1. Why are so many people incarcerated in the United States? Has violent crime caused the growth? Include at least two links to articles that you have found. 2. What steps has Kentucky taken to reduce the number of people who are incarcerated? 3. Why do you think so many of the people from Beecher Terrace end up incarcerated? Make sure to watch the video for questions 2 and 3. 4. Is the growing prison population a problem? Explain. 5. What is the economic cost of incarcerating so many people? 6. Do you think there is a relationship between the increased prison population and decreasing violent crime rates? Explain.

OneClass: 1. Why are so many people incarcerated in the United States? Has violent crime caused the g...

View the video transcript below and share your thoughts on the economic concepts that you believe are applicable.

Question# 1. Why does a firm have to posses market power in order to raise prices.

How to Raise Prices Without Losing Customers

JJ RAMBERG, anchor:

With gas prices soaring and the economy tightening, you may think itâs not possible to charge your customers more. But, it turns out you can successfully raise prices without driving those customers away. Bob Prosen runs the consulting company, Prosen Center for Business. Heâs helped business leaders rapidly increase performance, productivity and profits, and heâs also author of the book, âKiss Theory Goodbye: Five Proven Ways to Get Extraordinary Results in Any Company.â Bob, welcome.

Mr. BOB PROSEN: Thank you. RAMBERG: So, if youâre going to raise prices on your customers, one of the things you say is donât surprise them. So, how do you give them warning?

Mr. PROSEN: Well, our customers are very important to us, lets not surprise them. Letâs let them know in advance that prices will increase. But, itâs important to explain to them in their language as to why prices are increasing. For instance, if its fuel surcharges, theyâll understand that. But its important we put it in their language so that they, in turn, can pass that along and plan for it in their own business.

RAMBERG: So, a lot of times when people are paying more, they expect to get more. So, you should communicate increased value I assume. But is saying, um--gas prices are going up for me, is that uh--the same as saying, youâre going to get more for your money?

Mr. PROSEN: No, definitely itâs not. In fact, the equation for value is benefits plus price. So, if prices are going to go up we have to have increased benefits for our customers. So, we can do things like under promise and over deliver. Give them a little bit more. Understand their customerâs customer. So that when we provide our services to them, theyâre customized for our customers. They see more value, we understand their business, and therefore theyâll be more appreciative of what we do and less sensitive to price increases.

RAMBERG: That seems to--to follow into your next point, or go right into your next point, which is, track the quality of your products.

Mr. PROSEN: This is absolutely critical, and we can track the quality of our products many ways. Customers call us, complaints, warranty, rework. If weâll deal with that, capture that, and inside of âKiss Theory Goodbyeâ I teach business people how to reduce these problem occurrences and increase the quality of their product. You do it for two reasons: One, customers like us a lot more when things work the way theyâre supposed to; and our cost structure goes down therefore maybe we donât have to increase our prices as much and we can be more competitive.

RAMBERG: And then, also, relationships matter.

Mr. PROSEN: Oh thisâ¦

RAMBERG: So, if you have a good relationship, you can do more within that relationship.

Mr. PROSEN: Oh, definitely. People like to do business with people they like. So, lets make sure we stay in touch with our clients. Customize what we touch them with. You know, for instance, when I travel and I deal with business people, I always carry thank you notes in my briefcase. When Iâm finished, I send them a note. Itâs a rarity these days to even get a thank you note.

RAMBERG: Yeah, it absolutely is. So, about how much can you raise prices by? Can you suddenly figure out that your costs are gone up so much because of energy prices, or food prices, or gas prices, whatever it is, um--and raise it by 50%? Should you do it incrementally? Should you do it all at once? How does it work?

Mr. PROSEN: Yeah, thatâs a great question. It depends on what industry youâre in. It depends on what you customers are doing. It depends on a number of things that determine how much, and when, and the frequency of our ability to raise prices. Therefore, what I always recommend to business leaders is work on your cost structure; make sure youâre efficient and effective. Keep your costs as low as you can. Therefore, you can be more competitive on your pricing. Sometimes, you have to pass along the price. Other times, try to absorb what you can through improved efficiencies.

RAMBERG: Should you be looking at your competitors and how much theyâre charging?

Mr. PROSEN: Yes, you should absolutely be looking at your competitors. We always want to know what theyâre charging. And by the way, we want to differentiate our products and services from our competitors. And, if we can prove a higher value by dealing with us versus our competitor we should be able to articulate that, and we do it based on facts because we know whatâs going on in the industry.

