Microeconomics: Private and Public Choice, 15th Edition solutions manual and test bank James D. Gwartney

Microeconomics: Private and Public Choice, 15th Edition solutions manual and test bank James D. Gwartney

Microeconomics Chapter 2 B—Some Tools of the Economist

MULTIPLE CHOICE

181. Melanie decided to sleep in today rather than attend her 9 a.m. economics class. According to economic analysis, her choice was

a.	irrational, because economic analysis suggests you should always attend classes that you have already paid for.
b.	irrational, because oversleeping is not in Melanie's self-interest.
c.	rational if Melanie has not missed any other classes.
d.	rational if Melanie values sleep more highly than the benefit she expects to receive from attending the class.

ANS: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP: Production Possibilities Curve KEY: Bloom's: Application

MSC: On-line Practice

182. If a motorist is stranded in front of a pay phone and has only dollar bills, and he ends up buying a quarter from a passerby for $1,

a.	the stranded motorist must not understand that four quarters are worth $1.
b.	economic theory is unable to explain this transaction.
c.	both parties have gained from this exchange.
d.	the passerby was made better off and the motorist worse off.

ANS: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade TOP: Trade Creates Value

KEY: Bloom's: Application MSC: On-line Practice

183. When private ownership rights are well-defined and enforced, owners

a.	can ignore the wishes of others, without bearing the cost.
b.	have little incentive to take care of things.
c.	can do anything they want with their property.
d.	can be held accountable for damage to others through misuse of their property.

ANS: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic

STA: DISC: The role of government TOP: The Importance of Property Rights

KEY: Bloom's: Knowledge MSC: On-line Practice

184. The production possibilities curve illustrates the basic principle that

a.	an economy's capacity to produce increases in proportion to its population.
b.	if the resources of an economy are being used efficiently, more of one good can be produced only if less of another is produced.
c.	an economy will automatically seek the output at which all of its resources are fully employed.
d.	the distribution of income among households is the major determinant of the economic welfare of a nation.

ANS: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Productivity and growth TOP: Production Possibilities Curve

KEY: Bloom's: Knowledge MSC: On-line Practice

185. Which of the following attributes of trade explain why it is important for economic prosperity?

a.	Trade moves goods from people who value them less to people who value them more.
b.	Trade makes it possible to produce a larger output as a result of lower per unit costs that often accompany large-scale production.
c.	Trade makes it possible to produce a larger output as a result of gains from division of labor and specialization.
d.	All of the above.

ANS: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Knowledge

MSC: On-line Practice

186. The size of a country's "economic pie" is thought of as the total dollar value of all goods and services produced during some period of time. The economic pie

a.	is a fixed total waiting to be divided up among people.
b.	determines how much wealth an individual can obtain.
c.	is variable, not fixed, across time periods.
d.	depends solely upon the natural resources of a country.

ANS: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic

STA: DISC: The role of money TOP: Human Ingenuity and the Creation of Wealth

KEY: Bloom's: Knowledge MSC: On-line Practice

187. In a market economy,

a.	a larger income for one person means a smaller one for another.
b.	the government answers all the basic economic questions.
c.	a larger income for one person means it is possible for others to earn more too.
d.	economic output shrinks as we discover better ways of doing things.

ANS: C PTS: 1 DIF: Easy NAT: BUSPROG: Analytic

STA: DISC: The role of money TOP: Human Ingenuity and the Creation of Wealth

KEY: Bloom's: Application MSC: On-line Practice

188. According to the law of comparative advantage, a particular task is performed most efficiently by the individual with the lowest

a.	wage rate.
b.	tax liability.
c.	net worth.
d.	opportunity cost.

ANS: D PTS: 1 DIF: Easy NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Knowledge

MSC: On-line Practice

189. A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are being used efficiently. If an economy operates at a point inside its production possibilities curve,

a.	it lacks the resources necessary to produce at full employment.
b.	it is utilizing some resources inefficiently.
c.	it does not confront the problem of scarce goods relative to unlimited wants.
d.	it does not exist in the real world since it is impossible for an economy to operate inside its production possibilities curve.

ANS: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Productivity and growth TOP: Production Possibilities Curve

KEY: Bloom's: Application MSC: On-line Practice

190. Given freedom of movement for both goods and resources, if Florida producers specialize in oranges and Georgia producers specialize in peaches, then it would be reasonable to conclude that

a.	the opportunity cost of growing oranges is higher in Florida than in Georgia.
b.	Georgia has a comparative advantage in producing peaches.
c.	Florida has a comparative advantage in producing peaches.
d.	total output will be expanded when Georgia allocates more resources to producing oranges and Florida allocates more resources to producing peaches.

ANS: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade TOP: Trade Creates Value

KEY: Bloom's: Application MSC: On-line Practice

191. The law of comparative advantage indicates that

a.	a group of people will reduce their output when each good or service is supplied by the low opportunity cost producer.
b.	trading partners lose when they can acquire a good through trade cheaper than they can produce it.
c.	trade is most effective when people trade only among those in their own nation.
d.	a group of people can increase their output when each good or service is supplied by the low opportunity cost producer.

