Question 1. Planet Earth is our only home for the time being. As global populations grow and our resources dwindle, we should worry more about the issues of
a. Scarcity and Choice.
i. List the 5 most critical nonrenewable resources.
1. oil of any kind,
2. any kind of fossil fuel including coal, or natural gas, shale oil,
3. timber, gold, silver, copper
4. or Uranium) please don't use nuclear power (it's the output of a production process)
ii. Do some research on critical nonrenewable resources and make your list. If you are having trouble finding good ones, check out the rare earth elements.
iii. For EACH of the 5, explain why it is so critical to global economies,
1. Discuss why those nonrenewable resources are so critical to us. What's it used for and why are those things so critical? You need to be thorough.
iv. For EACH of the 5, discuss 3 things we need to do today relative to that nonrenewable resource, to avoid running out of that resource.
1. Discuss the implications of your choices, both positive and negative. Make sure you have 3 suggestions for EACH of your 5 resources.
b. The theory of rational behavior says that we humans act in our own self-interest. Given our actual behavior and the decisions we have made and are continuing to make relative to the planet, please:
i. Explain how over-pumping aquifers around the world is in our best interest. Specifically,
1. Define over-pumping of aquifers.
2. Explain how the continued over-pumping of aquifers in America, China, and India, could impact our ability to survive on the planet. Hint - what do America, China, and India have in common relative to aquifers?
3. Discuss 3 things we can do to stop the over- pumping problem. Focus on the top uses of water in the world. Hint - personal use is not one of them. Need some detail here.
c. Utility Concepts:
i. Explain the 3 concepts of Utility, Marginal Utility, and Diminishing Marginal Utility.
ii. Explain how EACH of those 3 concepts relate to a yes or no decision to implement the Keystone XL Pipeline project.
1. You should be able to explain each of these concepts as they relate to rational behavior.
2. You should be able to discuss the implications of our not always behaving rationally.
3. You should discuss each concept as it relates to the Keystone decision.
d. The Theory of Consumer Behavior:
i. Explain EACH of the key elements of the Theory of Consumer Behavior and what the theory tells us.
ii. Does the theory of consumer behavior reflect reality? If yes, then why. If no, the why not.
e. Marginal analysis is a decision-making tool.
i. Please define Marginal Cost and Marginal Benefit,
ii. Explain these 3 cases in terms of what you should do regarding an activity.
1. MB>MC
2. MC>MB
3. MC=MB
iii. Explain 3 examples of MC and 3 examples of MB related to the Keystone XL Pipeline question.
Question 2. To a great extent, Economics is about connecting the dots (finding relationships between seemingly unrelated things).
a. Our behavior impacts our ecosystem and the ecosystem services. Those impacted ecosystem services in turn have impacts on the people and economies of the global north and global south.
i. Pick 5 ecosystem services from the list in slide 13.
ii. Explain how each of your 5 ecosystem services is supposed to work.
iii. Thoroughly explain the human behavior that has disrupted each of those services.
iv. Explain how those disruptions to each ecosystem service impacts the two different parts of the world (the global north and global south).
b. For each of the 5 ecosystem services, thoroughly explain 3 things that we should do now to repair or at least stop the damage to the 5 ecosystem services you selected. Be sure you provide and explain 3 recommendations for EACH of the 5 ecosystem services you selected!
Question 3. The Production Possibilities Model is one of the first Economic Models students learn about.
a. Please explain what the mode teaches us.
b. Please explain each of the 4 assumptions of the model.
c. Please explain Productive Efficiency and how it relates to the ppc.
d. For Allocative Efficiency
i. Please provide thorough explanation of Allocative Efficiency.
ii. Please provide thorough explanation of the 2 step process for finding the point of allocative efficiency on the PPC.
e. On the topic of Economic growth: need to see some detail here.
i. What does it mean?
ii. How can it be graphically represented?
iii. What are the prerequisites to Economic growth?
iv. Why is Economic growth important to you and your country?
v. Please provide thorough explanation of 3 factors that would tend to limit economic growth. Be sure you explain how those factors would actually limit economic growth.
f. The Presentville - Futureville case:
1. Explain what motivated each group to make the decisions they made.
2. Explain the impact of those decisions on the future of each group.
3. Which group is most like America, and why?
4. What does this case teach you?
g. Law of increasing opportunity cost:
1. Explain it.
2. What does it teach us?
3. How could it be explained graphically?
h. Explain how you could use the Production Possibility Model to represent the US Economy during 2008 - 2010.
