Unemployment at 10.2% (17.5% "real" unemployment); Half of American Youth will Live on Food Stamps
The latest unemployment rate is 10.2%.
Chapter 4 Market Efficiency, Market Failure, and Government Intervention
Markets are efficient mechanisms for allocating resources. However, in the real world, markets can “fail” as a result of departures from the idealized competitive market structure. This chapter assesses the efficiency of markets in terms of maximizing consumer and producer surplus, and explains the circumstances under which market failures can occur. Government intervention in markets in the forms of price floors, price ceilings, and taxes is also examined.
We have the Short Answer Questions to consider.
We can re-arrange the class into small groups for the review of the Short Answer Questions.
Chapter 2 Short Answer Questions
This is the last one that we finished on Friday:
3. Suppose you are a restaurant owner. What is your output? What resources do you need and how would you classify them under the four categories?
4. Describe the main differences between production efficiency and allocative efficiency. Do you think the economy is efficient? Why or why not?
5. Suppose a worker decides to become a stay-at-home mom or dad. What are the opportunity costs of the decision?
For #6 and in the time being, just explain your answer, I will post a reference to a link that permits graphing online for our use.
6. In 2007 a tornado wiped out the town of Greensburg, Kansas. The governor complained that not enough National Guard units could be sent to the town because so many were deployed to Iraq. Use a production possibilities curve to illustrate this situation.
For the time being, just explain your answer, I will post a reference to a link that permits graphing online for our use.
7. There is much debate regarding immigration into the United States. Using a production possibilities frontier graph, show what would happen if all immigration were halted.
8. Economists maintain that there is a tradeoff between current consumption and future consumption. Explain what they mean.
9. What are some of the factors that contribute to economic growth?
10. What is meant by the statement “International trade is a positive-sum game”?
Chapter 3 Short Answer Questions
1. What are the determinants of demand?
2. Evaluate the following in terms of the shifts in demand: Industries that sell inferior goods do well in an economic downturn.
3. Explain the difference between a change in demand and a change in quantity demanded. Why might this distinction be important to a business manager?
4. What happens to the supply curve when certain inputs used to make the products are banned? What are some examples of such cases?
5. Suppose a union successfully raises wage rates. How would the increase result in a decrease in supply?
6. Assume that Wal-Mart finds that its inventory of pink leather jackets is unexpectedly rising. Illustrate this situation using a supply/demand diagram. Explain how price adjustments would be used to reduce the excess inventory.
7. Using supply/demand analysis, explain the reason that the increased production of ethanol (a gasoline additive made from corn) is raising the price of tortillas (a type of bread made from corn). What effect would this price rise have on poor people?
8. Suppose suppliers expect a sudden drop in the market price. How might the expectation become a self-fulfilling prophecy?
For the time being, we can skip #9, I will post a reference to an online link that allows graphing illustrations online.
9. Graph the following table and find equilibrium price and quantity. Suppose that the demand for good XYZ rises by 5 units at every price because of clever advertising. What happens to equilibrium price and quantity? Under what conditions would it be profitable to advertise?
10. Suppose there is an outbreak of E. coli (a harmful bacteria) in a certain type of vegetable. If the authorities were to remove the vegetable from the market, what would happen to the price of the vegetable? Suppose the growers could not reassure consumers that future outbreaks will not occur. What would be the long-term effect on equilibrium price?
Dr. Walid Phares, Director, Foundation for Defense of Democracie's Future of Terrorism Project, is interviewed about Ft. Hood. He referred to the "Ft. Dix Six," a reference to the five of six Muslim immigrants who were convicted of plotting to massacre U.S. soldiers at Fort Dix, New Jersey; and, he noted that one private was killed--Private Long--and another soldier was wounded by a Muslim terrorist, Abdulhakim Mujahid Muhammad, at a Little Rock, Arkansas, Army recruitment center (in which a Muslim protester later appeared to proclaim "Islam is the religion of peace"). The American military has been a terrorist target according to Dr. Phares.
The shooting attack at Ft. Hood by a Muslim soldier, the Ft. Dix convictions, and the Little Rock shooting are anything but isolated incidents. Leaving out the numerous attacks on American soldiers overseas, by soldiers in uniform or in fake uniforms, attacks have continued in the U.S.
1) On 23 March 2003 there was a grenade attack by Muslim Sgt. Hasan Karim Akbar that killed Army Captain Christopher Seifert and Air Force Major Gregory Stone and wounded 14 others. He was convicted of two counts of premeditated murder and three counts of attempted premeditated murder on April 21, 2005. Notably, during his trial Akbar smuggled scissors out of a conference room, then asked the Military Police Officer guarding him to remove his hand cuffs so he could use the restroom. When the officer removed Akbar’s restraints, he stabbed the officer in the neck and shoulder before being wrestled to the ground by another officer.
2) While serving as a naval signalman on board the USS Benfoldin the months following the attack on the USS Cole, Hassan Abujihaad (a/k/a Paul R. Hall) actively provided Islamic terrorists with sensitive information about the location of Navy ships and their weaknesses. He also discussed sniper attacks on military personnel and attacks on U.S. military recruitment sites with Muslim terrorists as well. For his crimes, Abujihaad is currently serving a ten-(10) year sentence. On 5 March, 2008 Abujihaad was convicted by a jury and was sentenced to 10 years in prison.
3) There is also the case of U.S. Army captain James “Yousef” Lee, the former Muslim chaplain charged with espionage while serving at Guantanamo Bay, Cuba. Lee was arrested at a U.S. airport on charges of espionage after he was caught in possession of detailed maps of the detention facility along with other classified materials.
4) In addition to Lee, two other Islamic Arabic translators stationed at Guantanamo were convicted of unauthorized possession of classified documents.
Ultimately, the U.S. Army opted not to proceed with the espionage charges against Lee due to national security concerns arising from the evidence that would be made available to the public at the trial.
The list just continues on and on:
• Army reservist Jeffrey Battle in 2003 pleaded guilty to conspiring to wage war against the U.S., confessing he enlisted "to receive military training to use against America."
• Army reservist Semi Osman in 2002 was arrested for providing material support to al-Qaida and pleaded guilty to weapons charges after agreeing to testify against other terror suspects.
• Marine Abdul Raheem al-Arshad Ali trained at a suspected al-Qaida camp and was charged with selling a semi-automatic handgun to Osman.
• Army Sgt. Ali Mohamed trained Green Berets at Fort Bragg's elite special warfare school before stealing military secrets for al-Qaida and helping plan bombings at three U.S. embassies in 1998.
• Army Spec. Ryan Anderson in 2004 was convicted of leaking military intelligence to al-Qaida terrorists, including sensitive information about the vulnerabilities of armored Humvees.
• Army sniper John Muhammad was put on death row after fatally shooting 10 in the nation's capital a year after 9/11.
And yet, the military has made no apparent effort to identify ongoing security threats. For example, take the case of Ali Mohamed, al-Qaeda’s military chief who served as a U.S. Army sergeant at the Special Warfare Center at Ft. Bragg and gathered extensive intelligence in his position that advanced the terror group’s understanding of warfare and helped to plan the U.S. embassy bombings in Africa. As documented in Peter Lance’s book Triple Cross and the National Geographic documentary of the same name, Mohamed was allowed to continue in his position at this sensitive facility despite warnings from the Egyptian military and acknowledgment from his Army superiors that he held jihadist ideas. In light of what we presently know about Major Nadal Malik Hasan, it already seems clear that there were many obvious warning signs that were intentionally ignored, giving proof that very little has been learned from Ali Mohamed and several other similar cases since 9/11.