Several years ago, the orange
growers of Florida launched a marketing campaign in which the spokesperson,
while holding a can of California almonds, told viewers: “One can a week.
That’s all we ask.“
Economically speaking, was this a wise way to run a marketing
campaign? Why or why not?
One of the arguments for wide,
across-the-board military conscription is that it would lower the costs for the
armed forces. The argument goes this way: At the present time, the U.S. Armed
Forces are voluntary and depend upon enlistments. Because of this, the Armed
Forces must offer financial incentives to entice people to go into military
service instead of pursuing higher-paying civilian jobs. A draft would pull men
and women from all kinds of occupations that would be useful to the Armed
Forces, and authorities could pay them less than they do now for enlisted
people who do the same things for the military services.
Therefore, the argument goes,
if the government can save money for things like medical and legal services
(draft doctors and lawyers along with others), then the whole country saves
money because the cost of financing the armed forces is lower. Is this a sound
economic argument? Why or why not?
A college professor once wrote:
Economics—strongly affected by a mechanical rationalism borrowed
from Cartesian influences and Newtonian mechanics—sought both a precise
measuring rod for economic value and…a deterministic view of how economic value
comes into being. The result was a price theory of value that today pervades
both the halls of academia and everyday consciousness. Price theory holds that
economically valuable things are those with prices, that economic value is
proportional to price, and that nonpriced entities are economically valueless.
Please answer the following question:Is the writer correct in saying
essentially that prices create value? Why or why not?
The town of Lookout Mountain,
Georgia, had become a desirable place to live, and property owners were
subdividing some of their land within the city limits in order to build new
homes. However, after some people complained about all of the new houses, the
town’s city council passed an ordinance requiring new homes to be built on at
least one acre of land. (Before the ordinance, builders were constructing new
houses on as little as a quarter acre of land.)
told otherwise, we ALWAYS assumeceteris paribus), explain the
effect this new ordinance will have on the following things:
A. The per-acre price of land
located in Lookout Mountain, Georgia. Why?
B. The per-acre price of land
located just outside the Lookout Mountain city limits. Why?
C. The price of new houses in
Lookout Mountain relative to housing prices before the new ordinance was
D. Property tax revenues in
Lookout Mountain after the ordinance was passed relative to what they would
have been had there been no such ordinance. Why?
In the early 1970s, inflation
was hitting the U.S. economy, and one of the results was that beef prices began
to rise to record levels. Some of President Richard Nixon’s advisers urged him
to place price controls on the sale of beef cattle with the intended purpose
being to hold down the price of cattle. If cattle prices were kept from rising,
the advisers reasoned, then beef prices also would not rise. (The president did
not follow their recommendations, but he did place overall wage and price
controls on the economy for a while.)
Had the president implemented
this recommendation of price controls on beef cattle, would that action have
resulted in lower beef prices? Why or why not?