ECON 2500 W

Instructor: Erdal Asker

PAPER 2 Topics:

Each of the questions below involve trade-offs. I am mentioning the basic trade-off for each of the following questions. You have to argue for a position you believe on any one of the questions.

1. Are tax cuts effective?

Depending on whether it is an income or corporate tax cut, tax cuts leads to increased consumption (through increased disposable income) and higher investment by firms. However, government revenue (of which tax revenue is a big part) reduces. This is a trade-off.

2. Is free trade harmful to domestic economy?

Free trade results in gains from trade. The gains from trade theory tells us that some people benefit, some will be worse off, but the economy as a whole is better off. Trade leads to lower prices as the domestic country imports goods and services at a cheaper price from abroad. But some people in the domestic country, end up losing their jobs, that are outsourced to foreign nations. This is a trade-off.

3. Does School Finance Reform Affect Adolescence (Teenager) Risky Behaviors?

This question is related to the first paper. Risky behaviors are smoking, drug usage, alcohol consumption, delinquency, and teenage fertility, etc. As we all know, school finance reform improved the quality of education; notably, it added to more activities on the curriculum. Therefore, students might not have time to involve risky behaviors because they had to participate in school activities. However, you may think that increasing school finances means that decreasing other public expenses, for example, security expenses. If states cut the budget of the police department, this leads to fewer police officers and more crimes. This is a trade-off. (This may not be realistic, but you are free to come up with different mechanisms.)

4. Does universal health care make everyone’s life better?

Universal health care means that the government offers quality medical services to everyone, irrespective of their ability to pay. However, the cost of such a system is pretty high, and usually involves imposition of high taxes . This is a trade-off.

5. Is economic development at the cost of pollution and environment a good idea for any country in the short run?

Many countries are actively pursuing policies that accelerates growth in the economy in the short run. But there are costs involved that harm the health of its citizens and the environment in the long run. This is a trade-off.

PAPER 2 Length Requirement- 8 PAGES

General Instructions for Paper 2 First Draft and Final Submission

1. There must be a cover page that includes your name and group number (Group A/B/C).

2. Please make sure the font size is 12, and your text is double spaced.

3. Please make sure to have complete 8 pages of writing.

4. Please make sure header or footer should include the page number only. Your name should not be included.

5. Please make sure to indent paragraphs.

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