econ 312 entire course – devry

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ECON 312 ENTIRE COURSE - DEVRY

Week 1 discussion

Opportunity Cost

(graded)

Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent

decision you made. It could be a decision as simple as whether to eat out or cook your own dinner,

or it could be a decision to quit your job and go back to school. What alternatives did you consider?

How did you arrive at your final decision? Did you implicitly weigh marginal cost and marginal

benefit? How does the concept of opportunity cost apply to production possibilities curve (PPC)

analysis? How can we use PPC analysis to examine what we do?

Economic Systems

(graded)

Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes &

Noble, McDonald’s, etc.). What motivated the producers of all the individual products in the store to

make them and offer them for sale? How did the producers decide on the best combinations of

resources to use? Who made those resources available, and why? How does the market determine

who will get the goods and services? Who decides whether these particular products should

continue to be produced and offered for sale? How do these decisions differ between capitalist and

socialist systems?

Week 2 discussion

Demand, Supply, and Market

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Equilibrium

Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk,

shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your

purchase. Give specific examples of how the determinants of demand and supply affect this product

(T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of

these determinants change? Give examples of scenarios that would cause a change in demand

versus a movement along the same demand curve and supply curve for this product. Discuss the

new equilibrium price and quantity that result from these changes. Can you demonstrate some of

these changes graphically?

Price Elasticity of

Demand

Think of another good that you have purchased recently (or you could continue with the good you

selected in TDA I). Be specific (e.g. is it breakfast cereal in general or Cheerios cereal specifically). If

the price of this item increases, how would this affect the quantity of the good that you consume? Is

the Demand for this good Price elastic or Price inelastic? Justify your classification by talking about

the determinants of elasticity as they apply to this product. Say price is on the rise for this product

and you are the manager of a store, would you be thrilled to be selling this product? Under what

circumstances would you want to own a business that sells this product? In other words, how does

an increase in price for this good affect your Total Revenue? Using specific examples, relate the

concepts of Cross Elasticity and Income Elasticity to this product.

Week 3 discussion

A Firm’s Shut Down Decision

(graded)

Say you are the manager of a perfectly competitive firm selling a product. Your business is making a

loss because total revenue is less than total costs. What would you do--shut down or continue to

operate? Use hypothetical numbers to explain. Information you need to provide include--state the

product you are selling, the price of the product, the quantity of the product you produce, fixed costs,

total cost, figure out total revenue, total and average variable costs. Then go ahead and make your

decision. Explain carefully why it makes better sense to shut down rather than continue to operate or

to continue to operate rather than shut down, as the case may be. How do fixed costs play a role in

your analysis? What is the difference between shutting down and going out of business?

Market Structure

Classification (graded)

Think about a firm that you have done business with recently. What industry does this firm belong

to? For example, McDonald's is a firm in the fast food industry. What market structure would this

industry fall under? What are the names of other firms in this industry? Is it monopolistic competition,

oligopoly, monopoly, or perfect competition? Justify your classification of the firm. Use the

characteristics/features of the different market structure to determine which market structure to

classify your chosen firm.

Week 4 discussions

GDP

(graded)

Go to the Bureau of Economic Analysis website, www.bea.gov, and access the BEA interactively by

selecting "National Accounts" and then "National Income and Product Account Tables." Select

"Frequently Requested NIPA Tables," and find Table 1.1.1 on GDP. What is the current GDP growth

rate for the U.S.? Examine the trend over the past few years. What trends interest you? What stage

of the Business Cycle would the U.S. economy be in currently given the trends? Why might GDP not

be considered an accurate measure of economic well-being of a country? Identify at least three

limitations of GDP as a measure of economic well-being.

Unemployment and Inflation

(graded)

Go to the Bureau of Labor Statistics website, www.bls.gov/news.release/empsit.toc.htm, and click on

"Employment Situation Summary" to get the most up-to-date summary of unemployment in the U.S.

or the "Employment Situation Summary Table A. Household data, seasonally adjusted." What

interests or surprises you about the summary table? How does that rate compare with the rate in the

previous month or quarter? Discuss the differences in unemployment rates by gender, age,

education, etc.

Week 5 discussion

Aggregate Demand and Aggregate

Supply (graded)

Go to the BEA website www.bea.gov. On the left tab under Publications, go to the Interactive Data

Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine all four

components of GDP (C, I, G, and Xn). Which of these four components of AD declined the most

during the 2007 and 2009 recession? Do you think an increase in government's spending (G) can

boost the Aggregate Demand (AD) in a recession? Analyze why the economy may operate below

full-employment GDP in the short run. How can the multiplier have a negative effect? What is the

relationship between the multiplier and the marginal propensities? Explain.

