Heather's Homework

After reading these essays what do you think about protecting manufacturing industries from international trade? Who will benefit from the tariffs on steel and aluminum?  Who will lose?  Do you think more people will benefit than will lose? Why or why not? Look up the employment trends in manufacturing.  (Try the Bureau of Labor Statistics).  When did manufacturing employment reach its peak? Why do you believe manufacturing employment is declining? Just like an earlier example in the textbook about how technological innovations have made it possible for only 3% of the US population to produce our food, it is not surprising that manufacturing industry jobs are also declining in the same manner. But even as the demand for basic jobs decreases, it will only transfer demand because now we'll need people to oversee the technologies and work in other fields that are the result of innovation. Increasing productivity is what will bolster economic welfare. Setting t...

Give an example of a tax that you have paid in the past.  Pretend for a moment you are a member of the group considering imposing this tax (city council, state legislature, etc).  Give three reasons from the text to impose the tax.  Give three reasons not to impose it. What would the economic theory from this section of the course have to say about your tax? Will it raise much revenue? Will it change purchase decisions? OR Pick a concept from the chapter and summarize it in a single word.  In a paragraph, explain why the word you chose summarizes or describes the concept. I have paid federal income tax every year. At the moment, I am pretty close to the line where my bracket could change from 12% to 22%. But because I would just barely cross that line, it would be more worth it for me to put aside those pre-tax dollars into a health savings account or a retirement account and thus be able to stay in the lower bracket than to seemingly have more take-home pa...

1.  Describe efficiency from the perspective of an economist. 2. Why are producer and consumer surpluses important in determining market equilibrium? 3.  Should market efficiency always be the goal of policy setters?  Why or why not? Efficiency is the allocation of resources in a way that maximizes the total surplus for everyone in society. It results in consumers feeling like they saved money, and producers feeling like they made a profit that is worth their while. Both consumer surplus and producer surplus can be measured with a demand curve. These surpluses are an important factor in determining market equilibrium because it results in the resources being allocated to the members who value it most, as measured by price. Market efficiency should not always be the goal of policy setters. For example, it would be unwise to try to maximize the black market for slave labor because that does not contribute to an society with equality. However, government should n...

A few years ago there was a flurry of blog posts from economists on price controls and inflation in Venezuela. Read this article from the Times:  http://www.nytimes.com/2012/04/21/world/americas/venezuela-faces-shortages-in-grocery-staples.html?_r=1  (Links to an external site.) Links to an external site.  and then read the post copied in below. How does this relate to the theories from the chapter?  Now consider a different case.  After Hurricane Katrina and after Hurricane Sandy speculators brought in bottled water, but charged quite a lot for it.  What might have happened had price controls been imposed?  How might speculators have responded?  What would have happened to the quantity supplied of water? How about the quantity demanded? Where does the concept of fairness fit into this subject? Last, choose an article about increases in the minimum wage and comment on it using the theories from this chapter in your comments.  ...

This is one of the most practical chapters you ever read in an economics text. Many years ago when I was an economist for GTE (now Verizon) we spent significant amounts of time estimating cross-price elasticities as the basic decision-making tool for package design --deciding whether or not to package call-waiting or caller ID with other phone features for example.  Including features consumers really want with other, not-so-popular features in a package can increase sales of all features. Give an example of sales based on price elasticities that you have seen or used.  Why do you think it worked (or didn't work)?  What would you change to make it a more effective sales promotion? How did the theory from class influence your response? What topic in this chapter was the most useful? What topic would you like to spend more time on? Why? I was involved in retail merchandising for a time, and I remember talking about grouping really cheap eye-catching sale items wit...

In many large cities you can now use your cell phone to call Uber or Lyft instead of hailing a taxi.  Would you expect this to affect the prices of taxi medallions (that is really the supply of taxis)?  Why or why not?  Talk about supply and demand curves in your answer. Can you think of an example where you watched the supply of a good or service change rapidly?  (For example, a new hotel or restaurant opened.)  Based on the chapter what would you expect to see happen? Why? Give another example of a concept from this chapter.  For example I just used AirBnB to rent an apartment in San Francisco.  How did AirBnB affect the supply of rooms to rent in San Francisco? Because of the convenience of using Uber, I would expect consumers to prefer it over traditional taxis. Even if they didn't have a strong preference, there would be an increase in the availability of transportation. So the supply of transportation shifts to the right. When dema...

What surprised you most about the concepts in this chapter?  Why? What is your opinion about international trade?  Overall is it good or bad?  Why? Did your opinion about trade change after reading the chapter? Go back to your thoughts on the buy local movement in your first reflection.  Can we think about trade with China and trade with Wyoming in the same way? Why or why not? Give an example of a recent purchase you made that was primarily produced overseas.  Was there a locally produced option? How much more would you be willing to pay for the locally produced option? Why?  If you did pay more, was there a trade-off? The thing that stood out to me in this chapter was the interplay between absolute advantage and comparative advantage. The illustration of Serena Williams giving up a $30,000 TV commercial just because she can  mow the lawn better than anyone else doesn't mean she should.  I also like the story about splitting up household...

How does the use of a very simplified model of the economy such as those found in a production possibilities frontier help you to understand the economy? The buy local movement is fairly strong in Colorado.  How can you think about it in terms of the PPF?  Watch this video:  http://www.mruniversity.com/courses/everyday-economics/buy-local-movement-shop-small-business  (Links to an external site.) Links to an external site.   How do his arguments relate to economic efficiency? Give an example of a positive or normative statement about the economy.  Why does it matter which it is?  (If you happen to have a favorite example of a politician or political candidate confusing the two include it here. :^)) A simplified model of the economy helps to see the basic dynamics that are at play, which can then be translated to a larger group of people. The production possibilities frontier helps illustrate how specialization can pay off for everyone inv...

What in this chapter made you think about an economic concept differently than your previous beliefs?   What new questions do you have now about the US economy based on this chapter? If you already took Macroeconomics, what is your strongest memory from the material you covered in that class?  As a child, I remember my dad advising me numerous times that "something is only worth as much as someone is willing to pay" whenever I was getting ready to set up a lemonade stand or garage sale. That idea was echoed in more depth as this chapter addressed how people make decisions while facing trade-offs and how people interact in markets. While not necessarily new to me, the idea of opportunity costs caught my attention. Each action taken means the possibility of some other action was given up. It resonates in every area of life including deciding where to shop, how close to live to work, how you date, etc.  I was glad to see that the chapter mentioned inflation and ...