Concepts: Shift of supply curve, inelastic demand, monopsony power
Background: With the help of US resources and intel, the Colombian military police destroyed cocaine labs all over the country, burning coca farms and seizing over a billion dollars in cocaine.
Question: Use a supply and demand diagram to explain why the US and Colombian governments sought to destroy labs and crops. Discuss the effectiveness of governments’ interventions.
Question 2: Out of the following statements we hear in this clip, select the ones that are considered “positive.” Which sentences are considered “normative statements”? Explain your choices.
Fighting the narcos was the same as fighting the communists.
The US Southern Command in Panama sent us a care package.
The price of cocaine in Miami was skyrocketing.
The ensuing gun battle cost dozens of men.
Lehder was immediately extradited to the States, where a federal court sentenced him to life plus 135 years.
For anti-narco candidate, Luis Carlos Galan, [the victory] would provide him the momentum he needed to propel him to the presidency.
Background: In this clip, the Colombian government cooperates with the DEA to capture Pablo Escobar and dismantle the Medellin cartel. Both governments plan to sign an extradition treaty, allowing drug lords to be prosecuted under American law. Threatened by the extradition, Pablo Escobar decides to attack the Colombian Palace of Justice.
Question: Create a payoff matrix, modeled on a Hawk-Dove game, to depict the Colombian government and the Medellin cartel’s strategies. What is each player’s dominant strategy? What is the Nash equilibrium of the game?
Background: While Africa is abundant in natural resources, several African countries are among the poorest countries in the world. The Netflix series depicts the corruption of some African leaders and the legacy of apartheid in South Africa.
Question (Let’s Use Data): Find the most recent GDP per capita for five Sub-Saharan African countries. Compare the data to those of some developed countries (e.g., United States, Sweden, United Kingdom, Canada). Discuss if institutions play a role in encouraging economic growth. To answer this question, you may use the GDP per capita values (current U.S. dollars) from the World Bank website: https://data.worldbank.org/.
Background: Player 111, a doctor, agreed to remove transplant organs from deceased players so that staff members could sell them on the black market. As in many other countries, selling transplant organs is illegal in South Korea. Instead, organs are typically donated by live donors when possible or by families after a relative passes away. Such a prohibition is equivalent to a price ceiling of 0 won on human organs. In 2019, there were 32,560 potential organ recipients on Korean waiting lists (data from the Korean Network for Organ Sharing – KONOS). Of these, only 1,612 patients received an organ donation. Network for Organ Sharing. Of these, only 1,612 patients received an organ donation.
Question: Using a supply and demand diagram, describe the effects of a price ceiling on the market for human organs available for transplant. Is the demand curve perfectly inelastic? Analyze the effects of legalizing the purchase and sale of human organs. Include ethical considerations in your analysis.
Background: Jet gifts his daughter a dog for her birthday. However, in Cowboy Bebop’s world, dog owners are highly taxed. So the mother rejects the present and asks Jet to get the puppy back because of how expensive dog ownership taxes are.
Question: What is the effect of a tax on a market’s equilibrium? Draw a graph to illustrate your answer.
Background: Hot water is scarce, especially in a spaceship where everybody has free access to the shower. And so, when Faye overuse water in the shower, others are negatively affected, as they do not have hot water for their own showers.
Question: Discuss if hot water is a rivalrous or non-rivalrous good and if it can be considered excludable or non-excludable. To what economic problems this situation refers to?
Background: The Australian minister of defense must choose between ordering military submarines from Australia or from Japan. Japanese submarines are as efficient but cheaper to purchase. The minister decides to order them from Australia to favor an Australian company, though recognizing the significant cost difference.
Question: Use the concepts of absolute and comparative advantages to discuss under which conditions the Australian minister of defense could have made a correct decision.
Background: The Minister for Justice discusses with advisors the causes of the explosion of a residential house. The cause seems to be a gas leak and no public funds were allocated to fix the problem. In this clip, we understand that gas leaks were a well-known problem.
Question: Discuss the reasons why the government did not invest in fixing gas leaks in this area. Can we expect a government to fix every problem of similar importance in a timely fashion? Should the government invest in infrastructure projects during economic downturns?
