In this paper you are asked to select some of the economic concepts covered in t

In this paper you are asked to select some of the economic concepts covered in this class to a real world situation. The paper needs to be 4-6 pages in length and must use APA style citations. For help with APA style please see Purdue’s Online Writing Laboratory [http://owl.english.purdue.edu/owl/]. There are two options for this paper.
Please review the rubric before starting your paper. What is most important is your demonstration of accurate economic reasoning and that this is what occupies most of the space in the paper! You will want to pick a topic that is appropriate for the task. The important goal of the paper is to convey your own economic reasoning—so the emphasis needs to be on this application.
Example #1: Take an issue from a recent news article related to material we cover in class. Provide detailed economic analysis of the issues in order to describe and then evaluate the situation. I recommend the Wall Street Journal, Businessweek, Forbes, or The Economist. This list is not comperhensive. Certainly other news sources business and non-business alike may have something worthwhile to write about. As an example: I might choose to write about the pricing changes made by Netflix and the resulting uproar from consumers. In this case I may choose to incorporate the following issues into my analysis: people respond to incentives, optimal decisions are made on the margin, changes in market equilibrium, price elasticity of demand, behavioral economics. My analysis might then express why economists might have been able to anticipate this outcome based on what we assume to be true about rational decision makers.
Example #2: Apply economic reasoning from this course to analyze a decision or activity relevant to your own life. Provide detailed economic analysis of the issues and the supporting intuition necessary to arrive at a recommendation for optimal behavior. As a example: suppose I were to analyze the decision of whether pay for a haircut or to do it myself. To satisfy this assignment I may choose to discuss several of the following concepts: opportunity cost, comparative advantage, price elasticity of demand, rationality, optimal decisions are made on the margin, and/or responding to incentives. My analysis might then conclude with a recommendation of when I should pay for a haircut and when I should not.