ECO202 Module 4 Written Homework Assignment

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Morgan Community College *

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ECO202

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Economics

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Jun 11, 2024

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Unit 4: Written Homework Assignment Instructions 60 Points 1 O/verview Complete the following Unit 4 Written Homework Assignment for this module by the stated due date on the Schedule. Please submit in the Unit 4 Written Homework Assignment Dropbox as a .doc, .docx, .pdf or .rtf file. Instructions Complete the following questions in the form of short essays. Each question is worth 10 points. Be sure to cite your references. Type all responses following each question on this assignment page and submit to the Dropbox. 1. How rich are the rich? Wealth statistics on the very rich are compiled every year by Forbes magazine. Answer the following questions: A. Carefully define wealth, differentiating it from income. Which of these two are more unequally distributed in the US? Why? The definition of wealth is an abundance of valuable possessions or money, while income is money received, especially on a regular basis, for work or through investments. Wealth is more unequally distributed because while everyone can earn an income, it is hard to achieve wealth. Thus less people actually achieve wealth, due to the difficulty of achieving this goal, and the unequal distribution becomes greater because the more resources or wealth you have the more opportunities you have to create wealth or earn wealth and more resources. B. Find out who are the richest in the US and world at www.forbes.com: i. Choose lists, then "400 Richest Americans." ii. Select ten individuals for study at random. iii. List and explain your 10 individuals and explain how much wealth they each own. (Make certain that your units are correct.) How did they achieve this wealth? Alice Walton: $62.3 billion Alice Walton, age 71, is the only daughter of Walmart founder Sam Walton. She has a Bachelor of Arts/Science from Trinity University and lives in Fort Worth, Texas. Walton has focused on curating art, rather than working for Walmart like her siblings, Rob and Jim. She inherited this wealth. Alice W

Unit 4: Written Homework Assignment Instructions 60 Points 2 Jacqueline Mars: $28.9 billion Jacqueline Mars, age 81, has gained most of her wealth from candy and pet food. She owns approximately 1/3 of the Mars company which was started by her grandfather. She worked for the company for nearly 20 years and served on the board until 2016. She lives in The Plains, Virginia and has a degree in Bachelor of Arts/Science from Bryn Mawr College. She inherited this wealth Ray Dalio: $16.9 billion Ray Dalio, age 71, is the founder of the world's biggest hedge fund firm, Bridgewater Associates, which manages roughly $140 billion. He lives in Greenwich, Connecticut with his wife and has a degree in Bachelor of Arts/Science, Long Island University and a Master of Business Administration, Harvard Business School. Dalio has given more than $850 million to philanthropic causes. His Dalio Foundation has supported microfinance and inner-city education. He created this wealth. Donald Newhouse: $13.7 billion Donald Newhouse, age 91, and his late brother, Samuel "Si" inherited the publishing and broadcasting empire Advance Publications decades ago. Advance Publications is a media company. He lives in New York, New York. He attended Syracuse University but dropped out to help his dad with the company. He both inherited and created the wealth he has. Philip Anschutz: $16.9 billion Philip Anschutz has built fortunes in oil, railroads, telecom, real estate and entertainment. He owns the NHL's Los Angeles Kings and a third of the Los Angeles Lakers, plus the arena in which they play, the Staples Center. His Anschutz Entertainment Group operates more than 100 arenas and concert venues worldwide. He is 80 years old and lives with his wife in Denver, Colorado. He earned a Bachelor of Arts/Science from University of Kansas. He created his wealth. Jim Kennedy: $8.2 billion Jim Kennedy is the chairman of privately held automotive and media company Cox Enterprises; he shares ownership with his sister and cousins. Kennedy's grandfather, James M. Cox, founded Cox Enterprises in 1898 when he purchased the Dayton Evening News. He inherited his 25% stake in Cox Enterprises from his mother, Barbara Cox Anthony, who died in 2007. Jim Kennedy is 73

