The Economics of Social Issues

May 8, 2001

College of Business
EC 211 – Course Outline
Semester: Spring 2000
Class Sessions: The class meets on Wednesdays from 7:45-10:10

Course Description

This course utilizes economic principles and techniques to analyze social issues. Topics include: the allocation of resources, the distribution of wealth and income, health care, crime, education, environmental, tax and regulatory issues. In addition to providing an economic analysis of four current issues, you will participate in a service learning project as a means of applying the concepts discussed in class and examining the complexities often involved in projects which entail a number of potential economic and social impacts.

Course Learning Objectives

You will learn to apply basic economic principles to analyze current social issues including the allocation of resources, the distribution of wealth and income, health care, crime, education, environmental, tax and regulatory issues. The complex interactions between the economic and social impacts of issues will be analyzed in classroom discussions, position papers on current issues, and through participation in a service learning project. In the service learning project, we will work with a neighborhood group, Trashbusters, and the Bridgeport Regional Business Council to study the impact of the proposed expansion of the Seaview Avenue Corridor, in Bridgeport, on the community. We will analyze potential economic, environmental, community, health and environmental justice impacts on the community. The analysis and recommendations will be presented in both a written form, and a PowerPoint presentation to members of Trashbusters and the Bridgeport Regional Business Council. In addition, you will be required to write four “position” papers evaluating current social issues. Two of these papers will be presented to the class. The service learning project and position papers are intended to enhance analytical skills and both written and oral communication skills.

Prerequisites: 3 credits in economics

Course Text and Supporting Materials

Text Book: Economics of Social Issues, by Sharp, Register and Grimes; Irwin, McGraw-Hill, 14th edition and any principles of economics text

Grading Policy:
Service Learning Project 30%
2 written position papers 20%
2 written/presented papers 40%
Class participation 10%

Service Learning Project

You will be required to participate in a service learning project. We will work with a neighborhood group, Trashbusters, and the Bridgeport Regional Business Council to study the impact of the proposed expansion of the Seaview Avenue Corridor in Bridgeport, on the community. We will analyze the potential economic, environmental, community, health and environmental justice impacts on the community. The analysis and recommendations will be presented in both a written form, and a PowerPoint presentation to members of Trashbusters and the Bridgeport Regional Business Council. Details of the project are attached.

Position Papers and Presentations

You must write four “position” papers on current social issues. You may select topics from the list below and/or devise your own topics (subject to my approval). After thoroughly researching the issue selected from alternative perspectives, write a 6-8 page (single spaced) typed paper which includes:
an overview of the issue
a thorough economic analysis of the pros and cons of proposed policies or alternative solutions to the issue
include graphs, statistics, etc to provide support for your claims
your recommendation supported by evidence

Two of the papers will be summarized in five to ten minute presentations to the class. The papers presented to the class are worth 20% each, while the papers submitted (but not presented) are worth 10% each.

Class Participation: You are expected to attend class and participate in classroom discussions. The class participation grade will reflect preparation for class discussions and the quality of participation in class discussions.

Additional Requirements:

1. Attendance is expected and as required by University regulations, absences will be reported to the registrar.
While class lectures will emphasize the most important and/or the most challenging concepts, you are required to read and study the entire chapter unless otherwise instructed.
Assignments must be turned in, and presentations made, as scheduled. Late assignments will generally not be accepted and certainly will not be accepted without prior instructor permission.

Schedule and Assignments

Tentative schedule:
Date Economic Principles to be Applied Social Issues Analyzed Readings
9/6 Introduction
9/13 Our resources are Scarce given the extent of our “wants” Poverty
Income and wealth distribution
Global resource allocation Ch 1,7
9/20 Scarcity implies Tradeoffs or Choices Education versus national defense
Medicare versus medicaid
The budget surplus Ch 3,15
9/27 The best decisions are based on Marginal analysis FAA Safety Rules
The “right” level of Crime
Fighting cancer versus heart attacks Ch 4
10/4 Continued
10/11 Markets often lead to good outcomes Market versus non-market systems Ch 2
10/18 The role of Prices Health Care
Water shortages
Minimum wage
10/25 Market failure Pollution and other externalitites
Public goods
Information effects Ch 5, 11
11/1 When the government can improve market outcomes Antitrust regulation
Title 9
Protecting private property rights
Ch 6,8,14
11/8 Incentives matter The US tax system
Using the tax system to influence behavior
Ch 13
11/15 Most people benefit from Free Trade The theory of Free Trade
11/22 Thanksgiving
11/29 Most people benefit from Economic growth The determinants of economic growth
Historical analysis of growth
Global growth rates
Recent experience in US Ch 16
12/6 Seaview Avenue Presentation



The course outline and schedule are tentative and may be changed at my discretion.

Position Paper Topics

Feel free to see me with your suggestions for topics other than those listed below. Alternative topics must be approved and scheduled.

