For Thursday's lecture on the underground economy I would like you to listen to this podcast by Planet Money (NPR). Here are some questions to expect on the quiz - What is the name of the drug being discussed? What is its purpose? Why don't doctors prescribe this drug more often? Why has demand tripled for this type of drug?
atleast the Chinese government says so. Officially the saying is, "Genius comes from hard work - Tobacco helps you become talented" and it's written on the gate of many elementary schools. The reason this is scrawled across the opening gates is because many schools are sponsered by the state-owned tobacco-company. Here's an article and short audo clip (about 4 minutes) about how the government-run industry affects the people of China. Relating this article to te previous North Korea article, how do the policies of contorol for each government contrast? Could you provide an argument defending China's stance on tobacco in society?
As we've learned, our choices are affected in many ways. In this Economix article about the "Beer Recession" we see the classic normal good scenario. If drinking beer at a bar is a "normal good" demand will fall as income falls, as we would predict! Also in the article, brewers are quoted saying that the hefty tax on beer has caused the dramatic drop in sales. You'll be able to answer this question more easily as the semester progresses, but how does a tax on beer change the quantity demanded? Do you expect the tax to lead to a big drop in quantity demanded, or only a little bit of a drop? What does it depend on?
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