HomeNaked Economics AssignmentTravels of a T-Shirt in the Global EconomyTEACH the CLASS: Use actual examples from at least one of the Four Parts of Pietra’s book—Texas, China, North Carolina, Africa-- to demonstrate the concept(s) raised in each of the Wheelan chapter. ASSESSMENT: Teach the Class Rubric
1. On the wiki post Power Paragraphs( click for a review of the power paragraph), not more than two, that use compelling evidence from the Pietra text to exemplify the economic concepts described in the Wheelan chapter.
2. Ask open-ended questions which encourage the students to demonstrate that they understand why your example is a practical application of the economic concept. Their engagement indicates their understanding. Be prepared to explain the concept in an alternative way. This is your formative assessment.
3. Each of the six posts should focus on one of Rivoli's four regions.
4. When the project is complete each student will have written paragraphs on all four of the regions--Texas, China, North Carolina, Africa and the content covered will demonstrate that the student read and understands the Rivoli text. This is a summative grade, 100 points.Friday, August 27: Chapter 1, The Power of Markets When American consumers dispose of their tired clothing to organizations such as the Salvation Army or Goodwill, much of this clothing ends up in small vendors stands on the African used clothes market, known as the mitumba trade, where market decisions are made by a combination of supply, demand and the American clothing trade, representing the middle ground between a free economy and a command economy. The questions of what to produce and how to produce it are determined by forces outside of the markets control, meaning the firms in this market are forced to work with whatever is brought to them from across the Atlantic (Rivoli, 212). This represents the command aspect of this market, and it also showcases how the firms in this market are some of the losers as they have difficulty shifting their supply to meet the demand. Thus the first two questions in this economy are answered back in America by people who have no direct affiliation in the mitumba trade.
Because questions concerning what to produce and how to produce it are determined by the retail T-shirt and clothing market, the primary question that the mitumba market must answer is who will get the products. Because this is what is known as a perfectly competitive industry, who gets the product is determined by a price mechanism based on consumer demand and firm supply. Firms are constantly competing with prices, attempting to lure the customer to their stand rather than the nearly identical one next to them (Rivoli, 227). So in short, the consumers are winners in this market because they are able to benefit from the best price possible brought on by the perfectly competitive market.will.Works CitedRivoli, Pietra. The Travels of a T-shirt in the Global Economy: an Economist Examines the Markets, Power, and Politics of World Trade. Hoboken, NJ: John Wiley, 2009. Print.Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton, 2010. Print. George,
You do a nice job analyzing the market aspects of the mitumba trade. However, now that you are preparing for IB style assessments, you need to organize your paragraphs and use evidence effectively. Please follow the power-paragraph format and cite the evidence both internally and in a works cited. FIX this, I will be back to grade the rewrite. Click edit and post your power paragraphs. Make use that you cite evidence from both the Rivoli and Wheelan texts.Tuesday, August 30: Chapter 2, Incentives Matter Overall goal: Demonstrate to the year 1 students that economics gives us an analytical framework for thinking about important questions such as incentives. Objectives: 1. Accurately and precisely define the following: adverse selection, perverse incentives, principle-agent problem, the expansion of underground economies. 2. Select compelling evidence from the Travels of the T-Shirt and clearly explain how each example demonstrates one of the four behaviors. When you have exemplified all four concepts make sure that you have used at least one example from Texas, China, North Carolina, and Africa. 3. Post your paragraphs—one for each concept on your wiki before class, 4. Present your examples to the year 1 students.
Adverse Selection- When people choose actions or engage in behavior that is not the most beneficial because the incentives for that action are not aligned correctly.Bad results occur when buyers and sellers have asymmetrical information.
Perverse Incentives- Unintended incentives that sometimes materialize as a result of an action intended to do something else.
Principal-agent problems- When an employee or agent has incentives to do things that do not always benefit the firm for principal.
Expansion of Underground economies- In places where marginal tax rates are high, wealthy individuals and even corporations have incentive to break the law to evade taxes by becoming a part of the underground economy which is becoming more and more common in very highly taxed areas such as Norway.
For many years, United States cotton farmers have been protected by a number of heavy subsidies and other measures to ensure they are sheltered from nearly every risk associated with growing and selling raw cotton. This creates an environment of adverse selection, where farmers have a strong incentives to produce cotton as opposed to wheat, soybeans or other crops, regardless of what may be best for the market or the economy as a whole just intelligent professionals have an incentive to do other things besides teach despite the obvious benefits as a result of misaligned financial incentives. Cotton subsidies are on average five to ten times higher than those of other crops, creating enormous financial incentives to produce cotton (Rivoli, 59). So it becomes apparent that even if consumer demand or other forces make it more beneficial to produce other crop, farmers in Texas will still produce cotton due to misaligned financial incentives creating adverse selection. If you stressed the asymmetrical outcomes--risk of crop failure far exceeds opportunity for profit from an alternative crop--you would have nailed the concept.
