Wage Discrimination

In our last episode of the econ blog, we examined the discrimination in prices that men and women pay for similar products/services, haircuts being the most explicit example.  But now that we are in Unit 4 (and looking at factors of production), it is appropriate for us to examine what could be another example of discrimination:  the pay gap between men and women.

Provided here for your perusal is a very interesting chart courtesy of The New York Times, showing the wage gap between men and women at a variety of jobs.  (On the left hand side of the page you will see color-coded occupations; click on one to get more information on the jobs within that category).

Provided here for your ponderment is an article from The Economist looking at the issue of labor force participation by women in a variety of countries.  Consider these two sources, and answer the questions below.

• Describe the history of labor force participation by women.  Historically, how involved have they been in the labor force?  In what sorts of jobs?
• How has the gap closed?
• What economic benefits and costs have accrued as a result of more women in the workforce.
• Carefully examine the chart on the Times website.  Using your knowledge of MRP and derived demand, could there be any economic justification for the wage gap?  Explain why or why not.
• Note:  this can quickly become a very contentious, political, and decidedly uneconomic discussion if we are not careful.  For this particular question, I'm asking you to use your knowledge of derived demand to answer the question, not your knowledge of ethics, business, or anything else

Your first post on this issue is due by midnight on Saturday, December 3rd.  Your second post will be due by midnight on Sunday, December 11th.

Addendum:  For your second post, I'd like you to consider the productivity improvements on the continent of Africa.  This article summarizes one of the major influences on African productivity:  cell phones.  After reading the article, consider these questions:

• Explain the improvements to the economy since cell phones became popular.
• Using your understanding of marginal revenue product and derived demand, explain how increased cell phone penetration throughout the continent will help improve economic conditions.
• How might cell phones be used to effectively improve productivity in Africa?  In particular, keep in mind that many in Africa are still farmers...it's easy to see how a cell phone would help a banker, but how does it help a farmer?

This post is due by midnight on Sunday, December 11th.

Price Discrimination, or Discrimination?

In class recently we discussed the different types of price discrimination.  As I was driving home from work yesterday, I found myself at the cafe buying a cup of coffee.  Next to the cafe was a barber shop, catering to cutting men's hair.  Nearby the barber shop was a salon, catering to cutting women's hair.  The salon was much more expensive for a haircut.  I'm not talking about shampoo, or curls, or anything else.  The haircut at the barber shop was $10, at the salon it was $15.  I started thinking about this in economic terms, because I am a nerd.

Some internet trolling led me to this article, which discusses the differences in price that genders pay for products.  My question to you is this:  are these examples of price discrimination, or are they examples of "real discrimination"?

Consider the following below:

• Why do you think that there is a price difference between the salon and the barber shop?
• Are some of the products mentioned in the article examples of price discrimination, or are they examples of old-fashioned gender discrimination?
• Is price discrimination bad?  Should it be somehow outlawed or curtailed?
• The author seems to suggest that this price discrimination is not just a harmless case of charging women more for shampoo; subprime mortgages and other large purchases seem to fall into this category.  Is this an example of price discrimination, gender discrimination, or is there perhaps a perfectly "legal" reason that more women have worse mortgage rates or higher premiums?

The first blog post on this topic is due by Saturday, November 19th at midnight.  The second post will be due on Sunday, November 27th at midnight.

The Game Theory Behind Early Decision

We are in the midst of our discussion about game theory; at the same time, the annual ritual of the college application process is growing to a climax.  As your teacher, I am aware of this fact, given how much time I spend writing letters of recommendation from mid-October to late-November.  Therefore, it seems to take a moment during this stressful time and analyze the college admissions process through the lens of game theory.


I would like for you to read this article from The Atlantic magazine.  I will warn you now, the article is lengthy, but given the topic I don't think that you will find it boring.  I would like for you to consider the college admissions process as an example of game theory, and to answer the questions below:

• What is the history of early decision?
• Analyze this quote from the article using game theory:  "No one wants to be the first one to take the step, so everyone needs to step back together."  What is the speaker referencing, and how does game theory apply to the quote?
• Using what we have learned about game theory, suggest why the author's proposal would not work?
• How do you feel about the early decision process?  After all, you are all wrestling with this issues now.

The first post will be due on November 5th at midnight.  The second post will be due on November 13th at midnight.


Addendum:  Now that you have examined the game theory behind college, let us assume for the moment that college is not in your future:  instead, a life of crime awaits you!  Let's examine the game theory behind a REAL prisoner's dilemma.


Here is the opening scene from The Dark Knight.  I would like for you to watch the clip and answer the questions.

• How is this scenario an example of game theory?
• Listen to the conversation in the car at the beginning.  What does the driver suggest about The Joker?
• What was the strategy for each of the robbers?
• How might their strategy change if they were a true criminal gang that would work together in the future?
• What SHOULD each of the robbers have done?

This blog post will be due November 13th at midnight.

Sin Taxes

Recently we talked about taxes, and one of the things mentioned was that taxes serve double duty:  not only do they bring in government revenue, they can also serve to "nudge" us toward proper behavior.  For example, taxes on alcohol are not just to raise money; by making that six pack just a little more expensive, states can discourage the marginal drinker from buying a little extra booze, thus sparing society from the bacchanalian mayhem that might ensue.  Recently, the government has proposed another potential "sin tax" that might hit a little closer to home...