Fiscal Policy

(graded)

Give an example of an event or incident that has taken place in the U.S. economy which has a major

economic impact--be specific, e.g., 9/11 attack, natural disaster, rise or fall in oil prices due to OPEC

policies, consumer optimism or pessimism about an expected economic expansion or downturn,

increase in government spending on healthcare, tightening of the legal and institutional environment,

and so forth. What effect would this event have on AD or AS, other things being constant? What

would be the resulting effect on equilibrium price level? Explain. What will be the effect of the

different tools of fiscal policy to stabilize the economy? Give an example of a built-in stabilizer and

explain how it would work to reduce this rise or fall in the level of AD.

week 6 discussion

Money and Banking

(graded)

What factors led to the mortgage default crisis? How did mortgage defaults affect banks involved in

mortgage lending and mortgage investing? Securitization? TARP? What do these mean? How did

mortgage-backed securities spread losses during the mortgage default crisis? How does TARP

illustrate the problem of moral hazard? What did the Federal Reserve do during the financial crisis of

2008 and 2009? How did the recent financial crisis affect the financial services industry? What are

some of the major provisions of the Wall Street Reform and Consumer Protection Act?

Monetary Policy and the Federal

Reserve (graded)

What is the Federal Reserve (Fed) all about? Which Federal Reserve District Bank is closest to you?

Who is the current Chairman of the Fed? Should the Fed remain independent from political authority

or should the President and Congress have a say in their operations? Why? Why not? What is

FOMC? What is the current Federal Funds Rate? How does the Fed implement monetary policy to

manage the economy? At the last meeting of the FOMC, what was done to the federal funds rate--

increased, decreased, or no change from previous meeting? Given the current state of the U.S.

economy, should the Fed be using expansionary monetary policy or contractionary monetary policy?

Why? Why Not?

Week 7 discussion

Free Trade

(graded)

Are you for or against free trade? Are you for or against NAFTA? What is the economic basis for

trade? Explain the underlying facts that support free trade and give an example of a good that you

purchased recently that is based on resource differences. What are some examples of goods that

the U.S. has comparative advantage in producing? Take a look at the tag of the shirt/dress/pants

you are wearing today. Where was it made? Anyone wearing “Made in America” items of clothing

today? We sometimes hear people say “Buy American." Why don't we? What is the basis of

international trade? What are the benefits and the costs? Under what conditions would you advocate

for trade restrictions?

Foreign Exchange

(graded)

What is happening to the value of the U.S. dollar these days? What causes the value of the U.S.

dollar to rise or fall? Who demands U.S. dollar? Who supplies U.S. dollar? When we purchase

German products, does our demand for euro go up or down? What are freely floating exchange

rates all about, and how do they work? How can the falling U.S. dollar impact your travel expenses?

Why would a cheap dollar relative to other nations' currencies be good or bad for U.S. trade?

(TCO 1) The general concern of economics is with the study of the

Student Answer: degree of competition in stock and bond markets in the economy.

efficient use of limited productive resources to satisfy economic wants.

issue of equality in the distribution of income and wealth among households.

budget deficits in the domestic economy and trade deficits in the international economy.

Question 2. Question :

(TCO 1) The term scarcity in economics refers to the fact that

economic wants are limited and resources are abused.

even in the richest country some people go hungry.

no country can produce enough products to satisfy everybody's economic wants.

it is impossible to produce too much of any particular good or service in a market economy.


(TCO 1) Are the goods that businesses offer for "free" to consumers also free to society?

Yes, because the individual consumer does not have to pay for them.

Yes, because the marginal benefit is greater than the marginal cost.

No, because scarce resources were used to produce the free goods.

No, because society does not assign a value to free goods.


(TCO 1) Which is considered to be an economic resource by economists?

Rent

Money

Labor

Wages


(TCO 1) If an economy is producing at a point inside a production possibilities curve, then

the economy is efficient.

there is economic growth.

resources are unemployed.

resources are fully employed.


(TCO 1) Which would not be characteristic of a capitalist economy?

Government ownership of the factors of production

Competition and unrestricted markets

Reliance on the market system

Free enterprise and choice


(TCO 1) The term dollar votes means

inflation will occur if consumers don't spend wisely.

voters may be offered dollars to help elect certain political candidates.

government is responsible for determining what will be considered legal tender.

consumers "vote" for certain products to be produced by how they spend their incomes.


