Sunday, June 8, 2008
Tuesday, June 3, 2008
AP Summer Assignment
AP Microeconomics
Summer/Fall 2008
Course Description
AP Microeconomics is a college level course and will be taught as such. The purpose of this course is to give students an understanding of the principles of economics that apply to the functions of individual decision makers, both consumers and producers, within the economic system. It places primary emphasis on the nature and functions of product markets and the role of government in promoting greater efficiency and equity in the economy.
Summer Assignment
In order to be entirely prepared for the course, it is essential that a foundation of a basic level of economic understanding has been established. Read “Naked Economics”. There will be a test on the important themes/concepts the first week of school. You will be allowed one 3”x5” card (back & front) for the test. Our class blog halseyecon.blogspot.com will be available for discussion all summer; post questions, comments or insights.
"Naked Economics" Reading Guide
Your test on NE will focus on these areas, however I reserve the right to ask questions that may not be specifically taken from a page listed below. There is not substitute for reading the assigned chapters!!!
Chapter 1- The Power of Markets
Market allocation 3
Assume rational utility-maximizers 6
Opportunity costs 9
Profit max 11
Prices allocate resources 12
Barriers to entry 14
Market price, pricing decision & price discrimination 15
Lessons of markets 18
Chapter 2 – Incentives Matter
Wrong incentives lead to undesirable outcomes 23
Principal-agent problem 30
Prisoners dilemma 34
Creative destruction 36
Tax & govt program disincentives 38
Chapter 3 – Government and the Economy
Externalities 43
Govt solutions to externalities 48
Govt makes market economy possible – rights, laws, regulations 51
Public goods 57
Redistribution 59
Chapter 4 – Government and the Economy II
Govt inefficiency 63
Govt allocation vs private allocation 67
Effects of regulation 69
Effects of taxation 74
Summary 78
Chapter 5 – Economics of Information
Adverse selection 81
Firm screening 89
Branding provides information 90
Branding versus commodities 92
Signaling mechanisms 93
Chapter 6 – Productivity and Human Capital
Human capital 98
Job creation 103
Effects of human capital on standard of living 105
Productivity 107
Income inequality 111
Chapter 7 – Financial Markets
Purposes of financial instruments 118
Efficient markets & index funds 126
Investment guidelines 132
Chapter 8 – The Power of Organized Interests
Interest groups & politicians’ incentives 137
Some regulations benefit business 142
Tyranny of the status quo 144
Chapter 9 – Keeping Score
GDP: importance, real vs nominal, per capita 150
GDP growth & wage growth 152
GDP misses social progress 154
Recessions 156
Fiscal & monetary policy 158
Other “vital signs”: unemployment, poverty, inequality, govt budget, deficit, current acct, national savings, demographics 160
Chapter 10 – The Federal Reserve
Importance of Fed 168
Easy money causes inflation 170
FOMC & monetary policy tools 172
Difficulty of policy decision-making 175
Money 176
Inflation & effects 179
Political pressure to allow inflation 182
Deflation 184
Chapter 11 – Trade and Globalization
Benefits of trade 187
Comparative advantage & specialization 190
Losers from trade 191
Protectionism 193
Trade raises real incomes 195
Trade benefits for poor countries 196
Cultural homogenization 199
Sweatshops 201
Chapter 12 – Development Economics
Importance of policies (vs resources) 206
Effective development policies 208
Exchange rates 217
IMF 225
Subscribe to:
Posts (Atom)
