Economics

Case Study 1: Water Scarcity

As part of a discussion about natural resources and scarcity, view the following video clip http://www.youtube.com/watch?v=M3d0rGGS3OA.(If you are unable to open by clicking the link, copy and paste the link into a new browser window.)

There was no law to monitor or control the water coming out of these communities. Society entrusts the government to be responsible for overseeing the environmental conditions of the state. In response to this issue, hotly contested House Bill 6443 was introduced in the Michigan House of Representatives. Many claimed it was a way for government to control the way households with well water consume water, and add a tax to that water. House Bill 6443 did not pass.

View House Bill 6443 by clicking the following link: http://www.legislature.mi.gov/documents/2009-2010/billintroduced/House/pdf/2010-HIB-6443.pdf

Write a reflection on the video and discuss the following:
•Clearly define the problem presented in the video.
•What was your initial response to the video?
•What role do you think the government has to manage or not to manage scarce resources like water? Consider whether the needs of the local residents or the needs of the company are of greater social and economic consequence?
•What problem did House Bill 6443 try to address?
•Was it an appropriate solution for the problem?
•How might it solve the problem presented?
•What might have been the unintended consequences had the bill passed?
•Do you believe the bill should have been passed?

Case Study 2: Shifts in Market Supply and Demand

Research an article from an online source in the Baker Library, such as The Economist, Wall Street Journal, Journal of Economic Perspectives, American Journal of Agricultural Economics, or another academic journal. The article should discuss a specific market and indicate a change in price of the product (for instance, your article could discuss a recent increase in the price of something you purchase or sell). Include supply and demand graphical analysis to demonstrate your point.

Answer the following questions (you may number the answers but answer each question in essay format):
1.Provide a synopsis of case study in essay format, identifying the relevant market.
2.Describe the nature of the change in the market: shift in demand or shift in supply.
3.Describe and graph the direction of the shift.
4.Describe what induced the shift.
5.Indicate the effect of the shift on the equilibrium market price, and whether you can or cannot predict the change in the equilibrium quantity.