ANS: D PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Application

MSC: On-line Practice

192. Sophia is an architect and she is trying to decide whether to hire Jacob, a draftsman, to assist with her work. Sophia could hire Jacob at $20 per hour but it would take him three times as long to complete a task as it takes Sophia. Sophia is able to earn $90 per hour and has more architectural jobs than she is able to handle. Which of the following is true?

a.	Sophia should not hire Jacob because it would be faster for her to do the work herself.
b.	Sophia should do the drafting work herself because she has the lower opportunity cost.
c.	Jacob should be hired at the $20 per hour wage rate.
d.	Jacob should be hired, but only if he is paid more than $30 per hour.

ANS: C PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Application

MSC: On-line Practice

193. Suppose an airline ticket from Charlotte to Dallas costs $525. A bus ticket is $325. Traveling by plane will take 5 hours, compared with 25 hours by bus. Thus, the plane costs $200 more but saves 20 hours of time (Hint: Note how we are "thinking at the margin" here by looking at the changes). Other things constant, an individual will gain by choosing air travel if, and only if, each hour of her time is valued at more than

a.	$10 per hour.
b.	$13 per hour.
c.	$20 per hour.
d.	$105 per hour.

ANS: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Application

MSC: On-line Practice

194. Which of the following is NOT true of opportunity cost?

a.	Opportunity costs are subjective because they depend upon how the decision-maker values his or her options.
b.	Opportunity costs are only the monetary costs of lost options.
c.	Opportunity costs are the highest-valued alternative sacrificed in order to choose an option.
d.	Only the decision-maker can determine his or her opportunity costs for any particular action.

ANS: B PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: What Shall We Give Up?

KEY: Bloom's: Knowledge MSC: On-line Practice

195. Middlemen, such as grocers, stockbrokers, and realtors

a.	specialize in reducing transactions costs.
b.	provide nothing of value to either the buyer or the seller.
c.	have no effect on economic output in society.
d.	do not exist in capitalist economies.

ANS: A PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade TOP: Trade Creates Value

KEY: Bloom's: Knowledge MSC: On-line Practice

ESSAY

196. A popular video program used to teach economics to primary school children defines opportunity cost as "what you give up to get something." In light of your understanding of opportunity cost, how would you modify this definition?

ANS:

The video program always gives the children two choices; the choice forgone, therefore, is the opportunity cost. For children of this age and reasoning ability, this is probably a good approach. We know, however, that more than one option is relinquished once a decision has been made. A choice to take a 9 a.m. economics class will mean that you cannot take English, French, math, biology, or philosophy at that time. Our understanding of opportunity cost reveals that it is only the highest valued alternative forgone.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Analysis

MSC: Critical Thinking

197. After the terrorist attacks on September 11, 2001, the United States began devoting substantial resources toward the War on Terrorism, homeland security, and relief efforts. Use the production possibilities curve to demonstrate how this might affect the production of other goods in the United States.

ANS:

Increased resources devoted toward these efforts must come away from the production of other goods, reducing the production of these other goods.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Productivity and growth TOP: Production Possibilities Curve

KEY: Bloom's: Analysis MSC: Critical Thinking

198. An economics professor points to a student in the front row and announces that "sitting in class is the thing you value most during this time period." Is the professor correct? Why or why not?

ANS:

If the student is rational (and this is an assumption made in economics), he allocates time to its highest valued use. By attending class, the student has revealed that this activity was valued most during that time period. If this were not true, the student wouldn't be there.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Scarcity, tradeoffs, and opportunity cost

TOP: Trade, Output, and Living Standards KEY: Bloom's: Application

MSC: Critical Thinking

199. Explain the idea of capital investment by using the story of Robinson Crusoe. What is sacrificed, and what is gained?

ANS:

For Robinson Crusoe, engaging in capital investment involves producing tools now that would increase his consumption possibilities in the future. Examples might include making a net for fishing or constructing a tool that enables him to pick fruit faster. By engaging in these activities, he will not be able to use the time to fish and pick fruit for immediate consumption. He sacrifices consumption and gains the ability to consume more fish and more fruit in the future.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Productivity and growth TOP: Production Possibilities Curve

KEY: Bloom's: Application MSC: Critical Thinking

200. The president of a large public university proclaims, "If we can get the state government to fund our new football stadium, it will not cost us anything." Evaluate this view from an economic perspective.

ANS:

While it may not directly affect the university's budget, the cost will be borne by taxpayers. Also, there will be opportunity costs brought about by diverting stadium funding from roads, hospitals, or primary schools. We also should not ignore the fact that the state may reduce its funding of the university in other areas, such as student financial aid, to compensate for the cost of the football stadium.

PTS: 1 DIF: Challenging NAT: BUSPROG: Analytic

STA: DISC: Scarcity, tradeoffs, and opportunity cost TOP: What Shall We Give Up?

KEY: Bloom's: Analysis MSC: Critical Thinking

201. Mark and John are 10-year-old twins who do not get along. They have opened separate lemonade stands and are competing with each other, selling lemonade on their block. Their mother observes that Mark is very good at making lemonade and John is an excellent young salesman. She suggests they both could make more money if they worked together. John counters that two stands will always make more money than one. Who is right? Why?

