Assignment:
Discussion 1
Discussion Activity: Shag and Comparative Advantage
Introduction:
If you ever saw Shaquille O'Neal use his size and strength on the basketball court. You might wonder how someone could have any kind of advantage over him. But when it comes to comparative advantage. Opportunity costs tell the tale. Let's take a look at the numbers.
Discussion Questions:
(1) If you are better than your roommate at both cooking dinner and cleaning the apartment. Does that mean you should be responsible for both tasks? Use comparative advantage to explain.
(2) If you have a comparative advantage in doing something. Do you experience a high or low opportunity cost?
Discussion 2
There are five foundations of economics-incentives, trade-offs, opportunity cost marginal thinking. and the principle that trade creates value Once you have mastered these five concepts, even complex economic processes can be reduced to smaller more easily understood parts If you keep these foundations in mind. You'll find that understanding economics is rewarding and fun.
Discussion Questions:
(1) Which of the five foundations explains what you give up when you choose to buy a new pair of shoes instead of attending a concert?
(2) What are four types of incentives discussed in the chapter? Why do incentives sometimes create unintended consequences?
Discussion 3
Introduction:
A minimum wage is a price floor, a price control that doesn't allow prices-in this case the cost of labor-to fall below an assigned value. Although the media and politicians often discuss the minimum wage in America as if there is only one minimum wage, it turns out that there are numerous minimum wages in the USA. In states where the state minimum wage is not the same as the federal minimum wage, the higher of the two wage rates takes effect.
Discussion Questions:
1. Suppose you live in Arkansas and are looking for a job. The states minimum wage rate is $6.25/hour, the federal minimum wage rate is $7.25/hour, and the market equilibrium wage for the job is $8.00/hour. What wage will you be paid? Are the state and national minimum wages binding or non-binding price floors?
2. For business owners, why is it important to understand whether demand for their products is elastic or inelastic?