ECON312N
Principles of Economics
Week 1
Discussion
Trade Offs,
Opportunity Cost, and Factors of Production
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 1, 3
Lesson
Minimum of 1 scholarly
source
Introduction
The basic economic
problem that every society faces is the fact that resources – often called the
factors of production – are not sufficient enough to satisfy everything a
society would like to have. Thomas Sowell, a renowned economist said, “The
first lesson of economics is scarcity: there is never enough of anything to
fully satisfy all those who want it.” (Sowell, 1993, p. 131). This statement
implies that to get one thing we like, we usually have to give up another thing
that we like.
Paul Samuelson, America’s
first Nobel Prize winner for economics, is credited with providing the first
clear explanation of the economic problem. He argued that in order to solve the
problem of scarcity, societies must answer three basic questions:
What to produce?
How to produce it?
For whom it should be
produced?
Firms produce goods
and services, but what they produce and the quantity produced are largely
determined by the needs and wants of consumers. Firms make decisions with
respect to how goods and services are produced. In making these decisions,
firms are faced with the decision on how to combine factors of production to
produce the goods and services. For example, one of the decisions firms are
frequently confronted with is the decision as to whether to use labor intensive
or capital intensive methods of production. Finally, decisions on who will
receive the goods or services produced will depend, to a large extent, on the
distribution of income in the economy. Individuals with the highest incomes,
for example, will have the ability to buy the most goods and services and,
therefore, may have many goods and services produced for them.
Making decisions with
respect to what, how, and for whom, requires that we trade–off one goal for
another. Trade-offs are all the options we give up when we make a choice from
competing alternatives. Opportunity cost, on the other hand, is the most valued
alternative foregone or the next best alternative to any choice we make. It is
important to note that the opportunity cost of a decision is the cost of the
choice made in addition to the value or cost of the next best alternative
foregone. Effective decision making requires a cost-benefit analysis –
comparing the additional costs of alternatives with the additional benefits –
of each of the alternatives we have to choose from.
Initial Post
Instruction
For the initial post,
address all of the following:
What important
trade-offs have you made recently? What was the opportunity cost associated
with the trade-off? To what extent did you integrate the concept of
cost-benefit analysis in the decision-making process to arrive at the most cost
effective and efficient choice? In other words, based on the information at
your disposal at the time of making the decision, what steps did you take to ensure
that you were making the absolute best decision? (Use actual examples from your
own experiences or construct hypothetical examples).
Assuming that you are
a business owner faced with questions of What to Produce? How to Produce? and
For Whom to Produce? what factors would you consider in answering these
questions? (Use actual examples from your own experiences or construct
hypothetical examples).
ECON312N
Principles of Economics
Week 2 Discussion
Demand, Supply, and
Market Equilibrium
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 4, 5
Lesson
Minimum of 1 scholarly
source
Introduction
In a market-oriented
economy, a change in the price of a product is usually caused by changes in the
factors that affect the demand and/or the supply of the product and the price
elasticity of the demand for and the supply of the product.
Consider the market
for crude oil. As you know, changes in the price of crude oil affect just about
everything that is made, transported, eaten, and sold in the United States. For
example, a change in the price of crude oil is likely to affect the prices of
products like jet fuel, gasoline, diesel, home heating oil, just to name a few.
There is a strong correlation between the price of crude oil and the price of
gasoline. The Organization of Petroleum Exporting Countries (OPEC) is the
largest group of crude oil producing countries in the world. According to
Statistica (2018), the average annual OPEC crude oil price has risen steadily
from 2016 to 2018 as follows: $40.68 (2016), $52.51 (2017) and $67.33 (as of
July 24, 2018). With the significant improvement in the economies of the U.S
and other global economies and recent geopolitical events around the world, the
price of crude oil is likely to continue to rise in the foreseeable future.
Initial Post
Instructions
For the initial post,
address the following:
Considering the demand
and the supply sides of the crude oil market, provide a comprehensive analysis
of domestic and international factors that may be driving the increases in the
price of crude oil since 2016.
If the price of crude
oil continues to increase, how will the increases affect your buying behavior
in the short-term and in the long-term, considering that the demand for most of
the products derived from crude oil are typically inelastic?
Explain how changes in
the price of gasoline affect your buying behavior of related goods like cars,
the use of public transportation, vacations etc.?
Research shows that
the demand for gasoline is inelastic. Suppose the price of gasoline continues
to rise into the foreseeable future, as predicted. How would your purchases
change in the short-term and in the long-term? Explain.
Suppose you have
become very informed and convinced about the harmful effects of carbon
emissions on both the environment and on public health. Will this newly
acquired information change your demand for gasoline or the quantity of
gasoline demanded? Explain.
Will the increase in
the production of affordable electric cars change your demand or quantity
demanded of gasoline? Explain.
ECON312N
Principles of Economics
Week 3
Discussion
Concepts of Cost and
Prices Under Different Market Structures
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 10,
11
Lesson
Minimum of 1 scholarly
source (other than the article noted in the instructions)
Initial Post
Instructions
For the initial post,
address the following:
List and briefly
explain the features of a Perfectly Competitive market structure. How do firms
in a Perfectly Competitive market determine price and profit-maximizing output
levels?
