INTRODUCERE N ECONOMIE

"Mini" studii de caz

n continuare, sunt prezentate 5 "mini" studii de caz, care conin diverse subiecte din
domeniul economic. Studenii vor alege dou dintre textele urmtoare i vor ntocmi cte un
scurt eseu n limba romn (maximum o pagin) pentru fiecare. n elaborarea eseului se vor
urmri cteva idei principale, respectiv:

categoriile economice abordate;

problema tratat n text;
importana subiectului n economia contemporan;
opinia personal a studentului privind tema prezentat n text;
concluzii.

La finalul fiecrui studiu vei regsi o ntrebare, pentru care trebuie s elaborai un rspuns.
OBSERVAIE: pentru a elabora eseul n condiii optime i pentru a avea o imagine mai
clar privind subiectul ales, se vor parcurge n prealabil noiunile teoretice aferente, pe care le
putei regsi n suportul de curs.
Sursa textelor: Campbell R. McConnell & Stanley L. Brue, Economics. Principles,
Problems, and Policies, Seventeenth Edition, McGraw-Hill/Irwin, 2008, p. 9, 135, 233, 299,
309.

1. Opportunity costs
Opportunity costs come into play in decisions well beyond simple buying decisions. Consider
the different choices people make with respect to college. College graduates usually earn
about 50 percent more during their lifetimes than persons with just high school diplomas. For
most capable students, Go to college, stay in college, and earn a degree is very sound
advice.
Yet, Microsoft cofounder Bill Gates and talk show host Oprah Winfrey (she eventually went
back to school and earned a degree from Tennessee State University when she was in her
thirties) both dropped out of college, and baseball star Alex Rodriguez never even bothered to
start classes.
What were they thinking? Unlike most students, Gates faced enormous opportunity costs for
staying in college. He had a vision for his company, and his starting work young helped
ensure Microsofts success. Similarly, Winfrey landed a spot in local television news when
she was a teenager, eventually producing and starring in the Oprah Winfrey Show when she
was 32 years old. Getting a degree in her twenties might have interrupted the string of
successes and made her famous talk show possible. And Rodriguez knew that professional
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athletes have short careers. Therefore, going to college directly after high school would have
taken away 4 years of his peak earning potential.
So Gates, Winfrey and Rodriguez understood opportunity costs and made their choices
accordingly. The size of opportunity costs greatly matters in making individual decisions.
Did Gates, Winfrey and Rodriguez make bad choices? Explain the answer!

2. Unemployment rate in Europe

Several European economies have had exceptionally high unemployment rates recently. For
example, based on U.S. measurement concepts, the percentage unemployment rate in 2005 in
France was 9.7 percent; in Germany, 9.7 percent; in Spain, 9.6 percent; and in Italy 7.8
percent. Those numbers compare very unfavorably with the 5.1 percent in the United States
that year. Furthermore, the high European unemployment rates do not appear to be cyclical.
Even during business cycle peaks, the unemployment rates are roughly twice those in the
United States. Unemployment rates are particularly high for European youth. For example,
the unemployment rate for 20- to 24-year-olds in France was 20 percent in 2005 (compared to
8.8 percent in the United States).
The causes of high unemployment rates in these countries are complex, but European
economists generally point to government policies and union contracts that have increased the
business costs of hiring workers and have reduced the individual cost of being unemployed.
Examples: high legal minimum wages have discouraged employers from hiring low-skilled
workers; generous welfare benefits and unemployment benefits have encouraged absenteeism,
led to high job turnover, and weakened incentives for people to take available jobs.
Restrictions on firing of workers have made firms leery of adding workers during expansions.
Short work weeks mandated by government or negotiated by unions have limited the ability
of employers to spread their recruitment and training costs over a longer number of hours.
Paid vacations and holidays of 30 to 40 days per year have boosted the cost of hiring workers.
Also, high employer costs of pensions and other benefits have discouraged hiring.
Attempts to make labor market more flexible in France, Germany, Italy, and Spain have met
with stiff political resistance-including large rallies and protests. The direction of future
employment policies is unclear, but economists do not expect the high rates of unemployment
in these nations to decline anytime soon.
Why is the unemployment rate in Europe so high?

