless is also considerable. Thus, for a couple that is so desperate to have a child, it is logical to say that the utility gained from such a procedure is practically infinite. Thus, even though a price tag of $5000 may be an effective deterrent for a good with much smaller marginal utility, but for a good that gives the couple its own child seems extremely inexpensive because of the marginal utility it gives. This argument highlights another aspect: the utility we gain from goods can sometimes be caused by the evolutionary roles nature has caused us to play in the world :)

Gas Loadshedding

To the lucky souls that are yet unaware of the monster known as load shedding, it is a beast which the gas management company has decided to unleash upon the Pakistanis every weekend. This monster cuts off all gas supplies in the gas stations!! With such draconian a regulation in place, almost all activity comes to a standstill in the weekends because the cars do not have fuel. I have (un)fortunately experienced first hand the consequences of the regulation and can tell you that they are not pretty. But I am not going to grumble about this because I have something else to talk about. The actual imposition of this regulation is not as strong as it might be expected. (Still, most of the gas stations adhere to the rules set) but occasionally, during the load shedding time, one of the gas stations ignores the rules and continues to operate even in the prohibited period. Today, as I watched my car slow down as it used up the last traces of the gas and frantically prayed to God that I find some gas station which has decided to evade the regulation (I didn't!), it occured to me that this situation is very similar to collusion. The various cartels that form between the firms in the industry also follow the basic assumption: the other firms would also act according to the cartel rules and not take unfair advantage by cheating. Similarly, in the Load shedding model :) , the stations agree to forgo their potential earnings because a) it is a law and b) they can console themselves that they are not the only ones suffering but just as in cartels, a firm might cheat and earn even more profits, a gas station might risk ignoring the ban and open up. It would not only attract infinitely many customers (which does happen) and can act as a monopoly and charge as much as it wants (and consumers pay the price it wants; gas has inelastic demand) . Although, this practice is extremely unethical but what can we do: in economics, everyone is a profit maximiser :)

China's 1,459-year-old Buddha gets $10.8M facelift

With surpluses running all time high (see my post a few days back), the chinese have started spending hefty amounts on the makeover of cultural landmarks. China's oldest Buddhist statue, which is on the brink of collapse, is about to get a $10.8 million facelift.
The 1459 years old Meng Mountain Buddha in northern Taiyuan citywill be restored and repaired after the closure of seven nearbycoal mines which inflicted environmental damage. The closure took place in 2007 for the protection of statue.

What will happen tomorrow?

Jang News, Pakistan's largest newspaper, has issued journal called "Kia Hoga 2010" (What will happen?). This journal, a first in Pakistan, is being published under the license of "The Economist" and will not only feature the enticing,"economicy" articles similar to those in The Economist but also articles on a diverse array of subjects including the ubiquitous actress Meera. The price of the journal is slightly on the costly side (The price is Rs. 150) but considering that it is a licensed journal of "The Economist", I am very willing to pay the price.
I have searched for the official site of the journal but I have failed to find it thus far. However, rest assured that I will post any updates about the journal as they come.

After surpassing US in automobile industry and beating Germany in 2007 to become the world's second largest economy, China has gone on to become the biggest exporter in the world, beating Germany by the boost in exports in December 2008. The exports jumped 17.7%, for the first time in 14 months, and continue to underline the power China is achieving in the world economy.
Even though, China taking over US as world's largest economy in immediate futureremains a media hype (the assumption being that it continues to grow at its present rate for the next 25 years, which is, frankly, a bit too early to tell), the growing influence China is achieving is establishing it as a power to be dealt with. American and other governments continue to stress that such surpluses come from the price competitiveness which is endowed to the Chinese exporters by the government subsidies and from the widespread dumping which the exporters carry out in western markets. To counter the threat, the western governments have passed legislations-US has passed specific specific anti-dumping laws while the EU has imposed curbs on Chinese shoes. What would be interesting to watch in the future will be whether, with these strict regulations, the chinese government would succeed in becoming the world's largest economy even in the distant future.

World stocks take a plunge as inverstors anticipate the US jobs data

World stocks have fallen as the US jobs data, due Friday, looms. The job data which are expected to shed some light o the state of recovery of the world's largest economy, can define the fate of markets for the next week or two.
In Europe, the FTSE 100 index of leading British shares was down 19.98 points, or 0.4 percent, at 5,510.06 while Germany's DAX fell 52.78 points, or 0.9 percent, to 5,981.55. The CAC-40 in France was 21.55 points, or 0.5 percent, lower at 3,996.12.
It seems investors look forward to such reports so that they can establish the way markets should go in the new year. The market participants predict that for the first time in last two years, the figures could show jobs rising. However, the market is convinced , especially after a weaker than expected private jobs report, that at least 10000 jobs were lost in December.

Yahoo and Microsoft ink web agreement

It is official. Yahoo! and Microsoft announced earlier that they have finalised the details of their planned internet search and advertising partnership. The companies hope to implement the deal this year with the approval of anti-trust regulators.
Although the software and web giants had planned to complete their agreement by October 27 but the talks had continued given what they called "complex nature of the transaction". The plan to ink a 10-year Web search and advertising pact was unveiled in July and promises to set the stagee for a Yahoo!Microsoft offensive against the growing power of Google, the king of lucrative search and advertising market.
Under the no cash deal, yahoo will use Microsoft's new bing engine on its site while Yahoo! will provide the exclusive global sales force for premium advertisers.