Name: 

Topic: Suppy and Demand

What the AT&T and Time Warner Deal will Mean for You

by Brian Stelter October 24, 2016: 1:46 PM ET

source:http://money.cnn.com/2016/10/24/media/att-time-warner-consumers-ceo-interviews/index.html?iid=hp-stack-dom

Speed. AT&T's proposed acquisition of Time Warner (TWX) is premised on speed -- a need to keep up with consumer expectations and media industry changes.

With the addition of Time Warner, "we can move much, much faster to bring our customers unique experiences in the world of mobility and the world of TV," AT&T (T, Tech30) CEO Randall Stephenson says. 

Stephenson acknowledges, however, that the $85 billion deal will require a lengthy review by Washington regulators. The two companies are anticipating an approval by the end of 2017. 
For AT&T customers, nothing will change right away. Wireless service won't cost more or less as a direct result of the deal. 
But in the next few years, AT&T anticipates major changes in the ways we connect to and consume media, and it wants to be at the forefront of them. It wants to introduce new ways to watch TV and access news coverage. And it wants to persuade wireless customers to pay for a cable-like bundle of channels without the need for a cable cord. 
"Ultimately, we think we'll be competing head to head with the cable companies with a wireless offer," Stephenson said. "We can hit those kind of price points, combine it with this kind of content, we think this is exciting." 

AT&T is also looking to take on the cable companies in delivering broadband. And it is on this front that the company may be able to argue to regulators that it is going to deliver real benefits to consumers. Broadband in the U.S. is slow and expensive, especially compared to other countries, partly due to lack of competition. AT&T has big plans to bring innovative new wireless solutions to market. 

AT&T had already been charting this course before the talks with Time Warner turned into the deal that was announced on Saturday. It views Comcast (CMCSA), the country's biggest cable provider and the owner of NBCUniversal's channels, as a top competitor. 
Other distributor rivals include Charter and Dish, and other giants competing for ad dollars and attention spans include Facebook and Google. 
So the logic goes like this: Owning HBO, CNN, Warner Bros., and Time Warner's other assets will give AT&T a stronger hand in shaping the future of media. 
It could, for instance, use the control it will have over Time Warner to start building a new, more seamless, way to consume media. 
Time Warner CEO Jeff Bewkes has long promoted "TV Everywhere," an idea that people should be able to pay once for a bundle of TV channels and then watch anywhere, anytime, on any device. 

Imagine, for instance, that you're watching last night's episode of "Veep" on your TV as you get ready for work. You need to walk downstairs to make coffee, but you don't want to stop watching, so you get your iPad, hit a button, and it picks up exactly where you were. Then, when you're ready to leave the house, the show moves right to your phone -- or to the screen in your self-driving car. 
Cable companies would love to do this with shows from every network. But the adoption of this idea has been stymied by disagreements between channel owners like Time Warner and distributors like Comcast. If the channel owner is itself owned by the distributor, it will have a very difficult -- if not impossible -- time saying no. 
The deal could also eventually make AT&T's wireless, broadband and cable offerings more attractive to consumers. Stephenson has been talking about "unique" experiences for AT&T customers -- social media integrations, "curated content," and other things to be invented later. 
AT&T will almost certainly not do something like make HBO exclusive to its cable customers -- regulators likely wouldn't allow that, and even if they did, it wouldn't make business sense for HBO to stop selling itself to other distributors. (Appearing on CNBC, Stephenson called the idea of witholding channels from competitors like Comcast "nonsensical" and "crazy.") 
But it could, for instance, make new episodes of "Game of Thrones" available a week early for its customers. It could use Time Warner's assets -- its people, its studios, and the rights it owns to major franchises like Batman -- to produce entirely new shows or movies offered exclusively through AT&T. 

On Monday Stephenson and Bewkes began in earnest to sell the deal to regulators, Congress and consumers. 
In a joint interview on CNN's "New Day," Bewkes said the deal is a positive for consumers. "What it allows us to do is just move faster, with more innovation, better consumer offerings," Bewkes told CNN's Christine Romans. 