ANS:

The mother makes the point that gains from trade are possible and that the law of comparative advantage should apply. If the two stands operate separately, Mark might make quite a bit of lemonade but be unable to sell it. John might sell all he makes, but this is probably not very much. By working together, the two should be able to sell more lemonade than is possible if they operate two stands independently.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Analysis

MSC: Critical Thinking

202. A department store buys a wool coat for $120 and sets its retail price at $300. The coat costs $85 to produce. When the coat doesn't sell, the store marks the price down to $200, then $100, and finally $70. At $70, Amy buys the coat. What was the coat's true value? Why?

ANS:

Since the coat sold for $70, we would have to say that this is its value. In economics, the value of a product is assigned when a trade is made. Retail prices, costs of production, etc. are not relevant when assigning value. Goods are valued based on what individuals will give for them.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade

TOP: Trade, Output, and Living Standards KEY: Bloom's: Analysis

MSC: Critical Thinking

203. Jim values his car at $2,000, and Kelly values it at $5,000. Can value be created in this situation? How? Suppose Jim refuses to sell for less than $6,000. Is value destroyed? Why or why not?

ANS:

Value can be created in this situation. Jim can sell the car at more than $2,000, and Kelly can buy it at $5,000 or less. For example, suppose the car sells for $3,000. Jim has given up a good worth $2,000 to him in exchange for $3,000. He is better off by $1,000, a value created by the exchange. Similarly, Kelly is $2,000 better off because she has something that is worth $5,000 to her, and she only had to relinquish $3,000 to acquire it. If Jim refuses to sell the car, no value will be created, but none will be destroyed either. While a possible gain is forgone, no one is made any worse off by a transaction not taking place.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Productivity and growth TOP: Production Possibilities Curve

KEY: Bloom's: Analysis MSC: Critical Thinking

204. Market economies are often criticized for how they answer the basic question, "For whom are goods produced?" This criticism usually comes from people who believe that the distribution of income is not "fair." Is there some way to separate production from distribution so that we can leave production just as it is but make the distribution of income "fairer"?

ANS:

Unfortunately, there is no way to totally separate the act of production from the way income is distributed. We know that incentives matter, and tying income to production gives people the incentive to produce. Fairness is a normative concept, and reasonable people will disagree over what distribution of income is more fair. Since incentives matter, any attempt to change the distribution of income is likely to destroy some of the incentives for production.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Gains from trade, specialization and trade TOP: Trade Creates Value

KEY: Bloom's: Analysis MSC: Critical Thinking

205. It can be said that, ultimately, consumers are the driving force in answering the three basic economic questions. Explain the consumer's role in providing these answers.

ANS:

What will be produced is determined by businesses, but they know that the only way to succeed is to offer products consumers find desirable. What they produce is determined by what consumers want. How the goods will be produced is determined by firms that continually seek lower costs of production. Since consumers are price conscious, they will buy the product that carries the lowest price, ceteris paribus. Firms that lower production costs can lower prices and attract more consumers. The goods are consumed by people who desire them and have the ability to pay. Since income is derived from production, those who produce more of what consumers value will have higher incomes. The consumer is at the heart of all three basic economic questions.

PTS: 1 DIF: Moderate NAT: BUSPROG: Analytic

STA: DISC: Utility and consumer choice TOP: Economic Organization

KEY: Bloom's: Analysis MSC: Critical Thinking

Part 1

Introduction

This section has four parts. First, a summary of the supplements and packages available for instructors is included. Second, a discussion of the main features of PowerPoint and how to use it in the classroom is provided. Third, an explanation of the main features of the testing package, ExamView, is included. Fourth, some suggestions on how to use movies in the classroom are included.

SUPPLEMENTS

A full set of supplements accompanies the text. They include the following:

Aplia

Aplia™ is an online interactive learning solution that improves comprehension and outcomes by increasing student effort and engagement. Founded by a professor to enhance his own courses, Aplia provides automatically graded assignments that were written to make the most of the Web medium and contain detailed, immediate explanations on every question. Aplia is available in more than 15 disciplines and has been used by more than 2 million students at more than 1800 institutions. Visit http://www.aplia.com/economics/ for more details.

MindTap

MindTap is a fully online, highly personalized learning experience built on Cengage Learning content. MindTap combines student learning tools--readings, multimedia, activities, and assessments--into a singular Learning Path that guides students through their course. Instructors personalize the experience by customizing authoritative Cengage Learning content and learning tools, including the ability to add their own content in the Learning Path via apps that integrate into the MindTap framework seamlessly with Learning Management Systems.

Write Experience

Write Experience is a technology product that allows you to assess written communication skills without adding to your workload. Instructors in all areas have told us it's important that students can write effectively in order to communicate and think critically. Through an exclusive partnership with a technology company, Cengage Learning's Write Experience allows you to do just that! This new product utilizes artificial intelligence to not only score student writing instantly and accurately but also provide students with detailed revision goals and feedback on their writing to help them improve. Write Experience is the first product designed and created specifically for the higher education market through an exclusive agreement with McCann Associates, and powered by e-Write IntelliMetric Within™. IntelliMetric is the gold standard for automated scoring of writing and is used to score the Graduate Management Admissions Test® (GMAT®) analytical writing assessment. Better Writing. Better Outcomes. Write Experience. Visit http://www.cengage.com/writeexperience to learn more.