Unit 4: Written Homework Assignment Instructions 60 Points 3 years old and lives in Atlanta, Georgia, with his wife. He earned a Bachelor of Arts/Science from the University of Denver. He both created and inherited his wealth Dan Gilbert: $7.5 billion At 22 years old Dan started is own company, Quicken Loans, in 1985. Quicken, which originated nearly $146 billion in mortgages in 2019, went public as Rocket Companies in August 2020 at a $36 billion valuation. Dan is 58 years old and lives in Franklin, Michigan with his wife. He earned a Bachelor of Arts/Science from Michigan State University; LLB, Wayne State University. He created his wealth. Bubba Cathy: $7.1 billion Bubba Cathy and his brother run the fast food restaurant Chick-fil-A, the fried chicken chain founded by their father, Truett, in 1967. He grew up in the business, rising from construction apprentice to senior vice president in 1995. Today Bubba serves as Chick-fil-A's executive vice president and is president of the company's Georgia-based Dwarf House and Truett's Grill. He is 66 years old and lives in Atlanta, Georgia with his wife. He earned a Bachelor of Arts/Science from Samford University. He inherited his wealth. Jack Dorsey: $6.8 billion Jack Dorsey has been CEO of both social media firm Twitter and small business payments company Square since 2015. Dorsey cofounded Twitter in 2006 with Ev Williams, Biz Stone and Noah Glass, and was CEO until 2008. He returned in 2015. Dorsey cofounded Square with Jim McKelvey in 2009. Before gravitating to tech, Dorsey was a certified masseur and dabbled in fashion design. Jack is 44 years old and lives in San Francisco, California. He dropped out of New York University. He created his own wealth. David Sun: $6.5 billion David Sun cofounded and helps run Kingston Technology, which makes storage and memory products, as COO. With longtime partner John Tu, Sun launched a computer memory business out of a garage and sold it to now defunct PC maker AST a few years later. The pair started Kingston by making surface-mount memory chips after losing most of their first fortune in the stock market. David Sun is 69 years old and lives in Irvine, California with his wife. He earned a Bachelor of Engineering from Tatung University.

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Unit 4: Written Homework Assignment Instructions 60 Points 4 He created his own wealth. C. Based on your sample, explain what percentage of individuals gained this wealth through inheritance and what percentage through entrepreneurship. Approximately 60 percent of the people created their own wealth and 40 percent through inheritance. This is because some people both inherited wealth but also created their own wealth. 2. For this question, you will be internet searching for some information on the labor market. Begin by searching for information on current trends in the US Labor Markets and answer the following 2 questions: A. Has overall employment been rising or falling during the past 3 years? What factors might account for this pattern? Overall employment has risen slightly the past two years but has dropped this year due to unforeseen events. The factors that have caused this are that the economy was strong the past two years which led to job creation and stability. This year since the pandemic has occurred less people are going to stores and spending money which is hurting business and the economy. Since the economy and businesses were hurt works were laid off and unable to find jobs because everyone is in the same boat. B. Have US workers ’ wages been rising or falling during the past 3 years? US workers ’ wages have been rising the past three years. Now you will be searching for some information on the minimum wage. Using the website, www.dol.gov or any other sites you wish to use, determine information about the minimum wage. Answer the following questions: C. What is the current federal minimum wage in the U.S? The current federal minimum wage is $7.25. D. What is the federal minimum wage for workers who receive tips in the US? The current federal minimum wage for workers who receive tips is $2.13.

Unit 4: Written Homework Assignment Instructions 60 Points 5 E. What is the current minimum wage for the state that you live in? The Colorado minimum wage is $12.00. F. Why was the minimum wage law first enacted? The minimum wage law was enacted to help bolster wage workers and decrease class stratification . G. What are the arguments for and against raising the minimum wage? The arguments for raising minimum wage are that higher earnings would improve the overall standard of living for minimum wage workers by providing them with a more appropriate income level to handle the cost of living increases and A boost to economic growth is another potential advantage of increasing the minimum wage. The arguments against raising minimum wages are is the probable consequence of businesses increasing prices, thus fueling inflation, and that increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets. 3. Examine the following marginal costs and marginal benefits associated with air cleanliness for a firm: Quantity of Clean Air (%) Marginal Cost ($) Marginal Benefit ($) 0 50,000 600,000 20 150,000 360,000 40 200,000 200,000 60 300,000 150,000 80 400,000 120,000 100 Infinite 0 A. What is the optimal degree of air cleanliness? The optimal degree would be 40 percent.

