Econ_2103_Writing_Assignment_Topics[1] - Econ 2103 Writing...

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1 Econ 2103 Writing Assignment Topic 1 My wife and I engaged in ridiculous behavior today at the Whole Foods in Austin Texas (Whole Foods’ “mother store”). We drove separately and agreed to meet at a certain place, but we couldn’t find each other. So we called each other on our cell phones and kept talking until we literally bumped into one another. The cell phones functioned as walkie-talkies for us. No doubt, much of what cell phones do is substitute for land lines. But we would never have bought walkie-talkies, so for us the cell phones clearly made us better off. This example suggests that cell phones have shifted the production possibilities frontier outward; no doubt, too, their technology has removed the need to lay much more expensive telephone cable, thus freeing up resources that can be used to expand other activities. Q : Think about two other examples of inventions that did not even exist a decade ago. Did each shift out the production possibility frontier ? Topic 2 At a party recently, one of my colleagues mentioned that his 14-year-old daughter was babysitting for her 6- and 3-year-old siblings so her parents could be at the party. I asked how much they were paying the teenager, and he answered that she was not getting paid. He noted, however, that if his wife and he wanted the daughter to babysit but she was called by someone else to babysit for pay, they would match the market rate that she would have received outside the house. My colleague is paying his daughter her opportunity cost . When she has an alternative babysitting job that pays, she receives a rate of pay at home equal to her opportunity cost––what she was offered for babysitting elsewhere. When she has no alternative job, she is again paid the opportunity cost of her time––which is then zero! Only an economist would do something like this. Q : If you were in the daughter’s position, would you settle for what you would be paid elsewhere? Are there economic reasons why you might be willing to settle for less, or to insist on––and get––your parents to pay more than others would pay for your babysitting services? Topic 3 According to Roman legend, a series of prophecies by the god Apollo were written down in nine books and interpreted by the Sibyl of Cumae (an old woman living in a cave whose interpretations were sought on numerous occasions by Roman leaders). Around 500 B . C ., the Sibyl gave the Roman king Tarquinius Superbus a chance to buy the books for a price payable in gold. He refused. According to the myth, the Sibyl burned three of the books and offered the king the remaining six for the original price she had asked for the nine. He refused again; she burned three more books and offered him the remaining three at the same price she had asked for all nine. This time he paid her. Why would he do that? How can his behavior be seen as consistent with the theory of consumer demand? By reducing the number of books in
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2 existence, the Sibyl made it clear to him that the remaining ones were now
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This note was uploaded on 10/02/2011 for the course ECON 2103 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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Econ_2103_Writing_Assignment_Topics[1] - Econ 2103 Writing...

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