Economics CourseMate

CourseMate brings course concepts to life with interactive learning, study, and exam preparation tools that support the printed textbook. Watch student comprehension soar as your class works with the printed textbook and the text-specific Web site, Economics CourseMate goes beyond the book to deliver what you need!

Engagement Tracker

How do you know your students have read the material or viewed the resources you’ve assigned? How can you tell if your students are struggling with a concept? Engagement Tracker assesses student preparation and engagement. Use the tracking tools to see progress for the class as a whole or for individual students. Identify students at risk early in the course. Uncover which concepts are most difficult for your class. Monitor time on task. Keep your students engaged.

Interactive Teaching and Learning Tools

Economics CourseMate includes interactive teaching and learning tools:

• Quizzes

• Flashcards

• Videos

• Graphing tutorials

• News, debates, and data

Interactive eBook

In addition to interactive teaching and learning tools, Economics CourseMate includes an interactive eBook. Students can take notes, highlight, search and interact with embedded media specifi c to their book. Use it as a supplement to the printed text, or as a substitute—the choice is up to your students with CourseMate. Go to login .cengage.com to access these resources within CourseMate.

WebTutorTM ToolBox for WebCT, Blackboard, and eCollege

WebTutor will allow you to jumpstart your course whether you want to simply Web enable your class or put an entire course online. Using a WebTutor cartridge, it’s easy to add, edit, reorganize, or delete content customized for Economics: Private and Public Choice. The content includes media assets, quizzing, Web links, discussion topics, interactive games and exercises, and more. To find out more about WebTutor, contact your local South-Western representative. (Other platform choices are available on request.)

Test Banks

The test banks for the 15th edition were prepared by the author team with the assistance of Joe Calhoun. The authors have worked hard to update and improve the test banks for this edition. The three test banks contain approximately 7,000 questions—multiple-choice and short answer. Within each chapter, the questions correspond to the major subheadings of the text. The fi rst 10 questions of each chapter are suitable for use as a comprehensive quiz covering the material of the chapter. Instructors who would like to motivate their students to study will find online practice quizzes on MindTap that can easily be incorporated them into their quizzes and exams.

Cloud Based Test Banks (Cognero)

The cloud-based test banks for this edition have been enhanced significantly. Cognero contains all of the questions in the test bank so you create and customize tests in minutes. You can easily edit and import your own questions and graphics and edit and maneuver existing questions.

PowerPoint

We believe our PowerPoint presentation, prepared by Charles Skipton of the University of Tampa, is the best you will find in the principles market. The presentation includes chapter-by-chapter lecture notes with fully animated, hyperlinked slides of the textbook’s exhibits. Its dynamic graphs and accompanying captions make it easy for instructors to present (and students to follow) sequential changes. The graphs are also used to highlight various relationships among economic variables. To facilitate classroom discussion and interaction, questions are strategically interspersed throughout the PowerPoint slides to help students develop the economic way of thinking. Instructions explaining how professors can easily add, delete, and modify slides in order to tailor make the presentation to their liking are included. If instructors want to make the PowerPoint presentation available to students, they can place it on their Web site (or the site for their course).

Support Web site for Instructors

This password protected Web site includes some of the same essential resources that can be found on the Instructor’s Resource CD, including instructor’s manuals and test banks in Microsoft Word, and the PowerPoint lecture and exhibit slides. To get access to the site to download these supplements, register online at http://academic.cengage.com/economics/gwartney.

Powerpoint

A set of presentations has been developed to accompany the text. The presentations were prepared with Microsoft PowerPoint. For more information on PowerPoint, see an excellent web site created by Susan Brooks and Bill Byles called Internet4Classrooms: http://www.internet4classrooms.com/on-line_powerpoint.htm. Susan Brooks (sbrooks@internet4classrooms.com) and Bill Byles (bylesb@internet 4classrooms.com) are willing to answer questions from users of their site about PowerPoint.

Using the Internet4Classrooms web site, the next sections describe how to use some of the main features of PowerPoint within the Windows environment for Office XP. The site also provides information about using PowerPoint in the Office 2007 and Office 97 environments as well.

To create a new slide and choose a template: http://www.internet4classrooms.com/template_ppxp.htm.

Adding text to a slide, moving the text, and changing text style or color

http://www.internet4classrooms.com/text_ppxp.htm

Inserting an image into a slide:

http://www.internet4classrooms.com/image_ppxp.htm

Using different slide views:

http://www.internet4classrooms.com/views_ppxp.htm

Animating text:

http://www.internet4classrooms.com/building_ppxp.htm

Creating transitions between slides:

http://www.internet4classrooms.com/transitions_ppxp.htm

Keyboard shortcuts to use with your slideshow:

http://www.internet4classrooms.com/shortcuts_ppxp.htm

Slideshow options:

http://www.internet4classrooms.com/showing_ppxp.htm

Frequently Asked Questions

Can I customize my presentation?

Yes. The slides can be customized in a variety of ways. For example, clip art can be added; slides added or deleted; hyperlinks inserted; and sounds added. For details on how to do some of these changes, see the discussion on the previous pages.

