Assignment:

Janis Joplin wants a Mercedes Benz in order to keep up with her friends. Economist Robert Frank writes about how people seek status in a game of constantly trying to outdo each other. He has advocated highly progressive taxes in order to reduce the ability of people to seek status by earning more money than others. What do you think of this idea? Assuming people aren’t able to achieve high status by making a lot of money, what other means, good and bad, do you think people might choose to achieve status among their peers?

Assignment:

As the song notes, sometimes "we just disagree".  In economic life people often disagree about how resources should be used.  Some may want to use a tract of land to build houses, another to farm, and still another may want to have the land used as a nature preserve.  In his article, The Problem of Social Cost, Ronald Coase talks about the "reciprocal nature of the problem".  What does Coase's insight tell us about how disagreements can be settled efficiently?  What barriers exist to solving these problems efficiently in real life?

[Will Luther assisted with this assignment.]

Assignment:

Economists often use supply and demand curves to illustrate markets. Changes in income, preferences, and the price of a substitute or complement shift demand curves to the left and right. In the lyrics above, lead singer Anni-Frid Lyngstad is tired of the hard work life requires and plans to marry a wealthy man. If successful, how would this marriage change the artist’s demand for goods? How would it change her supply of labor? Illustrate both changes with supply and demand curves. Be sure to explain what is happening in the diagrams.

[Will Luther assisted with this assignment.]

Assignment:

The lyrics above remind us that there is a lot to do in one short lifetime. Freddie Mercury, Queen’s lead singer, asserts that he wants it all and he wants it now. Do you prefer to consume goods in the present or future? With reference to these lyrics, explain why individuals charge interest for deferring consumption.

[Will Luther assisted with this assignment.]

Assignment:

Every card game operates under a set of rules. These rules allow the players to know how to play the game. Legal institutions, like the rules of a card game, show economic agents “when to hold ‘em” and “when to fold ‘em” with respect to economic decisions. With an example, show how the rules under which individuals act might affect their decisions. What rules are necessary for markets to work well?

[Will Luther assisted with this assignment.]

Assignment:

This classic Donna Summer song is about a waitress she met at a local restaurant who was working two jobs. Donna could see “she works hard for the money.” Many economists are somewhat puzzled by tipping behavior. The tip is given after the meal – when it has no impact on the service rendered. Yet most people tip in spite of that fact. Explain why consumer’s tip and under what circumstances you’d expect tips to be less and more generous.

Assignment:

Liz Phair claims, if given the chance, individuals would wish for money. Why might money be the best gift one can give (hint)? If individuals can maximize utility with respect to income better than anyone else acting on his/her behalf, why are non-monetary gifts ever given?

Why don’t the presumed actions of the artist’s friends line up with what they say or “the way they see it”? In the real world, why might individuals hide their true preferences? Give examples.

[Will Luther assisted with this assignment.]

Assignment:

The artist of this song thinks it is a good idea to redistribute income. Construct an argument articulating the opposing view. Compare the last three lines in the lyrics above to Hayek’s conception of knowledge. How would this knowledge problem affect a policymaker’s ability to spend tax dollars efficiently?

[Will Luther assisted with this assignment.]

Assignment:

In the lyrics above, the artist complains about high gas prices. In 1918, the at-the-pump price of gas was only 25 cents/gallon. Is gas more expensive now than it was in 1918? Use the Consumer Price Index calculator to compare prices. Explain the difference between real and nominal prices and use these terms in your response.

[Will Luther assisted with this assignment.]

Assignment:

In this excerpt, Coolio suggests that he would rap for no money. Draw a representative labor supply curve.

[HT: Julianne Treme]

Assignment:

From the movie "Gentlemen Prefer Blondes," Marilyn Monroe sings about diamonds being a girl's best friend. Interpret the lyrics "Men Grow Cold/As Girls Grow Old/) in light of "Rings and Promises" by Margaret Brinig (Journal of Law, Economics, and Organization 1990). Why might diamond wedding rings persist given that increased career opportunities for women have eliminated much of the need for a 'wedding bond'? Do you see the diamond engagement ring disappearing over time? Why or why not?

[HT: S. Yopp]

Assignment:

This song is an ode to open borders. List some of the benefits of open borders described in the song. Do you think you could live without "fine Darjeeling?" How might truly closed borders affect your consumption?

[HT: Carl Oberg]

Assignment:

Thinking like an economist usually involves invoking phrases like 'on the other hand.' This excerpt from Bruce Springsteen's song "Youngstown" suggests that he is owed something for making the plant owners rich. According to economists Paul Gomme and Peter Rupert, labor's share of value-added in the nonfinancial corporate sector is around 74%. Are these perspectives at odds with one another? Please explain.

Assignment:

Generally, profit accrues to individuals when the value of a good produced and sold is greater than the value of other goods that could have been produced with those same resources. From this perspective, the pursuit of profits adds value to society. Why do think people might be against profit-making? Who do you think made the world a better place, Bill Gates or Mother Teresa? Explain your answer with reference to what you mean by 'a better place.'

