Beyond the sound bites (none today because of Assessment):
Clear your desk except for a pencil. Once everyone is quiet, and no talking during the Assessment, we can begin. Be sure to put your name on the Assessment and the Scantron. You may write on both the Assessment and the Scantron.
If you finish early, you may take out non-class materials; once everyone is finished, put away the non-class materials. Then, I will collect the Scantron first, and then I will collect the Assessment.
Be sure your name is on both the Scantron and the Assessment.
If your name is not on the Assessment it will not be returned.
Mulligan Seeks Fair U.S. Tax Code for Business Investors
Jan. 20 (Bloomberg) -- Casey Mulligan, an economics professor at the University of Chicago, talks about ways the U.S. tax code favors investing in housing over businesses and the need to create unbiased policy to encourage business investment. Mulligan speaks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
The Mid-Term Assessment is re-scheduled for today.
The Chapter 4 Section 2 Quiz Prep Page is available for the Quiz (once scheduled).
The Ch. 4 Sec. 1 Quiz Make-Up is available.
The Chapter 3 Section 3 Make-Up is available.
The Ch. 3 Sec. 2 Quiz Make-Up is today:
The Make-Up for the Chapter 3 Section 1 Quiz is today.
The Chapter 2 Make-Up Test is today.
The Ch. 2 Sec. 3 American Free Enterprise Make-Up Quiz is today.
The electronic edition of the Philadelphia Inquirer is available. We have the Sunday edition, available on Mondays, in addition to the Tuesday through Friday editions on the other days.
Please follow the steps below:
Click on the words "Access e-Inquirer" located on the gray toolbar underneath the green locker on the opening page.
Chapter 6 Prices and Decision Making
Ch. 6 Sec. 1 Reading Strategy
In-class assignment: with a partner, complete the graphic organizer by explaining the advantages of prices.
The Economic Impact of the BP Oil Spill, 7:27
In-class assignment: working with a partner, answer the following questions.
Is the Gulf Oil spill worse than Hurricane Katrina?
Could the damage be worse on the area?
How much did the Hurricane cost?
What three reasons could make it worse than Katrina?
What is the economic disruption?
What are the three drivers of the economy in New Orleans?
How will the decimation of these industries affect the economy?
How will tourism be effected?
How many are employed in this industry?
How is the oil and gas industry effected?
How much off-shore drilling in the U.S. takes place in the Gulf?
What is the lesson to be learned in this disaster?
Has there been innovation in preventing a disaster?
Brookings expert Amy Liu has been tracking the recovery of the Gulf Coast ever since Hurricane Katrina hit in 2005. In this week's @Brookings podcast, she discusses the enormous economic impact of the catastrophic BP Deepwater Horizon oil spill on New Orleans, the Gulf Coast region, and the nation.
The Global Economy and You
Advantages of Prices
In what way do prices perform the allocation function?
Allocations without Prices
Problems with Rationing
What are the differences between the price system and rationing?
Prices as a System
How do prices allocate resources between markets?
Ch. 6 Sec. 1 Review
In-class assignment: with a partner, identify the problems associated with rationing.
I Bought It On eBay
Section 2 The Price System at Work
Economists develop economic models of markets with supply and demand curves in order to analyze and predict outcomes. In a competitive market, the forces of supply and demand establish prices. A temporary surplus drives prices down; a temporary shortage forces prices up. Eventually, the market reaches the equilibrium price where there are neither shortages nor surpluses. Changes in supply or demand can disturb the market, but the market will tend to find its new equilibrium with the help of temporary shortages and/or surpluses. Whenever supply or demand for a product fluctuates, the elasticity of the two curves affects the size of the price change. Competitive markets represent the ideal, but the lessons learned from them apply to other markets as well.
In-class assignment, working with a partner, answer the following.
In your own words, explain the price system.
Does one person make a pencil?
Do it take many people and cultures to produce even simple goods such as pencils?
Does it take cooperation?
Is it likely that the differences between people would make them hate each other if they met?
Then what brought all these people together?
What does the price system foster if left unregulated according to Friedman?
Milton Friedman, Free to Choose (explains the price system), 2:11
Guide to Reading
In-class assignment, with a partner, answer the following.
As illustrated in the video, draw the graph.
Which direction does the demand curve go?
Which direction does the supply curve go?
Why (for each curve)?
What is the intersection of the curves called?
What does the idea of the surplus entail?
What is the red (in the video) section called?
What lines define the consumer surplus?
Can prices be determined as a result?
Equilibrium price and surplus, 6:27
Description of equilibrium price, consumer surplus, producer surplus and social surplus using supply and demand diagrams.
Companies in the News
Want prime seats? Get ready to bid?
The Price Adjustment Process
A Market Model
Figure 6.1 Market Equilibrium
Figure 6.2 Surpluses and Shortages
How do surpluses and shortages help establish the equilibrium price?
Explaining and Predicting Prices
Change in Supply
Figure 6.3 Changes in Prices
Change in Demand
Change in Supply and Demand
The Importance of Elasticity
Real Estate Agent
Real estate agents, among others such as actors (including voice actors), artists, novelists, freelance writers, and similar creative artists as talents are generally compensated on a "per job" basis, and thus are not treated as employees; as freelancers, they file a 1099 form for their taxes. They are not, strictly speaking, an employee of a company. The health care provisions passed last year require them to purchase health care and to be treated as regular employees of companies.
Prices and Competitive Markets
How does the elasticity of a good affects its price?
Business Week Newsclip
What's Raining on Solar's Parade?
Solar Power: Why Economics Matters, 7:12
Section 3 Social Goals and Market Efficiency
Prices work as a system to allocate resources between markets. However, if prices are fixed in one market, temporary shortages and surpluses tend to become permanent. A price ceiling, such as rent control, is one form of fixed price; a price floor, such as the minimum wage, is another example. Agriculture is especially hard-hit by price changes, because demand and supply tend to be inelastic, while weather often causes the supply curve to change. Therefore, to help farmers, the federal government established the Commodity Credit Corporation (CCC), an agency in the Department of Agriculture. The CCC then used a target price, which is essentially a price floor, to help stabilize farm prices. As a result, over the years, the government has established other forms of support for agriculture in the economy.
Guide to Reading
Issues in the News
Minimum Wage Rise Hurts Students
Ch. 4 Prep
Multiple Choice Quiz
Ch. 5 Prep
Chapter 5 Supply Multiple Choice Quiz
Chapter 5 Puzzle
Chapter 5 Supply Flashcards
Ch. 6 Prep
Chapter 6: Prices and Decision Making
Multiple Choice Quiz
Academic, Glossary, People/Places/Events
Ian Hunter, How's Your House, for the New Orleans Musicians Relief Fund
Email (or hand in hard copy) to firstname.lastname@example.org.
Last chance to turn in all In-class assignments and HW.