Assignment Instructions/ Description
Discussion questions and answers: Please answer in paragraph format and add citations and sources for each one in APA format.
- What is the difference between laissez-faire capitalism, the command system, and the market system?
- How does the "invisible hand" operate and why do market economies usually do a better job than command economies at efficiently transforming economic resources into desirable output?
- What is the origin of both consumer surplus and producer surplus? How do properly functioning markets maximize consumer and producer surplus while optimally allocating resources?
- How do positive and negative externalities lead to under- and over-allocations of resources?
5. Why does "government failure" happen?
- How can the government's power to coerce (influence economic behavior) be economically beneficial?
- What is the usefulness of the total revenue test for price elasticity of demand?
- What are the factors that affect price elasticity of demand and price elasticity of supply? What are some applications of each?
- What are the functions and responsibilities of the Federal Reserve?
- Why is Federal Reserve independence important?
- What are the components of U.S. money supply?
12. Watch the "Market Failure & Government Response" video.
Consider the following as you watch:
- In this video, viewers learn key concepts of efficiency and causes of market failure. What are the actions that governments take to remedy market failures?
13. Recall the readings and activities you have completed this week and describe the one or two points that were least clear to you. What questions do you have that would help you understand these points better? (you can write about any of the above topics).
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