Summer Assignment

Congratulations, and welcome to the wonderful world of economics!!  As a student in next year’s class, you are also the lucky recipient of a summer assignment giving you a preview of the topics we will focus on in the coming school year.  Below, you will find the details of this assignment.  In order for me to make sure you have received this assignment, please SEND AN EMAIL TO ME LETTING ME KNOW THAT YOU UNDERSTAND THE DIRECTIONS AND ACCEPT THE RESPONSIBILITY OF COMPLETING THE ASSIGNMENT AS INDICATED.  THIS EMAIL SHOULD BE SENT NO LATER THAN FRIDAY, JUNE 18TH, 2010.  My email address is .
Your task:
• To read the assigned chapters from the book, Naked Economics: Undressing the Dismal Science by Charles Wheelan.
• Answer the accompanying questions about the reading.
***Make sure to acquire the fully revised and updated 2010 version of the book!!!! ***
Written responses to the questions below must be turned in on Friday, September 10th, 2010.  Responses must be written in complete sentences and must be typed, double-spaced, 12 point Times New Roman font with standard margins.  For each response, you must support your answer with specific evidence from the book.
Before you begin reading and answering the following chapters and questions, please make sure to read the Introduction.
Chapter 1: The Power of Markets
1. How does Wheelan explain who feeds Paris and why the chicken crossed the road?
2. What is meant by “price discrimination?”  Provide one example from the chapter and one of your own.
3. What does Wheelan mean when he says the market economy operates as an “amoral force?”
4. According to Wheelan, why do attempts to fix prices (set legal prices) hardly ever work?
Chapter 2: Incentives Matter
1. “Capitalism can be a brutal, cruel process.  But ‘creative destruction’ (Joseph Schumpeter) is a tremendous positive force.  Competition means losers, which goes a long way to explain why we embrace it in theory and fight it bitterly in practice.”  Explain this statement, and give an example.
2. Can you think of any important incentives in your own life that have gotten you to do something or stop doing something?  Perhaps related to your school work?  Homework?  Chores?  Behavior?
Chapter 12: Trade and Globalization
1. Why do nations trade?
2. Should we (the rich and industrialized nations of the world) hold the poorest developing nations to the same environmental standards as we hold ourselves?  Why or why not?
3. Explain this statement: “Productivity is what makes us rich.  Specialization is what makes us productive.  Trade allows us to specialize.”
4. Wheelan makes the argument that “Protectionism saves jobs in the short run” but ultimately causes more harm than good.  Is there a non-economic argument (perhaps political, moral, or ethical) that helps to understand why governments sometimes impose trade sanctions on places like Gaza, Cuba, and Iran?
You are an AP student.  Lesson # 1: Do Not Procrastinate!
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