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TOPIC #3 – Posted Thursday

1) Business firms come in all shapes and sizes. A basic distinction is made, however, among three different legal organizations: • Corporations • Partnerships • Proprietorships. What are the advantages and disadvantages of each form?

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2) Rich people have over 15 times as much income as poor people. Is that fair? How should output be distributed? Consider the chart on page 380 of your text.

3) What can poorer nations do to raise their living standards?

4) Americans already enjoy living standards that far exceed world averages. Do we have enough? Should we even try to produce more?

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Class, Our first economic model is the Production Possibilities Curve (PPC) or Production Possibilities Frontier (PPF). It enables us to analyze choices in production. The United States first used the concept of the PPC during World War I to see the trade-offs between military production (e.g., guns) and civilian production (e.g., butter). What the United States found was that in order to get additional units of military goods, it had to give up increasingly more units of civilian goodsTutorial: Production Possibilities Curve

 (Links to an external site.)

This presentation teaches the Law of Increasing Opportunity Cost, scarcity, and four factors of production (CELL) as they pertain to the construction and usage of the Production Possibilities Curve. It includes a company example and basic interactivity to aid the student in understanding the chart.

Let’s keep it simple. Economics describes how a given country distributes it’s wealth to it’s citizens. Some economic systems allow for more private ownership of the inputs to production than others. 

Communism has a central planning function which makes all of the decisions related to the economy. There is little to no incentive for free enterprise. Private ownership of resources is discouraged.

The other extreme is laissez-faire economics where the market (seller & buyers) regulate the economy. Social problems are addressed by the invisible hand (unregulated supply and demand). Profit is the only measure of successful business ownership.

Market Economy: Definition, Pros, Cons, Examples

TOPIC B – posted Tuesday

1) The United States has plans to spend billions of dollars on a mission to Mars. List some of the possible opportunity costs of the mission. What resources will be used to execute the mission, and what do we sacrifice by using these resources in a mission to Mars?

2) How would your describe the variables that change in this chart? What does these curves suggest?

BUSN115Supply&Demand.png

3) What are the elements that make up GDP? Does ownership of the business matter?

4) Explain why buying a foreign car made abroad for $50,000 increases consumption by $50,000, but does not increase GDP.

TOPIC A – posted Sunday

1) How is the wealth of a capitalistic economy distributed? Who are what makes the decisions?

2) Is the US economy an example of socialism or capitalism or both?

3) What does an economist mean when they talk about the standard of living? Is there a formula that economists can use to mean the SOL for every country in the world?

4) Describe the five inputs or factors of production? How are these obtained in a capitalist economy? How about in a system with more government intervention?

5) Discuss the concepts of absolute and comparative advantage. Can you provide an example of each?

6) Why was the study of economics know as the dismal science?