Please read the following article and then answer the questions below:

• What is your view on this particular tax?  Is taxing sugary drinks a viable solution to help end obesity?
• Look carefully at paragraph four; there is lots of juicy economics in that little passage.  Based on what you read, is soda an elastic or inelastic good?  Explain.
• What do you think of the beverage lobby's argument against the tax?  Is this tax regressive (i.e. hurts the poor more than the rich?)  Does that matter when it comes to taxes?
• Are these "sin taxes" morally correct?  Is it okay for the government to use taxes to "nudge" us to proper behavior?

The first post for this blog question is due by midnight on Saturday, October 22nd.  The second post is due by midnight on Sunday, October 30th (spoooooooky!).

Gas Price Equilibrium

As we have talked about in class, prices in an economy are determined largely by the movements of supply and demand; as determinants of these goods change, the P and Q of the good change as well.  Gasoline is an item that is constantly in flux, and thus should serve as a useful commodity for us to perform a case study.

I would like for you to read the two provided articles, each concerning gas prices.  The first article talks a great deal about the future of gas prices.  Ignore the jargon (futures?  quantitative easing?) and focus on his message, which should come through with a couple of readings.  The second article discusses the affect of oil and gas prices on the economy, and puts particular attention on the (somewhat) counter-intuitive idea that lower gas prices could actually hurt the economy.

Using what we have learned about equilibrium in class, answer the following questions in your post.

• What is currently happening to gas prices?  What are the economic reasons for this?  (Hint:  what is causing the curves to shift?)  Be specific as to what curve you are shifting.
• What are the benefits of falling gas prices?  How do they help the economy overall?  Use equilibrium in your answer.
• Are there any problems with falling gas prices?  What are they indicative of?
• Based on your (perhaps rudimentary) knowledge of current events and economics, what do you think will happen to gas prices throughout the duration of this year and into next?  

The first blog post is due by midnight on Saturday, October 1st.  The second post will be due by midnight on Sunday, October 9th.

Addendum:  Here is an article that talks about gas prices for the most recent week.  I am curious as to how you all feel about the ideas put forward by some of the economists/analysts.  In particular, look at the following:

• Many of the analysts talk about Americans changing their consumption habits.  Do you really think that oil consumption habits really changed in just a few months?  What does this suggest to you about the elasticity of oil/gasoline?
• The analysts also talk about shocks in Libya.  The country still remains in turmoil, so how much credence do you give their theories concerning Libya and oil prices?  And is Libya a supply or demand shock for oil?

Again, please post by Sunday at midnight.

Parking Economics

One thing that we have seen so far is that economics is the study of choices, and often those choices relate to the rationing of goods.  For this blog post, I want you to consider the rationing of a good near and dear to your heart:  parking at high schools.

Read this article about parking in Loudoun County, VA and consider the questions below.

• What do you make of Brett Fulcer's comment about parking in paragraph 4?  Why should you pay to park somewhere?
• What is it about suburbs that has ingrained in us the idea that parking has no monetary cost?  What are some of the non-monetary costs of parking?
• In paragraph 10, a parent complains about having to pay for sports and parking as something that "goes against what is normal and fair practice."  
• How does the concept of opportunity cost help explain the budgetary decisions that are being made?

You do not necessarily have to answer every bullet, but remember to use economic concepts (opp. cost, scarcity, etc) in your answers.  Your first blog post is due by midnight on Saturday, September 17th.  The second post is due by midnight on Sunday, September 25th.

Addendum:  Tuesday, September 20th


So as I trolled the internet looking for news, I stumbled on this article concerning an app that allows you to auction your parking space.  Yes, even free ones.


I would like for you to read the article, and consider the following questions:

• What is your general reaction to the app?  Good idea?  Waste of money?
• The app allows you to sell your parking space; implicitly, it seems to be implying that you "own" the property rights to the space.  If curbside parking is free, do you really "own" the space?  Should this even be legal?
• What are the economic costs of waiting for parking?

Again, your second blog post is due by midnight on Sunday, September 25th.

Welcome!

Hello everyone, and welcome to A.P. Economics for the year 2011-2012. I hope that you will find the class both enjoyable and interesting...that's the goal, anyway.


Indeed, you are taking economics in one of the most exciting periods in economic history, and I would argue that the great ideological debate of your time is going to center on economic issues.  You have done wisely to choose to educate yourself on these matters.  Kudos to you.  The blog is intended to be a kind of forum where you can bounce ideas off each other outside of class, and actually apply some of this economics stuff to more "practical" areas. After all, the last thing I want you to think is that economics is some sort of abstract field that has no relevance to the outside world.

You do not have to create a Google Account to make postings, although if you have one feel free to use it.  All you have to do is click on the blog post itself.  Then, click on "Comment."  You will be given a box to type your comments.  Where it says "Choose an Identity" select "Name/URL" and type at least your first name and last initial, or your first initial and last name.  Then, publish your comment.


I have to approve all comments, so don't expect to see yours pop up instantly.


Your first blog post is simple. Please post what you did over the summer, and two of the following: your favorite movie, book, band, or television show.  This assignment is due by midnight on Sunday, September 4th.