Unit 4: Written Homework Assignment Instructions 60 Points 6 B. What would then be the optimal degree of air pollution? The optimal degree would be 60 percent. C. Suppose that a state provides subsidies for companies to build plants that contribute to air pollution. Cleaning up this pollution causes the marginal cost of air cleanliness to rise by $210,000 at each degree of air cleanliness. What is the optimal degree of air cleanliness after this change? The optimal degree would be 20 percent. D. Why would we not just want the quantity of pollution to be zero? We would not want the quantity of pollution to be zero because there would be no benefits of this, while the costs would be infinite. Thus, the trade offs would not be worth the quantity of pollution to be zero. 4. You will now be discussing labor unions and strikes. A. Begin by describing the goals that unions may pursue in a paragraph or two. Some of the goals that unions may pursue are better working conditions, less hours, more pay, better insurance or retirement plans, and protection of workers rights. All of these are important topics to workers and can either make or break whether workers want to be employed there. Yet it is difficult to advocate for these things by yourself. Unions occur because the voice of multiple workers is stronger than just one (power in numbers) especially when advocating for the things listed above as most companies want to have maximum profits. B. Next, consider recent work stoppages and strikes by looking at the U.S. Bureau of Labor Statistics information at www.bls.gov . Under Subjects, go to the heading of Pay and Benefits and then select Strikes and Lockouts. C. Using the Work Stoppage information or data in the Strike Report, find a case of a strike that has occurred in the last 5 years that you have an interest in investigating. Research information on the BLS and write a summary about the strike. In your summary, discuss the establishment and union involved in the work stoppage, the number of workers involved and the number of days of idleness. Additionally do some internet searching on that particular strike you have chosen and determine more information on the purpose of the strike and any results or negotiations that ensued and explain that in your summary as well. Be sure and cite your references for your information found. I chose a private industry statewide strike in California with the National Union of Health Care Workers and the Kaiser Permanente. The strike began December 16, 2019 and ended

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Unit 4: Written Homework Assignment Instructions 60 Points 7 December 21, 2019, or a total of five days, with 4,000 workers participating in the strike. The cumulative days idle were 20,000. The strike occurred because of lack of benefits and contracts outlining worker wages, raises, and benefits as well as the lack of new hires but increase in patients which led to mediocre care. The results of the strike are the workers have won patient care ratios, they’ve won the right to advocate for patients, they also won on economic demands as well; 6 % the first year, 4.5% plus bonuses in the second and third years of a three year contract. They protected their pension benefits and cemented the right to be a union. 5. Using the historical tables from the Budget of the US government, utilize the following website to determine where the US government allocates its expenditures. The website is http://www.whitehouse.gov/omb/budget/Historicals A. Examine Table 3.1 on Outlays by Superfunction and Function. B. Explain what government functions have been capturing growing shares and what functions have been capturing declining shares of government spending in recent years. The government functions that are capturing growing shares are Physical resources, Net interest and other functions. The government functions that are capturing declining shares are National defense and Human resources. C. Select one of the government functions and describe whether it has seen an increase or decrease in government spending over the past 10 to 15 years. For the function you have selected, is it related to the problem of addressing externalities, providing public goods or dealing with other market failures. Does it appear to be related to political functions instead of economic functions? Human resources has experienced an overall increase over the past 10 to 15 years. It is related to providing public goods. It could be seen as related to both political functions and economic functions as they are used both politically to gain support but also to boost the economy in times of recession. 6. Read the following article, UPS is turning Trash into Gas to Clean up its Emissions at this website: https://www.cnn.com/2019/05/22/business/ups-renewable-natural-gas/index.html Answer the following questions:

Unit 4: Written Homework Assignment Instructions 60 Points 8 A. Explain how pollution represents market failure. Pollution represents market failure because you are not being as efficient as possible and creating waste thus you are wasting resources and not making maximum profit. B. Why is UPS buying renewable natural gas? UPS is buying renewable natural gas to deliver its goal to reduce greenhouse gas emissions of its ground fleet 12 percent by 2025 and meet regulations in the U.S and Europe. C. Why is renewable natural gas better for the environment? Renewable natural gas is better for the environment because instead of the harmful gas being released into the atmosphere it is turned into fuel and used up. D. What is expected to be the future of this industry? Electric cars are expected to be the future of this industry. Make sure you use correct spelling, grammar, etc. Please see the Course Schedule and Course Rubrics pages in the Syllabus Module for due dates and grading information.

ECO202 Module 4 Written Homework Assignment

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