At what point in my lecture do I show the presentation?

At anytime during the lecture. One may use the presentation for the entire lecture or only part of the lecture depending on your preferences.

How long does each presentation take to show?

It will vary depending on how many additional examples one introduces; how many questions arise from students in the class; and etc.

Are there any potential problems with using the presentations?

One has to be careful not to make the course too “canned” when using the PowerPoint presentations. In order to keep this from happening, the presentations have integrated some thought-provoking questions designed to get student to think about the material that is being covered. Two or three questions of this variety--most out of the text--are inserted about half way through each chapter and at the end of each chapter. This will make the PowerPoint presentations more useful.

COGNERO

Access from Anywhere

Web-based software that runs in a web browser. No installs are required to start using Cognero. Works in Windows, Mac, and Linux browsers.

Desktop-Like Interface

Looks and feels like a desktop application. Uses the latest web functionality to imitate desktop usability features like drag-and-drop and wizards.

Full-Featured Test Generator

Author and manage your assessment content as well as build tests using the only online test generator that supports all of the major functionality of its desktop competitors. Cognero is complete with a full-featured word processor, multi-language support, Math-ML compliant equation editor, algorithmic content support, native support for 15 question types (true/false, modified true/false, yes/no, multiple choice, multiple response, numeric response, completion, matching, objective short answer, subjective short answer, multi-mode, ordering, opinion scale/likert, essay, and custom), unlimited metadata, ability to print professional paper tests with multiple styles and versions, and more.

Class Management and Assignments

Manage your students, classes, and assignments with the ease of simple drag-and-drop. You can build or import rosters, have students self-register for a class, and move students easily from class to class. Once your roster is set, simply drag a test to a class to schedule and put your students to work.

Secure Online Testing

Cognero has an integrated secure online testing center for your students. Along with delivering traditional tests, your students can receive immediate feedback on each question and/or receive a detailed end of assignment report to help them know exactly how they are doing.

Complete Reporting System

What is the use of assessment without being able to disseminate the data derived from it? Cognero allows you to analyze how your students are performing on a real time basis and from multiple approaches to allow for immediate intervention. You can also quickly analyze your questions and perform a gap analysis of student testing.

Technical Support

Technical support can be found at: http://poweron.cengage.com/magellan/TechSupport/login.aspx

Hardware Requirements

Cognero is a completely web-based application that runs in the following browsers:

Windows

Firefox 3.5 and higher (recommended)

Internet Explorer 8.x and higher

Chrome 11 and higher

Macintosh

Firefox 3.x and higher (recommended)

Safari 4.x and higher

Student testing is supported on iOS, Android, and Windows Mobile devices.

movies in the classroom

An exciting and effective way to increase student interest in principles of economics classes is to show short movie clips (three to seven minutes) that highlight economic concepts. It also has the advantage that shows students the real-world applicability of the economic analysis. The author’s experience with this technique in their classes has been very positive. Furthermore, showing movie clips in class has become increasingly feasible as more and more classrooms have been updated to include DVD players as well as projectors.

The text has interspersed some examples of how movie clips can be used to illustrate economic concepts with the boxes titled “Economics in the Movies.” For example, a box in chapter 2 discusses how the movie Wall Street the concept of gains from trade. The relevant scene is when in response to a question Charlie Sheen poses to Michael Douglas about how much money is “enough,” he replies: “It’s not a question of enough, pal. It’s a zero-sum game. Somebody wins; somebody loses. Money itself isn’t lost of gained; it’s simply transferred from one person to another.” After showing the scene one could point out that Michael Douglas is wrong. In the real world voluntary trade is a positive-sum game, meaning that wealth is created, and both parties gain. It is not a zero-sum game, where gains to one person result in losses to another.

As another example, a box in chapter 14 explains how the movie It’s a Wonderful Life provides a nice lesson in fractional reserve banking. In the scene, when everyone shows up at James Stewart’s bank and wants to withdraw their money, he explains that their money is not in the vault, but instead investment in their neighbors’ homes. Thus, he cannot give everyone their money because the bank uses the deposits to make loans to other people.

The following is a list of the other movies discussed in the text: Chapter 1: Ferris Beuller’s Day Off; Chapter 3: Pretty Woman; Chapter 5: Along Came Polly; Chapter 16: Seabiscuit; Chapter 18 (16 Micro): Cast Away; Chapter 23 (10 Micro): You’ve Got Mail; Chapter 24 (11 Micro): A Beautiful Mind; Chapter 27 (14 Micro) A Knight’s Tale.

Two approaches can be done to show movies in the classroom. First, one can purchase or rent a DVD of the movie. To prevent fumbling around during the class period, it is important to queue up the appropriate scene on the DVD before the class has started. It is important to note showing a movie clip in class does not violate copyright laws due to the educational exemption.

Second, one can use G. Dirk Mateer’s workbook published by South-Western titled Economics in the Movies (ISBN: 0-324-30261-4). If you are interested in learning more about this product please go to: http://www.economicsinthemovies.swlearning.com. This workbook contains a collection of 20 film scenes from movies such as Traffic and Along Came Polly. Instructors can show these clips in class by streaming the videos if they have Internet access in the classroom. The workbook is organized by economic concept which helps professors plan which films to use. It also provides a list of questions and issues one could discuss after showing each scene. Alternatively, the workbook can be assigned as homework for students as long as students have Internet access.

