CE-+Holiday+Surprises+help+Sears+and+Tiffany+-+Christy

=Holiday surprises help Sears and Tiffany = **Source:**http://news.yahoo.com/s/nm/20110111/bs_nm/us_usa_retail_holiday;_ylt=Akj1EWeFdLEfQQlSZwVjdY2yBhIF;_ylu=X3oDMTJxZmFqaDQ3BGFzc2V0A25tLzIwMTEwMTExL3VzX3VzYV9yZXRhaWxfaG9saWRheQRwb3MDNARzZWMDeW5fYXJ0aWNsZV9zdW1tYXJ5X2xpc3QEc2xrA2hvbGlkYXlzdXJwcg- **By Brad Dorfman – Tue Jan 11, 10:51 am ET**

__Brief Summary: __ This article is mainly about the holiday shopping season that delivered surprises yet still shows that "the U.S. economic recovery is not strong enough to lift all retailers." The article also provides evidences of the fourth quarter forecast of many companies such as Talbots Inc, Sears Holding Corp, Signet and Tiffany & Co, where "Tiffany and Signet shares were down slightly, while Sears' shares were up more than 9 percent. Talbots plunged 17 percent, while the Standard & Poor's retail index was up 0.3 percent." Regardless of the drop in shares, all but Talbots Inc says that the holiday sales helped to raise the companies' forecast profit. These evidences of sales results show that "only some retailers are positioned to grow in an economy that is struggling to create jobs" as "consumer spending accounts for about 70 percent of the U.S. economy." The article implies that the holiday shopping season has helped the U.S. economy to recover as "sales at stores open at least one year saw their best performance since the start of the recession." This is because the law of demand states that as the price of a product decreases (due to sale in this case), the quantity demanded will increases, leading to an increase in total revenue for many elastic products. At last, the article suggests to allow the U.S. economy to recover, firstly, there is a need of job opportunities, as providing more job opportunities will increase the amount of consumer that is willing and able to spend money, therefore increasing in demand of goods due to the determinant of demand (income). Secondly, government action in reducing taxation is needed to lower the cost of production for producers, allowing an increase in profit for producers as total profit equals to total cost subtracted by total revenue.

__Vocabulary: __ Retailers: The sale of goods to ultimate consumers, usually in small quantities  Fiscal: of or pertaining to the public treasury or revenues  Forecast: To calculate in advance  Consumer: a person or organization that uses a commodity or service  Competition: Having another film that produces similar substitute goods as one film  Expense: cost or charge Recession: A period of an economic contraction, sometimes limited in scope or duration Commodity: Products

__**Graphs:** __ __ Graph 1: __ 

This graph shows an example of Tiffany &Co. mentioned in the article. Tiffany & Co. says “sales rose 11 percent in November and December and raising its full-year forecast” due to the holiday sale. Shown on graph 1 and stated in the law of demand, as the price of the product decreases, the quantity demanded will increases.

__<span style="font-family: Arial,Helvetica,sans-serif;"> Graph 2: __ <span style="font-family: Arial,Helvetica,sans-serif;"> <span style="font-family: Arial,Helvetica,sans-serif;">This graph shows the result of one of the solution analysts have suggested- which the U.S. government should increase job opportunities as it will increase their income. As state in the article, Consumer spendings account for 70% of U.S. economy. Therefore, an increase in people's income is important in recovering the economy. As you can see from the graph, the demand increased due to the increase in income/ number of consumers (both determinants will do), as more people are willing and able to consume goods because they are no longer jobless. As and result, both the price and quantity of the product will increases. As there is more trades happening, it helps to speed up the recovery of the economy.

__<span style="font-family: Arial,Helvetica,sans-serif;"> Graph 3: __ <span style="font-family: Arial,Helvetica,sans-serif;"> <span style="font-family: Arial,Helvetica,sans-serif;">This graph shows the results of the 2nd solution suggested in the article. Government action in reducing taxation is needed to lower the cost of production for producers, allowing an increase in profit for producers as total profit equals to total cost subtracted by total revenue. Shown on graph 3, as there is a decrease in tax, there will be a increase in supply due to the determinant of supply (government action). After a decrease in tax, the film will have a greater revenue, and therefore increasing its total profit as Total Profit = Total Revenue - Total Cost. As an result, reducing tax will allow films to earn more profit and therefore help the economy to recover faster.

__<span style="font-family: Arial,Helvetica,sans-serif;">**Evaluation:** __ <span style="font-family: Arial,Helvetica,sans-serif;">I agree with the article’s suggested solutions: <span style="font-family: Arial,Helvetica,sans-serif;">1. Increase in job opportunities <span style="font-family: Arial,Helvetica,sans-serif;">2. Decrease in taxation <span style="font-family: Arial,Helvetica,sans-serif;">This is because as shown on graph 2 and 3, an increase in job opportunities and decrease in taxation will both speed up the recovery of the economy due to the increase in trades. In these solutions, both the consumers and producers will benefit, yet the government will be hurt as it needs to increase job opportunities by advertisements and aids for companies (which both requires money), while decrease taxation at the same time, resulting in less money available for the government. Therefore, in a real life situation, the government might not be able to conduct both situations, as it will be hard to do. This will be a mistake of the solutions, yet in general, the article provides an overall view for people to understand the situation of the U.S. economy and advices solutions for the government to introduce into its plan.