RAMBERG: Alright, Bob I know a lot of people are thinking about raising prices so thanks for giving them some tips on how to actually do it.

Mr. PROSEN: My pleasure.

View the video transcript below and share your thoughts on the economic concepts that you believe are applicable.

Question# 1. Provide a rationale on whether or not a firm has to possess market power in order to raise prices.

How to Raise Prices Without Losing Customers

JJ RAMBERG, anchor:

With gas prices soaring and the economy tightening, you may think itâs not possible to charge your customers more. But, it turns out you can successfully raise prices without driving those customers away. Bob Prosen runs the consulting company, Prosen Center for Business. Heâs helped business leaders rapidly increase performance, productivity and profits, and heâs also author of the book, âKiss Theory Goodbye: Five Proven Ways to Get Extraordinary Results in Any Company.â Bob, welcome.

Mr. BOB PROSEN: Thank you.

RAMBERG: So, if youâre going to raise prices on your customers, one of the things you say is donât surprise them. So, how do you give them warning?

Mr. PROSEN: Well, our customers are very important to us, lets not surprise them. Letâs let them know in advance that prices will increase. But, itâs important to explain to them in their language as to why prices are increasing. For instance, if its fuel surcharges, theyâll understand that. But its important we put it in their language so that they, in turn, can pass that along and plan for it in their own business.

RAMBERG: So, a lot of times when people are paying more, they expect to get more. So, you should communicate increased value I assume. But is saying, um--gas prices are going up for me, is that uh--the same as saying, youâre going to get more for your money?

Mr. PROSEN: No, definitely itâs not. In fact, the equation for value is benefits plus price. So, if prices are going to go up we have to have increased benefits for our customers. So, we can do things like under promise and over deliver. Give them a little bit more. Understand their customerâs customer. So that when we provide our services to them, theyâre customized for our customers. They see more value, we understand their business, and therefore theyâll be more appreciative of what we do and less sensitive to price increases.

RAMBERG: That seems to--to follow into your next point, or go right into your next point, which is, track the quality of your products.

Mr. PROSEN: This is absolutely critical, and we can track the quality of our products many ways. Customers call us, complaints, warranty, rework. If weâll deal with that, capture that, and inside of âKiss Theory Goodbyeâ I teach business people how to reduce these problem occurrences and increase the quality of their product. You do it for two reasons: One, customers like us a lot more when things work the way theyâre supposed to; and our cost structure goes down therefore maybe we donât have to increase our prices as much and we can be more competitive.

RAMBERG: And then, also, relationships matter.

Mr. PROSEN: Oh thisâ¦

RAMBERG: So, if you have a good relationship, you can do more within that relationship.

Mr. PROSEN: Oh, definitely. People like to do business with people they like. So, lets make sure we stay in touch with our clients. Customize what we touch them with. You know, for instance, when I travel and I deal with business people, I always carry thank you notes in my briefcase. When Iâm finished, I send them a note. Itâs a rarity these days to even get a thank you note.

RAMBERG: Yeah, it absolutely is. So, about how much can you raise prices by? Can you suddenly figure out that your costs are gone up so much because of energy prices, or food prices, or gas prices, whatever it is, um--and raise it by 50%? Should you do it incrementally? Should you do it all at once? How does it work?

Mr. PROSEN: Yeah, thatâs a great question. It depends on what industry youâre in. It depends on what you customers are doing. It depends on a number of things that determine how much, and when, and the frequency of our ability to raise prices. Therefore, what I always recommend to business leaders is work on your cost structure; make sure youâre efficient and effective. Keep your costs as low as you can. Therefore, you can be more competitive on your pricing. Sometimes, you have to pass along the price. Other times, try to absorb what you can through improved efficiencies.

RAMBERG: Should you be looking at your competitors and how much theyâre charging?

Mr. PROSEN: Yes, you should absolutely be looking at your competitors. We always want to know what theyâre charging. And by the way, we want to differentiate our products and services from our competitors. And, if we can prove a higher value by dealing with us versus our competitor we should be able to articulate that, and we do it based on facts because we know whatâs going on in the industry.

RAMBERG: Alright, Bob I know a lot of people are thinking about raising prices so thanks for giving them some tips on how to actually do it.