According to
Papanicolas, Woskie, and Jha (2018), the main drivers of the cost of healthcare
in the U.S are “labor and goods, including pharmaceuticals and devices, and
administrative costs” (Conclusions and Relevance). If you were the Chief
Financial Officer (CFO) of a large medical facility, what cost-cutting measures
would you propose to address the excessive cost of operating the facility while
maintaining quality of care?
Journal of American
Medical Association (JAMA): Special Communication: Question: Why is health care
spending in the United States so much greater than in other high-income
countries?
Findings: In 2016, the
United States spent nearly twice as much as 10 high-income countries on medical
care and performed less well on many population health outcomes. Contrary to
some explanations for high spending, social spending and health care
utilization in the United States did not differ substantially from other
high-income nations. Prices of labor and goods, including pharmaceuticals and
devices, and administrative costs appeared to be the main drivers of the
differences in spending.
Meaning: Efforts
targeting utilization alone are unlikely to reduce the growth in health care
spending in the United States; a more concerted effort to reduce prices and
administrative costs is likely needed.
ECON312N
Principles of Economics
Week 4
Discussion
DQ1 Market
Concentration of Firms and the Determination of Price and Output
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 8,
12, 13
Lesson
Minimum of 1 scholarly
source
Introduction
Firms in the
healthcare industry do not seem to have features of a perfectly competitive
market structure and, therefore, must not be classified as such. Those firms
fall somewhere within the continuum from monopolistically competitive and
oligopoly markets to monopoly markets (specifically regional monopolies).
Initial Post
Instructions
For the initial post,
decide if you agree or disagree with the introductory statement.
If you agree with this
statement, provide at least two examples of firms in the healthcare industry
(pharmaceutical companies, medical centers, insurance companies etc.) and
identify the features the firms you selected have that make you believe that
they should be classified in one or several of the following market structures:
monopolistically competitive and oligopoly market structures; monopoly market
structures.
If you disagree with
the statement above, name at least two firms in the healthcare industry
(pharmaceutical companies, medical centers, insurance companies etc.) and
provide reasons why those firms you selected can be classified as perfectly
competitive firms.
Note: the two examples
must come from different industry groups – for example, both firms cannot be
insurance companies.
DQ2 Foreign Exchange
and the Balance of Trade
Introduction
The value of the U.S.
dollar relative to the value of other major currencies has always been an issue
of contention among foreign exchange experts and policymakers. There is a
school of thought that strongly believes that keeping the value of the U.S.
dollar high relative to other major currencies would be beneficial for the U.S.
economy. On the other hand, there are those who feel that such a policy could
be detrimental to the U.S. economy.
Initial Post
Instructions
For the initial post,
explain where you stand on the issue and provide reasons to support your
position.
If you agree with
keeping the value of the U.S. dollar high relative to other major currencies,
identify one or more reasons that you find convincing about the line of
argument presented by those opposed to a relatively high value for the dollar.
What proposals would you make to allay the concerns of those opposed to it?
If you disagree with
keeping the value of the U.S. dollar high relative to other major currencies,
identify one or more reasons that you find compelling about the line of
argument of proponents of a relatively high value for the dollar. What
proposals would you make to ease the concerns of proponents of raising the
value of the dollar?
ECON312N
Principles of Economics
Week 5
Discussion
Unemployment and
Skills Mismatch
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 14,
15
Lesson
Introduction
In the last few years,
there has been a debate about the main causes of the high rates of unemployment
during the Great Recession (2008-2009). One line of argument is that there is a
misalignment between the skill-sets required by employers and the skill-sets of
job seekers, which continues to keep millions of Americans out of the job
market. In an article published in MIT Technical Review Business Report,
Majcher (2014) reported that “employers have 300,000 unfilled manufacturing
jobs” which she attributes to the lack of the required skills needed in the manufacturing
sector (para. 1).
Since 2010, there has
been a steady decrease in the unemployment rate. In fact, in its April 2018
Hiring and Unemployment report, the Labor Department presented the unemployment
rate as 3.9%. Despite this low rate of unemployment, there is still a significantly
large number of people who cannot find jobs. In a research conducted by
LiveCareer, it was reported that “companies claim they cannot find workers with
the right skill sets, while workers complain that their existing skills are
becoming obsolete due to technological change and automation of various job
functions. Less skilled workers simply are not fit for many jobs in the digital
age.” (LiveCareer, 2018, para. 1). The lack of well-trained and skilled
workers, some worry, may have adverse consequences on the performance of the
U.S economy as the economy grows and the productivity of labor becomes
increasingly crucial in sustaining the growth. As pointed out in their 2017
report, the Business Roundtable – an association of chief executive officers of
America’s leading companies – surveyed its members and reported that “as
America continues to recover from the worst economic recession since 1930, our
economic growth is hindered because the skills of today’s workers have not kept
up with requirements of current and future jobs” (p. 1). This state of affairs,
the report argues, is caused by the fact that “the working-age population is
growing at half the rate of the past century; labor force participation is
holding steadily below that of the past three decades and baby boomers are
retiring in record numbers” (p. 1). The report went on to state that “no amount
of automation or technological innovation can overcome these headwinds if our
nation does not take action to ensure that our labor force holds the skills
needed for today’s jobs and for the future" (p. 1).