STOSSEL VIDEO CLIPS FOR THE TEACHING OF ECONOMICS

Most instructors are looking for ways to get their students engaged and excited while developing their critical thinking skills. Three DVDs containing short video clips from John Stossel will help you achieve these goals.

Two DVDs containing 31 short (3 to 7 minute) video clips are available from ABC News:

1. “Teaching Tools for Microeconomics from John Stossel,” and

2. “Teaching Tools for Macroeconomics, Government and International Trade from John Stossel”

These two DVDs are available for purchase from ABC News at http://abcnewsstore.com, (select TEACHING TOOLS FOR MICROECONOMICS AND MACROECONOMICS FROM JOHN STOSSEL - HIGH SCHOOL AND COLLEGE EDITIONS).

The most recent Stossel DVD is entitled Making Economics Come Alive. This DVD contains 18-3 to 6 minute clips covering both micro and macro topics. It was compiled from segments of the 2010 programs of John Stossel on the Fox Business Network. This DVD is available at http://www.stosselintheclassroom.org/economics/.

The short video clips from these three DVDs will enrich your class and help you bring important economic concepts alive for your students. Topics covered by the videos include: opportunity cost, gains from trade, competition, the invisible hand, price controls, subsidies, property rights, entrepreneurship, crony capitalism, budget deficits, government debt, international trade, and economic freedom. The video clips will stimulate discussion and enliven the related material of Economics: Private and Public Choice. All three of these DVDs come with an instructor’s manual, testing materials, PowerPoint slides, and related exercises that will help teachers use the material more effectively. Instructors who would like more information on the Stossel videos may contact James Gwartney (email: jdgwartney@fsu.edu).

Most instructors are looking for ways to get their students engaged and excited while developing their critical thinking skills.

Two DVDs containing 31 short (3 to 7 minute) video clips are available from ABC News:

1. “Teaching Tools for Microeconomics from John Stossel” and

2. “Teaching Tools for Macroeconomics, Government and International Trade from John Stossel”

A third DVD containing four additional clips is available free of charge from www.stosselintheclassroom.org.

These short (3 to 7 minute) video clips will enrich your class and help bring economics alive in your classroom. Topics covered by the videos include: opportunity cost, gains from trade, competition, the invisible hand, price controls, subsidies, property rights, entrepreneurship, real versus nominal gasoline prices, unemployment, poverty, outsourcing, taxes, government spending, and economic freedom. Initially prepared for ABC television (20/20 and various Stossel specials), they have been chosen and, in some cases, modified for classroom use. They are the best of John Stossel designed just for your economics class. The DVDs come with an Instructor’s Manual prepared by James Gwartney, John Morton, Joe Calhoun, Mark Schug, and Tawni Ferrarini. This manual provides users with discussion questions, related activities and exercises, and testing materials for each of the clips to help you use the videos more effectively. For information about availability and pricing, please contact ABC News directly at: ABC NewsStore. You may also contact James Gwartney (email: jdgwartney@fsu.edu) for additional details.

These clips are complementary with Economics: Private and Public Choice. The following contains a brief description of the clips and the chapter of Economics: Private and Public Choice containing closely related material is indicated below in parentheses next to the title of each clip.

DVD 1, Microeconomics: Concepts, Wealth Creation, and Earnings

Clip 1: Opportunity costs, tradeoffs, and secondary effects (Chapters 1 or 2 of Economics: Private and Public Choice)

Description: The segment illustrates marginal thinking by weighing the marginal benefits of an action against the marginal costs. Ralph Nader proposes spending $1,800 on each school bus to increase the safety of children and suggests the money would be well spent. John Graham of the Harvard Center for Risk Analysis calls this “statistical murder” to spend $1,800 on seat belts to save a few lives instead of spending it on other forms of child safety that would save more lives.

Clip 2: Economics of private property rights (Chapter 2)

Description: This segment addresses private and public (common) property rights and how they change the incentives of individuals to take care of things. The segment uses two examples to illustrate modern versions of the “tragedy of the commons”. First, an experiment from a high school economics class about fishing illustrates how common property rights will lead to over-utilization of resources. Second, ownership of elephant hunting rights in Africa reinforces the concept: countries where there is private ownership have tripled their elephant population while countries where there is common ownership have seen dramatic decreases in the elephant population.

Clip 3: Exchange and wealth creation (Chapter 2)

Description: The segment begins with a description of the Vanderbilt mansion, the yacht and lavish parties with Imelda Marcos, the wife of the former dictator of the Philippines, and the shopping sprees of the Duvaliers, Haiti’s former dictator (Baby Doc) and his wife. All three seem to be examples of greed. However, there is a difference with Vanderbilt: he couldn’t use force to create his wealth. The segment highlights the importance of gains from trade.

Clip 4: Invisible hand; how steak gets to New Yorkers (Chapter 3)

Description: The segment illustrates market coordination and Adam Smith’s “invisible hand” by tracing the people and steps involved to get beef from Iowa to New York City.