Mr. PROSEN: My pleasure.

Economist claim that terrorist attacks can be viewed as another type of trade barrier. Do you agree? Why?

After reading The African Business Journal article about Boko Haram in, "Boko Haram and its impact on the Nigerian Economy." Do you think this terrorist organization and it's action in Nigeria is having an impact on Nigeria's import/export industry (trade)?

If so, what type of affect do you think the terror group has on Nigeria's import/export business?

Boko Haram and its Impact on the Nigerian

Economy

By Angus Gillespie

Despite emerging from the murky shadows within Nigeria just a dozen years ago,

Boko Haram has quickly earned itself an infamous reputation for being one of the

most callous and violent radical Islamist groups in African history. In fact, itâs

already been tagged a terrorist group by western countries such as the United

States. Over the past 12 to 15 months, Boko Haram has unleashed a massive

wave of violence, fear and chaos throughout the northern African country â so

much so, that itâs know seen by many as having a noticeable impact on the way

the country operates, and by extension, is hindering its economic well being to a

widening degree.

Founded in 2002, Boko Haram is an ultra extremist Islamic cult focusing primarily

on the edict that Western education is forbidden. Military operations were

launched in 2009 to support their cause in creating an independent Islamic state.

It also has roots that can be traced to the northern part of Cameroon and parts of

Niger. The Boko Haram leadership has international connections to Al-Qaeda.

Suspected Boko Haram militants have killed dozens of Nigerians in recent weeks

and there is no sign of the violence abating. In one attack, gunmen disguised as

soldiers fired on a crowd in a church compound. The radical sect is known for

attacking churches, schools, and police stations. Tourists are also considered fair

game. Violence linked to the Boko Haram insurgency has resulted in an

estimated 12,000 killings since 2002, although that figure has gone up

considerably since 2009 when the group began to heavily arm itself as a militia.

Making matters worse for the Nigerian government of Goodluck Jonathan is that

some of the attacks come amidst reports some army generals have been aiding

the rebel militants, on the belief that a national coup is going to take place.

Nigerian media sources have reported that as many as 10 generals and five

other senior military officers have already been tried before the courts for

supplying arms and information to Boko Haram. However, at least one Nigerian

military spokesman called the reports âfalsehoodsâ.

This contradicted Interior Minister Abba Moro said it was âgood newsâ that the

army had identified soldiers who were undermining the fight against the

insurgents, and that it sent a strong message to other serving officers.

Boko Haram has waged an increasingly bloody insurgency since 2009 in an

attempt to create an Islamic state in Nigeria.

One small town that has been hard hit by the violence is Attagara, where the

village church came under attack leaving at least 20 people dead.

Nigeriaâs government has been facing mounting pressure both at home and

abroad to do more to tackle the group and bring about the release of more than

300 schoolgirls kidnapped by the group on April 15.

President Jonathan originally declared a state of emergency in May of last year in

the three northern states where Boko Haram is, and has been, most active â

Borno, Adamawa and Yobe.

Boko Haram retaliated by stepping up its bombing campaign in cities and

launching mass attacks on small towns and villages.

Media correspondents in those regions say that since the infamous kidnapping of

more than 300 schoolgirls, the attacks have become an almost daily occurrence.

The campaign to free the girls that began in their home village has now gone

global, with the U.S., Canadian and British governments offering support to help

with the rescue. Itâs believed about 55 girls have managed to escape their

captors since being taken hostage in April. The government has ruled out

swapping the girls for detained insurgents associated with Boko Haram.

President Jonathan has promised to address the poverty that helps fuel the

uprising â but only once the insurgency is put down. The World Bank says twothirds

of 170 million Nigerians struggle in poverty in Africaâs biggest oil producer.

Despite the fact there is so much poverty and lack of widespread education,

Nigeria remains Africaâs largest economy â thanks in large part to the massive oil

reserves that are often exploited by international corporations. That said, to put

things into perspective, only about 3% of the worldâs oil supply is found in the

country. More recent successful business sectors have included the likes of

banking, telecommunications and a burgeoning film industry. Agriculture and

services have also been two traditional economic staples for the country,

although neither has shown much in the way of expansion over the past 10 to 20

years. To its credit, the country has also been diversifying the core economic

drivers away from energy and agriculture. The nationâs GDP is now $490 billion,

just shy of the economies of countries like Norway and Sweden.

