Naked Economics Essay

Chapter 1 The fountain of MarketsWhat are the two basic assumptions that economists make about individuals and firms?What is the role and significance of prices in the mart rescue?Whats so great about a foodstuff economy anyway?Market parcelling 3 / Assume rational utility-maximizers 6 / Opportunity costs 9 / Profit max 11 / Prices allocate resources 12 / Barriers to entry 14 / Market price, pricing decision & price discrimination 15 / Lessons of markets 18Chapter 2 Incentives MatterExplain how each of the following relates to efficient outcomes in a market economy-adverse selection-perverse incentives-principal-agent problem,-the prisoners dilemma.Wrong incentives lead to undesirable outcomes 23 / yeasty destruction 36 / Tax & govt program disincentives 38Chapter 3 Government and the EconomyIn your deliver words, explain what an externality is.Besides addressing externalities, what other important and beneficial roles does government play in our market economy?Externalities 4 3 / Govt solutions to externalities 48 / Govt makes market economy possible rights, laws / regulations 51 / Public goods 57 / Redistribution 59Chapter 4 Government and the Economy IIWhat are the main reasons why government should only support a limited role in a market economy?Govt inefficiency 63 / Govt allocation vs semiprivate allocation 67 / do of regulation 69 / Effects of taxation 74 / Summary 78Chapter 5 Economics of InformationWheelan explains that basic stinting models assume that all parties have perfect information. How does informational imbalance undermine our market economy?Adverse selection 81 / Firm screening 89 / stigmatization provides information 90 / Branding versus commodities 92 / Signaling mechanisms 93Chapter 6 Productivity and Human crownworkAfter reading Wheelans argument, do you agree that Bill Gates should be so practically richer than you? Evaluate the following statement from p. 113 We should not care about the gap between rich and curt as long as everybody is living better.Human capital 98 / Job creation 103 / Effects of human capital on standard of living 105 / Productivity 107 / Income inequality 111Chapter 7 monetary MarketsExplain how get-rich-quick schemes violate the most basic principles of economics.What advice about investing in the stock market did you get most interesting and/or useful?Purposes of financial instruments 118 / Efficient markets & index funds 126 / Investment guidelines 132Chapter 8 The Power of Organized spare-time activitys wherefore have mohair farmers earned a subsidy from the federal government fordecades?Interest groups & politicians incentives 137 / Some regulations benefit business 142 / Tyranny of the status quo 144Chapter 9 Keeping ScoreWhy is a nations GDP a good measure of its economic benefit and advancement?Why is a nations GDP a poor measure of its economic well-being and progress?GDP importance, real vs nominal, per capita 150 / GDP growth & wage growth 152 / GDP misses tend er progress 154 / Recessions 156 / Fiscal & monetary policy 158 / Other vital signs unemployment, poverty, inequality, govt budget, deficit, current acct, national savings, demographics 160Chapter 10 The Federal ReserveWhat is the primary role of the Federal Reserve?What is the significance of this role?What is deflation, and why is it worse than inflation?Importance of Fed 168 / Easy money causes inflation 170 / FOMC & monetary policy tools 172/ hassle of policy decision-making 175 / Money 176 / Inflation & effects 179 / Political pressure to allow inflation 182 / Deflation 184Chapter 11 Trade and GlobalizationWhat is the good news about Asian sweatshops?Benefits of trade 187 / Comparative advantage & strength 190 / Losers from trade 191/ Protectionism 193 / Trade raises real incomes 195 / Trade benefits for poor countries 196 / Cultural homogenization 199 / Sweatshops 201Chapter 12 emergence EconomicsAfter reading this chapter, what do you believe are the two greatest obstacle s preventing poor countries from bonnie rich?Importance of policies (vs resources) 206 / Effective development policies 208 / Exchange rates 217 / IMF 225Epilogue Life in 2050What economic question do you have about life in 2050? About todays economy? About life in general?