Initial Post
Instructions
For the initial post,
address the following:
What educational and
job training policy proposals would you like to see implemented to help resolve
the apparent skills-mismatch in the U.S labor market?
ECON312N
Principles of Economics
Week 6
Discussion
Inflation in the Costs
of Education and Healthcare
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 16
Lesson
Link (website): Bureau
of Labor Statistics (Links to an external site.)
Introduction
The Consumer Price
Index (CPI) is a measure of the average monthly change in the price for goods
and services paid by urban consumers between any two time periods. There are
three steps in calculating the CPI. First, the Cost of the CPI market basket is
calculated at base year prices. Second, the cost of the CPI market basket is
calculated at current period prices. Finally, the CPI is calculated for the
base period and the current period. The CPI is used to calculate changes in the
cost of living and changes in the value of money. To measure these changes, we
calculate the inflation rate, which is the percentage change in the price level
from one year to the other. Due to the volatility in the prices of certain
goods and services, the CPI basket (that includes all items that Americans
spend most of their incomes on) might not be a reliable measure of inflationary
and deflationary periods. To get a more accurate measure of CPI, therefore,
food and energy items are removed from the basket to get Core CPI (Consumer
Price Index for All Urban Consumers: All Items Less Food & Energy
[CPILFESL]). This measure of the cost of living is often used as a benchmark
for changes in the cost of other goods and services.
Two key components of
CPI are the costs of Education and Healthcare. These two variables constitute
what is known in Economics as Human Capital, which is a key determinant in the
productivity of labor, and hence, essential for economic growth and development.
In the last few decades, the value of these variables has risen faster than the
value of the general level of prices (CPI), which they are subsets of. According to David Wiczer (2017), “the price
of medical care has grown at an average annual rate of 5.3% while the entire
basket (headline CPI) has grown at an average annual rate of 3.5%.” He goes on
to state that “In the past 20 years, in the regime of stable inflation,
headline CPI has grown at an average annual rate of 2.2%, whereas the price level
of medical care has grown at an average annual rate of 3.6% - about 70% faster”
(para. 1).
As shown in Figure 1,
the increases in the costs associated with Healthcare and Education have
consistently exceeded the overall cost of living during the period of
observation (2000-2018). There are many consequences for the high cost of
Healthcare and Education, not least of which are skipping expensive but
necessary medical procedures, discouragement from pursuing career enhancing
educational requirements, or resorting to educational loans with the potential
for life-long financial consequences.
Graph showing the
changes in medical care, education, and all items minus food and energy
Figure 1: Increases in
the Overall Cost of Living (CPI) Vs. Increases in the Costs of Healthcare and
Education.
Initial Post
Instructions
For the initial post,
address the following:
In your opinion, what
are the implications of the high cost of Healthcare and Education on the Human
Capital needs of the U.S economy?
What policies would
you recommend to rein in these costs, or at least to slow down their rate of
increase?
ECON312N
Principles of Economics
Week 7
Discussion
The Federal Deficit
and National Debt
Required Resources
Read/review the
following resources for this activity:
Textbook: Chapter 18,
20
Lesson
Introduction
The federal debt is
symptomatic of the nation’s persistent Budget Deficits as the National Debt is
the accumulation of Budget Deficits. Deficits grew steadily during the Great
Recession when there was a significant shortfall in government revenue, which
required that the government pursue an expansionary Fiscal Policy to stimulate
the economy. The recession is now over, but the Trump administration, at least
for the first two years, pursued deficit spending. In a contribution to Forbes
magazine, Chuck Jones (2018) points out that the U.S. Federal deficit was $587
billion in Obama’s last year in office, and it grew to $666 billion in the
first year of Trump’s presidency. The Trump Administration’s Tax Reform plan
and the two-year bipartisan budget, which passed in February 2018, are
estimated, by many accounts, to cause the Federal Deficit to exceed 1 trillion
dollars by 2020 (Jones, 2018). The implication of this growing deficit is a
further increase in the National Debt.
From 1965 to through
2018, there has been a persistent increase in the Federal Debt. This trend
became more pronounced during (and in the aftermath of) the recession of
2008-2009. As shown on Figure 1, in September of 2017, for example, the
National Debt rose to 20.24 trillion U.S. dollars. This disturbing increase in
the Federal Debt is likely to increase the per capita debt burden for each
American citizen. According to Statistica (2018), if the debt owed in 2016 were
distributed to every American citizen, the amount owed per capita would be
60,470 U.S. dollars.
Graph showing the
total public debt increasing from 1970 to 2017 to 20.24 trillion U.S. dollars.
Figure 1: Federal
Debt: Total Public Debt
As the U.S. Federal
Debt increased over the years, so did the Federal Debt as a percentage of GDP.
