see attach
ECON 203 Project Description (Term Paper) Select at least three news articles that discuss the economic concept that you chose as a topic for your term paper. At least one news article should be dated within the previous two months. Please note that the goal of this assignment is to read, understand, and discuss recent news using microeconomic terminology. The articles should be from an on-line newspaper or magazine. Materials posted on educational websites, like www.thebalance.com, www.khanacademy.org , and so on, are not considered news articles even if they were recently updated and contain material related to the term paper topic. The Term paper should have the following structure: 1. Abstract (0.5 of a page) – the short description of the concepts, problems, questions discussed in the Term paper. 2. Introduction (0.5 of a page) (optional) 3. Literature Review (about 2 pages) – please compare and contrast the opinions of the authors of the articles, present the important information, data, statistics to support your conclusions. It is important that the Literature review is written in your own words with small quotes from the article. All quotes must have references in accordance with the 7th Edition APA Style. 4. Discussion (about 2 pages) - Your task for this part of the Term paper is to analyze the issue described in the articles using the economic concepts and theory learned in this class. Refer to the course content materials and use specific economic vocabulary within your term paper. The articles you choose may not use these exact terms; therefore, it is incumbent upon you to convert the article language into economic language as is appropriate. Include at least one graph developed in our course. (for the one paragraph use attachment Chapter6ConsumerChoices) 5. Conclusion (0.5 of a page) The Term paper should be the title page and sub-titles that correspond to the structure described above. Please note the Term paper should be written in your own words. You can use short quotes from the article(s) to support your statements. However the size of these quotes should be reduced to minimum. No more than 20% of the text of the term paper should be made up of quotes. (less is better!!!). Please also avoid copying the materials from any textbooks, including our textbook. Please be aware that Wikipedia, Investopedia, and other on-line dictionaries and encyclopedias are not verifiable sources of reliable information, and should not be used in the Term paper. Acceptable sources of the information are: research papers, newspaper articles, and books. Please note that this is the course of microeconomics, so you should choose the concepts related to microeconomics (not macroeconomics). Possible concepts include: · taxes and consumer or producer surplus · elasticity on a particular product · perfect competition · imperfect competition, such as monopolies · monopolistic competition · oligopoly · labor market, · wage determination · income inequality · poverty and public policy · another topic selected by the professor Format of the Paper: Written projects: 1. Must be typed, double-spaced, in 12-point Times New Roman or Arial font, with one-inch margins 2. Must have the title page in APA-7th style 3. Must have in-text citations in APA-7th edition style 4. Must have reference list in APA-7th edition style. Please note that you must reference the data you are using for the project 5. Must be prepared using word processing software (Microsoft Word preferred) The Term Paper should be about 4-5 double-spaced typewritten pages (plus tables and graphs) Please note that Use of 7th Edition APA Citation Methodology is required for the assignment Chapter 6 Consumer Choices Chapter 6: Consumer Choices in the text Principles of Microeconomics by OpenStax is available under a Creative Commons Attribution 4.0 license. © Feb 25, 2016 OpenStax. UMGC has modified this work and it is available under the original license. http://cnx.org/contents/ea2f225e-6063-41ca-bcd8-36482e15ef65@10.168 http://creativecommons.org/licenses/by/4.0/ 6 | Consumer Choices Figure 6.1 Investment Choices Higher education is generally viewed as a good investment, if one can afford it, regardless of the state of the economy. (Credit: modification of work by Jason Bache/Flickr Creative Commons) "Eeny, Meeny, Miney, Moe"—Making Choices The Great Recession of 2008–2009 touched families around the globe. In too many countries, workers found themselves out of a job. In developed countries, unemployment compensation provided a safety net, but families still saw a marked decrease in disposable income and had to make tough spending decisions. Of course, non-essential, discretionary spending was the first to go. Even so, there was one particular category that saw a universal increase in spending world-wide during that time—an 18% uptick in the United States, specifically. You might guess that consumers began eating more meals at home, increasing spending at the grocery store. But the Bureau of Labor Statistics’ Consumer Expenditure Survey, which tracks U.S. food spending over time, showed “real total food spending by U.S. households declined five percent between 2006 and 2009.” So, it was not groceries. Just what product would people around the world demand more of during tough economic times, and more importantly, why? (Find out at chapter’s end.) That question leads us to this chapter’s topic—analyzing how consumers make choices. For most consumers, using “eeny, meeny, miney, moe” is not how they make decisions; their decision-making processes have been educated far beyond a children’s rhyme. Introduction to Consumer Choices In this