Question 4. Every country has its own unique type of Economic System. Ours is called Capitalism.
a. Please list and explain 5 "good" things Capitalism has given us over the years (not characteristics of capitalism) and explain why those things would be considered good. BE SPECIFIC!!!
i. This is harder than it looks! Think carefully and be objective. Make a list of the good things and discuss why they are good.
b. Please list and explain 5 "bad" things Capitalism has given us over the years, and explain why those things would be considered bad. BE SPECIFIC!!
i. What are some of the "bads" that Capitalism has given us and why you consider them to be "bad"?
c. Please explain in detail what would happen to our capitalist system when confronted with limited global resources and limited global markets.
Question 5. The Circular Flow Model with Government is another important model for students to understand.
a. Please explain what the model shows us.
b. List and explain the characteristics of each component
- be thorough.
You should have at least 4 characteristics for each of the components of the cfm!
i. Government sector - list and explain the characteristics
ii. Household sector - list and explain the characteristics
iii. Business sector - list and explain the characteristics
iv. Product market - list and explain the characteristics
v. Resource market - list and explain the characteristics
c. Thoroughly explain how each component of the model interacts with the other components - be thorough - this requires detail!
i. Explain how all of the sectors and markets interact with each other. You can do this as part of your answer to part ( c) if you like.
ii. Detail is critical here!
Question 6. Demand, Supply, Market Equilibrium
a. Demand:
i. Please Thoroughly and completely define demand.
ii. Please state the law of demand.
iii. List and thoroughly explain the 3 factors that support the law of demand. Be sure you explain how each actually supports the law of demand.
1. Don't just copy from the slides, explain what
they actually mean.
iv. List and explain the determinants of demand and how each can either cause an increase in demand or a decrease in demand.
1. List and explain each of the 5 determinants and how they impact demand.
v. Thoroughly and completely explain the differences between a change in demand and a change in quantity demanded along with the causes of those changes.
1. You should be able to explain each of these cases and draw a picture of each case. Be sure you include the causes of the changes.
b. Supply
i. Define supply.
ii. State the law of supply.
iii. List and explain the determinants of supply and how each can either cause an increase in supply or a decrease in supply.
1. There are 6 determinants of supply listed in the slide set. You should be able to list and explain how each shifts the supply curve to the left or right.
iv. Thoroughly and completely explain the differences between a change in supply and a change in quantity supplied and the causes of those changes.
1. You should be able to explain each of these cases. Be sure you include the causes of the changes!
c. Market equilibrium.
i. Please thoroughly and completely explain what market clearing equilibrium means.
1. Explain what this really means. Please be thorough.
ii. Thoroughly and in detail, explain what happens when a price is above the equilibrium price, and why those things happen!!! Detail!
iii. Thoroughly and in detail, explain what happens when a price is below the equilibrium price, and why those things happen!!! Detail!
iv. Thoroughly and completely explain the two government intervention cases, price floors and price ceilings and give examples.
Question 7. In the discussion of the Market System we talked about the characteristics of the Market system and 4 Fundamental Questions that every economy must respond to.
a. List and thoroughly and completely explain those 4 fundamental questions and how they are answered.
i. What will be produced?
1. The following information should be included in your explanation of this first question.
a. products that generate profits and why
b. explain economic profits
c. explain economic costs
d. relate normal profit to economic profit and explain who gets the economic profit.
e. define expanding industry and give an example.
f. define declining industry and give an example.
g. Consumer sovereignty - explain, what it really means and how it works to influence what gets produced?
ii. How will the goods and services be produced?
1. The following information should be included in your explanation of this second question -
a. Why must firms try to employ the most economically efficient production techniques?
2. For each of the following issues, please explain why they are important to a firm and how a firm might address each one:
a. Optimal plant location
b. Resource Prices
c. Resource Productivity
d. Transportation Costs
iii. Who will get the goods and services?
iv. How will the system accommodate change?
1. The following information should be included in your explanation of this fourth question.
a. start with the system in equilibrium
b. shock the system into a disequilibrium condition
i. Use a change in one of the determinants of demand.
c. Explain in detail, how the system adjusts to the change.
d. Explain how the system completes the adjustment process and returns to equilibrium, and what indicates a return to equilibrium.
b. Characteristics of the Market system.
i. Select any 5 of the characteristics of the Market system that we covered, and explain each of them. Be thorough!
ii. Explain how each characteristic you selected impacts the 1% versus the 99%.