(TCO 1) The circular flow model

assumes that central planning is taking place.

illustrates how natural resources are created.

illustrates how money is created by the banking system.

illustrates the interdependence of businesses and consumers.


(TCO 1) In a market system, well-defined property rights are important because they

reduce unnecessary investment.

limit destructive economic growth.

create economic problems.

encourage economic activity.


(TCO 1) Which is necessary to make a trade in a barter economy?

Money

Unlimited wants

A medium of exchange

A coincidence of wants


(TCO 1) Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to

fly to another city to attend the concert of her favorite music group. The cost of transportation for the

trip is $250. The cost of the concert ticket is $50. What is the opportunity cost of Tammie’s trip to the

concert? Show your calculations


(TCO 1) Identify some intrinsic qualities ofcapitalist and command economic systems. Identify two

countries that practice each.

(TCO 2) Economists use the term "demand" to refer to

a particular price-quantity combination on a stable demand curve.

the total amount spent on a particular commodity over a stipulated time period.

an upsloping line on a graph that relates consumer purchases and product price.

a schedule of various combinations of market prices and quantities-demanded.


(TCO 2) Which of the following would not shift the demand curve for beef?

A widely publicized study that indicates beef increases one's cholesterol

A reduction in the price of cattle feed

An effective advertising campaign by pork producers

A change in the incomes of beef consumers


(TCO 2) Which of the following is most likely to be an inferior good?

Fur coats

Ocean cruises

Used clothing

Steak

Instructor Explanation: Chapter 3.

Points Received: 1 of 1

Comments:


(TCO 2) Which of the following would mostly likely increase the demand for gasoline?

The expectation by consumers that gasoline prices will be higher in the future

The expectation by consumers that gasoline prices will be lower in the future

A widespread shift in car ownership from SUVs to hybrid sedans

A decrease in the price of public transportation


(TCO 2) The supply curve shows the relationship between

price and quantity supplied.

production costs and the amount demanded.

total business revenues and quantity supplied.

physical inputs of resources and the resulting units of output.


(TCO 2) The price elasticity of demand is generally

negative, but the minus sign is ignored.

positive, but the plus sign is ignored.

positive for normal goods and negative for inferior goods.

positive because price and quantity demanded are inversely related.


(TCO 2) Suppose the price* of local cable TV service increased from $16.20 to $19.80, and as a

result, the number of cable subscribers decreased from 224,000 to 176,000. Use the Midpoint

formula to find the answer. Along this portion of the demand curve, price elasticity of demand is

0.8

1.2

1.6

8.0


(TCO 2) A firm can sell as much as it wants at a constant price. Demand is thus

perfectly inelastic.

perfectly elastic.

relatively inelastic.

relatively elastic.


(TCO 2) The demand schedules for such products as eggs, bread, and electricity tend to be

perfectly price elastic.

of unit price elasticity.

relatively price inelastic.

relatively price elastic.


(TCO 2) The demand for autos is likely to be

less price elastic than the demand for Honda Accords.

more price elastic than the demand for Honda Accords.

of the same price elasticity as the demand for Honda Accords.

perfectly inelastic.


(TCO 2) What is the Law of Supply? Why does the supply curve slope upwards?


(TCO 2) Suppose the price of widgets falls from $7 to $5 and consumption of widgets rises from 15

widgets a month to 25 widgets. Calculate your price elasticity of demand of widgets. What can you

sa

Question: Antitrust Practices and Market Power

Research authoritative articles using the news and the DeVry Online Library

(http://library.devry.edu) for a recent case of antitrust investigation. You are free to choose a

case from any industry and any part of the world. Based on the case you have selected, answer the

following questions.

1. Why was/were the firm(s) investigated for antitrust behavior?

2. Identify some of the costs (pecuniary and nonpecuniary) associated with the antitrust

behavior (firms having power in the market). Additionally, note the specific antitrust act

(Sherman Act, Clayton Act, etc.) under which the violation was investigated.

3. Given your research and findings, are monopolies and oligopolies (firms demonstrating

power) always bad for society? Be sure to provide real world examples of where this

may be the case to strengthen your position.

4. Provide at least one example of a case where having a monopoly or oligopoly may

actually benefit the society.

Based on your findings to the questions listed above, write a report with a minimum of 300 words

in essay format in APA style (use theAPA template in Doc Sharing), using correct economic

terms covered in the discussions. If you ONLY write 300 words, you probably won’t be able to fully

answer the questions.