Textile workers in North Carolina and other southern states have banded together in recent decades by way of dozens of lobbyist groups trying to protect their rapidly fading jobs. Interestingly however, these efforts have actually created a scenario of perverse selection at each level of the production process. According to Rivoli, the higher price of imported raw cotton, brought on by lobbyist efforts, mean higher production costs for American yarn spinners, with a similar pattern all the way up the production process, with each stage lobbying for tarrifs and quotas on imports of that good (Rivoli, 175). These rising prices in the American textile industry, primarily in North Carolina, give consumers great incentive to turn to foreign made cotton goods instead of paying higher prices for the American textiles, a set of incentives not forseen in the original policymaking. Use spell check. Good example of perverse incentives
For many years, the United States has imposed tarrifs and quotas on Chinese cotton imports for many reasons, not the least of which being the lobbying efforts of American "alphabet armies" which attempt to persuade the government to protect their interests in the American textile market. . But whatever the reason, Chinese firms still have strong incentive to get their products to an American market where they will fetch a far higher price than in many other countries. To do so, these firms must bypass the legal quotas and tarrifs which make conducting their business difficult, and drop into the "underground economy" by breaking the law and fixing garments with tags saying they were made in other countries besides China (Rivoli, 180). Thus, just as Wheelan explains, high tax rates, or in this case, high tarrifs and low quotas, give people and firms incentive to break they law and join the "underground economy". This paragraph is confusing because you introduce the topic in the last sentence. Please follow the power paragraph format.
While United States cotton farmers have a plethora of resources available to them from the latest farming equipment to a staggering number of subsidies, farmers in sub-Saharan Africa do not have access to these same tools. In fact the governments of many of these countries, which can be likened to the "agents" of the farmers, who should be helping the farms be as profitable as possible by providing them with adequate tools and supplies, instead fall victim to the principal agent problem and have more incentive to fill their own corrupt pocketbooks than help the "principal" or farmer. They provide supplies sporadically and unreliably, and do not ensure adequate safety measures are taken when using dangerous pesticides, all of which hurt the farmer, but benefit the corrupt officials since they do not have to spend as much money (Rivoli, 65,66). Thus we see that farmers in Africa are helpless victims of the principal agent problem and unfortunately, there is no simple stock option scheme to put in place to make the government more inclined to help the farmers. An apt example but the "money" part of the evidence needs explanation. I know what you mean but your paragraph does not clearly make your point.
George:
Fix these last two concepts and I will return to grade it this weekend. It is evident that you read the Rivoli text and understand the concepts raised in the first two chapters of the Wheelan text. I want you to research Pakistan. Click on this link. George--Pakis
Works CitedRivoli, Pietra. The Travels of a T-shirt in the Global Economy: an Economist Examines the Markets, Power, and Politics of World Trade. Hoboken, NJ: John Wiley, 2009. Print.Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton, 2010. Print.
ASSESSMENT: Teach the Class Rubric
1. On the wiki post Power Paragraphs( click for a review of the power paragraph), not more than two, that use compelling evidence from the Pietra text to exemplify the economic concepts described in the Wheelan chapter.
2. Ask open-ended questions which encourage the students to demonstrate that they understand why your example is a practical application of the economic concept. Their engagement indicates their understanding. Be prepared to explain the concept in an alternative way. This is your formative assessment.
3. Each of the six posts should focus on one of Rivoli's four regions.
4. When the project is complete each student will have written paragraphs on all four of the regions--Texas, China, North Carolina, Africa and the content covered will demonstrate that the student read and understands the Rivoli text. This is a summative grade, 100 points. Friday, August 27: Chapter 1, The Power of Markets
When American consumers dispose of their tired clothing to organizations such as the Salvation Army or Goodwill, much of this clothing ends up in small vendors stands on the African used clothes market, known as the mitumba trade, where market decisions are made by a combination of supply, demand and the American clothing trade, representing the middle ground between a free economy and a command economy. The questions of what to produce and how to produce it are determined by forces outside of the markets control, meaning the firms in this market are forced to work with whatever is brought to them from across the Atlantic (Rivoli, 212). This represents the command aspect of this market, and it also showcases how the firms in this market are some of the losers as they have difficulty shifting their supply to meet the demand. Thus the first two questions in this economy are answered back in America by people who have no direct affiliation in the mitumba trade.
Because questions concerning what to produce and how to produce it are determined by the retail T-shirt and clothing market, the primary question that the mitumba market must answer is who will get the products. Because this is what is known as a perfectly competitive industry, who gets the product is determined by a price mechanism based on consumer demand and firm supply. Firms are constantly competing with prices, attempting to lure the customer to their stand rather than the nearly identical one next to them (Rivoli, 227). So in short, the consumers are winners in this market because they are able to benefit from the best price possible brought on by the perfectly competitive market.will.Works CitedRivoli, Pietra. The Travels of a T-shirt in the Global Economy: an Economist Examines the Markets, Power, and Politics of World Trade. Hoboken, NJ: John Wiley, 2009. Print.Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton, 2010. Print.
George,
You do a nice job analyzing the market aspects of the mitumba trade. However, now that you are preparing for IB style assessments, you need to organize your paragraphs and use evidence effectively. Please follow the power-paragraph format and cite the evidence both internally and in a works cited. FIX this, I will be back to grade the rewrite.
