MICROECONOMICS:

Papers:

Papers that are submitted by the due date can be rewritten as many times as necessary until the student is satisfied with the grade received. Students are warned that these papers, worth 10 points, can only receive scores of 1 or 10. In other words, students receive either an F or an A. Therefore it is important to finish the papers by the due date so that they can be rewritten.

General Instructions

ALL PAPERS MUST:

• be typed
• be double spaced
• include paper title and number
• include student's name and CLASS MEETING TIME
• have no cover page or plastic covers, etc.
• be stapled in the upper left-hand corner
• if they include graphs, the graphs must be discussed IN THE PAPER
• tell the reader when to refer to the graph
• all graphs must be drawn by hand
• be more than one paragraph
• have ALL previous drafts handed in with re-write.

Paper 1: the 5 E's (Ch 1)

Define the "5 Es" and relate each definition to the concept of SCARCITY and the goal of MAXIMIZING SATISFACTION. Explain by using realistic examples of how economic growth, allocative inefficiency, productive inefficiency, inequity, and unemployment affect scarcity. Please keep the paper as short as possible.

This paper is based on information from class lectures and from http://www.harpercollege.edu/mhealy/eco211/lectures/intro/5es.htm. Be sure to read and study this before writing your paper.

Paper 2: Supply and Demand (Ch. 3)

SAMPLE ARTICLE:
http://cnn.com/US/9907/27/gas.prices/
http://cnn.com/US/9908/09/rv.boom/

Find a newspaper article on an INDIVIDUAL PRODUCT whose PRICE and QUANTITY SOLD has changed. Your analysis should indicate why the price and/or quantity has changed by noting which non-price determinates of demand or supply have changed. The article must mention at least TWO non-price determinates that have changed. If the article mentions more, then you must discuss them in your paper as well. Use supply and demand graphs to show changes in the equilibrium price and/or quantity. Clearly state what happened to the non-price determinates, what happened to supply and demand, and what happened to the price and quantity sold of the product as a result. The graph must be drawn by hand.

EXAMPLES

Paper 3: SHOULD GAS PRICES BE HIGHER?

Read and study the assigned reading for chapters 5 and 17.

Listen to the news article below.

Write a short paper WITH GRAPHS explaining the following:

• Why does James Surowiecki believe the current price of gasoline is too low and results in inefficiency?
  • which kind of inefficiency?
  • does he believe that there are spillover costs or spillover benefits and what are they?
  • show the inefficient quantity on your graph
• What are the effects of the higher tax that James Surowiecki is proposing?
  • what effect does it have on efficiency?
  • show the effect of the higher tax on your graph
  • use your graph to discuss how the tax makes the market for gasoline more efficient
  • the graph must be drawn by hand

Arguing the Upside of High Gas Prices Morning Edition, September 22, 2005 One writer believes gas prices actually should be high. Steve Inskeep talks with James Surowiecki, a financial columnist for The New Yorker who says a 50-cent gas tax would make drivers pay for the real cost of cars on the road and make business cater to the fuel-conscious. http://www.npr.org/templates/story/story.php?storyId=4858826

Paper 4: Elasticity (ch. 7)

Discuss the (1) price elasticity of demand and (2) the price elasticity of supply for the product in your article from paper 2. Explain whether you think the market demand is prince elastic or price inelastic and justify your answer by discussing all the determinants of price elasticity of demand. Do the same thing for the price elasticity of supply. Finally (3) discuss why it is important to know the price elasticity of demand. What happens to total revenues if the price changes.?