Mankiw, G. (2018). Brief principles of macroeconomics. (8th ed.). Cengage. ISBN: 9781337802154
Read/review the following resources for this activity:
- Textbook: Chapter 6, 7, 8
- Videos: Chapter 6, 7, 8 (in Weekly Resources)
- Minimum of 1 library resource for initial post
In this discussion, you will apply what you have learned in Chapters 6, 7, and 8 to real-world situations in order to see how the concepts can be applied to a very broad range of situations.
Keep in mind that throughout this course, discussions are intended to bring real-world situations to the course material that we are covering each week. Part of your grade will depend on the connections you make between the article or scenario in each discussion, the material from the chapters we covered in the week, and, when applicable, your own experience.
Initial Post Instructions
Find an article from a newspaper or magazine that exemplifies that discusses a tax (or a tariff—a tariff is very similar to a tax on imports and has similar effects to a tax on the imported goods). Briefly explain the tax. What happens to the producer, consumer and total surplus because of this tax? Does the article address these gains or losses? Does the article state what will happen (or has happened) to the prices the buyers pay, the amount of money the seller receives or the quantity of transactions? Are those statements consistent with what you’ve learned in these chapters?
Is the reduction of transactions involving the taxed good beneficial or harmful—or, are there beneficial aspects of having the tax in place (perhaps beyond just the tax revenue the government can spend)?
Are there any other connections between your article and material from this class? Is there anything that seems to be incorrect?
Don’t forget to cite your article!
Secondary Post Instructions
Do you agree with your classmates and/or the article they’ve cited? Are there other questions from above that your classmate didn’t answer to which you have an answer? Are there similar taxes or situations of which you are aware that can be analyzed in a similar fashion? Why might taxes of the sort in the original post to which you are replying have been put in place?
- In addition to one initial post, respond to at least two peers.
- Initial Post Length: minimum of 250 words
- Secondary Post Length: minimum of 200 words per post
- Use APA format for in-text citations and list of references.
Grading and Assessment
Meeting the minimum number of postings does not guarantee an A; you must present an in-depth discussion of high quality, integrate sources to support your assertions, and refer to peers’ comments in your secondary posts to build on concepts. Refer to the Discussion Forum Grading Rubric (in Course Documents).
Course Learning Outcome(s): 1, 2, 3, 4, 5, 6
1. Apply the Ten Principles of Economics (basic economic axioms) to real-world situations.
2. Predict market outcomes using simple Microeconomic models.
3. Illustrate how markets serve to allocate goods and services.
4. Analyze the welfare effects of differing market allocations.
5. Apply the simple Microeconomic models to real-world situations and determine how the assumptions or predictions of a model may need to be modified to apply to the real-world situations.
6. Analyze the implications of Government interventions on market outcomes and welfare.
Taxes, Incidence of Taxes, Determinants of Tax Incidence, Effects of a Tax on Quantity of Transactions
Consumer Surplus, Producer Surplus, Total Surplus, Optimal Market Results
Applications of Surplus, Deadweight Loss, Size of Deadweight loss and Tax Revenue as the Tax Size changes.