Clip 5: Rent controls (Chapter 4)

Description: Rent control is intended to assist low-income families in obtaining adequate housing and is currently used by about 200 American cities. Using New York City as an example, the rent control program is found to help mostly high-income families by keeping their rent below market prices. The secondary effects are to decrease new housing in the market, increase prices for property not under rent control, and create an incentive for landlords to either let their buildings deteriorate or abandon their investment.

Clip 6: Pharmaceuticals price controls and availability (Chapter 4)

Description: The clip illustrates the general impact of price controls. Protestors against U.S. pharmaceutical companies claim prices are too high and do not reflect the costs to bring the drug to market. The segment reveals that most drugs never make it to market but the companies incur large research and development costs which, if such research is going to continue, must be covered by revenues from the drugs that do make it to market.

Clip 7: Subsidized flood insurance (Chapter 4)

Description: The segment outlines John’s personal experience with oceanfront property and government subsidized flood insurance. While the subsidy makes the insurance cheaper it also generates a secondary effect: more waterfront property is developed than would otherwise be the case. As the clip documents, construction has increased dramatically which is exactly what economic theory would predict.

Clip 8: Politics, economics, and farm subsidies (Chapter 4 or 6)

Description: The main theme of the segment is farm subsidies. A cotton farm in California is used as a case study to consider both the economic and political factors underlying farm subsidy programs.

Clip 9: Wal-Mart, competition, and cost control (Chapter 22 or 23)

Description: Wal-Mart is both loved and vilified. Critics suggest that the company wrecks communities, discriminates against women, and underpays its workers. An interview with Paul Blank, hired by the Food and Commercial Workers Union to campaign against Wal-Mart, offers the critical view. Brink Lindsey of the Cato Institute offers the proponents view. The segment documents earlier examples like Sears and A&P that were once in similar situations to Wal-Mart.

Clip 10: Poverty and entrepreneurship (Chapter 28)

Description: By using Steve Mariotti, a teacher in one of New York City’s worst high schools, as an example the clip addresses the entrepreneurship process.

Clip 11: Wage Discrimination (Chapter 26 or Special Topic 11)

Description: On the surface, the earnings difference between men and women appears to be wage discrimination. Women currently earn 78.5% of men’s wages. Martha Burk, chairman of the National Council of Women’s Organization and author of Cult of Power, suggests women earn less than men performing the same work with the same job title and experience. However, Warren Farrell, a former board member of the National Organization for Women, disagrees. After reviewing the data that reveal the job characteristics, and exploring the desires of men and women the earning difference is largely explained.

Clip 12: Child labor laws (Chapter 26)

Description: The major point of the segment is to identify the government’s role in regulating labor markets with an emphasis on children. The segment features an example of an underage batboy working past 7 p.m.

Clip 13: Investment versus giving (Chapter 27)

Description: After Ted Turner announced his gift of one billion dollars to U.N. charities, the media applauded his actions. T.J. Rodgers, founder of Cypress Semiconductor, and philosopher David Kelley believe Turner’s money would be better used in other capacities. Both make the point that perhaps a better and more effective way to help people is to create jobs and expand business opportunities.

Clip 14: Is making money good or bad? (Chapter 3 or 23)

Description: Through an interview with T.J. Rodgers, founder of Cypress Semiconductor, the role of the profit motive is brought to life. By “making money” Rodgers generates substantial wealth for himself, which is illustrated by his luxurious home with a $100,000 pizza oven. But the benefits are more widespread than Rodgers’ possessions. Jobs are created which allow his employees to buy their homes, pay for school, and save for retirement. Further, his customers benefit by obtaining new products.

Clip 15: Poverty in the US (Chapter 28)

Description: The segment brings to light some of the items included and not included in the official wage data. The Federal Reserve data that’s often cited doesn’t include such items as sales commissions, retirement contributions, and medical insurance. When these items are included, compensation has increased 20% instead of staying flat or going down as some suggest.

Clip 16: School Choice (Special Topic 10)

Description: The segment illustrates the difference between what politicians vote for in the legislature and what they do in their private lives.

DVD 2, Macroeconomics: Concepts, International Trade, and the Role of Government

Clip 1: Is life getting worse? (Chapter 1 or 7)

Description: The segment dispels the notion that life is worse or more difficult and risky today than in the past. During an interview, several 100-year-olds emphatically agree that life is better and easier. The segment documents that most risks are greatly reduced from levels just a few years ago. Pollution levels and crime rates are down. Diseases such as diphtheria and rheumatic fever have virtually been eliminated while the flu, which killed 20 million people around 1918, has been contained. The average American now lives 30 years longer than the average American 100 years ago.

Clip 2: Gas prices-nominal versus real (Chapter 7)

Description: Without being too technical or mathematical, the segment clearly illustrates the error of comparing nominal (current) prices across time periods.

Clip 3: Unemployment and labor mobility (Chapter 8 or 26)

Description: Using the labor market in Youngstown, Ohio as an example, the segment addresses resource mobility. Youngstown used to be home to many large steel mills and steel-related industries. After several steel mills closed, many workers were laid off and unemployment grew to 25%. However, as new companies emerged most of those workers found better, safer, and higher-paying jobs.

