Northern Virginia Community College Macro Economics Essay

Hello! I am working on a few short answer questions for Macro econ. There are only 8 questions and each response must be 3-4 sentences long. Overall easy assignment!!!

1.) How does subjective value make “gains from trade” possible?

2.) Think back to August 6, 1945. The United States has just dropped an atomic weapon on the city of
Hiroshima killed tens of thousands of Japanese and devastated the infrastructure. A Keynesian at that
time might conclude that there is a silver lining in the destruction, as economic prosperity will result.
Evaluate the logic of this claim in a few sentences.

3.) Most introductory economics textbooks have a section on “market failure.” It is here that students
learn that markets may fail to achieve their potential – leaving people worse off than they theoretically
could be. The existent of market failure is often taken as an excuse for government intervention to do
whatever markets fail to do. In just a couple of sentences, explain why economists (and others,
particularly politicians) must accept the possibility of “government failure” as well? That is, tell me why
government solutions to perceived market “failures” may themselves fail to achieve their own stated
goals? The U.S. Drug war is an apt example of a discrepancy between a stated political policy goal and
the actual attainment of that goal.

4.) How might price controls on gasoline lead to human fatalities in an area where there is an oncoming
hurricane?

5.) Some economists argue that minimum wage policy does not always lead to the unemployment
consequences that are so often predicted. For the sake of argument, grant that this is true. That is, due to
the passage of say, a $15 minimum wage in Virginia, no one loses his or her job. Does this prove that
minimum wage policy can improve the economic circumstances of unskilled laborers? Why or why not?

6.) Does Elon Musk suffer from scarcity? Explain.

7.) The logic of politics often leads to very different market outcomes than if the logic of economics
were being used to allocate scarce resources. In our discussions, we covered a concept called
“concentrated benefits, dispersed costs” that might help one understand this disparity. Briefly explain
what the concept means and then give an example of applying it to say, farm price supports (a type of
price control we covered, but other examples may be used).

8.) Is the following claim logical? Explain your answer. Actor Matt Damon will be more likely to buy a court-side Boston Celtics basketball seat because they are more expensive.