Assignments

icon of a pencil cup

The assignments in this course are openly licensed, and are available as-is, or can be modified to suit your students’ needs. You can download the assignments (also called performance assessments) in the following formats.


#1: Use Data to Explain Scarcity

Recommended Placement: Micro or Macroeconomics course after Scarcity

Module Alignment:

  • Explicitly addresses Scarcity

Assignment Description

In this assignment, you will demonstrate your ability to draw a simple production possibilities curve given data on the quantity of one input (labor) available and the amount of labor required to produce each of two outputs (guns and butter). You should also be able to identify the opportunity cost of one good in terms of the other as the slope of the PPC. You will explain your analysis of the figures to explain why it’s not possible to produce combinations of the two goods outside the PPC.

Suppose a nation has a total of 12 units of labor, which can be used to produce either guns or butter. One gun takes 6 units of labor to produce and 1 butter takes 2 units of labor to produce.

  • Explain why scarcity exists in this economy. Use the data as evidence of your reasoning.
  • What is the maximum quantity of guns that can be produced?
  • What is the maximum quantity of butter than can be produced?
  • Draw the nation’s production possibility curve.
  • What is the opportunity cost of guns in this nation?
  • Explain why the nation can’t produce both 3 guns and 4 butters.
  • Explain why the nation shouldn’t produce both 1 gun and 2 butters.

Sample Grading Rubric

     15     10     10     10     15     15     15     10

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Explain why scarcity exists in this economy, and use data to justify
Calculate maximum quantity of guns that can be produced
Calculate maximum quantity of butter than can be produced
Draw the nation’s production possibility curve
Describe the opportunity cost of guns in this nation
Explain why the nation can’t produce both 3 guns and 4 butters
Explain why the nation shouldn’t produce both 1 gun and 2 butters
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#2: Economic Model of Rational Crime

Recommended Placement: Micro or Macroeconomics course after Scarcity

Module Alignment:

  • Explicitly addresses Scarcity

Assignment Description

Create an economic model of rational crime.

For example, imagine a burglar is deciding which house to break into or a car thief is deciding which car to steal.

  • Explain assumptions of rationality by individuals or firms.
  • What factors would a rational criminal take into account in deciding to commit a crime? Be sure to explain how economic models are used by economists to assess the example.
  • What would convince the criminal to do the deed? Explain the circumstances that would convince the criminal to do the deed. Address the concept of marginality and use your calculations of marginal changes as justification.
  • What are some policy implications of your economic model of rational crime? In other words, what does your model predict would cause an increase and a decrease in crime?
  • Use the distinction between positive and normative reasoning to explain the limits to using your economic model of rational crime to argue for capital punishment as punishment for burglary or car theft.

Sample Grading Rubric

     18     18     18     18     18     10

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Explain the assumption of rationality by individuals or firms
Describe the factors a rational criminal takes into account in deciding to commit a crime, and provide support with economic model examples
Explain the circumstances that would convince the criminal to do the deed, and use the concept of marginality to justify
Explain the policy implications of the economic model of crime, and includes the model’s prediction
Explain how this model highlights the difference between positive and normative reasoning in arguing for capital punishment as punishment for burglary or car theft
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#3: Comparative Advantage

Recommended Placement: Micro or Macroeconomics courses after Globalization, Trade, and Finance

Module Alignment:

  • Explicitly addresses Globalization, Trade, and Finance

Assignment Description

Suppose that the United States and Saudi Arabia can each produce two products, oil and personal computers.  The labor requirements per unit of output are provided in the table below.

Labor Requirements Per Unit of Output

United States Saudi Arabia
Oil 10 8
Personal Computers 30 4

Calculate the labor and opportunity costs for each good, and then compute each country’s absolute and comparative advantage.  Use the results to determine what good each country should export and explain your reasoning

Sample Grading Rubric

     10     10     20     10     20     20     10

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Calculate the labor and opportunity costs for each good and country, show your work with correct notation
Compute the absolute advantage each good, show your work with correct notation
Explain which country has the absolute advantage in each good and justify
Compute comparative advantage for each good, show you work with correct notation
Explain which country has the comparative advantage for each good and justify
Describe what good each country should export and justify
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#4: Price Controls after an Ice Storm

Recommended Placement: Micro or Macroeconomics course after Surplus

Module Alignment:

  • Explicitly addresses Supply and Demand and Government Action
  • Implicitly addresses Surplus

Assignment Description

In 2014, a major ice storm hit the southeastern U.S..  The storm brought down power lines and trees, cutting electricity in many areas, making travel difficult, and slowing down repair crews.  Heating homes became a major challenge.  The storm created shortages of power generators.  As a result, those products sold at prices much higher than normal.  These high prices provoked cries of “price gouging” and calls on the government to impose price controls to prevent gouging.  While no one likes to pay a higher price than normal for something, consider what would have happened with a price ceiling.  The economic intuition is revealing.

