Ch. 7 Reading Guide Part 2 (Due Thurs)

Carefully read p. 123-125


1.  In your own words, explain the difference between real and nominal GDP.


2.  In what circumstances would an economist prefer real GDP data to nominal GDP data? 


3.  What is a price index?


4.  What is the formula for calculating read GDP when you are provided with a price index?

Ch. 7 Reading Guide

Due Tues:
Read 112-117
1.  In your own words (and not the definition from class), what does GDP measure?
2.  Why do we only count final goods?  What would be an example of an intermediate good and why would it be excluded?
3.  What are "inventories" and how do they count towards GDP?
4.  Identify all other types of transactions that would be excluded from GDP.  Try to provide an example and explanation as to why national income accounts keep it out of out of GDP.
5.  How can the net exports component of GDP be negative?

Does My Vote Count? Economists weight in.....

With the Presidential election looming in the near future, people are gearing up to exercise their all-powerful ability to vote.  Citizens have been made to believe that each and every vote is important in determining the success of our future.  While voting is an essential part of a functioning democracy, there are some economists that feel that the act of voting is the single greatest waste of time.

http://www.nytimes.com/2005/11/06/magazine/why-vote.html

http://mentalfloss.com/article/59873/10-elections-decided-one-vote-or-less

http://www.nytimes.com/2016/04/25/opinion/should-everybody-vote.html

http://reason.com/archives/2012/10/03/your-vote-doesnt-count/ 


As you read through the articles in the above links, you should answer the following questions:

1) Explain two reasons why you believe that people feel so strongly about voting.

2) Explain the main conclusion that is reached in the article "Should everybody vote?"

3) Explain 3 reasons why economists suggest that people should NOT vote.

4) After reading the articles, do you believe that every citizen of voting age should vote?  Why or why not?

30 Days on Minumum Wage

Today we discussed price floors-legal restrictions on how little may be changed/payed for a good or service..  Minimum wage is a great example of a price floor in our economy.  We know price floors cause harmful surpluses, but do they also do good for the most vulnerable people in our society? 


Watch the film:  https://www.youtube.com/watch?v=vpTXmJ9-0Ic


Answer 1 of the following questions for class on Monday.  A 1-2 page response is adequate.


1. As you watch the film, keep a running list of challenges and hardships faced by minimum wage earners.  In a well-written response, identify three specific hardships and discuss how they were manifested in the movie.  Describe how these hardships impact the characters economically and/or socially.  How could these negative impacts be mitigated or avoided? 


2. The goal of the documentary was to provide insight into the lives of minimum wage workers.  To what extent do you think the film is realistic and accurate?  Cite specific examples from the film to discuss the ways in which the film was a real and accurate depiction of life making minimum wage.

 3. Some have argued that minimum wage today is a “broken” system and should be changed or done away with.  To what extent do you agree with this statement?  What changes could be made to minimum wage to make the system more effective.

Demand Quiz Practice

Graph:
1.  Computers and printers are complements.  Illustrate the demand curve for computers as printer prices decline.
2.  Fords and Toyotas are substitutes.  Illustrate the demand curve for Toyotas as Ford prices decline.
3.  Illustrate the demand curve for Fords.  Illustrate the impact of consumers expecting a 10% price reduction for Ford products.
4.  Illustrate the demand curve for Fords.  Illustrate a 10% price reduction for Ford products.
5.  Illustrate the demand curve for ice cream.  Illustrate an increase in consumer incomes.


Law of Demand
Diminishing Marginal Utility
Normal vs Inferior Goods
Elasticity of Demand




Stop by 338 in the AM if you wish!