Clip 4: Government spending, jobs, and unemployment (Chapter 11 or 12)

Description: John breaks several windows in an apartment to illustrate how jobs would be created by the destruction. Cleaning crews, window repairmen, glass manufacturers, and many others would see an increase in demand for their services. It appears as if the economy would be better off with the destruction by keeping these people employed and earning income. John then illustrates the fallacy of the multiplier if the money to pay for the windows is taken from other places in the economy. The net effect would be a zero gain for the economy.

Clip 5: Stadiums, subsidies, and taxes (Chapter 4 or 6, or Special Topic 1)

Description: The segment uses the new baseball stadium for the Chicago White Sox as an example. Jerry Reinsdorf, the majority owner of the White Sox, and former Illinois Governor Jim Thompson are interviewed to describe the rationale and the process involved to fund the new stadium.

Clip 6: How much taxes do the rich pay? (Chapter 4 or Special Topic 1)

Description: The segment documents the proportion of income taxes paid by the wealthiest Americans. At the beginning of the clip, the Reverend Al Sharpton, former Democratic presidential candidate, claims the top 1% of income earners pay less than 5% of total income taxes. He suggests they should pay 15%. The fact is that the top 1% of income earners already pay 34% of the total income tax collected by the IRS. The clip can be used to illustrate the taxes paid by various groups and the difference between average and marginal tax rates.

Clip 7: Are boycotts of sweatshop products helpful? (Chapter 16 or 18)

Description: The role of profits in business activity to import goods from cheaper, foreign countries is a general theme. The segment includes scenes from various student protests regarding imported goods made by “sweatshops.” The protestors claim foreign workers are being exploited. During interviews with representatives from foreign countries, quite the opposite story is depicted. Those countries and workers desire those jobs and would like to have more.

Clip 8: Does Outsourcing Cost Americans Jobs? (Chapter 18)

Description: Lou Dobbs of CNN argues that outsourcing is bad and should be limited. However, as some jobs are sent to foreign countries, labor resources are freed up to move to more productive areas. While the short-term consequences can be difficult, the long-term benefits often include better and higher-paying jobs for the displaced workers

Clip 9: Economic freedom and prosperity (Chapter 17)

Description: A single point is made in this segment. Where economic freedom and liberty are allowed to flourish, economic growth and prosperity follow. The clip compares and contrasts places where government planning dominates (India, North Korea, Syria, and Haiti) against places where there is relatively little government planning (U.S., Hong Kong, Switzerland, and New Zealand).

Clip 10: Institutions, growth, and freedom (Chapter 17)

Description: The segment compares and contrasts the ease with which businesses operate in India, the United States, and Hong Kong. Several entrepreneurs are interviewed to describe their experiences in the different countries.

Clip 11: Property rights, eminent domain, and the role of government (Chapter 2 or 16)

Description: Eminent domain is the ability of the government to take private land for public use. Property rights and their enforcement are the major themes. Using a neighborhood in New Rochelle, New York as an example, the segment documents the local government forcing people out of their homes because it feels the land is better used in another capacity.

Clip 12: Is government too big? (Chapter 6 or Special Topic 1)

Description: The overriding theme is that taxes are high and placed on numerous goods in order to fund all of the projects in which government is currently involved. The view of the founding fathers on the role of government is compared with the actions of government today through an interview with Tibor Machan from Chapman University.

Clip 13: Size and growth of government (Chapter 6 or Special Topic 1)

Description: The segment discusses and uses an enlightening graphical image to document the size and growth of the U.S. government since 1800. Despite politician’s claims to reduce spending, government spending has increased dramatically during the past century.

Clip 14: Pork barrel spending (Chapter 6)

Description: Voting behavior and collective decision-making are the two major concepts addressed. By using the example of a proposed $200 million bridge in Ketchikan, Alaska, the segment illustrates the behavior of special interests in receiving government funding for projects that benefit a small number of people.

Clip 15: Competition and efficiency of government (Chapter 6 or Special Topic 1)

Description: Private versus public production is the theme of the segment. The incentives of cost minimization and efficiency are discussed under the two alternative forms of ownership.

DVD, Stossel in the Classroom, 2007 edition

(Note: There are 4 clips on this DVD. It is available free of charge to teachers at http://stosselinclassroom.org.)

Clip 1: Stereotypes (Chapter 28)

Description: How much do expectations of success or failure influence how students actually perform? John Stossel examines whether a bold experiment from decades ago still holds true today.

Clip 2: Foreign aid (Chapter 16)

Description: Some say that more foreign aid is the answer to poverty in Africa. But after billions of dollars in aid, individual Africans are worse off than before. John Stossel asks the experts, “Is there a better way to help the poor?”

Clip 3: Price gouging (Chapter 4)

Description: After natural disasters, some businesses raise prices on essential goods and services. Is that evil? Exactly the opposite, say three Nobel Prize-winning economists. John Stossel uncovers why in this lesson about supply and demand.

Clip 4: Oil supplies: Are we running out of oil? (Special Topic 12)

Description: It's a common belief that America is running out of oil. John Stossel digs for the truth behind this popular view.