William Rainey Harper College
ECO 211
Papers
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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 0, 3, 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:

 

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/microch1-17.htm . Be sure to read and study this before writing your paper.

If you need to rewrite this paper ONLY REWRITE the "Es" that you got wrong. DO NOT just change the paragraphs that you got wrong and hand in the whole paper again including the paragraphs that were correct in a previous draft. You will have to DELETE the paragraphs that were OK and just hand in rewrites of the paragraphs that you got wrong.

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 determinants of demand or supply have changed. The article must mention at least TWO non-price determinants that have changed. If the article mentions more, then you must discuss them in your paper as well. You may use two different articles that mention two different determinants. Use supply and demand graphs to show changes in the equilibrium price and/or quantity. Clearly state what happened to the non-price determinants, what happened to supply and demand, and what happened to the price and quantity sold of the product as a result.

The following are also REQUIRED for paper 2:

  • See the "General Instructions" above
  • Before beginning to look for a news article and write your paper:
    • read and study chapter 3
    • do the assigned Study Guide problems
    • attend class and take plenty of notes
    • rewrite your notes from class
  • The news articles must be printed on, Xeroxed on, or taped to, an 8 1/2" x 11" piece of paper and stapled to the back of your paper
  • In the article CIRCLE the statements that indicate that a non-price determinant of supply or demand has changed

 

  • Your paper MUST include a supply and demand graph.
    • The graph must show the change in equilibrium price and quantity mentioned in the article.
    • Your graph must show the changes in demand and/or supply that causes the change in equilibrium price and quantity. This means that the demand and/or supply curves must shift.
    • If you are discussing one product, then all changes should be made ON THE SAME GRAPH.
    • In your paper you must say something like " . . . therefore demand has increased. This will shift the demand curve to the right. On the graph below you can see that an increase in demand will sift the demand curve from D1 to D2. As a result, the price of the product will increase (from P1 to P2) and the quantity will increase (from Q1 to Q2)."
    • Hand-drawn graphs, well labeled, are preferred.
    • On your graph be sure to label the horizontal axis with the product that you are discussing (for example "Q of gasoline" or Q of boats"). THIS IS REQUIRED.
    • Supply and demand must be drawn on the SAME GRAPH with the equilibrium price and quantity clearly labeled.

     

  • The purpose of this paper is to show me that you understand how to use supply and demand graphs to explain why prices change.
  • Do not summarize the article, but rather explain your graph.
  • Let me say this again. Do not summarize the article. Only use the parts of the article that explain the change in price and quantity. You should be summarizing the textbook and class notes, NOT the article.

 

  • Grading:
    • 1/10 means get a new article and start over (if you handed in your original paper on time).
    • 3/10 means that at least one, possibly two or more, determinants were found in the article. You must either rewrite your analysis if there are two or more determinants, or rewrite your analysis for the one determinant and find another article with another determinant.
    • 10/10 means you are done!

Paper 3: SHOULD GAS PRICES BE HIGHER?

Read and study the assigned reading for chapters 4 and 16.

Listen to the news article below.

Write a short paper WITH A GRAPH OR 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 negative externalities (spillover costs) or positive externalities (spillover benefits) and what are they?
    • show the inefficient quantity on your graph and explain the graph in the text of your paper.
    • show the efficient quantity on your graph and explain the graph in the text of your paper.
    • Is there an OVERallocation of resources or an UNDERallocation of resources?
    • WHY DOESN'T THE MARKET ECONOMY GIVE US ALLOCATIVE EFFICIENCY IN THIS CASE? -- Explain using a graph and explain the graph in the text of your paper.
  • 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 and explain the graph in the text of your paper.
  • Hand-drawn graphs, well labeled, are required!!!
  • In the text of your paper you must explain how the graph shows the following:
    • the profit maximizing quantity and price (why is it the profit maximizing quantity price?)
    • the allocatively efficient quantity and price (why is it the alloc. efficient quantity and price?)
    • the quantity that WE GET (why is htis the quantity we get?)
    • the quantity that WE WANT (why is this the quantity we want?)
    • the quantity where MSB=MSC
    • the equilibrium quantity (how did you find this)
    • the effects of the higher tax

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

Basically, you are writing a paper about a graph that explains why the writer wants higher gasoline prices.

Paper 4: Elasticity (ch. 6)

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