chapter, you will learn about: Chapter 6 | Consumer Choices 129 Download for free at http://cnx.org/contents/ea2f225e-6063-41ca-bcd8-36482e15ef65@10.168 • Consumption Choices • How Changes in Income and Prices Affect Consumption Choices • Labor-Leisure Choices • Intertemporal Choices in Financial Capital Markets Microeconomics seeks to understand the behavior of individual economic agents such as individuals and businesses. Economists believe that individuals’ decisions, such as what goods and services to buy, can be analyzed as choices made within certain budget constraints. Generally, consumers are trying to get the most for their limited budget. In economic terms they are trying to maximize total utility, or satisfaction, given their budget constraint. Everyone has their own personal tastes and preferences. The French say: Chacun à son goût, or “Each to his own taste.” An old Latin saying states, De gustibus non est disputandum or “There’s no disputing about taste.” If people’s decisions are based on their own tastes and personal preferences, however, then how can economists hope to analyze the choices consumers make? An economic explanation for why people make different choices begins with accepting the proverbial wisdom that tastes are a matter of personal preference. But economists also believe that the choices people make are influenced by their incomes, by the prices of goods and services they consume, and by factors like where they live. This chapter introduces the economic theory of how consumers make choices about what to buy, how much to work, and how much to save. The analysis in this chapter will build on the three budget constraints introduced in the Choice in a World of Scarcity chapter. These were the consumption choice budget constraint, the labor-leisure budget constraint, and the intertemporal budget constraint. This chapter will also illustrate how economic theory provides a tool to systematically look at the full range of possible consumption choices to predict how consumption responds to changes in prices or incomes. After reading this chapter, consult the appendix Indifference Curves to learn more about representing utility and choice through indifference curves. 6.1 | Consumption Choices By the end of this section, you will be able to: • Calculate total utility • Propose decisions that maximize utility • Explain marginal utility and the significance of diminishing marginal utility Information on the consumption choices of Americans is available from the Consumer Expenditure Survey carried out by the U.S. Bureau of Labor Statistics. Table 6.1 shows spending patterns for the average U.S. household. The first row shows income and, after taxes and personal savings are subtracted, it shows that, in 2015, the average U.S. household spent $48,109 on consumption. The table then breaks down consumption into various categories. The average U.S. household spent roughly one-third of its consumption on shelter and other housing expenses, another one-third on food and vehicle expenses, and the rest on a variety of items, as shown. Of course, these patterns will vary for specific households by differing levels of family income, by geography, and by preferences. Average Household Income before Taxes $62,481 Average Annual Expenditures $48.109 Food at home $3,264 Food away from home $2,505 Housing $16,557 Table 6.1 U.S. Consumption Choices in 2015 (Source: http://www.bls.gov/cex/csxann13.pdf) 130 Chapter 6 | Consumer Choices This content is available for free at http://cnx.org/content/col11627/1.10 Download for free at http://cnx.org/contents/ea2f225e-6063-41ca-bcd8-36482e15ef65@10.168 Apparel and services $1,700 Transportation $7,677 Healthcare $3,157 Entertainment $2,504 Education $1,074 Personal insurance and pensions $5,357 All else: alcohol, tobacco, reading, personal care, cash contributions, miscellaneous $3,356 Table 6.1 U.S. Consumption Choices in 2015 (Source: http://www.bls.gov/cex/csxann13.pdf) Total Utility and Diminishing Marginal Utility To understand how a household will make its choices, economists look at what consumers can afford, as shown in a budget constraint line, and the total utility or satisfaction derived from those choices. In a budget constraint line, the quantity of one good is measured on the horizontal axis and the quantity of the other good is measured on the vertical axis. The budget constraint line shows the various combinations of two goods that are affordable given consumer income. Consider the situation of José, shown in Figure 6.2. José likes to collect T-shirts and watch movies. In Figure 6.2, the quantity of T-shirts is shown on the horizontal axis, while the quantity of movies is shown on the vertical axis. If José had unlimited income or goods were free, then he could consume without limit. But José, like all of us, faces a budget constraint. José has a total of $56 to spend. The price of T-shirts is $14 and the price of movies is $7. Notice that the vertical intercept of the budget constraint line is at eight movies and zero T-shirts ($56/$7=8). The horizontal intercept of the budget constraint is four, where José spends of all of his money on T-shirts and no movies ($56/14=4). The slope of the budget constraint line is rise/run or –8/4=–2. The specific choices along the budget constraint line show the combinations of T-shirts and movies that are affordable. Figure 6.2 A Choice between Consumption Goods José has income of $56. Movies cost $7 and T-shirts cost $14. The points on the budget constraint line show the combinations of movies and T-shirts that are affordable. José wishes to choose the combination that will provide him with the greatest