Can government do anything well?

http://www.realclearpolitics.com/articles/2012/04/11/can_government_do_anything_well_113800.html

Electric cars and the supply and demand of gasoline

U.S. Gasoline Demand Is Likely to Slide
by: Lynn Cook and Alison Sider
Jun 20, 2016
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: Electric cars are poised to reduce U.S. gasoline demand by 5% over the next two decades-and could cut it by as much as 20%-according to a new report being released by energy consulting firm Wood Mackenzie.

CLASSROOM APPLICATION: Students can evaluate the effect of adoption rates of electric cars on the demand for gasoline. They can also evaluate the effect of the decrease in the demand for gasoline on the price of gasoline in the short run and in the long run.

QUESTIONS: 
1. (Introductory) What is the effect of the increased adoption rates of electric cars on the demand for gasoline?

2. (Advanced) What is the effect of a change in the demand for gasoline on the price of gasoline in the short run and in the long run?

3. (Advanced) What is the effect of the shift from internal-combustion engines to electric-powered engines on the demand for natural gas?

Reviewed By: James Dearden, Lehigh University

Supply and demand in action in the market for coffee beans

That Coffee Taste Stale? It Could Be Nine Years Old
by: Julie Wernau
Jun 15, 2016
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: The value of premium arabica beans in storage is deteriorating, becoming more attractive to certain commercial buyers that typically favor a lower quality variety.

CLASSROOM APPLICATION: Students can evaluate the effect of an increase in the price of robusta beans and an increase in the supply of arabica beans on the price of arabica beans.

QUESTIONS: 
1. (Advanced) The value of three-year-old coffee gets cut by 35 cents a pound. Nine-year-old coffee is discounted by $1.55 a pound. Based on this data is the decline in the price of coffee a linear function of time?

2. (Introductory) What is the relationship between the average age of coffee beans sitting in warehouses and the premium of arabica beans over robusta beans?

3. (Advanced) What factors are causing the increase in the prices of robusta beans? What is the effect of an increase in the price of robusta beans on the demand for arabica beans?

Reviewed By: James Dearden, Lehigh University

Best book ever on trade?

Opinion. Milton Friedman's Favorite Book on Trade
by: Jim Powell
Jun 12, 2016
Click here to view the full article on WSJ.com

TOPICS: International Trade

SUMMARY: Henry George's 'Protection or Free Trade' in 1886 decisively showed the value of opening markets.

CLASSROOM APPLICATION: Instructors can introduce students to the American economist Henry George (1839-97). The excerpts from George's "Protection or Free Trade" reproduced in the opinion piece offer hints about why Milton Friedman considered George's book to be the most rhetorically brilliant work ever written on the subject.

QUESTIONS: 
1. (Introductory) Is trade, whether between individuals or countries, voluntary?

2. (Advanced) According to Henry George, are tariffs needed to support vital domestic industries? Should tariffs be implemented to protect infant industries?

3. (Advanced) What is the effect of trade barriers on economic growth?

4. (Introductory) What is George's analogy of war to trade barriers?

Reviewed By: James Dearden, Lehigh University

Is the minimum wage the best way to help poor people?

The Saturday Essay. A Guaranteed Income for Every American 
by: Charles Murray
Jun 04, 2016
Click here to view the full article on WSJ.com

TOPICS: Public Economics

SUMMARY: Replacing the welfare state with an annual grant is the best way to cope with a radically changing U.S. jobs market-and to revitalize America's civic culture.

CLASSROOM APPLICATION: Students can discuss whether a universal basic income should replace existing welfare programs. They could do so in the context of the wellbeing of households and economic incentives to work.

QUESTIONS: 
1. (Advanced) Is a household made better off by receiving the cash equivalent of the transfer payments it receives through welfare programs? Advanced students can analyze the question using the consumer choice model : budget constraints and an indifference map with two good, food and all other things. The welfare program would be food stamps.

2. (Advanced) Is a household made better off by receiving the cash equivalent of the transfer payments it receives through welfare programs? Advanced students can analyze the question using the consumer choice model : budget constraints and an indifference map with two good, food and all other things. The welfare program would be food stamps.

3. (Introductory) According to an anecdote in the Saturday Essay, what would be the effect of replacing existing transfer payments with a universal basic income on the rate of teen pregnancies?

