home

Review for the final exam: We will be reviewing in class over the next week and a half. I will break the subject matter down into pieces and we will answer IB questions in class.
I will also publish the IB review guide as we go - The Theory of the Firm review ad a macroeconomics review are on S-Share under Stone Economics

Be sure to review the following topics for the final exam: Merit Goods Public Goods Demerit Goods Allocative Efficiency Productive Efficiency Unemployment - structural, seasonal and frictional and what can be done about each type Price discrimination Aggregate Demand and Aggregate Supply - AD&AS AD - What shifts the curve?
 * C+I+G+(X-M)=Y
 * What is fiscal policy, monetary policy and exchange rates and how can they influence AD?
 * Know what demand side policies are i.e. how can fiscal policy and monetary policy be used to impact AD?

AS - What shifts the AS curve in the short run? AS - What shifts the AS curve in the long run? Inflation
 * Changes in input costs and taxes and subsidies
 * Changes to the stock of productive resources (capital)
 * Changes in productivity
 * Changes in technology
 * Know what supply side policies are page 196 of the Glanville text
 * Demand Pull inflation - know the details of what causes it and how it can be remedied
 * Cost Push inflation - again, know the details of cost push inflation and possible solutions.

SP Jain Center for Management will be running a free summer course: >
 * http://spjain.org/bba/bridge_to_bba.asp

===Internal Assessments - I have uploaded the IBO Internal Assessment guide to S-Share. It is in the folder marked "Stone Economics" and there are two sample portfolios starting on page 12 of that guide. Please take a look at the sample portfolios.=== As you are writing your IA please remember:
 * You must use 4 different sources for the 4 IAs that you will include in your portfolio.
 * Make sure that over the 4 Internal Assessments that you do you draw from at least 3 different areas of the syllabus.
 * The word limit is strict: 650-750 words.
 * Please take a look at the example portfolio on S-Share.

Inflation
Homework due Wednesday(5/11) and Thursday(5/12) Answer questions 3&5 in the packet distributed in class. Please try your best to write thorough and complete answers in preparation for the IB exam.

Unemployment
Homework for Thursday (5/5) & Friday (5/6): Please write out plausible, reasonable and thorough responses to questions 1-4 (student workpoint 20.7) on p 231 of the Blink/Dorton book. These will be collected in class.

Homework for Monday (5/9) & Tuesday (5/10) Please answer questions 1-7 and read p. 208-216 of the Glanville text. Here are the questions. Please prepare your answers in a format that can be collected and marked.
 * [[file:Econ Unemployment multiple choice.pdf]]

Aggregate Demand and Aggregate Supply - The AD/AS model
Homework - AD/AS Problem Set: Answer Questions 10-16
 * Use the green Glanville text p. 197-201 to help you answer these questions.


 * [[file:Econ Questions 10-12 .pdf]]
 * [[file:Econ Questions 13-18 .pdf]]

Unemployment? Take a look at the US unemployment numbers: What do you see? What would you expect to see over the long run here? What do you see as the unemployment number over the long term?
 * http://data.bls.gov/pdq/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

A rise in price level?

 * http://theinvestmentinsight.files.wordpress.com/2011/01/inflation-cartoon.jpg

Why does the AD curve slope downwards? Click on the link below and pick a price that you think you might pay for your first apartment. Then adjust the interest rate on the loan from 5% to 15%. What happens to the monthly payment that you are expected to make? [] What other durable good purchases might be impacted by high interest rates? > The theory suggests that you will seek to maintain the value of you bank balance, and you will spend less in order to build your bank balance back up, and aggregate demand will fall.
 * Interest Rate Effect - As interest rates rise, what happens to interest-sensitive spending?
 * The Net Export Effect - As the price level rises or falls, what will be the impact on exports?
 * The Real Balance Effect - As price level rises and the value of your bank balance falls, how will you respond?

