William Rainey Harper College ECO 211 Microeconomics: An Introduction to Economic Efficiency PAPERS ~/~ Home ~/~ Syllabus ~/~ Lecture Outlines ~/~ Schedule ~/~ Assignments ~/~ Papers~/~ Mic Web App ~/~ Textbook Website ~/~ Blackboard ~/~

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 1 (sometimes 2 or 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:

• be typed
• be double spaced
• include paper title and number
• include student's name and CLASS MEETING TIME
• have no cover page or plastic covers, etc.
• be stapled in the upper left-hand corner
• written as you would an English composition with complete sentences, correct punctuation, etc.
• if the paper includes a graph (paper 2 and paper 3)
  • the graphs must be discussed IN THE PAPER
  • Hand-drawn graphs are required !!!
  • tell the reader when to refer to the graphs
  • EXPLAIN the graphs in the paper
• be more than one paragraph
• if they include news articles the articles must be printed on, or taped to(Xeroxed), an 8 1/2" x 11" piece of paper and stapled to the paper
• have ALL previous drafts handed in with rewrite.

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/microch1-18.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 shift 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).
  • 2/10 means that only one determinant was found in the the article. If you handed your paper in on time you may redo your paper using that one determinant AND find another article with one more determinant and write another paper.
  • 3/10 means that two or more determinants were found in the article, but you must rewrite your analysis
  • 10/10 means you are done!

Paper 3: SHOULD GAS PRICES BE HIGHER?

Read and study the assigned reading for chapter 5.

Listen to the news article below.

Write a short paper WITH 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
• 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
• Hand-drawn graphs, well labeled, are required!!!
• Discuss in your paper and show on the graph:
  • the profit maximizing quantity and price
  • the allocatively efficient quantity and price
  • the quantity that WE GET
  • the quantity that WE WANT
  • the quantity where MSB=MSC
  • the equilibrium quantity
  • the effects of the higher tax
• The purpose of the paper is to EXPLAIN THE GRAPH. You must explain the graph in your paper (you cannot just say "see graph below").
• You must also explain why the supply curve with negative externalities is to the right of the MSC curve. This must be done to explain why "too much" will be produced if there are negative externalities

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

Paper 4: Elasticity (ch. 4)

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. This means, what happens to total revenues when the price changed? Did they increase or decrease?