Click edit and post your power paragraphs. Make use that you cite evidence from both the Rivoli and Wheelan texts. Tuesday, August 30: Chapter 2, Incentives Matter
Overall goal: Demonstrate to the year 1 students that economics gives us an analytical framework for thinking about important questions such as incentives.
Objectives:
1. Accurately and precisely define the following: adverse selection, perverse incentives, principle-agent problem, the expansion of underground economies.
2. Select compelling evidence from the Travels of the T-Shirt and clearly explain how each example demonstrates one of the four behaviors. When you have exemplified all four concepts make sure that you have used at least one example from Texas, China, North Carolina, and Africa.
3. Post your paragraphs—one for each concept on your wiki before class,
4. Present your examples to the year 1 students.
Adverse Selection- When people choose actions or engage in behavior that is not the most beneficial because the incentives for that action are not aligned correctly.Bad results occur when buyers and sellers have asymmetrical information.
Perverse Incentives- Unintended incentives that sometimes materialize as a result of an action intended to do something else.
Principal-agent problems- When an employee or agent has incentives to do things that do not always benefit the firm for principal.
Expansion of Underground economies- In places where marginal tax rates are high, wealthy individuals and even corporations have incentive to break the law to evade taxes by becoming a part of the underground economy which is becoming more and more common in very highly taxed areas such as Norway.
For many years, United States cotton farmers have been protected by a number of heavy subsidies and other measures to ensure they are sheltered from nearly every risk associated with growing and selling raw cotton. This creates an environment of adverse selection, where farmers have a strong incentives to produce cotton as opposed to wheat, soybeans or other crops, regardless of what may be best for the market or the economy as a whole just intelligent professionals have an incentive to do other things besides teach despite the obvious benefits as a result of misaligned financial incentives. Cotton subsidies are on average five to ten times higher than those of other crops, creating enormous financial incentives to produce cotton (Rivoli, 59). So it becomes apparent that even if consumer demand or other forces make it more beneficial to produce other crop, farmers in Texas will still produce cotton due to misaligned financial incentives creating adverse selection. If you stressed the asymmetrical outcomes--risk of crop failure far exceeds opportunity for profit from an alternative crop--you would have nailed the concept.
Textile workers in North Carolina and other southern states have banded together in recent decades by way of dozens of lobbyist groups trying to protect their rapidly fading jobs. Interestingly however, these efforts have actually created a scenario of perverse selection at each level of the production process. According to Rivoli, the higher price of imported raw cotton, brought on by lobbyist efforts, mean higher production costs for American yarn spinners, with a similar pattern all the way up the production process, with each stage lobbying for tarrifs and quotas on imports of that good (Rivoli, 175). These rising prices in the American textile industry, primarily in North Carolina, give consumers great incentive to turn to foreign made cotton goods instead of paying higher prices for the American textiles, a set of incentives not forseen in the original policymaking. Use spell check. Good example of perverse incentives
For many years, the United States has imposed tarrifs and quotas on Chinese cotton imports for many reasons, not the least of which being the lobbying efforts of American "alphabet armies" which attempt to persuade the government to protect their interests in the American textile market. . But whatever the reason, Chinese firms still have strong incentive to get their products to an American market where they will fetch a far higher price than in many other countries. To do so, these firms must bypass the legal quotas and tarrifs which make conducting their business difficult, and drop into the "underground economy" by breaking the law and fixing garments with tags saying they were made in other countries besides China (Rivoli, 180). Thus, just as Wheelan explains, high tax rates, or in this case, high tarrifs and low quotas, give people and firms incentive to break they law and join the "underground economy". This paragraph is confusing because you introduce the topic in the last sentence. Please follow the power paragraph format.
While United States cotton farmers have a plethora of resources available to them from the latest farming equipment to a staggering number of subsidies, farmers in sub-Saharan Africa do not have access to these same tools. In fact the governments of many of these countries, which can be likened to the "agents" of the farmers, who should be helping the farms be as profitable as possible by providing them with adequate tools and supplies, instead fall victim to the principal agent problem and have more incentive to fill their own corrupt pocketbooks than help the "principal" or farmer. They provide supplies sporadically and unreliably, and do not ensure adequate safety measures are taken when using dangerous pesticides, all of which hurt the farmer, but benefit the corrupt officials since they do not have to spend as much money (Rivoli, 65,66). Thus we see that farmers in Africa are helpless victims of the principal agent problem and unfortunately, there is no simple stock option scheme to put in place to make the government more inclined to help the farmers. An apt example but the "money" part of the evidence needs explanation. I know what you mean but your paragraph does not clearly make your point.
George:
Fix these last two concepts and I will return to grade it this weekend. It is evident that you read the Rivoli text and understand the concepts raised in the first two chapters of the Wheelan text. I want you to research Pakistan. Click on this link. George--Pakis
Works CitedRivoli, Pietra. The Travels of a T-shirt in the Global Economy: an Economist Examines the Markets, Power, and Politics of World Trade. Hoboken, NJ: John Wiley, 2009. Print.Wheelan, Charles J. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton, 2010. Print.