From 1965 to 2018, there has been a general increase in the Federal Debt as a
percentage of GDP. Remarkably, this increase was very pronounced during (and in
the aftermath) of the recession of 2008-2009, after a brief decline from 1995
to 2002. As shown on Figure 2, in the fourth quarter of 2017, the Debt to GDP
ratio was 104%. The ratio compares what the U.S. owes to what it produces, and
it serves as an indication of the U.S.’s ability to pay its debt. This number
can also be interpreted as the number of years it would take for the U.S to pay
back its debt if the nation’s GDP is used entirely to pay back its debt
(Statistica, 2018).
Graph showing the
total public debt as a percent of the gross domestic product. The Debt to GDP
ratio was 104% in the fourth quarter of 2017.
Figure 2: Federal
Debt: Total Public Debt as a Percent of GDP
Deficit hawks in
Congress and conservative activists who railed against President Barack Obama's
spending plans called the GOP debt explosion "dangerous"
“immoral" and "a betrayal." American Conservative Union chairman
Matt Schlapp warned the Republican-controlled Congress not to underestimate the
impact of responsible spending for voters. In fact, President Trump, whose aides
participated in the negotiations and the crafting of the Budget, had a little
bit of buyer’s remorse when the Budget was presented to him. In a morning
tweet, he threatened to veto the Budget, but later signed it. The Washington
Post (2018) summed it up this way “Just hours after threatening a veto,
President Trump said Friday afternoon that he had signed a ‘ridiculous’ $1.3
trillion spending bill passed by Congress early Friday, averting a Government
Shutdown” (para. 1).
The spending situation
has become so alarming that there are renewed calls - from both sides of the
political aisle - for a Balanced Budget Amendment to the constitution based on
the premise that unless restrained by constitutional rules, legislators will
run budget deficits and spend excessively, especially if this would help their
reelection efforts. Another basis of this argument is that politicians do not
like to levy taxes on constituents, but like to spend on projects favored by
their constituents or big political donors. This situation, they argue, creates
an incentive structure that makes budget deficits almost inevitable.
Initial Post
Instructions
For the initial post,
address the following:
Do you agree that the
constitution should be amended to include a Balanced Budget requirement? Why or
why not?
If you agree with a
constitutional amendment, can you identify one reason why some people may be
opposed to it? What proposals would you make to allay the concerns of those
people?
If you disagree with a
constitutional amendment, can you identify a line of argument - made by the
proponents of the constitutional amendment - that you find compelling? What do
you find persuasive about that line of argument?
ECON312N
Principles of Economics
Week 8
Discussion
Fiscal Policy
Simulation Exercise
Resources
Read/review the
following resources for this activity:
Textbook: all chapters
Lesson (This lesson
provides an overview of The Fiscal Ship. Make sure to review before beginning
this activity.)
Link (website): The
Fiscal Ship (Links to an external site.)
Introduction
Data analysis is an
indispensable part of the study of Economics, and plays a significant role in
the formulation of economic theory and policy. The Fiscal Ship game will be
based on simulating Fiscal Policies to set the U.S budget on a sustainable
path. This exercise also reinforces concepts taught in the course.
It is imperative that
you read the Instructions provided to help you successfully play this game.
Once you have familiarized yourself with the features of the simulation tool,
click on the link for The Fiscal Ship to launch the game. Select New Game.
Then, conduct your desired policy simulations.
Initial Post
Instructions
Answer all of the
following questions after you attempt to meet your target goal. If you have the desire and the time, you can
play the game more than once in order to meet your target goal.
Specify where in the
spectrum of political ideology you would consider yourself to be? Centrist,
Progressive or Conservative.
State the Governing
Goals you chose and provide reasons why you chose those goals.
Specify which of your
policy choices had the largest impact on your fiscal target, and which barely
moved the line. Were you surprised by the magnitude of any policy choices?
State whether or not
the game made you reevaluate your initial governing goals?
Propose ways that you
think the federal government should set the budget on a sustainable course in
the next 25 years?
Remember to attach a
screenshot of your budget solutions to your discussion post.
ECON312N
Principles of EconomicsWeek 1 Homework
Question 1
Label each entry in
the list as dealing with a microeconomic topic or a macroeconomic topic. Type
microeconomic or macroeconomic for each item.
Motor vehicle production in China is growing
by 10 percent a year.
Coffee prices rocket.
Globalization has reduced African poverty.
The government must cut its budget deficit.
microeconomic Apple
sells 20 million iPhone 6 a month.
Question 2
A professor changes
the penalty for cheating on exams from getting a 0 on the exam to getting an F
in the course. The professor has
recognized that students don't respond to
incentives.
increased the marginal cost of cheating.
decreased the marginal benefit of cheating.
made all the students act in the social
interest.
recognized that students don't make rational
choices.
ECON312N
Principles of EconomicsWeek 2 Homework
Question 1
Suppose over the next
several years the productivity of firms producing electric cars improves
dramatically. The advance in productivity leads to
an increase in the supply of electric cars so
that the supply curve shifts leftward.
a decrease in the supply of electric cars so
that the supply curve shifts leftward.
a decrease in the supply of electric cars so
that the supply curve shifts rightward.
no change in the supply of electric cars,
only a change in the quantity supplied of electric cars.
an increase in the supply electric cars so
that the supply curve shifts rightward.