Time Warner programming will be "an anchor tenant for these kinds of experiences," Stephenson said in a telephone interview on Sunday. 
He predicted that "it's going to cause other content creators to join in... It's going to spur a whole cycle of innovation." 
A lot of what's being described is theoretical at the moment. But one example involves DirecTV Now, a streaming service that AT&T is planning to launch later this month. DirecTV Now is a cable-like bundle of channels that will be sold via the Internet. 
"Our challenge is to make sure our customers have choice," Stephenson said. 
He said he is convinced that a "large segment of our customers" will continue to pay for a "premium bundle," the kind most American households currently have, but "there is another segment of our customer base that wants mobility-centric content. They want smaller bundles of premium content. They want to integrate it with social apps." 
Buying Time Warner gives AT&T more influence over how bundling will evolve in the years to come. 
AT&T is clearly positioning itself as a nationwide wireless competitor to Comcast, and Stephenson asserted that "as this demand for premium content on these mobile devices continues to grow, it gives us more and more incentive to invest more and more in infrastructure." 
The executives are also predicting changes on the advertising front. 
The sharing of data between AT&T and Time Warner can result in "more effective advertising," Bewkes said on CNN's "New Day," and "therefore people are going to see that more of the cost of content can be borne by advertising, and the experience of television can be better." 

Stephenson said that because AT&T does not own big entertainment or news channels currently, the proposed deal is a "true vertical integration." 
AT&T's failed bid for T-Mobile, on the other hand, was a "horizontal integration" because it would have merged two competitors. 
"This transaction is not horizontal. We don't compete," Stephenson said. 
He added: "There's not a competitor being taken out. And, in fact, you're hard-pressed to find, in either one of our industries, a time when a vertical integration was shot down by regulators." 
When regulators reviewed the Comcast-NBCUniversal deal in 2010, they decided to approve it with a number of conditions attached. The merger took effect in 2011.
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Driving Question: What does the AT&T and Time Warner mean for you the consumer? (Thesis- position)
Write a 5 paragraph essay answering the following questions: 
What is AT&T supplying and what demand are they meeting?   
What changes in supply and demand can you predict based on your experience as a consumer and what is mentioned in the article?

Use a say mean matter chart for concrete details and analysis on:
Body paragraph 1= supply
Body Paragraph 2= demand
Body paragraph 3= predicted changes




Academic Language to use: Scarcity, Price, Quantity, Value, Producers, Consumers, Competition

Simple 5 Paragraph Essay

5 Paragraph Essay

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http://www.smart-words.org/linking-words/transition-words.html

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Simply put: Marginal cost/benefit

February 18, 2011 at 5:00 am, Austin Frakt

A  doctor and an economist have the following conversation:

Doctor: There is no waste in health care. Allof care I provide my patients is valuable. Every bit improves health

Economist: That last little bit of care you provide costs far more than it is worth. It’s a waste of resources. You’re reducing, not increasing, welfare

Doctor: Reducing welfare? Ridiculous! My job is to benefit patients and the public. That’s what I do

Economist: Benefiting patients and the public? Don’t be so sure! My job is to point out where we can make better use resources. That’s what I do.

What’s this argument about? And who is right? It’s about two different views of “welfare” and both the doctor and the economist are right (or could be). It all can be explained in terms of marginal benefit and marginal cost.

Let’s start with one thing the doctor and the economist can both agree on. It’s the following intuitive idea: any good or service a person buys is worth at least as much to that person as the money that person spent on it. From this idea it follows that people will buy more of something the less they have to pay for it.

The maximum amount of money someone will spend on a good or service is called that individual’s valuation of that good or service. We can think of it as a monetized form of the benefit (or utility, in economist speak) they’ll derive from that good or service. If you’d spend up to $3 for a cup of coffee at a coffee shop but not a penny more, then $3 is your valuation of that cup of coffee. Though you may be willing to spend $3 for the first cup, you may not be for a second, or third, or tenth. If the price is lower, say $1 per cup, you might be more willing to buy more than one cup, however.

