Critical Inquiry Assessment for ECON 2321 Principles of Microeconomics

Worth 5% of your Grade

Critical Inquiry Goal: Demonstrate a knowledge base to ask more informed questions and learn more complex concepts.

Search Google News for either "minimum wage," "rent control," or "externalities." Read an article or two on one of those key words. Write 3 paragraphs then include the answers to one set of questions below (choose either Minimum Wage or Rent Control or externalities questions). You will need to use your textbook and/or your lecture notes to evaluate the statements in the article.

Minimum Wage:

1) Does the article support an increase in minimum wage? Why or why not?

2) According your textbook and/or lecture notes, who benefits from a minimum wage increase and who suffers from it? How?

3) Do the statements in the article align with your textbook and/or lecture notes? Explain.

4) Why would a politician favor a minimum wage increase? Cite an example.

5) What do you think the minimum wage would be if it was set by economists with the goal of helping the poor? Explain your answer using what you have learned about supply and demand.

Rent Control:

1) Does the article favor rent control? Why or why not?

2) According to your textbook and/or lecture notes, if rent control is implemented, what happens to the number of apartments available and the quality of apartments after a couple of years? Do the statements in the article align with your textbook and/or lecture notes?

3) Does economic theory suggest that rent control helps the poor? Explain.

4) Does rent control increase or decrease discrimination based on race, gender, age, # of children, etc.? Explain using economic logic.

Externalities:

1)what examples of externalities does the article use? Briefly explain why they are positive/negative externalities.

2) According to your textbook and/or lecture notes, what are the consequences of positive/negative externalities?

3) How can we remedy market failure caused by externalities? Is the solution mentioned in the article a public policy or a private solution?

4) What is Coase Theorem? Use an actual or hypothetical example of how negotiation between interested parties can solve the problem of externality and lead to an efficient outcome.