Take Home Questions Essay Example

- Using Economic concepts explain why Nike can charge $ 185 for a pair of Air Jordon basketball shoes. (12 points)
The sophistication and overall quality of the Air Jordan make it expensive than other similar shoes in the market. This is because of the cost of production right form the material used and time taken to produce a pair. The target markets, the players, who are associated with high income, also determine the price which in this case is high.
- Explain in details what is being done to combat poverty. But also add why poverty is so hard to define and ultimately solve (12 points).
Minimum wages has been introduced to determine the least amount employees can be paid. This reduces the chances of exploitation from employers. The principle of horizontal and vertical equity is critical in taxation and benefits. Horizontal policy hold that people in the same financial circumstances have a similar ability to pay taxes and hence should be taxed the same. Vertical principle holds that if the individuals are at different circumstances should be taxed differently. Cash benefits can be provided to the jobless. Poverty is very difficult to define and solve due to the fact that different indicators are used to measure and define it. In most case the earning in a day may be used. This varies in space and time hence the generalized poverty level are fluid.
- Playing the economist, analyze in detail the Affordable Care Act. Be careful not to get into either a political or emotional discussion. (12 points)
The Act some provisions that tend to restrain growth in health care costs as, price competition in the state health exchanges, very high deductible plans that are offered through exchanges, medical reforms leading to lowered payment to healthcare providers. This has great implications to the overall health system in form of the cost, quality, and availability. On the contrary, it improves the welfare of the poor since they are included in the health system fully, and dependants can benefits at higher ages than before.
- Why is the minimum wage of politician’s dream issue? Be sure your response is based on economic concept discussed in class. (15 points )