Key concepts to include in your paper include the following.

Monopoly Market Structure

Oligopoly Market Structure

Barriers to Entry Into the Market

Natural Monopoly

Government Monopoly

Downward Sloping Demand Curve

Economies of Scale

Price Fixing

Collusion

Monopoly Pricing

Price Maker

Market Power

Economic Profits

Imperfect Competition

Rent-Seeking Behavior

http://library.devry.edu/

X-Inefficiency

Deadweight Loss to Society

Marginal Cost

Marginal Revenue

Antitrust

You must use at minimum at least one article from the DeVry Online Library. Note: Although your

textbook is a good source of knowledge, it is NOT an article and cannot be the only sourcefor

the assignment. Cite all your references in APA format. You can use the Citations & Bibliography

function of Microsoft Word, which is found under the References tab.

(TCO 6) Fiscal policy refers to the

manipulation of government spending and taxes to stabilize domestic output, employment, and the

price level.

manipulation of government spending and taxes to achieve greater equality in the distribution of

income.

altering of the interest rate to change aggregate demand.

fact that equal increases in government spending and taxation will be contractionary.


(TCO 6) Suppose that the economy is in the midst of a recession. Which of the following policies

would most likely end the recession and stimulate output growth?

A Congressional proposal to incur a Federal surplus to be used for the retirement of public debt.

Reductions in agricultural subsidies and veterans' benefits.

Postponement of a highway construction program.

Reductions in Federal tax rates on personal and corporate income.


(TCO 6) The crowding-out effect of expansionary fiscal policy suggests that

government spending increases at the expense of private investment.

imports replace domestic production.

private investment increases at the expense of government spending.

saving increases at the expense of investment.


(TCO 5) Which of the following would not shift the aggregate supply curve?

An increase in labor productivity

A decline in the price of imported oil

A decline in business taxes

An increase in the price level


(TCO 6) Other things equal, a reduction in personal and business taxes can be expected to

: increase aggregate demand and decrease aggregate supply.

increase both aggregate demand and aggregate supply.

decrease both aggregate demand and aggregate supply.

decrease aggregate demand and increase aggregate supply.


(TCO 6) The MPC can be defined as that fraction of a

change in income that is not spent.

change in income that is spent.

given total income that is not consumed.

given total income that is consumed.


(TCO 6) Dissaving means

the same thing as disinvesting.

that households are spending more than their current incomes.

that saving and investment are equal.

that disposable income is less than zero.


(TCO 5) Refer to the graph. Which of the following factors will shift AD1 to AD3?

Graph Description

An increase in expected returns on investment

An increase in productivity

A decrease in real interest rates

A decrease in consumer wealth


Question: What is the "current macroeconomic situation" in the U.S. (e.g. is the U.S. economy

currently concerned about unemployment, inflation, recession, etc.)? What fiscal policies and

monetary policies would be appropriate at this time?

1. Write your individual answers to the questions listed above together in essay format (minumum of

300 words combined in APA style), using correct economic terms covered in the discussions.If you

only write 300 words, you probably won't be able to fully answer the questions. Use the APA

Template in Doc Sharing as a guide. You will also find the grading rubric for this assignment in Doc

Sharing.

2. Key concepts to include in your paper--data trends on unemployment, inflation, GDP growth,

expansionary fiscal policy tools, FOMC, easy money policy tools and other terms from this class.

3. You must use at least one article. Note: The textbook is not an article and cannot be the only

source for the assignments. Use the DeVry Library as a resource for finding your references.

CO 1) As a consequence of the condition of scarcity

there is never enough of anything.

production has to be centrally planned.

things which are plentiful have relatively high prices.

individuals and communities have to make choices from among alternatives.


(TCO 1) The opportunity cost of constructing a new public highway is the

money cost of hiring contractors and construction workers for the new highway.

value of other goods and services that must be sacrificed to construct the new highway.

expected cost of constructing the new highway in a future year.

value of shorter driving times and distances when the new highway is completed.


(TCO 1) A nation can increase its production possibilities by

shifting resources from investment good production to consumer good production.

shifting resources from private goods to public goods.

improving labor productivity.

eliminating discrimination.


(TCO 1) Which expression is another way of saying "marginal benefit"?

Benefits given up

Unintended gain

Employment benefits

Extra benefit


(TCO 1) The individual who brings together economic resources and assumes the risk of business

ventures in a capitalist economy is called the

manager.

entrepreneur.

stockbroker.

banker.

econ 312 entire course – devry

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