Summer 200 Reading Assignment

AP Macroeconomics

 

Naked Economics: Undressing the Dismal Science

by Charles Wheelan

 

This book strips away the math and graphing from economics and brings it to you in real life terms.  It is an easy read for anyone, but is particularly useful for AP students.  Its real life applications will help you no matter what you study after high school.

 

http://www.amazon.com/Naked-Economics-Undressing-Dismal-Science/dp/0393324869/

 

You may also consider used books from Campusbooks.com, Amazon.com, half.com, abebooks.com, etc. 

 

Your Assignment:

Read this book.  All of it.

In a perfect world, I would ask you to read the book.  You would read it, be entertained, learn valuable information and get 100 points.  However to prove to me that you read the book you will need to answer the following questions.  I want to make sure you read the book- it’s for your own good.  (This book teaches you about “why things are the way they are in life”) It is a great primer for this course and will prepare you for the material and topics of discussion during the course of this school year.

 

Expectations: Work must be typed, 12 point font, single spaced, with your name and hour at the top. Label each section with the appropriate number.  You do not need to restate the question.  Use common sense and complete sentences.

 

Due Date:  First day of school.  Fifteen points will be deducted for every day this assignment is late.  I suggest you complete this work well ahead of time.  The book is small and only 236 pages long.  It took me about three hours to read.

 

  1. Read Chapter one. In a paragraph, summarize the main points of chapter one.  Note that simply listing the bolded statements will get you zero points.  There are key ideas and assumptions in this chapter. (5 points)
  2. Read Chapter two.  Explain why incentives matter.  Explain what you think about the author’s ideas on black rhino conservation.  Explain what perverse incentives are and give examples from a high school student’s life.  (10 points)
  3. Read Chapter three. Summarize this chapter in 1-2 paragraphs.  Why might government regulations and lawyers be a good thing?  Cite specific examples. (5 points)
  4. Read Chapter four.  Summarize this chapter in one paragraph.  Cite specific examples of government involvement as needed.  In another paragraph, be sure to discuss the government’s “grabbing hand” as it licenses and regulates businesses in third world countries versus Capitalist nations. (10 points)
  5. A.  Chapter Five: What does information asymmetry have to do with the hiring process, in regards to gender?  What does the author feel about this discrimination?  Do you agree with him?  Explain.  What do you feel about his long term solution to this problem? (5 points)

 

B.  Chapter Five: Explain the problem of private health insurance?   Why do the costs continue to rise?  What is the problem with public health insurance.  Discuss adverse selection, as it relates to this chapter.  (5 points)

 

6.  Chapter 6: The author discusses the symptom of being poor, and the illness of being poor.  What does the author mean?  Do you agree with him?  Explain.  How does the poverty line right now compare to 100 years ago?  Why is America like a real life version of “Revenge of the Nerds?”  What’s so important about Human Capital? (10 points)

 

7.  Chapter 7:  What does the efficient market theory have to do with Financial markets?  Discuss the positives and negatives of the theory.  Why do Wall-Street types not like it?  Explain the coin flipping experiment, as it relates to investment diversification.  (10 points)

 

8.  Chapter 9: Explain how the average American is three times as rich as they would have been in 1950.  Explain the most effective “knock” on GDP.  What does the author think about the effectiveness of fiscal policy?  Explain how a current account surplus/deficit can be good and bad.  (10 points)

 

9.  Chapter 10: What is the drastic consequence of poor monetary policy the author discusses at the start of the chapter?  Do you agree with this argument?  Explain.  What is the relationship between governments who owe money, government polices to fight inflation, and monetary policy?  Does this change your opinion of how monetary policy is used by the US Government?

(10 points)

 

10.  Chapter 11:  What is the relationship between specialization and productivity?  Discuss, in two paragraphs or less, your opinions on globalization after reading this chapter.  Cite data from the book to prove your point.  Finally, discuss the problem of “good intentions” on globalization and “sweatshops”.  What do you propose to solve this problem?  (15 points)

 

11.  Chapter 12: After reading this chapter, explain and discuss what we can do to help developing nations.  What do these nations need to do to help themselves?  (5 points)