Intro To Enconomics Mod1
ALL WORK MUST BE
ORIGINAL AND WILL BE SUBMITTED TO TURN IT ASSIGNMENT MUST BE A MINIMUM OF 1200
WORDS IN APA FORMAT WITH REFERENCE PAGE THE 1200 WORD COUNT DOES NOT INCLUDE
THE REFERENCE PAGE
ASSIGNMENT:
1 One of the
skills of the economist, as defined in Chapter 1 of the book, is to observe
facts, weed out relevant ones from irrelevant ones, and theorize about the
cause Yet top economists wildly and readily disagree on most, if not all,
aspects of the economy Itâs often even joked about that economists are like
weathermen in that they can be wrong all of the time and still have a job where
people listen to what they say Explain why this is so, and what you think
contributes to the wide variance in theories put forth by economists,
especially during election years
2 A newspaper item reported that two-thirds of
all mothers who work outside the home âdo it for the money, not by choiceâ Are
those really the only alternatives? Could it be that the real culprit is that
most American families want to climb the social ladder and have more
possessions; therefore one income is often not enough to make that happen? Or
maybe is it that divorce is so prevalent that women must work to cover her
living expenses? Or that many mothers have never married? Or is it that most
mothers want a life outside of just being a âmommy?â Or is it a bit of
everything Explain your view on working mothers and the economics reasons
behind them
3 Airlines are
willing to overbook flights because they know that people who make reservations
do not always show up Sometimes, however, this results in more people holding
reservations at the gate than there are seats on the flight A Is overbooking efficient from the
airlinesâ standpoint? Why or why not?
B Is overbooking
efficient from the standpoint of passengers? Why or why not?
C As a
consequence of a 1976 court case that Ralph Nader won against an airline that
had âbumpedâ him, the federal government adopted a rule requiring airlines to
compensate people who were denied boarding despite holding a confirmed
reservation As a result, the airlines started to ask for volunteers who were
willing to take a later flight whenever a flight turned out to be overbooked
Who benefited from this new regulation, and how?
D If passengers
can, in effect, sell their confirmed reservations when a seat shortage arises,
why canât passengers sell their right to land at a crowded airport when a
shortage of landing slots arises? How do you think this would change air travel
as we know it?
E Before 1976, the airlines often denied
boarding to passengers who were flying on urgent business in favor of
passengers who were not in any particular hurry to reach their destinations
This would seem to be a cooperative failure What was the crucial step that
lowered transaction costs sufficiently to transform the frustrating situation
before 1976, when the last persons to show up at the gate were denied boarding,
into the current system, where only volunteers are denied boarding?
4 Suppose a gasoline station offers the
following promotion on the 4th of July: âTODAY ONLY: FREE GASOLINE FROM NOON
UNTIL 3:00 PM! HAPPY BIRTHDAY, AMERICA!â Is that gasoline a free good to the
owner of the station? Is it a free good for all the drivers who wait in long
lines to fill up? Countless others might decide to avoid the âfreeâ gas and
fill up at other stations that charge $400 per gallon In your opinion, are
they foolish to pass up the opportunity? In the economic way of thinking, would
they be failing to economize?