Question 2
Suppose the San
Francisco 49ers lower ticket prices by 15 percent and as a result the quantity
of tickets demanded increases by 10 percent. This set of results shows that San
Francisco 49ers tickets have
an inelastic demand.
a unit elastic demand.
an inelastic supply.
an elastic supply.
an elastic demand.
ECON312N
Principles of EconomicsWeek 3 Homework
Question 1
GM cuts jobs at its
Australian manufacturing unit
GM will cut 500 jobs, or about 12% of its
workforce, at its Australian plant because of a sharp fall in demand for
its locally-made "Cruze" small
car.
Source: The Wall
Street Journal , April 8, 2013
As GM cuts its workforce, how will the marginal product and
average product of a worker change in the short
run?
Suppose that before
the cuts the marginal product of GM workers is below their average product.
________________________
As the number of
workers decreases, the marginal product
of a GM worker ______ and the average
product of a GM worker ______ in the
short run.
?decreases; decreases
?increases; increases
?decreases; increases
?increases; decreases
does not? change; does not change
Question 2
Maryland farmers turn
from tobacco to flowers
Maryland tobacco
farmers will be subsidized if they switch from growing tobacco to growing crops
such as flowers and organic vegetables.
Source: The New York
Times ,February 25, 2001
How does offering
farmers a payment to exit tobacco growing influence the opportunity cost of
growing tobacco?
What is the
opportunity cost of using the equipment owned by a tobacco farmer?
______________________
Offering farmers a
payment to exit tobacco growing _______
the opportunity cost of growing tobacco.
The opportunity cost
of using the equipment owned by a tobacco farmer is _______.
?decreases; the sum of the implicit and
explicit costs of using the tobacco equipment
?increases; the next best alternative?
forgone, which could be the production of flowers and organic vegetables
?decreases; the explicit cost of using the
tobacco equipment
does not? change; the next best alternative?
forgone, which could be the production of flowers and organic vegetables
?increases; the implicit cost of using the
tobacco equipment
ECON312N
Principles of EconomicsWeek 4 Homework
Question 1
Consider the market
for running shoes shown above. Before a tariff is imposed, if the United States
trades with the world, then the United States produces ________ running shoes
at a price of ________.
5 million; $40
3 million; $80
5 million; $80
3 million; $40
1 million; $40
Question 2
Which of the following
is NOT a characteristic of monopolistic competition?
few firms compete
easy entry and exit
small market share
no barriers to entry or exit
differentiated product
ECON312N
Principles of EconomicsWeek 5 Homework
Question 1
U.S. real GDP
is not as accurate as nominal GDP when
measuring standard of living changes over time.
excludes the value of underground production
and leisure time.
measures the change in the price level over
time.
precisely measures the improving standard of
living in the United States.
includes the value of underground production
but excludes the value of leisure time.
Question 2U.S.
unemployment rate lowest since 2008
The Labor Department
said that the economy added 146,000 jobs
in November, and the unemployment rate
fell to 7.7% from 7.9% in October. But it fell mainly because
workers dropped out of the labor force.
Source: CNN Money, December 7, 2012
Explain why workers
dropping out of the labor force lowers the unemployment rate and why by more
than new jobs do.
____________________
When workers drop out
of the labor force, the unemployment rate falls because _______.
the ratio of the number employed to the
number unemployed increases
the percentage change in the number
unemployed is less than the percentage change in the labor force
the percentage change in the number
unemployed equals the percentage change in the labor force
the percentage change in the number
unemployed is greater than the percentage change in the labor force
ECON312N
Principles of EconomicsWeek 6 Homework
Question 1
All of the following
can create a bias in the CPI EXCEPT the
new goods bias.
commodity substitution bias.
outlet substitution bias.
GDP price index bias.
quality change bias.
Question 2
Demand-pull inflation
is an inflation that starts because
_____.
of labor productivity growth
real GDP increases
aggregate supply decreases
aggregate demand increases
ECON312N
Principles of EconomicsWeek 8 Homework
Question 1
When the government's
expenditures exceed its tax revenue, the budget
has a deficit and the national debt is
decreasing.
None of the above because by law the
government's expenditures cannot exceed its tax revenue.
has a deficit and the national debt is
increasing.
has a surplus and the national debt is
increasing.
is balanced and the national debt is
increasing.
Question 2
Using the data in the
above table, if potential GDP for this economy is $25 billion, then in order to
restore full employment, the federal funds rate can be
lowered so that consumption expenditure and
investment increase, though net exports decrease.
raised so that net exports increase.
raised so that consumption expenditure,
investment, and net exports increase.
lowered so that consumption expenditure,
investment, and net exports increase.
lowered so that government expenditure on
goods and services increase.
ECON312N
Principles of EconomicsWeek 2 Quiz
Question 1
In the above figure,
the shift in the demand curve from D to D2 can be the result of
an increase in the price of a sub sandwich, a
substitute for pizza.
an increase in income if pizza is a normal
good.
a change in quantity demanded.
an increase in the price of soda, a
complement to pizza.
a decrease in the supply of pizza that raises
the price of pizza.