You’ll keep buying cups of coffee until the increase in benefit you’d get from the next cup is lower than the additional amount you’d have to spend on it. Notice those words “increase” and “additional”? Those are synonyms for another term economists use, marginal. So long as the marginal benefit exceeds the price, you’ll keep buying. This just means you keep buying something (coffee, whatever) until you no longer think it is worth it, given how much you’ve already bought (or consumed). This should be intuitive. It’s how you decide how many cups of coffee to buy at the coffee shop, or how many bananas to buy at the super market, or how much of anything to buy.

It’s true for health care too. Now, purchasing health care is more complicated because of insurance. But the same idea applies. You’ll consume as much health care as you think worth it for the transaction price (your copayment if you’re insured). The lower the price, the more you’ll consume. You’ll keep using health services until the marginal benefit falls below the price you pay.

Imagine you’re fully insured. (You pay no copayment.) You pay nothing for each health care service. How much will you use? Well, if it costs you $0 for a service you’ll use as much of that service until the marginal benefit is $0. So long as the service is at least providing a tiny bit of benefit (to your health, or just because you enjoy the experience for some reason), you’ll keep using it. This is illustrated in the following diagram. The vertical axis is price (that you pay out of pocket) and the horizontal axis is the quantity you’ll use. The downward sloping line is marginal benefit. It slopes downward for the reasons given above; lower price means you’ll buy more. You’ll use quantity B because that’s the quantity for which marginal benefit reaches the price you pay, $0 (because you’re fully insured).

So long as you’re benefiting from the service, the physician is likely willing to provide it, particularly if he perceives the benefit is at least not harming your health. In other words, the physician is inclined to provide quantity B of health services too. To the physician and the patient, all of that health care is “welfare” improving in the sense that it improves your health, or doesn’t harm it, anyway. (Qualitatively, the story doesn’t change if the patient is not fully insured, but pays a copayment. In that case, the horizontal axis in the figure is not at the $0 price level, but at the copayment level.)

The economist considers not just marginal benefit, but the (full) marginal cost. Imagine each health service costs a fixed amount, as shown by the marginal cost line in the figure. For example, each service costs $100, no matter how many are provided. (The story is not much different if marginal costs varies.) The insurance company may be paying most or all of that $100, but it is still a cost. It reflects real resources used (physician time, supplies, etc.).

The economist notices that the marginal benefit falls below marginal cost at quantity A. All the resources used to provide B-A services cost more than they’re valued by the patient. This is termed a “welfare loss” by economists because it reflects a misuse of resources in the following sense. If the patient were handed enough cash to buy B health care services, she would not buy that many. She’d buy the amount A and use the rest of the money for something else (like coffee). The cost reflected by the blue triangle in the figure is, in this sense, “wasted.” The patient only receives a benefit reflected by the marginal benefit line and all the cost of providing care that is above that line and to the right of A (the blue triangle) is economic waste, even if it is health improving.

Economists term the area of the blue triangle “deadweight loss.” To them it is a welfare loss even as the doctor (and patient) may perceive it as a health (or welfare in another sense) gain.

This is the crux of the debate between the doctor and the economist. One sees point B as providing the greatest value, the other point A. Who is right? They both are. “Waste” and “welfare” mean different things to each of them. To the right of A, marginal benefit is below marginal cost, notwithstanding any health improvements. The doctor sees providing quantity B as his job, the economist sees limiting provision to quantity A as his. If you already see how this relates to the notion of “rationing,” you’re on the right track.

Source: http://theincidentaleconomist.com/wordpress/simply-put-marginal-costbenefit/

Question:

The Role Of Opportunity Cost In Financial Decision Making

When it comes down to personal finance, one economic principal rules the roost - opportunity cost. With more household incomes stretched to the limits in the wake of the global economic slowdown, this principal is quickly becoming a budgeting essential. However, the rule doesn’t just affect what we spend our money on – it also dictates much of our personal finance lives. From our careers and our individual housing situations to how we invest and where to go to school, understanding the opportunity costs concerning these decisions is key for a sound financial footing.