CPI information:
 * http://www.bls.gov/cpi/cpifaq.htm

3/21/2011 - Coffee production and economic growth

Working in groups of 2 please consider: How have the prices for coffee changed since 2007?
 * http://www.ico.org/prices/p2.htm

After watching the short video, take a look at the 2009 report on the Technoserve grant and write up a response in teams: Video: http://www.gatesfoundation.org/topics/Pages/athanasie-technoserve-grant-training-coffee-farmers-video.aspx
 * What were the basic goals of the Technoserve grant in 2009? Were they met?
 * http://www.gatesfoundation.org/learning/Pages/2010-progress-report-technoserve-business-training-coffee-farmers-africa.aspx
 * How do you see this development work contributing to a self reinforcing cycle of economic development?
 * How might you see GDP rise (C, I, G, X-M) from the increased economic activity presented in the Technoserve report and in the video?
 * How would you account for human attitudes in this story? Are the Rwandan people featured here resistant to change, or do they embrace it? Why might that make a difference?
 * How much of the improvement in output here is caused by technological change or an increase in education?

Submit your response (with both names on it of course) on Moodle:
 * http://www.scisdragons.net/moodle/course/view.php?id=247

Homework - Please answer questions 1&2 on the handout using the link below. Then write one paragraph about the Millennium Development Goals you may use this link or other sources to find out about the MDGs
 * http://www.un.org/millenniumgoals/pdf/MDG%20Report%202010%20En%20r15%20-low%20res%2020100615%20-.pdf

For the classwork/homework on 3/15 & 3/16 you can use the UN Human Development Report:
 * http://hdr.undp.org/en/countries/

The Human Development Index:
 * http://hdr.undp.org/en/statistics/hdi/
 * What is considered in building this index?

Mollie Orshansky:
 * http://aspe.hhs.gov/poverty/Orshansky/index.shtml

http://www.oecd.org/document/33/0,3746,en_2825_35731996_40881569_1_1_1_1,00.html

For the exam you should know:

Perfect competition: The defining characteristics of the perfectly competitive market structure How to graph perfect competition (both for the industry and for the firm) The differences between the short run and long run in terms of what profits/losses can be made in a perfectly competitive marketplace

Monopoly: The defining characteristics of the monopolistic market structure How to describe economies of scale and a natural monopoly How to graph a monopolistic market structure The profit maximizing level of production for a monopoly

Monopolistic competition: The defining characteristics of monopolistic competition The difference between perfect competition and monopolistic competition (Product differentiation) Can losses/profits be made in monopolistic competition in the short and long run?

Oligopoly: The defining characteristics of oligopoly The difference between a collusive oligopoly and a non-collusive oligopoly What non-price competition is

Price discrimination: What is price discrimination and what three conditions are necessary for it to occur? How do producers separate consumers in order to prevent arbitrage?

Contestable Markets, Price Discrimination, Consumer and Producer Surplus

For more information on contestable markets you can read: p131-132 in the Blink/Dorton (Blue) book p 109-111 in the Glanville book

What is wrong with nationalization?
 * http://www.washingtonpost.com/wp-dyn/content/article/2010/07/08/AR2010070802795.html

Price discrimination?
 * http://www.autoblog.com/2008/07/29/european-pricing-for-corvette-zr1-doubles-to-over-214k/
 * http://www.chevrolet.com/corvette-family/

Price war:
 * http://tutor2u.net/blog/index.php/ib-diploma/comments/book-price-wars-do-they-improve-consumer-welfare/

The World Economic Forum was held in Davos, Switzerland from Jan 26-30. Have you read about it yet?


 * http://dealbook.nytimes.com/category/main-topics/davos-2011/
 * http://www.weforum.org/

China's Ministry of Commerce rejects a Coca-Cola bid to buy Huiyan Juice Co. for $2.4 billion
 * http://www.mallesons.com/publications/2009/Mar/9842472W.htm

Hong Kong: Cross sector competition law and the Competition Commission:
 * http://www.cedb.gov.hk/citb/ehtml/Consultation_Paper_Eng.pdf

Oligopoly in the chocolate market - See who sells what...
 * http://www.guardian.co.uk/business/interactive/2010/jan/20/cadbury-kraft-nestle-mars-ferrero

Brynco cola comes to market in Bolivia:
 * http://www.reuters.com/article/2011/01/19/us-bolivia-coca-idUSTRE70I0G920110119

Where do you see aspects of perfect competition as a result of this traffic jam? = =
 * http://www.nytimes.com/2011/01/19/world/asia/19traffic.html?_r=1&hp