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Economics Homework Two - Model (view source)
Revision as of 19:54, September 20, 2009
, 19:54, September 20, 2009added two
3. When the '''''supply''''' of a good or service increases, such as increasing the number of oil wells, what happens to the market price of oil? Explain. When the '''''demand''''' for a good a good or service increases, such more people driving cars that need gasoline (refined oil), what happens to the market price of oil? Explain.
3. When the '''''supply''''' of a good or service increases, such as increasing the number of oil wells, what happens to the market price of oil? Explain. When the '''''demand''''' for a good a good or service increases, such more people driving cars that need gasoline (refined oil), what happens to the market price of oil? Explain.
:
:When the supply of a good such as oil increases, the price decreases, as sellers have a greater quantity than usual to sell, and not enough people will purchase it if the price remains steady, resulting in unsold oil. If the demand increases, the price will rise, as people are willing to pay more for what there is, as there is not enough to go around. (Duncan)
4. Why do grocery stores lower the price of their fruit (such as grapes) when they have an oversupply of ripened fruit? Explain by citing the downward slope of a demand curve, and describe what happens to this fruit after the grocery store lowers its price.
4. Why do grocery stores lower the price of their fruit (such as grapes) when they have an oversupply of ripened fruit? Explain by citing the downward slope of a demand curve, and describe what happens to this fruit after the grocery store lowers its price.
:
:No one wants to buy rotten fruit. A grocery store reduces the price of their fruit when they have an oversupply. As a result, people buy their fruit faster so they don’t rot and go to waste. The result is that due to the downward slope of the demand curve the fruit will sell faster. (James)
5. When the New York Yankees built their new $1.5 billion ballpark, they made a decision about how many "obstructed view" bleacher seats to include. Due to the design of this new stadium, people sitting in these bleacher seats could not see all of the field because part of the stadium structure blocks part of their view. Here is what the supply and demand are for those obstructed-view seats:
5. When the New York Yankees built their new $1.5 billion ballpark, they made a decision about how many "obstructed view" bleacher seats to include. Due to the design of this new stadium, people sitting in these bleacher seats could not see all of the field because part of the stadium structure blocks part of their view. Here is what the supply and demand are for those obstructed-view seats:
10. Discuss any aspect of the economics of health care.
10. Discuss any aspect of the economics of health care.
:
:Basically, there are problems with healthcare: premiums and actual care both cost too much, and they are rising in price. Right now, some people have insurance and get the care they need, while others do not have insurance and cannot get care. However, under a government system, nothing would really change; everyone would have insurance in name, but many would still be unable to get their care because of rationing.
What must be done is first to figure out why insurance and care prices are rising. One reason is malpractice lawsuits. Another is government regulation. Another is lack of interstate competition. Due to these and other factors, when you go to the doctor you are not actually paying the price of drugs or procedures, but those prices with countless other fees piled on top.
Government claims it needs to get into the insurance business to keep insurance companies honest. However, it is due much to government stifling of competition among insurance companies that prices are so high to begin with. What will really make insurance affordable is serious tort reform, a handful of federal regulations (especially no preexisting conditions) which facilitate interstate competition, and tax cuts or subsidies for low-income consumers. I once heard a congressman say that insurance companies are acting like a monopoly. Everyone knows monopolies are inefficient because they do not have to compete with anyone else. Introducing competition into the insurance industry will drive down price and drive up quality- the opposite of what the government plans will do. (Addison)
11. How are the forces of supply and demand and the free market helpful to someone who might otherwise be an social outcast and victim of prejudice in a community? In addition or alternatively, discuss the social benefits of a "free market" more generally.
11. How are the forces of supply and demand and the free market helpful to someone who might otherwise be an social outcast and victim of prejudice in a community? In addition or alternatively, discuss the social benefits of a "free market" more generally.