Naked Economics Essay

616 WordsSep 21, 20133 Pages
Katherine Piedra P4 09/12/13 Chapter 1: The Power of Markets 1. What are the two basic assumptions that economists make about individuals and firms? First, we assume that all of these entities have unlimited wants. This assumption forms the basis of economics. It is the study of how entities try to fulfill these unlimited wants when confronted with limited resources. Second, we assume that all of these entities are rational actors. We assume that they typically act in ways that will help to achieve their goals. This allows us to understand their actions which we would not be able to do if we assumed that they constantly acted on the basis of whims. 2. What is the role and significance of prices in the market economy?…show more content…
Chapter 6: Productivity and Human Capital 9. After reading Whelan’s argument, do you agree that Bill Gates should be so much richer than you? Why? 10. Evaluate the following statement from p. 113: “We should not care about the gap between rich and poor as long as everybody is living better.” Chapter 7: Financial Markets 11. Explain how get-rich-quick schemes violate the most basic principles of economics. 12. What advice about investing in the stock market did you find most interesting and/or useful? Chapter 8: The Power of Organized Interests 13. Why have mohair farmers earned a subsidy from the federal government for decades? Chapter 9: Keeping Score 14. Explain why a nation’s GDP is both a good and poor measure of its economic well-being and progress? Chapter 10: The Federal Reserve 15. What is the primary role of the Federal Reserve? What is the significance of this role? 16. What is deflation and is it worse than inflation? Why? Chapter 11: Trade and Globalization 17. What is the“good news about Asian sweatshops”? 18. What is there relationship between specialization and productivity? Chapter 12: Development Economics 19. After reading this chapter, what do you believe are the two greatest obstacles preventing poor countries from becoming rich? 20. After reading this chapter, explain and discuss what we can do to help developing nations. What do these nations need to do to help themselves? Epilogue: Life in 2050
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