Paper topics and dates for presentations to be made and papers turned in are:

Due September 27:
Do you believe that the United States should increase humanitarian aid to lesser developed nations where poverty is widespread? What form of aid would you recommend? Why? If so, how should this increase in aid be financed? If not, why not?

The US is arguing that emission cuts under the Kyoto treaty to curb global warming should be reduced to account for the level of a nation’s carbon absorbing forests. Do you believe this argument is valid? What are the impacts of such an amendment?

The US has a number of programs aimed at alleviating poverty and related problems. Select one such program (for example welfare, WIC, EIC), outline the program’s goals and argue whether or not it has been successful. Do you recommend maintaining the program? Why or why not? Would you suggest any changes?

There are also a number of global organizations which aim to alleviate poverty (see the websites at the end of chapters 1 and 7). Investigate several programs and describe those projects have been most and least successful. What factors do you think determine success?

Due October 4:
Research the positions of Vice-President Gore and Governor Bush regarding what they intend to do with the budget surplus and their corresponding policies regarding tax cuts. Analyze the candidates’ plans? What do you believe should be done? Why?

Due October 11:
Research the use of airbags. These devices were mandated by Federal Law to provide higher levels of safety. Carefully outline all of the costs and benefits of mandatory airbags. Do you believe the policy has been successful? Has the policy had any unintended consequences? Explain.

Due October 18:
How should a city decide on the optimal level of crime prevention to provide? What are the costs and benefits of crime prevention? How can the costs and benefits be assessed? Large cities generally spend more per capita on crime prevention than small towns. Economists suggest that this is due to differences in both the costs and benefits of (1) committing crimes and (2) preventing crimes in large cities compared to small towns. What do you think these differences in costs and benefits might be?

Given a fixed amount of research spending by an agency such as the NIH, how should funds be allocated between different health problems, for example research on aids, cancer and diabetes?

Consider the role and goals of the FAA. Is it possible for the agency to require “too much” safety? What does this imply? Why do you think that automobile manufacturers advertise the safety of vehicles while airlines never mention safety in ads?

Due October 25:
As the debate over health care reform continues, systems such as the Canadian system of universal coverage will be proposed as solutions to the US system. How does the Canadian system provide access to all citizens? Compared to the US system, what are the advantages and disadvantages of the Canadian system?

Many areas in the US and elsewhere wrestle with temporary or permanent water shortages. Water is seldom allocated using a market system. Describe the pros and cons of using prices versus non-price mechanisms to allocate water.

Consider the US system of agricultural price supports. Why does the government intervene? What are the implications of the policy? Do you believe the current policy works? Explain your response.

Due November 1:
Investigate the recent lawsuit filed by some Northeastern states in conjunction with the EPA against midwest utilities because of the acid rain produced by these firms. Explain the economic issues involved in this debate. Propose a solution.

The FDA is often criticized for its decisions regarding whether new medicines should be permitted to go on sale in the US. The agency aims to protect consumers from “unsafe” use but is often criticized because of the resulting delays in bringing promising new drugs to market. What are the costs and benefits that the FDA must weigh? How should they reach decisions?

Due November 8:
Why was Title IX initiated? Has it been successful? What has been achieved? What has the initiative cost? Include your recommendations.

The AOL-Time-Warner merger will probably be challenged on antitrust grounds. Research the merger and the regulatory issues. Do you believe the merger should be permitted? Explain your response carefully. What social benefits and costs do you think would emerge from the merger?

Research the case against Napster brought by the music industry. What so you believe are the relevant issues? What would you recommend as a resolution to this controversy? Explain the costs and benefits of your proposal.

Due November 15:
Will the increase in cigarette taxes instituted last year significantly reduce teen smoking, as expected? Why or why not? What other policies might achieve this objective? What is your recommendation?

Consider the legalization of marijuana. What factors should be considered in weighing the pros and cons? What non-monetary costs and benefits should be incorporated in the analysis?

Given a federal objective of reducing illegal drug use, what policies do you think will be most and least effective? Carefully explain your response.

Republicans have recently voted to repeal the so-called marriage penalty, while President Clinton has vowed to veto any repeal. What is the marriage penalty, why does it exist and what do you recommend?

Due November 29:
Should a prescription drug benefit be added to Medicare? Examine several of the proposals discussed and detail the scope of benefits and the means of financing. Include your own specific recommendations.

Research the deregulation of electricity in California. What problems are occurring as a result of deregulation? How well do you think the deregulated industry will ultimately work? Explain your response.

Research the current debate over genetically modified foods and the provisions under which the Cartagena Protocol permits nations to ban GM foods. Do you think this provision will be used to inhibit free trade? Can you recommend an alternative?

Research productivity, output, employment and income levels (as well as any other variables you choose) during the 1980s and 1990s in the US and the country of your choice. Do differences in productivity appear to be related to differences in standards of living? What factors seem to be most important in leading to higher productivity? What policy implications arise from your analysis?

School: Sacred Heart University
Professor: Dr. Bridget Lyons
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