When an organization managed to get the president of the country to declare a

state of emergency, it stands to reason it has the ability to unwieldy a

tremendous amount of damage on the country, be it through violence or

economic crippling.

Economic Impact

Since Boko Haram emerged from the shadows about four years ago, once armed

militarily, one of the first obvious economic concerns was the almost immediate

drop in foreign direct investment (FDI), with the concern being whether the

government had the wherewithal to deal with the serious insurrection and stave

off the many decades of political instability the country has faced. According to

the World Investment Report (WIR) 2013, FDI flows into Nigeria dropped by 21%

in just one year â from $8.9 billion in 2011 to $7 billion in 2012. The loss of $1.9

billion for a country in desperate need of money â such as Nigeria â was a

staggering blow.

The monumental decline in FDI over such a short period of time sent ripple

effects throughout the international community, creating a negative domino

effect. Itâs a rock heading downhill that continues to gain momentum, and it will

be up to Jonathan and his government not only to slow it down, but to stop it

altogether, or it will begin all over again.

FDI into Nigeria has a direct impact on trade, while also ensuring progression of

economic development to the south. FDI inflow also supplements the available

domestic capital by stimulating the productivity of domestic investments.

Someone troublesome is the high codependency ratio between the inflow of FDI,

the Nigerian oil sector, and the countryâs GDP.

A scientific study found that a unit increase in FDI into the Nigerian oil sector will

increase the countryâs GDP by approximately 16 units. This shows that the

Nigerian oil and gas sector, which is the mainstay of the economy, has a high

rate of exposure to foreign direct investment.

Between the lack of jobs, and the increasing violence with the likes of terrorist

groups such as Boko Harm, there has been a mass movement of Nigerian

citizens looking to settle in areas not impacted by the violence. The trouble is

this: the areas not affected by the violence are most often areas that have

nothing in terms of sustainable economic activity that would allow a person or a

family to survive. Living in the dangerous regions is where thereâs hope for

employment.

The rush to escape from the northern part of the country that has been hard hit is

already affecting the profitability of businesses in the region. Itâs no reached the

point where accredited banks have begun closing down some branches due to a

huge decrease of economic activity. On top of that, a number of employees at

these businesses are demanding to be reassigned to areas that are less volatile.

As noted many times before, a lot of the current problems with terrorist uprisings

can easily be pinpointed to a lack of government leadership due to the constant

political insecurity, and especially so in the northern region.

Once the banks and other businesses decide to pack up and move elsewhere, it

leaves the region in a state of economic depletion, and one that wonât easily be

regained. Itâs always quicker destroying something than it is building it up. The

people of Nigeria are hoping President Jonathanâs government takes drastic

action to bring about more stability in the country and soon. Or, it will be a long

road to recovery for a nation that can already ill afford this type of economic

setback.

More than $21 billion of foreign direct investment poured into Nigeria in 2013, up

28% from the year before. The country does not want to see that slide backwards

due to political instability and the onset of widespread violence. The country has

attracted the most foreign direct investment in sub-Saharan Africa since 2007,

according to Ernst & Young. But all of that could be quickly eroded if the violence

is not snuffed out.

Many financial analysts seem to be of the opinion that the impact on foreign

investment will largely be determined by geography. As example, investors may

pull out funding from manufacturing and infrastructure investments in northern

Nigeria, which has been ravaged by violence. But the resource rich southern

region has been spared from violence to this point. This could be one of the

factors as to why Nigeriaâs stock market has been seemingly unaffected by all the

recent turmoil. The benchmark equity index has only declined about 1% since the

kidnappings in mid April; so for all intents and purposes, it has been business as

usual.

So just how bad is it in Nigeria? It is perhaps best summed up in a balanced

report by an analyst with Ernst & Young.

âNigeria epitomizes this almost bipolar view of Africa,â says Henry Egbiki, West

Africa regional leader at Ernst & Young. âFor many of us already doing business

on the continent it is an exciting, dynamic, high octane growth market; for some

others, often on the outside looking in, it seems chaotic, unstable, and uncertain.

The reality is obviously less cut and dried than either of these extremes.â

The next 12 to 18 months will be critical for the government and how it responds

to the upswing in violent outbreaks by radical groups such as Boko

Haram. Humanitarian groups and countries will be looking on from a human

rights point of view, but you can also bet that the international investment

community will be keeping a close watch as well.

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