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Learning Team Assignment Desperate For Entrepreneurs By Amy S. Choi From Businessweek

1082 words - 4 pages

Article AnalysisWe, as a team, analyzed and evaluated a current economic article from Business Week’s website. Desperate for Entrepreneurs, article was written by author Amy S. Choi, on May 15, 2009. The author presents tough economic factors effecting a county in California; discussing its unemployment rate, housing, and why small businesses are falling. Merced County has double the unemployment rate than California at 22% and is second highest in the number of foreclosures in the nation (Choi, 2009). The team presented economic concepts, positive and negatives and a recommended course of action.The article Desperate for Entrepreneurs not only relates to Merced County, but to the nation as a whole. Merced County could set the pace with new strategies of helping existing small business owners. If the strategy works, then the nation could see positive outcomes and work on empowering our small business owners across the country. “The small businesses are the backbone of our country,” states Choi (2009). This small Californian County relied heavily on the new university to bring growth, employment and housing opportunities. The housing developments flourished, with hopes of growth from the university’s development. The university only provided approximately 1600 jobs – possible homebuyers; not nearly enough to fulfill the housing developer’s dreams (Choi, 2009). Houses remain unfinished and finished houses were abandoned in foreclosures; which lead Merced to the nation’s second highest foreclosure numbers. Unemployment rate of Merced County is nearly double that of the entire state of California. With the above mentioned economic factors we found some key concepts.Some of the key concepts that we saw while analyzing the article are discussed below. We learned of the surplus of houses, due to abandoned homes and unfinished housing developments. The surplus of housing has caused the price of homes to lower. Homeowner loans are more then the value of the homes. In order for the surplus to meet equilibrium, the houses need to be reappraised to a lower price. This in turn, would allow homebuyers more opportunities to purchase. Unemployment is 22% almost double that of the state, which is also contributing to the amount of empty and foreclosure homes. The high rate of unemployment is due to the shortage of jobs, debt and lack of profit in the county. The law of supply and demand is applied to this situation. With high unemployment rates, small businesses will have higher prices making the value of money inflated. To counter balance, business owners might lower prices to bring in more profit which will allow more employment opportunities. With prices lower and unemployment rate lower the value of money deflates. Key economic concepts within the article were surplus, shortage, inflation, deflation, and equilibrium.Positive aspects we, as a team found while analyzing the article are also possible solutions for the...

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