BU224 Unit 1 Assignment
- Liza needs to buy a textbook for the next economics class. The price at the college bookstore is $65. One online site offers it for $55 and another site, for $57. All prices include sales tax. The accompanying table indicates the typical shipping and handling charges for the textbook ordered online.
|Shipping method||Delivery time||Charge|
|Standard shipping||3–7 days||$3.99|
|Second-day air||2 business days||$8.98|
|Next-day air||1 business day||$13.98|
- What is the opportunity cost of buying online instead of at the bookstore? Note that if you buy the book online, you must wait to get it.
- Show the relevant choices for this student. What determines which of these options the student will choose?
- In August 2007, a sharp downturn in the U.S. housing market reduced the income of many who worked in the home construction industry. A Wall Street Journal news article reported that Wal-Mart’s wire-transfer business was likely to suffer because many construction workers are Hispanics who regularly send part of their wages back to relatives in their home countries via Wal-Mart. With this information, use one of the principles of economy-wide interaction to trace a chain of links that explains how reduced spending for U.S. home purchases is likely to affect the performance of the Mexican economy.
- During the Great Depression, food was left to rot in the fields or fields that had once been actively cultivated were left fallow. Use one of the principles of economy-wide interaction to explain how this could have occurred.
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- A representative of the American clothing industry recently made the following statement: “Workers in Asia often work in sweatshop conditions earning only pennies an hour. American workers are more productive and as a result earn higher wages. In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low – wage Asian clothing.”
- Which parts of this quote are positive statements?
“American workers are more productive and as a result earn higher wages.”
- Which parts are normative statements?
“In order to preserve the dignity of the American workplace, the government should enact legislation banning imports of low-wage Asian clothing.”
- Is the policy that is being advocated consistent with the preceding statements about the wages and productivities of American and Asian workers?
No. Because as the representative said, there is a fair correlation between high wages and productivity, thus, if the system is able to work that way no complains in the form of advocating change should be made.
- Would such a policy make some Americans better off without making any other Americans worse off? That is, would this policy be efficient from the viewpoint of all Americans?
No. the policy would not be efficient form the point of all Americans because while the workers in the clothing industry benefit from lack of competition, the consumer would face less choices and higher quality die to lack of competition (Schumacher, 2012).
- Would low – wage Asian workers benefit from or be hurt by such a policy?
They would be hurt. This is because the policy is aimed at taking away wealth from the Asian workers. Refusing form buying from sweatshops slows down the process of economic growth…..