Draw a diagram showing the market for generators with an equilibrium price at $250.  Now impose a price ceiling at $200 per generator.  What would be the impact of the price ceiling on the quantity demanded?  On the quantity supplied?  Who would benefit from the price ceiling and who would be harmed?  Let the graph guide your thinking.  Don’t start with your gut reaction!  Did the price ceiling help the people it was designed to help?  Explain the economic reasoning behind your analysis.

Sample Grading Rubric

     20     20     20     20     20

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Analyze the consequences of the government setting a price ceiling
Graphically calculate a market’s equilibrium price and quantity
Graphically illustrate a market shortage
Calculate the impact of government regulations on price and quantity of a product produced
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#5: State of the Macro Economy

Recommended Placement: Macroeconomics course after Macroeconomic Measures of Performance

Module Alignment:

  • Explicitly addresses Macroeconomic Measures of Performance

Assignment Description

This table shows U.S. economic indicators for a five-year period.  All variables are measured in percent.

U.S. Economic Indicators for a Five Year Period

GDP Growth Inflation Unemployment
2.5 2.1 5.6
3.7 1.9 5.4
4.5 1.8 4.9
4.4 1.1 4.5
4.8 1.5 4.2

How would you characterize the state of the economy over this time period and especially in the final year shown.  What do you expect will happen in subsequent years?  Please explain your reasoning in detail.

Sample Grading Rubric

     25     25     25     15     10

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Assess the state of the economy based on the data for the GDP Growth indicator
Assess the state of the economy based on the data for the Inflation indicator
Assess the state of the economy based on the data for the Unemployment indicator
Predict what will happen in subsequent years based on the data for all three indicators
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#6: Analysis of a Demand/Supply Shock using AD/AS

Recommended Placement: Macroeconomics course after Policy Application

Module Alignment:

  • Explicitly addresses Macro Working
  • Implicitly addresses Neoclassical and Keynesian Economics, Fiscal Policy, Monetary Policy, Policy Application

Assignment Description

In 2014, China’s economy slowed significantly causing a decrease in demand for US exports.

Use the AD/AS model to explain the likely short run impacts on US GDP and the aggregate price level.  What do you anticipate will happen to US consumption expenditure and US employment?  Please explain your reasoning for each of your predictions and show graphically as appropriate.

Sample Grading Rubric

     20     20     20     20     20

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Explain the likely short run impacts on US GDP using the AD/AS model
Explain the likely aggregate price level use the AD/AS model
Create a graphic to illustrate the anticipated result to US consumption expenditure and US employment
Explain the anticipated result to US consumption expenditure and US employment
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%

#7: Policy Response to a Macro Shock

Recommended Placement: Macroeconomics course after Policy Application

Module Alignment:

  • Explicitly addresses Policy Application
  • Implicitly addresses Macro Workings, Neoclassical and Keynesian Economics, Fiscal Policy, Monetary Policy

Assignment Description

The Great Recession was the most serious economic downturn in U.S. history since the Great Depression.  The recession began in December 2007.  Interest rates at the time were very low, close to zero.  Despite the American Recovery and Reinvestment Act of 2009, a nearly $800 billion fiscal stimulus and an expansionary monetary policy, the economy is only now getting back to normal in 2015.

In retrospect, what set of macro policies, if anything, should we have conducted to achieve a better recovery?  Show using the AD/AS model and explain your reasoning.

Sample Grading Rubric

     20     30     30     20

Criteria Not Evident

0%

Developing

55%

Proficient

80%

Distinguished

100%

Weight
Create a graphic to illustrate the recession using the AD/AS model
Explain why monetary policy is unlikely to work
Explain why fiscal policy is likely to work well in this scenario
Articulation of response (citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas.)
Total: 100%