Introduction to Economics
1. Value, like beauty, is often in the eye of the beholder. A 1909 S VBD penny is considered one of the most valuable U.S. coins because of the small number that were minted. One penny can fetch several thousand dollars, depending on the buyer. Yet the actual value of the coin, if it were to be spent, is only one cent. It could easily be put into distribution at a convenience store, passed from hand to hand, without anyone who touches it even knowing its value. What does this say about the value of something?
2. Gas prices are often talked about as having an impact on how much people drive. Yet if you ask most people, they will say most of their travel – to work, to school, to shopping locations, to see family – cannot be curbed more than slightly. Similarly, most people are not going to cancel a vacation because gasoline for their vehicle will cost them 38% more than the prior year. These being acceptable facts, explain why gasoline costs are even discussed in the media – especially to the extent they are – and whether you have ever altered your behavior on those costs. Include in your answer your views on why gas prices seem to go up almost the same instant that news outlets announce oil barrel prices are set to increase in the near future, yet they don’t ever seem to drop back down to the pre-hike rate even though oil prices decrease.
3. Define the true cost of something. Is it what the store is selling it for; or what it cost to make it, ship it, and sell it; or what you are willing to pay for it? In your answer consider the example of an artist who creates a sculpture made out of $2,000 worth of nickels. Because the art is made up of $2,000 of actual money (40,000 coins) does that mean it’s worth that? What if the artist was willing to sell it for $800? Or what if he was only willing to sell it for $41,000? How does that affect the cost of the art piece?
4. In recent years, more and more Americans have begun to evade jury duty, creating a serious problem in some courts, which have been forced to postpone trials because an adequate number of jurors were not available.
A. What is the cost to a citizen of serving as a juror?
B. For whom will the net cost be very low or even negative? For whom will the net cost be very high, perhaps even prohibitively high?
C. Can you think of any simple system for reducing the average cost to citizens of jury service?
D. What consequences would you predict if we moved to a completely volunteer jury system, under which the courts paid jurors a daily wage sufficient to obtain the services of as many qualified jurors as the court required?
E. Many citizens who faithfully answer every summons to jury duty have complained of their treatment at the hands of court officials who behave as if the time of jurors had no value whatsoever. For example, prospective jurors may be required to sit for days in a waiting room without ever seeing the inside of a courtroom. What is the cost to court officials of behaving inconsiderately toward jury candidates?