Assignment 2

5 points

Typed or Hand-Written

  1. Suppose that there are freezing temperatures in Florida. At the same time the press reports that drinking orange juice significantly reduces the risk of stomach cancer. Predict the effect on equilibrium price and quantity.
  2. In 2001 an outbreak of foot-and-mouth disease in Europe led to the burning of millions of cattle carcasses. What impact do you think this had on the supply of cattle hides, hide prices, the supply of leather goods, and the price of leather goods?
  3. Using Economic Analysis to Consider Policies Concerning Endangered Species

As human populations and economic markets have developed, one unintended result has been the threat imposed on certain animal species, especially in Asia and Africa. By accessing the Web site of Endangered Earth, information about endangered species can be found. Many policies enacted to help save endangered species come directly from basic economic laws such as supply and demand. Thus economics can play an important role in helping to save animal species in great danger of vanishing entirely from the planet.

  1. Access the Endangered Earth Web site. Next click on "In the Wild." Select "Extinct". What are the reasons that certain animal species are threatened with extinction?
  2. Return to the “In the Wild” page and go to the “Classroom” page and then “Classroom Studies.” Read about “Why It Matters” and the pages describing "Causes." How would an economist discuss or approach this issue. What are some economic causes that could be discussed?
  3. Now take a look at conservation actions (under classroom studies). What are some actions that have been proposed that are based on economics and markets?
  4. Now consider a particular case study. Return to “In the Wild” and choose “Vanishing” and then “Rhinoceros, Black.” Summarize the current situation of the Black Rhinoceros. Summarize the conservation policies being used to help save the Black rhino.
  5. In the case of the black rhino, it is clear that the market for rhino horn has caused devastating consequences. Do most of the policies you listed above impact the supply or demand for rhino horn? In the case of making the trade illegal the policy has not been very successful. Can you explain why this is the case?
  1. What are the two basic economic roles of the government? What would be an example of each?
  2. Please click on the following link and read the article
    Please answer the following questions:
  1. In the article, Samuelson states that "lower home prices are the only real solution to the housing collapse." Briefly explain using the supply and demand model.
  2. The article states that housing prices rose faster than incomes but that this situation was such that it could not continue. Briefly discuss.

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