Reviewed By: James Dearden, Lehigh University

The article below does a nice job describing the effect of increased demand for SUVs on Subaru dealers, with one exception. It confuses "scarcity" with "shortage". The questions continue to make the error. Boo!

Why Finding a New Subaru May Take Some Time
by: John D. Stoll and Yoko Kubota
Jun 03, 2016
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: As retail demand for light vehicles softens in the U.S., Subaru dealers are confronting a problem unusual for most: scarcity. Limited production of its small SUVs are keeping customer waiting lists long.

CLASSROOM APPLICATION: Students can learn about the reasons for the scarcity of Subarus, and examine the effects of Subaru's limited supply of automobiles. Advanced students can discuss whether production capacities are important strategic variables in the competition among automobile manufacturers.

QUESTIONS: 
1. (Introductory) What factors are causing the scarcity of Subarus?

2. (Advanced) What is the effect of the scarcity of Subarus on the prices of the automobiles?

3. (Introductory) What is the view of Subaru dealers about the limited supply of Subarus?

4. (Advanced) Are production capacities are important strategic variables in the competition among automobile manufacturers?

Reviewed By: James Dearden, Lehigh University

Stossel on socialism

https://www.youtube.com/watch?v=igT3dJgBdAE

Using incentives to reduce crime

http://www.newamerica.org/weekly/118/crime-doesnt-pay-but-lowering-it-might/

The retreat of globalism?

This article contains some discussion of the benefits and costs of free trade.

Supply and demand in action in the US housing market

U.S. Home Prices Jump as Supply Pinch Plays Out
by: Laura Kusisto and Chris Kirkham
Jun 01, 2016
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: Home prices across the U.S. rose sharply in early spring amid rising demand and supply constraints, a sign that the lopsided housing-market recovery of the past five years is gaining strength.

CLASSROOM APPLICATION: Students can evaluate factors that affect the demand for home ownership (e.g., lending standards) and the supply of homes. They can also evaluate the relationship between new home construction and the market for existing homes.

QUESTIONS: 
1. (Advanced) What is the relationship between the number of new homes constructed and sales of existing homes? What is a factor that could be driving up sales of existing homes?

2. (Advanced) What is the effect of stricter lending standards on the demand for starter homes? What is the effect on the equilibrium prices of starter homes?

3. (Introductory) What factor is driving up rents in big U.S. cities?

Reviewed By: James Dearden, Lehigh University

Costs and benefits of tariffs

This article reports on the costs and benefits of recent increases in tariffs on steel. Here are some money quotes.

1. The "Commerce Department ... impose[d] tariffs in response to an oversupply in the steel industry, especially from China. Some duties are as high as 266%." 
2. "Steel imports into the U.S. during the first quarter of 2016 fell to eight million metric tons, down 29% from a year earlier, and inventories also declined."This spring, major U.S. producers sent out a flurry of letters announcing nonnegotiable increases in prices. On April 15, for example, U.S. Steel Corp. wrote to its customers that 'effective immediately, base pricing for all new flat-rolled product sport orders is increased by $60 per ton.'" 
3. "That is helping American producers. U.S. Steel’s share price, for example, has nearly doubled since Jan. 1." 

U.S. Steel Tariffs Create a Double-Edged Sword
by: John W. Miller
Jun 01, 2016
Click here to view the full article on WSJ.com

TOPICS: International Trade

SUMMARY: U.S. tariffs are boosting steel prices, helping American producers but raising costs for manufacturers.

CLASSROOM APPLICATION: Students can evaluate the effect of increased U.S. steel tariffs on the U.S. steel prices, the profits of companies that produce steel in the U.S., the U.S. consumers of products made with steel, and the U.S. producers of products made with steel.

QUESTIONS: 
1. (Advanced) What is the effect of the U.S. raising steel tariffs on the quantity of steel imported into the country? What is the effect on the quality of steel produced in the U.S.? What is the effect on steel prices in the U.S.?

2. (Advanced) What is the effect of the U.S. raising steel tariffs on the profits of manufacturing companies that use steel as an input in their manufacturing processes?

3. (Introductory) The article uses the term "fairly traded steel." Define fairly traded steel.

Reviewed By: James Dearden, Lehigh University