1. Explain & interpret the quote by Robert Bartley that opens the chapter.

2. After significant natural disasters, FEMA (part of the national government) tries to provide aid to the affected people. Compare & contrast the results of FEMA versus private insurance companies who are also involved in these situations.

3. There is often a political temptation for government to come to the aid of certain industries, regions of the country, or even portions of the population. What are some of the economic consequences of this behavior?

4. Summarize the last sub-section of this chapter ("Winners and Losers").

5. What have been some of the economic and social consequences of the substitution of machine power for human strength because of industrialization?

6. What have been some of the economic and social consequences of the growing importance of knowledge, skills, and experience in a high-tech economy?

7. Does inequality of income tend to be greater or less in the long run compared to the short run? Explain.

8.. Why do many statistics about the "rich" or the "poor" include people who are neither rich nor poor in reality?

9. Why is the productivity of an individual not the same as the efficiency or merit of that individual? Explain using examples.

reference

1) Basic Economics

by THOMAS SOWELL

Fifth Edition