Question 2
The question "Should
economics majors or sociology majors earn more after they graduate?" is an
example of a ________ question.
for whom
what
how
why
where
ECON312N
Principles of EconomicsWeek 4 Quiz
Question 1
Paulette owns a pizza
parlor. Her total cost schedule is in the above table. Her total fixed cost is
equal to
Some amount, but more information is needed
to determine her fixed cost.
$35.
$85.
$79.
$20.
Question 2
Mylan Pharmaceuticals
holds a patent on the EpiPen - designed to inject epinephrine into shock
victims. In 2016, Mylan received criticism for charging $600 for this
life-saving drug. The market for EpiPens is considered ________ which means
that the price of an Epipen ________ its marginal cost.
perfect competition; equals
an oligopoly; equals
a monopoly; is greater than
a monopoly; equals
monopolistic competition; is greater than
ECON312N
Principles of EconomicsWeek 6 Quiz
Question 1
In 2010, the GDP price index was 101.2 and real
GDP was $14.8 trillion.
In 2011, nominal GDP was $15.5 trillion and real GDP was $15.0 trillion.
Calculate the increase
in nominal GDP and the increase in the GDP price index in 2011.
The percentage increase
in nominal GDP in 2011 is
The percentage
increase in the GDP price index in 2011 is
Question 2
The change in
potential real GDP and aggregate supply shown in the graph above can be a
result of
a decrease in the money wage rate.
a decrease in the money price of oil.
an increase in the quantity of capital.
a fall in the price level.
an increase in the real wage rate.
ECON312N
Principles of EconomicsWeek 8 Quiz
Question 1
How do the Fed's monetary policy actions influence the
exchange rate?
The Fed influences the exchange rate by
changing the U.S. interest rate differential.
The Fed influences the exchange rate by
conducting transactions in the foreign exchange market.
The Fed can influence the exchange rate only
if it changes expectations.
The Fed? can't influence the exchange rate
because the Fed has no influence on foreign interest rates.
Question 2
The Fed's policy tools
include
required reserve ratios, the discount rate,
open market operations, and extraordinary crisis measures.
holding deposits for the U.S. government,
reserve requirements, and the discount rate.
required reserve ratios, income tax rates,
and open market operations.
setting regulations for lending standards and
extraordinary crisis measures.
supervision of the banking system and buying
and selling commercial banks.
ECON312N
Principles of EconomicsWeek 3
Assignment
Required Resources
Read/review the
following resources for this activity:
Textbook: Review
Chapter 1, 3, 4, 5
Lesson
Minimum of 2 scholarly
sources
Introduction
In Chapter 4 of the
text, we learned that a market is in equilibrium when the demand curve
intersects with the supply curve. The general notion in Economics is that when
a market is in equilibrium, the desires of consumers are considered to be
aligned with those of suppliers, and there is an efficient use of resources in
the market. These conditions, however, do not always prevail in the market.
There are times when there is, what is known as, a disequilibrium condition in
the market. Under this condition, there is either a surplus or a shortage in
the market. A surplus occurs when there is an excess of supply of a commodity
over the quantity demanded. A shortage, on the other hand, is a situation where
the quantity demanded of a product exceeds the supply of the product.
The preponderance of
evidence in the market for the services provided by nurses is that there is an
issue of perennial shortages that has lasted for several decades. Ms. Roberta Spohn, Assistant Executive
Secretary of the American Nurses’ Association, Research and Statistics Unit,
stated that “Although there are reports of manpower shortages in many other
professional fields, nursing seems to enjoy the dubious distinction of
continually suffering from this condition” (Spohn, 1954, p.865).
Activity Instructions
Provide a
comprehensive analysis of demand and supply factors that seem to cause the
persistent shortage of nurses in the U.S. Please make sure you address the following
items, in your paper.
Identify, at least,
five factors that are likely to cause the increase in the demand for nurses and
five factors that are likely to cause a decline in the supply of nurses, or the
failure of supply to keep up with demand.
What are the likely
implications of the shortage of nurses on the quality of care given in U.S.
hospitals?
What solutions do you
propose to address this seemingly persistent issue of nursing shortages in the
U.S.?
Has government policy
intervention over the years helped or exacerbated the shortage of nurses?
Provide reasons to justify your opinion.?
Writing Requirements
(APA format)
Length: 2-4 pages (not
including title page or references page)
1-inch margins
Double spaced
12-point Times New
Roman font
ECON312N
Principles of EconomicsWeek 5 Assignment
Resources
Read/review the
following resources for this activity:
Textbook: Chapter 14,
15
Lesson
Link (website): FRED
Economic Data (Links to an external site.)
Minimum of 2 scholarly
sources
Introduction
This assignment is
based on the exploration and analysis of two of the most important economic
variables used in economic analysis: Real GDP and Unemployment. These variables
are compiled by the Bureau of Economic Analysis and are used extensively by the
Federal Reserve of St Louis, in a database called FRED (Federal Reserve
Economic Data), which is made up of nearly 140,000 economic time series from
more than 50 data producers. The expectation is that at the end of the course,
your new found ability to extract, manipulate, and understand economic data
will be an enduring benefit from taking this course.
