What happens when the Rule of Law breaks down?

http://nypost.com/2017/01/10/how-venezuelas-corrupt-socialists-are-looting-the-country-to-death/

Would a government bureaucrat have mandated this solution to CO2 emissions?

This article in QZ.com reports that a firm in India has found new way to reuse CO2 released when it burns coal. Here are some questions to consider.

1. Did the firm spend R&D to "be green" or to increase profit?
2. When would R&D spending and the adoption of new green technologies be greater: when firms may emit CO2 without paying an emissions tax or when they must pay an emission tax for each ton emitted?

What happens when prices are high and barriers to entry are not?

http://www.marketwatch.com/story/cvs-takes-on-mylans-epipen-with-much-cheaper-version-of-an-alternative-2017-01-12

Supply and Demand in Action

U.S. Low Fuel Prices Drive Consumers Away From Smaller Cars
by: Mike Colias
Jan 03, 2017
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: While sales of pricey light trucks amid a sustained run of cheap fuel may be good for Detroit's bottom line, the collapse in demand for smaller vehicles has led to job cuts elsewhere.

CLASSROOM APPLICATION: Instructors can put an auto manufacturer's decision about the number of autos to produce for each product in its line in terms of decision making under uncertainty.

QUESTIONS: 
1. (Advanced) What variables do auto manufacturers include in their determining their forecasts of automobile demand?

2. (Advanced) How does the length of time and the cost of adjusting manufacturing to changes in actual demand for different types of automobiles affect the degree to which manufacturers are willing to use forecasts in making production decisions?

3. (Introductory) What is the effect of an auto manufacturer producing too many smaller cars and too few crossovers and trucks on the firm's profits?

Reviewed By: James Dearden, Lehigh University

Minimum wage laws kick in

Minimum Wages Set to Increase in Many States in 2017
by: Eric Morath
Dec 31, 2016
Click here to view the full article on WSJ.com

TOPICS: Labor Economics

SUMMARY: About 4.4 million workers across the country are slated to receive a raise at the start of the year, a shift that may shed light on a debate about the effects of mandated pay increases at the bottom of the wage scale.

CLASSROOM APPLICATION: Students can use supply and demand to examine the benefit to workers of an increased minimum wage and the cost in terms of decreased job creation and increased unemployment. "Economists and policy makers are of two views on the costs and benefits of minimum-wage increases. While the policy puts more money in the pockets of low-wage workers, it also gives employers less incentive to add to their payrolls, leaving some workers behind. A 2014 study from the nonpartisan Congressional Budget Office found raising the federal minimum wage to $10.10 an hour would reduce job creation by 500,000 over two years. At the same time, the report estimated that the increase in the federal minimum wage would raise the pay of 16.5 million workers who kept their jobs."

QUESTIONS: 
1. (Introductory) What is the effect of raising the minimum wage on the willingness of firms to expand the sizes of their operations?

2. (Introductory) What is the effect of raising the minimum wage on the willingness of businesses to invest in automation that eliminates jobs?

3. (Advanced) What is the effect of raising the minimum wage on U.S. imports and on U.S. exports?

4. (Advanced) Describe the tradeoff involved in a state raising its minimum wage.

Reviewed By: James Dearden, Lehigh University

What happens when no one controls an externality

http://www.newsweek.com/china-issues-first-national-smog-red-alert-538121

A better way to address poverty?

http://money.cnn.com/2017/01/02/news/economy/finland-universal-basic-income/