AP Microeconomics Summer Assignment 2013

Congratulations, and welcome to the wonderful world of economics!!  As a student in this year’s class, you are also the lucky recipient of an assignment giving you a preview of the topics we will focus on in this school year.  Below, you will find the details of this assignment. My email address is rstern2@boston.k12.ma.us should you need to contact me.

 

Your tasks: 

  • Read the assigned chapters from the book, Naked Economics: Undressing the Dismal Science by Charles Wheelan.  Acquire the fully revised and updated 2010 version of the book.
  • Answer the accompanying questions using specific evidence from the reading.  Your answers should be written in complete sentences and typed.  Please double space, and write in 12 point Times New Roman font with standard margins.
  • For each section (foreward and chapters 1, 2, 3, and 12), write one question related to the reading that you would like answered.

 

Due Date: Monday, September 9th, 2013.

 

Foreword by Burton G. Malkiel

 

  1. Why has the study of economics often been criticized?

 

  1. The influence of economics is present in many business, financial, and government communities.  What are three institutions and agencies that rely on economics in some significant way?  Include at least one business, one financial, and one government organization in your response.

 

Chapter 1: The Power of Markets

 

  1. Define barrier to entry.  What are some “barriers to entry” that make it so only one seller can provide a good or service?

 

  1. What is meant by “price discrimination?”  Why are airlines able to price discriminate?

 

  1. What does Wheelan mean when he says the market economy operates as an “amoral force?”

 

Chapter 2: Incentives Matter

 

  1. What are incentives?  Can you think of an incentive that has worked in your own life?

 

  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.

 

Chapter 3: Government and the Economy

 

  1. What are externalities?  What externalities are associated with cigarette smoking?

 

  1. What are five ways in which the government is essential for a market economy to operate successfully?

 

Chapter 12: Trade and Globalization

 

  1. Why do nations trade?

 

  1. 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?
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