Question 8. Public goods vs. Private goods.
a. Please thoroughly and completely explain the difference between public goods and private goods and give 2 examples of each, including why those examples best fit your definition.
i. You should include the following:
1. private goods
a. Definition
b. Characteristics
c. 2 examples of private goods and why they are good examples.
2. Public goods
a. Definition
b. Characteristics
c. 2 examples of public goods and why they are good examples.
b. Please thoroughly and completely explain the free rider problem, give two examples and explain why they are good examples.
i. You should be able to explain the Free Rider problem including what creates the Free Rider problem.
c. Please thoroughly and completely explain the presence of quasi-public goods.
i. You should explain what a quasi-public good is and give 2 examples, explaining why they are good examples.
ii. Explain how quasi-public goods are used by the 1% versus the 99%.
Question 9. Depreciation and Appreciation of currency.
a. Please thoroughly and completely explain how the US dollar might depreciate relative to another currency.
b. Please thoroughly and completely explain how the US dollar might appreciate relative to another currency.
i. The notes should be sufficient to help you answer parts (a) and (b).
c. Please thoroughly and completely explain how the depreciation of the dollar relative to a foreign currency impacts U.S. GDP.
i. Start with an Increase in U.S. demand for another country's products. Explain how this could lead to the depreciation of the U.S. Dollar - and specifically state which direction U.S. GDP would go.
d. Please thoroughly and completely explain how the appreciation of the dollar relative to a foreign currency impacts U.S. GDP.
i. Start with An increased foreign demand for U.S. goods. Explain how this could lead to the appreciation of the U.S. Dollar - and specifically state which direction U.S. GDP would go.
Question 10. Market Failure.
a. State the definition of a market failure,
b. List and explain the 4 causes of market failure included in the slides, including how they actually lead to market failure. Don't miss this part! Must be specific.
c. Spillover costs
i. State the definition of spillovers costs
ii. Give two examples of a spillover cost situation and explain why your examples are correct.
d. Explain in detail, the economic effects of spillover costs
i. Provide specifics starting with the firm avoiding costs (how and why that happens) and conclude by explaining the nature of the market failure and what it really means.
e. Explain in detail, how spillover costs are corrected and how those solutions would actually work to solve the problem. Be specific. Details!
f. Spillover benefits
i. State the definition of spillover benefits.
ii. Give two examples of a spillover benefit situation and explain why your examples are correct. Be specific.
g. Explain in detail, the economic effects of spillover benefits.
i. Explain why the market demand curve understates true demand and what happens next leading to the market failure. Explain the nature of the market failure.
h. Thoroughly and completely explain how spillover benefits are corrected and the economic implications of the corrections.
i. Explain the two approaches used to solve the spillover benefit proble m and how they work to solve the problem.
Question 11. Throughout the ages countries have implemented impediments to trade.
a. What is a tariff?
b. Why would the U.S. impose steep tariffs on Chinese solar panels?
i. Explain how this would work to accomplish the U.S. objective.
c. What is an import quota?
d. Identify 3 cases where the U.S. has imposed import quotas on another country and explain why they were implemented.
i. Google can help you.
e. What are non-tariff barriers?
f. Identify 3 examples of non-tariff barriers imposed by the U.S., why they were implemented, and their impact on the U.S. and other countries.
i. Google can help you.
g. What could happen to the domestic economy of a country when trade barriers are eliminated and why?
i. Explain what would happen to GDP, employment, and national income, and why.
Question 12. Discuss the role of the World Trade Organization and its impact on member countries.
Suggestions:
- Start with the information provided in the slides and supplement that with your own research on how the WTO operates and its rules and regulations.
- Discuss the impact of the WTO on the ability of nations to maintain their sovereignty.
- Discuss the impact of the WTO on maintaining the inequalities between the global north and global south.
- Some Google research should help you with this question.
- It is critical here that you provide objective answers here. Cover the positive and the negative aspects!
a. How is the WTO organized?
b. How are policies and regulations established?
c. When and who can file a dispute?
d. Who is in charge of dispute resolutions, where do the members if that group come from, and how are disputes resolved?
e. How have WTO policies and regulations impacted the U.S. Economy? Be specific. Provide 3 examples.
f. How have WTO policies and regulations impacted U.S. Citizens? Be specific. Provide 3 examples.