ECON 1 Applications Assignment
This assignment will require you to do a bit of reading and research, so it may take you longer than the typical homework to complete. Trust me, you don’t want to start it the night before it is due!
For this assignment, you will be using the Naked Economics text by Charles Wheelan to understand applications of the concepts we have been learning in class and come up with some real world examples of your own. Our goal is to think critically in order to connect what might seem like abstract microeconomics to your everyday life. By the end of it, no one will feel like asking me, ‘When am I ever going to use this stuff?!’ (Right?)
There are three parts to the assignment – (1) Concept, where you will summarize the relevant material, (2) Text, where you will draw on examples from the Naked Economics text, and (3) Application, where you will come up with some relevant examples of your own.
You will turn in this assignment in stages according to the following due dates (all submissions done on Canvas through the Applications Assignment module):
April 30th – Submit topic you have chosen
May 19th – Submit draft (must be complete, including all 3 parts described below)
May 26th – Peer review due
June 2nd – Final submission through Turnitin on Canvas
Once you have turned in your completed draft, one of your classmates will edit it. You will also help edit a colleague’s assignment as part of the peer review. After taking into consideration any constructive criticism you will submit your final assignment through Turnitin for grading.
Part 1 – Concept
First, choose one of the concepts from class that interests you from the list below. The topic you choose is completely up to you. Provide a brief summary of the relevant models surrounding your topic. This does not need to be more than a page long, plus relevant graphs if applicable. Think quality, not quantity.
Part 2 – Text
Next, read the related portion of the Naked Economics text listed below and discuss some examples provided by the author to illustrate the relevance of your topic. If there are many, you only need to provide two. Again, think quality over quantity here. Another page or two is more than enough. Side note: the book is a very interesting read, I highly recommend you read it in its entirety especially if you decide economics is an interesting topic to you (it is!).
Part 3 – Application
This is the most important part of the assignment. Here you will come up with two examples of your topic that you have encountered in your life, and an additional example from current events.
For example, if your topic is externalities, you might mention (as I would) that your neighbor provides a positive externality to you with the addition of a beautiful sounding fountain in their backyard. Make sure you explain the relevance of your example to the topic. In other words, the fountain provides excess benefits that my neighbor does not incorporate in his analysis of whether to install it or not. The excess benefits are the positive externality in the form of beautiful running water sounds that mask the sound of the freeway. If he thought about the externality provided, he would install one in my yard as well!
Lastly, provide an example from the real world/current events. For this part I ask that you find a newspaper, magazine, etc. article (online is fine of course, as long as it is from a reputable source such as the LA Times or The Economist, and not The Onion) or some data on your topic. Explain how it is relevant to your topic, and cite as part of your assignment.
As part of your submission you must also include a link to or copy of the article or data you have used here for me to review. This is also done in Canvas.
This portion should be a bit longer, approximately two to three pages, since it requires the most in depth and interesting analysis of your three examples. In total your assignment does not need to exceed 3-5 pages.
As usual, if you have any questions at all come see me. If you are not sure whether your data is from a reliable source or your examples are relevant to your topic it is easiest just to check with me.
No credit will be given for examples we have already used in class – this section of the assignment is your chance to critically analyze and apply your topic to your own life and current event applications.
Presentation
The final part of this assignment is an optional presentation component worth up to 1% extra credit toward your final grade. This has the potential to increase your letter grade in the course.
The presentation should be approximately 5-8 minutes long and cover each of the three portions of the assignment, with emphasis on the last Application section. The presentation format is up to you – PowerPoint slides, write on the board or any other format you like better. Time permitting, be prepared for me to ask questions!
Presentation opportunities will be limited so as to leave time for review before the final exam, so I encourage you to sign up early if you plan to present and to present in groups with others who have chosen the same topic as you. The deadline to sign up for a presentation slot on Canvas is May 29th, after which I will assign slots and groups if necessary. Presentations will take place the last week of class.
Topics and Reading
All reading assignments here are from the Naked Economics text by Charles Wheelan. Notice that you do not need to read the entire book to complete the assignment, so it is easy to share with a classmate if you want to share costs ($10 on Amazon). Questions underneath each topic are for guidance as you read the section and write up Part 1 of your paper, but do not need to be the sole focus of your paper.
– Absolute/Comparative Advantage and Trade
o Intro and Ch. 12 – Why does the author claim that the idea that international trade makes us collectively worse off is wrong?
– Demand, Supply, and Market Prices
o Intro and Ch. 1 – Why is allocating resources without a market/price system, like with a centrally planned economy, “overwhelmingly difficult” in the long run? How does the pursuit of maximum utility and/or profits lead to efficient market outcomes? What is the role of market prices as signals?
– Efficiency and Deadweight Loss
o Intro, Ch. 2 pgs. 46-53, Ch. 4 pgs. 87-103 – What is deadweight loss, and how does it interfere with the efficiency of our market economy?
– Monopolistic Competition
o Intro, Ch. 1 pgs. 6-18, Ch. 5 pgs 117-121 – What defines a competitive market? What do consumers and producers maximize in this market?
– Monopoly and Antitrust Policy
o Intro and Ch. 4 – What defines a monopoly market? In what way is the government a monopoly? What effects do monopolies have on the economy and innovation?
– Price Discrimination
o Intro and Ch. 1 – What is the role of prices in markets? What are the benefits of price discrimination and how does it work?
Note that we will learn the following topics after your assignment draft (but before the final draft) is due. They are included because many students find them to be the most interesting topics. Feel free to choose them but know that you will need to read ahead a little to complete the assignment.
– Externalities
o Intro, Ch. 3 – What is an externality? Why is it a problem and how can we solve it?
– Environmental Economics and Policy
o Intro, Ch. 1 pgs. 6-12, Ch. 2 pgs. 34-39, Ch. 12 pgs. 289-293 – Why do markets struggle with environmental issues, and how is this related to the environment as a luxury good? How can we solve these issues?
– Public Goods
o Intro, Ch. 3 pgs. 69-79, Ch. 4 pgs. 80-84 – What defines a public good? Can markets provide them?
– Asymmetric Information, Adverse Selection, and Lemons
o Intro and Ch. 5 – What are the consequences of asymmetric information in markets? Can we fix this issue?
– Behavioral Economics
o Intro and Ch. 1 – What is behavioral economics? How do some of its issues affect our economic models?
– Role of Government – Price Controls and Taxes
o Intro, Ch. 3 pgs 58-62, 67-79, Ch. 4 pgs. 94-103 – What is the significance of government’s role in solving market failures, enforcing patents, providing market infrastructures, wealth redistribution, and economic productivity?