Naked Economics Essay

Chapter 1 The major power of MarketsWhat atomic number 18 the two basic assumptions that economists make nigh individuals and firms?What is the parting and significance of prices in the commercialiseplace rescue?Whats so great about a market economy anyway?Market eitherocation 3 / conduct rational utility- pocketimizers 6 / Opportunity costs 9 / Profit max 11 / Prices allocate resources 12 / Barriers to entry 14 / Market price, set decision & price discrimi ground 15 / Lessons of markets 18Chapter 2 Incentives matterExplain how each of the pursuance relates to efficient outcomes in a market economy-adverse selection-perverse incentives-principal-agent problem,-the prisoners dilemma.Wrong incentives breaking wind to undesirable outcomes 23 / Creative destruction 36 / Tax & govt plan disincentives 38Chapter 3 disposal and the EconomyIn your own words, apologize what an externality is.Besides addressing externalities, what other important and beneficial roles does govern ment typify in our market economy?Externalities 43 / Govt solutions to externalities 48 / Govt makes market economy possible rights, laws / regulations 51 / Public goods 57 / Redistribution 59Chapter 4 Government and the Economy IIWhat are the main reasons why government should exactly take a limited role in a market economy?Govt inefficiency 63 / Govt allocation vs private allocation 67 / make of regulation 69 / Effects of taxation 74 / Summary 78Chapter 5 Economics of InformationWheelan explains that basic economic models assume that all parties have perfect cultivation. How does informational asymmetry undermine our market economy? wayward selection 81 / Firm screening 89 / Branding provides information 90 / Branding versus commodities 92 / Signaling mechanisms 93Chapter 6 productiveness and Human CapitalAfter exercise Wheelans argument, do you ensure that Bill Gates should be so much aboundinger than you? Evaluate the following statement from p. 113 We should not care ab out the gap between rich and shortsighted as long as everybody is living better.Human swell 98 / Job creation 103 / Effects of human capital on standard of living 105 / Productivity 107 / Income inequality 111Chapter 7 pecuniary MarketsExplain how get-rich-quick schemes violate the most basic principles of economics.What advice about investing in the stock market did you find most interesting and/or serviceable?Purposes of financial instruments 118 / Efficient markets & index funds 126 / Investment guidelines 132Chapter 8 The Power of Organized InterestsWhy have mohair farmers earned a subsidy from the federal government fordecades?Interest groups & politicians incentives 137 / Some regulations benefit business 142 / Tyranny of the military position quo 144Chapter 9 Keeping ScoreWhy is a nations GDP a good measure of its economic benefit and progress?Why is a nations GDP a poor measure of its economic well-being and progress?GDP importance, satisfying vs nominal, per capita 150 / GDP growth & wage growth 152 / GDP misses kind progress 154 / Recessions 156 / Fiscal & monetary policy 158 / Other vital signs unemployment, poverty, inequality, govt budget, deficit, on-line(prenominal) acct, national savings, demographics 160Chapter 10 The Federal ReserveWhat is the primary role of the Federal Reserve?What is the significance of this role?What is deflation, and why is it worse than ostentatiousness?Importance of Fed 168 / Easy money causes inflation 170 / FOMC & monetary policy tools 172/ Difficulty of policy decision-making 175 / Money 176 / Inflation & set up 179 / Political pressure to allow inflation 182 / Deflation 184Chapter 11 Trade and globalizationWhat is the good news about Asian sweatshops?Benefits of trade 187 / Comparative returns & specialization 190 / Losers from trade 191/ Protectionism 193 / Trade raises real incomes 195 / Trade benefits for poor countries 196 / Cultural homogenization 199 / Sweatshops 201Chapter 12 Development Econom icsAfter reading this chapter, what do you believe are the two greatest obstacles preventing poor countries from worthy rich?Importance of policies (vs resources) 206 / Effective development policies 208 / Exchange rates 217 / IMF 225epilogue Life in 2050What economic question do you have about life in 2050? rough todays economy? About life in general?