Assignment:

What does this song have to do with sunk costs? Explain in your own words.

Hat tip: Bryan Caplan

Assignment:

Billy Joel laments the loss of the way things were in Allentown. At one time it was a boom town, but now "they've taken all the coal from the ground." Assume that the presence of coal is the primary reason Allentown exists at all (like mining towns in the old west). (See here for a more complex history of Allentown). If coal and water access for easy shipping brought people flooding to the area upon its initial discovery, why don't people leave as quickly as they came once the coal is gone? Which do you think will decline faster: population or housing prices? Why? Based on your answer, can it be utility maximizing to stay in a declining city?

Assignment:

Self-regarding behavior is the cornerstone of economic analysis. Recall Adam Smith's famous quote, "It is not from the benevolence of the butcher, baker, or brewer that we expect our dinner, but from their own self interest." Would a world full of "Angels" work as well at providing what people want? What about a world full of "Insects?" Papa Roach seems to be saying that "greed" is a problem. Comment.

Assignment:

This song sings the virtues of having $1M and all that it can buy. However, millionaires are far more common today than when the Barenaked Ladies first released this song in 1992. Use the consumer price index to find the equivalent amount of money you'd need to possess today to buy what $1M dollars bought in 1992. Also, there are several items mentioned in the song that money can't buy. Discuss.

Assignment:

This 2005 modern rock hit examines the circular nature of poverty. Recognize the ending? It is a variation of the well-known children’s song, “There’s a hole in my bucket, Dear Liza.” The ballad is especially poignant since if your money is draining out you can never get ahead! Using the most recent edition of the Statistical Abstract of the United States determine the personal savings rate. Why does a low savings rate matter?

Assignment:

Researchers have questioned whether you can design a welfare system that provides a generous safety net, but not so generous that the effective marginal tax rate that the poor face when contemplating leaving welfare is too onerous. Explain why creating the right incentives to get productive people to leave welfare is so difficult.

Assignment:

Mick Jagger dropped out of the London School of Economics to pursue a career with the Rolling Stones. His decision to quit proves that he learned something about opportunity cost! However, in the song he is never satisfied which is atypical. Most people become satisfied as they do more of something. Explain the theory of diminishing marginal utility and how it is applied throughout the song.

Assignment:

This song places the listener in the uncomfortable position of questioning whether or not they should help someone who asks to borrow a small amount of money. This is what is referred to as the Samaritan’s dilemma. Why does the dilemma have important policy ramifications? What does the song say about the dependency created by charitable handouts? Finally, giving is not costless. What are some of the things that are foregone in order to help others?

Assignment:

Losing it all is pretty rare; likewise, striking it rich is rare. But how rare? Go to your textbook or the internet (use a reputable source!) to find out how much income mobility exists in the U.S. economy. How common is it for someone in the top quintile of the income distribution to fall to the bottom quintile within (say) a decade? Is this more income mobility or less than you would have expected? What are some common explanations for such a decline in income?

Assignment:

While most people think of jobs as good things, economists are more likely to think of them as "bads". After reading the lyrics to this song, can you see why?

Assignment:

In this Weird Al parody of The BackStreet Boys' "I Want It That Way", he sings about buying and selling on eBay. In what way does eBay lower the transactions costs to buyers and sellers? eBay's feedback system allows buyers and sellers to rate each other. Why is this kind of information important to the functioning of the market? In other (non eBay) markets, how do buyers and sellers get this kind of information?

Assignment:

What is the implied rate of taxation in this Beatles song? Does this seem high to you? For comparison, what was the top marginal tax rate in the U.S. federal income tax code in 1960? In 1980? What incentives do you think are created when tax rates are this high? Why might lower tax rates be better from the standpoint of generating more government revenue?

Assignment:

Economics is sometimes dubbed the dismal science, in part because it emphasizes that there are costs/tradeoffs associated with everything we do. Why, according to economists, is getting people enough food, shoes, housing, etc. actually not as easy as the song suggests? If we could get everybody all the food, shoes, and housing they wanted, would we have any economic choices facing us?

Assignment:

This classic 1969/1970 song advocates that we "share the land." Do you think simply sharing the land is likely to lead to the good results suggested in the song ("no more sadness, no more sorrow...")? In writing your answer you might want to consider the idea of the "tragedy of the commons".

Assignment:

In this song the maples are upset about the "greedy" oaks and demand equality. Do you see any parallels between this song and policy issues such as anti-discrimination laws, affirmative action, set-asides, etc.? In your discussion be sure to highlight the notions of efficiency and equity/equality and the trade-offs that may exist in achieving these goals.

Assignment:

The song "Fat Cats, Bigga Fish" is about hustling. The rapper Boots thinks he is a hustler, but quickly realizes that he is the one being hustled in the game of life. From a public choice perspective, does the story Boots tells about Mr. Coke and Mr. Mayor's conversation sound compelling? Why does Mr. Mayor care about Mr. Coke's plans since the campaign donations do not directly go into his pocket? Do you think campaign finance reform will solve this type of problem? Why or why not?