Heather's Homework

Post three of your "margin notes" from your reading of the chapter to your blog.  Why did you make the comment you made in the margin?  What did you find confusing, useful, or important about the passage you commented on? (I know many of you don't use margin note -- but just what you found interesting and might like more information on. What caught your eye as you read the chapter? Why did it catch your eye?) The compensating differential was an interesting idea, and I can see why some unattractive jobs that may require one to work in dirty conditions or odd hours may pay highly even if they do not require specialized skills. People respond to incentives, so financial rewards can be used to attract workers to undesirable jobs. The signaling view of education sounds like what I have experienced in life. Nobody has ever asked what my GPA was, or how any particular class will help me perform my job, yet having a degree caught their attention.  Another thing that caug...

Pretend for a moment you are the instructor developing this course.  Write 3 short answer questions for an exam over this chapter that you believe cover the most important points in the chapter. Post all three questions on your blog.  Give an example of a great answer and an okay answer to each question. (Be sure to differentiate between the two responses. Don't write simple definition or list questions.)  Your overall goal here is to first choose questions that highlight the important part of the chapter - which means you have to decide what that is.  The second goal is to be sure you know the difference between a C answer and an A answer.  An A answer will talk about the theory covered in the chapter and will include some analysis of the concepts. This blog post gets called out as both the favorite and the least favorite topic more than any other topic - favorites win by a small margin, so I leave it in.  Hope you are one of the favoriters. ...

The Garbage Dream game is about recycling and how to limit that amount of garbage going to landfills.  The game is found here:  http://www.gamesforchange.org/play/the-garbage-dreams-game/  (Links to an external site.) Links to an external site. .  Play the game a few times to get an idea of how it works.  You have many choices and all of them have expenses attached to them.  Once you have played the game enough to get your own recycling up above 10% answer the following questions: 1.  Describe how you managed your upgrades?  Why did you upgrade in the order you chose? 2. Did you expand your territory? How? 3. Did you think about marginal costs and marginal benefits as you planned your strategy? Describe how. Choose one type of recycling and do some research around the following questions: 1.  What costs are associated with this type of recycling? 2.  What is the value of this type of recycling (both explicit and implicit)? ...

Muse a little about the role of advertising in industries classified as monopolistic competition or even oligopoly. Can advertising make markets either more or less competitive?  How? What was the most interesting thing you learned in this chapter?  Why was it interesting to you? Advertising can raise awareness of options in a market.  Even in an industry classified as monopolistic competition, developing a brand name signals consistency.  Even if they don't rattle off a list of specifications and benefits, spending money on ads shows that a company believes in their product. Strengthening brand loyalty will pay off in the long run with repeat customers. The psychology behind advertising was most interesting to me. People are emotional creatures, and it is interesting to see what influences them. I'm especially interested in how the messages and tactics change depending on targeted demographics. For example, the way laundry detergent is marketed to mom...

Pretend for a moment that this is Twitter and you only have 140 characters to respond in -- write a tweet defining and/or describing oligopoly. Can you think of a market that was an oligopolistic market, but has changed and is now either leaning monopoly or Monopolistic competition?  Were regulatory agencies involved? (Good or bad.) My definition can fit within Twitter's constraints with room to spare, and it also happens to be a haiku: Rising to the top, the select few dominate. Who else sells these things? My thoughts are that the laundry detergent market is becoming more and more monopolistic. Sure, there are plenty of brands, but P&G owns many that are seemingly competing against each other. Their portfolio includes Tide, Gain, and Downy. They also have many other home care brands which dominate the grocery store shelves.

Give an example of a  monopoly.  Is this monopoly created by government fiat or is it a natural monopoly? Is it regulated in some way?  Do you believe prices are lower because the monopoly is regulated? Why or why not? What if we discarded the monopoly regulations - how would this market work were it not a monopoly?  Do you prefer this industry as a monopoly? Give economic reasons. Don't use a monopoly someone else has already used unless you have more to add.  Every now and then I have a lazy class and everyone chooses the post office.  I know you guys would never do that of course, because that makes for a boring discussion. :^)  If you really want to talk about the post office talk about why packages are no longer a part of its monopoly and what happened in that portion of the mail market?  Would there be no mail service in rural America without the post office?

