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Well, does it? This is an interesting, and short, podcast from Freakonomics about the odd effects that this recession has had on our waistlines. Some things to consider while listening: What do you think the cross-price elasticity coefficient is like between food and cigarettes? What do you think the income elasticity coefficient is like for cheap food and cigarettes? Which effect do you think matters most in determining how much cheap food we consume - the "income effect" (recession implies lower income) or the "substitution effect" (price of substitutes i.e. cigarettes increasing)?
Here's a quick supply and demand problem. The officials at Foxconn (The main hub of Apple manufacturing) are going to increase the wages paid to their workers. What do you expect to happen to the price of iPhones and iPads? I assume that Foxconn's decision to increase wages came from pressure by Apple who has recently been under scrutiny for how foreign labor has been treated. Do you think, though, that Americans would still be pressuring Apple to pay the people who manufacture their products more if they knew what this would do to the price of Apple products?  enthusiastic Foxconn employees In this article from SmartMoney the rising cost of college is addressed. We can see with supply and demand everything that is at work in this article. Consider the following: Let's assume that going to college is a "normal good" and that the extension of loans and grants are a form of increased income. What does that do to the demand curve for college? What would happen to the equilibrium price and quantity of going to college? Using a supply and demand graph, could you show this?
Economist Joseph Schumpeter first pioneered the idea of creative destruction. The basic notion is that new technologies will "destory" older ones - i.e. mp3s killed CDs, CDs killed tapes, tapes killed records, etc... In this article from The Economist we can see the process of creative destruction graphically. Are you surprised at all by this? Does the economy in any way relate to evolution as Darwin put it? From societies point of view, are we helped by newer and better technology even though it kills the jobs and profits of anyone making "old" products?
From the NY Times blog, Economix. According to this blog post, women find that their jobs contribute to society more than men do. Another interesting graph in this post shows the "gender gap" according to job satisfaction. What economic reasons, if any, could there be to explain why men are paid more than women? What graph, that's not included, would you like to add to this article if you could?
Here is an interesting article and video from the WSJ on how President Obama is planning on raising money for his campaign. For the sake of the quiz you may either read the article, watch the video, or both. Why do you think that there are so many rules regarding campaign donations? Do the regulations put a disincentive on contributing to a campaign?
The U.S. government has decided to implement new sanctions on Iran. What this means is that the government has decided to stop demanding certain goods that come from Iran (mainly, oil) as well as limit the supply of US goods to Iran (property). What larger effects do you think these sanctions will have in the input/output markets? Are Americans helped or hurt by these sanctions?
Consider the following scenario: US households currently supply land to the input market. After the sanctions there are less demanders because Iran can no longer exchange money for land in the US input market. Could this be shown using a demand graph? What do you expect will happen to the price of land if demand decreases but supply stays the same? From the NY Times blog, Economix, this is a look at how this recession compares to past recessions. Although the unemployment rate is generally a concern of macroeconomics, we can analyse the labor market with a micro-prespective. From the graph, how do you compare this recession to those of the past? Would you say that there is a shortage or a surplus of labor in the market? Thinking back to the superbowl blog post, if a lot of demanders caused the price of tickets to increase, what will likely happen to the price of labor (i.e. wages) in this economic climate?
This is a great podcast from Planet Money, an offshoot of This American Life on NPR. In this podcast they provide a brief description of life in communist China and discuss the development of capitalism in China's economy. Pay specific attention to why the farmers in this story decided to meet, what solution they came up with to solve their hunger problems, and what the reaction was by Chinese government officials. In your opinion, could the farmers plan be applied to any other industry but farming? Can a system like that developed by the farmers in this story truly exist within a communist economy long term? |
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July 2017
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