Wall Street Journal Article Assignment
Directions:
Read each Wall Street Journal Article and answer the corresponding questions in a well, thought-out and elaborated manner. Answers must thoroughly answer each question and provide details and support from the articles and knowledge of the current events in order to receive credit. The answers to EACH topic should be ATLEAST one full page (not double spaced). This means there will be a total of ATLEAST three pages (not double spaced). You may include research/information from other sources for support but they must be cited. The websites for the articles are given. They are also included in this file below the article questions.
Wall Street Journal
TOPICS: Advertising
SUMMARY: Google parent Alphabet said quarterly profit soared 24%, the second internet giant in two days to report blockbuster earnings driven by consumers' rapid shift to mobile devices.
CLASSROOM APPLICATION: Students can evaluate the effect of the rise in smartphones on Google's revenues from click ads. The increase in the use of smartphones has increased the demand for click ads, which in turn has increased Google's revenues from click ads. Instructors can emphasize the point that a new technology, smartphones, has increased the demand for a product, click advertising.
QUESTIONS:
1. (Advanced) What is the effect of the rise of smartphones on internet use? What is the effect of the rise in internet use on click advertising?
2. (Introductory) Why are companies increasingly willing to advertise on smartphones?
3. (Advanced) Why has Google in particular benefited from the rise of smartphones?
http://www.wsj.com/articles/google-profits-surge-on-strong-ad-demand-1469736762?mod=djem_jiewr_EC_domainid
TOPICS: Microeconomics
SUMMARY: American Airlines expects its European routes to suffer from overcapacity, economic weakness and terrorism fears in the coming months.
CLASSROOM APPLICATION: The article inspires students to investigate the effect of excess capacity of flights on the prices airlines set. Advanced students can use the Bertrand model to investigate.
QUESTIONS:
1. (Introductory) What is the effect of terrorism in Europe in the price of travel to the continent?
2. (Advanced) What is the effect of overcapacity in the airline industry in the price of air travel? Advanced students can use Bertrand competition to answer the question.
3. (Advanced) What is the effect of Brexit on the demand for business travel to Britain?
http://www.wsj.com/articles/american-airlines-profit-and-revenue-decline-1469190634?mod=djem_jiewr_EC_domainid
TOPICS: Price Discrimination
SUMMARY: Behind a pair of recent multibillion-dollar deals in the mobile videogame industry is an expertly crafted weapon: virtual goods sold inside apps for as little as 99 cents a pop. In-app purchases let players spend real money to bypass ads, acquire skills or grow powerful quickly.
CLASSROOM APPLICATION: Students can evaluate the evolution of mechanisms within mobile videogames to increase the likelihood that players purchase in-game tools to improve the playing experience. One interesting class of mechanisms involves behavior-based price discrimination: "Data on players' behavior also are used to strategically tweak prices for virtual goods in real time."
QUESTIONS:
1. (Introductory) Is the use of a countdown clock within a game a tool used by game developers to price discriminate?
2. (Advanced) What is "behavior-based price discrimination"? What are examples of behavior-based price discrimination noted in the article?
3. (Advanced) Evaluate the statement, "Developers have gotten savvier about giving players more free things to do to keep them hooked until they start spending." Does getting hooked on a game imply that the player's demand for continued and faster play is more price inelastic? Does the higher price inelasticity imply that the player is more willing to pay to play a game without imposed delays?
http://www.wsj.com/articles/how-mobile-games-rake-in-billions-1469720088?mod=djem_jiewr_EC_domainid
Attachment:- Wall-Street-Journal-Article-Assignment.rar