How did your understanding of monopolies change after reading this chapter? What do you see differently now? Give an example of a regulated monopoly (a monopoly that exists due to government fiat).  Why did we choose to give this particular firm monopoly status?  Do you think it was a good decision?  Why or why not? Would you expect prices to rise or fall if we allowed other firms to enter the market? Why?  (Pricing is not always the reason we create a monopoly by government fiat.) I am beginning to understand that there is a downward-sloping market demand curve, and that marginal revenue is lower than price. So at a certain point, no more will be produced even if customers may want it. With the example of water providers, I can see how it would be inefficient for two separate companies to build two separate pipe systems. It would be an expensive and lengthy task, and they would be battling for a set number of customers. Prices may even rise as they bot...

Why does a perfectly competitive firm maximize revenues where P=MC?  Why is P=MR in this market type? Name a business you think belongs in this category.  Why? Be sure you think and write about all of the assumptions about firms in this industry. A competitive firm is able to maximize profit when price equals marginal cost. Essentially, they are breaking even on that last unit, which means that they are fully utilizing their resources in this business venture. If MR > MC, they should increase output to capture sales opportunities since they will take in more money than it costs to produce the good. If MR < MC, then they should decrease output because they aren't selling enough to cover the increased cost of producing. When MR=MC they are most efficient. A childcare facility would be operating competitively when the marginal revenue received from enrolling additional children equals the marginal cost of hiring caregivers. Because there are laws that require ...

This chapter is critical to your overall understanding of economics.  Be sure to spend extra time deriving and drawing the various curves. Why do marginal costs first fall and then begin to rise? (Think about productivity and how it is impacted by fixed resources.) Why are marginal costs important to a firm when making decisions to increase or decrease production? How can you apply these cost concepts to your own life? Marginal costs fall and then begin to rise as resources for production are more fully utilized. For example, as the building becomes more crowded and employees are using equipment to capacity, they get in each other's way and cannot be as productive. In order to allow more productivity, you may have to invest in additional supplies, which means that cost will factor in to the margin in each item. Marginal costs are important to to a firm when making decisions about how much to produce because it shows how much additional profit can be had with each ad...

If you want to read more about government expenditures one source is the Economic Report of the President, available online here:  http://www.whitehouse.gov/administration/eop/cea/economic-report-of-the-President/2014  (Links to an external site.) Links to an external site. Now that you have had a chance to think about tax systems which type do you prefer - progressive, flat tax, income, consumption - there are quite a few possibilities.  How do you think the concept of equity or fairness fits into a tax system? How about incentives?  President Trump says the last tax bill caused structural changes in the economy that will lead to more growth.  What do you think? The Fiscal Ship game has a section on tax policies -  http://fiscalship.org/  (Links to an external site.) Links to an external site. .  If you want to, go play that game and report back how your chosen tax policies affected the Federal budget. It really depends on the situation....

Think of an example of a Public Good (not a publicly provided good, but a Public Good using the definition from the chapter.)  What are the costs of providing the good?  What are the benefits?  Is there another way to have the good provided?  Did this chapter cause you to think of Public Goods differently?  In what way? Review the definition of a public good before answering this - not all publicly provided goods are public goods. Parks, for example, are both rival and excludable.  Just think about Maroon Bells. The reverse of this question is to think about a good that is provided publicly, but is not a Public Good.  How else could it be provided? Why do we choose to provide it publicly? A public good is non-rival and non-excludable. You can't prevent someone from using it, and using it does not take away from someone else's ability to also use it. A lighthouse is a public good because many many people can see it at the same time, and none o...

This is generally a very interesting chapter for everyone.  What is an  example of a negative externality that interests you?  Could the problem be solved via negotiation (Coase Theorem)?  Why or why not? Do you favor regulation to solve this externality?  Why or why not?   ( Don't respond "pollution".   Be specific.  What type of pollution, caused by what. There are many examples of externalities beyond "pollution" and of course many many types of pollution.) Would you regulate your example via a tax or via a rule?  Why do you prefer one solution over the other? An example of a negative externality are cargo ships that pollute the ocean and endanger marine life. Nobody owns the ocean so it would be difficult to sue them, but everyone who lives along the shore or who wants to enjoy eating seafood is negatively affected without being compensated. It would be very difficult for the shipping companies to bargain with large populat...