Activity Instructions
For this assignment,
complete the following in the FRED Economic Data website:
Part A: Plot real GDP
(Percent Change from Quarter One Year Ago – Quarterly Data) from 1977 (January)
to 2018 (January). Note that the shaded areas on the graph show periods during
which there were recessions.
Part B: Plot several
measures of Unemployment from either 1977 or 1997 (Q1 - January) to 2018
(January) as specified in the instructions. Note that the shaded areas on the
graph show periods during which there were recessions.
After plotting each
graph in Part A and each Multi-Series Graph in Part B, copy and paste the
graphs in a Word document. Then, provide a detailed comparative analysis of the
performances of the variables. See the specific question in Parts A and B that
follow.
Accessing and Using
the FRED Website
Click on the link for
the FRED Economic Data website (in the Required Resources area). Then, follows
these steps:
Once you are at the
website, copy and paste the research variable in the data (search) window.
Click on the “magnifying glass” (search icon) to the left of the window.
A new page opens with
the variable listed. Click on the variable.
A page opens with the
graph. Change the dates in the date window to the right.
To select the
beginning date, click inside the first window and click on the arrows to get to
the desired year. After selecting the year, a new window opens with a list of
months. Select the desired month.
Click the second
window and repeat step #4 to choose the end date.
After selecting the
desired dates, the graph appears.
With the graph
well-centered on your computer screen, press on the PrtScr/SystRq key of your
keyboard to copy the graph on the screen.
Alternatively, you can also use the snipping tool on your computer to
capture the graph. Note that the
combination for a Screen Shot may be different for laptops.
Paste the graph in a
Word document where you are writing your detailed analysis of the performances
of the variables. Hint: make sure the following labels appear on the cropped
graph: “FRED Graph” at the top left and “fred.stlouis.org” on the bottom right.
Part A: GDP: A Measure
of Total Production and Income (Chapter 14)
Plot real GDP (FRED
code: A191RO1Q156NBEA) from 1977 (January) to 2018 (January).
Provide a brief
description of the general performance of the output of goods and services
produced in the United States during periods of recessions (from 1980 to 2009).
Provide a general
description of the performance of the economy during the Great Recession of
2007 to 2009 (Hint: focus your discussion on the following economic indicators:
unemployment rates, incomes, profits, financial markets, real estate market
etc.).
Plot real GDP per
Capita (FRED code: A939RC0Q052SBEA) from 1977 (January) to 2018 (January).
Provide a general
description of the performance of real GDP per capita from 1977 to 2018.
Most Economists,
Policymakers, Social Scientists, and Business Analysts use a country’s real GDP
per capita as the main indicator of the average person’s standard of living in
that country. Robert Kennedy expressed his disagreement with the over-reliance
on the use of GDP per capita with the following comments:
Gross Domestic
Product, he argues “… does not allow for the health of our children, the
quality of their education, or the joy of their play. It does not include the
beauty of our poetry or the strength of our marriages, the intelligence of our
public debate or the integrity of our public officials. It measures neither our
courage, nor our wisdom, nor our devotion to our country. It measures
everything, in short, except that which makes life worthwhile, and it can tell
us everything about America except why we are proud that we are Americans”
(1968, para. 23).
Do you agree or
disagree with the late Robert Kennedy’s assessment of the importance of GDP per
capita in determining the standard of living? Provide reasons to support your
position.
Part B: Jobs and
Unemployment (Chapter 15)
Items A-E below will
require Multi-Series Graphs. This means plotting a graph with more than one
variable (line). To add an additional line (variable) to a graph, you will
first plot the initial variable, then click on the tab labeled as “Edit
Graph.” An Edit Graph box opens. Click
on the tab labeled “Add Line” within the Edit Graph box, and type the FRED code
for the additional variable and hit enter.
Select the correct variable from the list that populates and click the
“add data series” tab. Note: you will do
a separate Multi-Series Graph for each grouping (A-E) below:
Measures of
Unemployment
Plot the variable
Civilian Unemployment Rate (FRED code: UNRATE) from 1997 (January) to 2018
(January). (Note: this is the official Unemployment Rate)
Create a Multi-Series
Graph and plot the variable Special Unemployment Rate (FRED Code - U6RATE) from
1994 (January) to 2018 (January). (Note: this is Total Unemployed, Plus All
Marginally Attached Workers, Plus Total Employed Part-Time for Economic
Reasons, as a Percent of the Civilian Labor Force plus all Marginally Attached
Workers).
Duration Unemployment
Plot the variable Of
Total Unemployed, Percent Unemployed Less Than 5 Weeks (FRED code: LNS13008397)
from 1977 (January) to 2018 (January).
Create a Multi-Series
Graph and plot the variable Of Total Unemployed, Percent Unemployed 27 Weeks
and Over (FRED code: LNS13025703) from
1977 (January) to 2018 (January).
Educational Attainment
Plot the variable
Unemployment Rate - Bachelor's Degree and Higher, 25 years and over (FRED code:
LNS14027662) from 1997 (January) to 2018 (January).