The Basics

While most people are aware of the direct costs of life – for example, when you take money out of your wallet to buy a cheeseburger – many ignore the indirect costs associated with those actions. These are the opportunity costs. At its core, an opportunity cost is what you lose by choosing one alternative over another.  Now, let’s say you can choose between eating the aforementioned cheeseburger meal and putting $4.50 into savings. Each choice has benefits and drawbacks. If you choose the burger, you will likely have a nice lunch and a chance to leave the office. If you choose to save the money, you give up that break time and good food, but you get the chance to earn interest on that $4.50. That will give you more money in the future. Either way, you stand to gain and lose something. Every time you make a choice, you’re weighing the opportunity cost of that action.  Opportunity costs extend beyond just the monetary costs of a decision, but it includes all real costs of making one choice over another, including the loss of time, energy and a derived pleasure/utility.

Using Opportunity Costs in Our Daily Lives

For big choices like buying a home or starting a business, you may weigh the pros and cons, but generally, most of our day-to-day choices aren’t made without a full understanding of the potential opportunity costs. If they’re cautious about a purchase, most people just look at their savings account and check their balance before spending money. For the most part, we don’t think about the things that we must give up when we make those decisions.  However, that kind of thinking could be dangerous. The problem lies when you never look at what else you could do with your money, or buy things blindly without considering the lost opportunities. Certainly, buying a cheeseburger for lunch occasionally can be a wise decision, especially if it gets you out of the office when your boss is throwing a fit. However, buying one cheeseburger every day for the next 25 years could lead to several missed opportunities. Aside from the potential harmful health effects of high cholesterol, investing that $4.50 could add up to just over $52,000 in that time frame, assuming a very doable rate of return of 5%.

This is just one simplistic example, but the basic message holds true for a variety of situations. From choosing whether to invest in “safe” treasury bonds or deciding to attend a public college over a private one in order to get a degree, there are plenty of things to consider when making a decision in your personal finance life.

While it may sound like a bummer to have to think about opportunity costs every time you want to buy a candy bar or go on vacation, it’s an important tool in order to make the best use of your money. When it comes to personal finance, you cannot go through your life on autopilot. There are unseen positives and negatives with each financial decision. However, the good news is that once you recognize that these costs exist, it becomes easier to make good personal finance choices.

The Bottom Line

Most people are aware of the seen costs when it comes to personal finance. We understand the direct costs for our actions. However, the unseen costs could be more important to realize. Understanding these opportunity costs is critical to making the best possible decisions with our money.

source:http://www.forbes.com/sites/investopedia/2012/08/21/the-role-of-opportunity-cost-in-financial-decision-making/#66591e771ac8

Describe examples of using opportunity cost in your personal life, a local company in Sun Valley and a multinational corporation. What would be the argument for their decision and not the alternative?

Write a 5 paragraph essay

SERVICE LEARNING PORTFOLIO

50 hrs Required for Graduation

2016-2017 Seniors

Due May 12, 2017

The following  7 Sections must be completed in order to graduate from Sun Valley High School

as evidence of its vision and mission to develop social responsible students and community contributors.

1) What is Service Learning and why is it important?

2-3 paragraphs

2) What are examples of Service Learning opportunities and what lessons would they teach

(write out 5 ideas and significance)

number 1 through 5, 4 to 5 sentences each

3) What was my Service Learning Choice and why?

Describe place, date, tasks and economic and/or social impact

3 paragraphs minimum

4) Interview 5 adults in your life: Provide picture with adult and have them briefly answer the following three questions.

1-Did they ever volunteered and what their experience?

2-What were the benefits?  

3-If they had to do service learning, where would they choose to do it?

5) Hours Sign-off Sheet

See attached

6) Pictures, Artifacts

Include evidence of you participation.  

You may include pamphlets or flyers of events and organizations where you completed service hours.

7) Reflection

3 paragraphs minimum reflection on you overall experience.  Would you participate again and what would you do differently.

Highlights anecdotes in your experiences that were funny, touching, sad, exciting, scary.