Create a Multi-Series
Graph and plot the variable Unemployment Rate - High School Graduates, No
College, 25 years and over (FRED code: LNU04027660) from 1997 (January) to 2018
(January).
Gender
Plot the variable
Unemployment Rate - Men (FRED code: LNS14000001) from 1977 (January) to 2018
(January).
Create a Multi-Series
Graph and plot the variable Unemployment Rate - Women (FRED code: LNS14000002)
from 1977 (January) to 2018 (January).
Race
Plot the variable
Unemployment Rate - White (FRED code: LNS14000003) from 1977 (January) to 2018
(January).
Create a Multi-Series
Graph and plot the variable Unemployment Rate - Black (FRED code: LNS14000006)
from 1977 (January) to 2018 (January).
Create a third line
(variable) on this graph by plotting the variable Unemployment Rate – Hispanic
(FRED code: LNS14000009) from 1977 (January) to 2018 (January).
Using the graphs on
measures of unemployment, duration of unemployment, educational attainment,
gender and race, provide a comprehensive assessment of the labor market during
the period of the Great Recession (2007 to 2009). (NOTE: In responding to this
question, please briefly comment on the employment situations before and after
the Great Recession).
Writing Requirements
(APA format)
Length: 3-5 pages (not
including title page or references page)
1-inch margins
Double spaced
12-point Times New Roman
font
Title page
References page
(minimum of 2 sources)
ECON312N
Principles of EconomicsWeek 7 Assignment
Required Resources
Read/review the
following resources for this activity:
Textbook: Review all
chapters (Weeks 1-7)
Lesson: Week 1-7
Minimum of 4 scholarly
sources
Introduction
There are several
problems that every economy must contend with. The culmination of these
problems is often a recession or an inflation, each of which requires an
extensive policy prescription. A recession is technically defined as two
consecutive periods of negative growth in real GDP. The National Bureau of
Economic Research (NBER) which dates U.S. recessions defines recession as “a
significant decline in economic spread across the economy, lasting more than a
few months, normally in real GDP, real income, employment, industrial
production and wholesale-retail sales.” (NBER, 2008, para. 2). Inflation is
measured by the Bureau of Labor Statistics (BLS) as an increase in the overall
price in the economy. The inflation rate is the percentage change in the prices
of goods and services from one period to the other. To measure the percentage
change in the general level of prices, economists use the GDP deflator method
or the Consumer Price Index (CPI) method. It is important to note that as the
general level of prices rise, the purchasing power – or value – of money
diminishes, and as the general level of prices decline, the value or purchasing
power of money rises.
When an economy is
going through recessionary or inflationary periods, two key policy
prescriptions are used to deal with either problem are Fiscal Policy and
Monetary Policy. Fiscal Policy is often initiated by the executive branch of
government and approved by the legislative branch of government. The main tools
of Fiscal Policy are Taxes and Government Spending. Monetary Policy, on the
other hand, is conducted by the Federal Reserve Board. The main tools of
Monetary Policy are Required Reserve Ratio, Discount Rate, and Open Market
Operation.
A recessionary gap
(see Figure 1) occurs when the full employment equilibrium in an economy falls
short of potential GDP.
Below full employment
macroeconomic equilibrium graph with price level on y-axis and real GDP on
x-axis
Figure 1: Below Full
Employment Macroeconomic Equilibrium. Reprinted from Bade &Parkin (2018, p.
545).
Activity Instructions
For this assignment,
complete the following:
If you were an
economic advisor to both the President and the Chair of the Federal Reserve
Board, what Fiscal Policy and Monetary Policy recommendations would you make to
deal with a recession?
In the literature on
Health Economics, there is a significant amount of research on the impact of
the Great Recession (2008-2009) on the nursing profession. If you were the
Health Policy Advisor to the President, what specific recommendations would you
make to the President to minimize the effects of recessions on the nursing
profession?
In the implementation
of Fiscal and Monetary Policies, discuss the limitations of these policies and
explain how the limitations are likely to affect the effectiveness of your
recommendations.
Note: In making the
recommendations, provide clear and concise channels of transmission of the
policy from its implementation to its effect on Aggregate Demand or Aggregate Supply.
Providing channels of transmission shows the ripple effect of an event on one
or more variables in the process of achieving an ultimate Macroeconomic
objective.
Example
Sample Question: What
is the effect of an increase in U.S. Exports?
Sample Answer: An
increase in U.S exports will increase Business Investments (I) and Household
Consumption (C). The increases in consumer spending and Business Investments
will increase Aggregate Demand (AD) which will shift the AD curve to the right.
The rightward shift in the AD curve, assuming the Aggregate Supply curve does
not shift, will cause an increase in the general level of prices and an
increase in real GDP.
Before you answer the
question, identify the four phases of the Business Cycle and indicate which of
the phase is associated with a recession.
Writing Requirements
(APA format)
Length: 3-5 pages (not
including title page or references page)
1-inch margins
Double spaced
12-point Times New
Roman font
Title page
References page
(minimum of 4 scholarly sources)