3. The relation between credit cards and money

You may wonder why we have ignored credit cards such as Visa and MasterCard in our
discussion of how the money supply is defined. After all, credit cards are a convenient way to
buy things and account for about 25% of the dollar value of all transactions in United States.
The answer is that a credit card is not money. Rather, it is a convenient means of obtaining a
short-term loan from the financial institution that issued the card.
What happens when you purchase an item with a credit card? The bank that issued the card
will reimburse the store, charging it a transaction fee, and later you will reimburse the bank.
Rather than reduce your cash or checking account with each purchase, you bunch your
payments once a month. You may have to pay an annual fee for the services provided, and if
you pay the bank in installments, you will pay a sizable interest charge on the loan. Credit
cards are merely a means of deferring or postponing payment for a short period. Your
checking account balance that you use to pay your credit card bill is money; the credit card is
not money (a bank debit card, however, is very similar to a check in your check-book; unlike
a purchase with a credit card, a purchase with a debit card creates a direct "debit" - a
subtraction - from your checking account balance; that checking account balance is money - is
a part of monetary mass).
Although credit cards are not money, they allow individuals and businesses to "economize" in
the use of money. Credit card enable people to held less currency in their billfolds and, prior
to payment due dates, fewer checkable deposits in their bank accounts. Credit cards are also
help people coordinate the timing of their expenditures with their receipt of income.
Are credit cards money? Explain why!

4. Tax cuts and supply

Suppose that every day 10 people go out for breakfast together. The bill for all 10 comes to
$100. If they paid their bill the way we pay our income taxes in America, it would go
something like this: the first 4 people (the poorest) would pay nothing; the fifth would pay $1;
the sixth would pay $3; the seventh would pay$7; the eighth would pay $12; the ninth would
pay $18; and the tenth (the richest) would pay $59 (the total is $100).
That is what they decided to do. The 10 people ate breakfast in the restaurant every day and
seemed quite happy with the arrangement until the owner threw them a curve (in tax
language, a tax cut). "Since you are such good customers", the owner said, "I'm going to
reduce the cost of your daily meal by $20". So now breakfast for the 10 people cost only $80.
This group still wanted to pay their bill the way Americans pay their income taxes. So the first
four people were unaffected. They would still eat breakfast for free. But what about the other

six-the paying customers? How would they divvy up the $20 windfall so that everyone would
get their fair share?
The six people realized that the $20 divided by six is $3.33. But if they subtracted that from
the share of the six who were paying the bill, than the fifth and the sixth individuals would
end up being paid to eat their breakfast! The restaurant owner suggested that it would be fairer
to reduce each person's meal by roughly the same share as their previous portion of the total
bill. Thus, the fifth person would now pay nothing; the sixth would pay $2; the seventh would
pay$5; the eighth would pay $9; the ninth would pay $12; and the tenth person would pay $52
instead of the original $59 (the total is now $80). Each of the six people was better off than
before and the first four continued to eat free.
But once outside the restaurant, the people began to compare their savings. "I only received
$1 out of the $20", declared the sixth person, "But the tenth man saved $7!". "Yeah, that's
right!" exclaimed the fifth person, "I saved only $1 too. It is unfair that he received seven
times as much as me". "That's true!" shouted the seventh person. "Why should he get $7 back
when I got only $2. The wealthy get all the breaks!" "Wait a minute!" yelled the first four
people unison. "We didn't get anything at all. The system exploits the poor!"
The nine people angrily confronted the tenth and said, "This is not fair to us, and we are not
going to put up with it". Next morning, the tenth man did not show up for breakfast, so the
other nine sat down and ate without him. But when it came time to pay the bill, they
discovered what was very important. They were $52 short.
Morals of this supply-side story:

The people who pay the highest taxes get the most benefit from a general tax
reduction.
Redistributing tax reduction at the expense of those paying the largest amount of taxes
may produced unintended consequences.

Critics point out that the tax cuts advocated by the supply-side economists usually provide the
greatest tax relief to high-income individuals and households. What do you think about the
fairness of income redistribution resulted from reduced fees?

5. Women, the labor force and economic growth

The substantial rise in the number of women working in the paid workforce in the United
States has been one of the major market trends of the past half-century. In 1965, some 40
percent of women worked full-time or part-time in paid jobs. Today, that number is 59
percent.

Women have greatly increased their productivity in the workplace, mostly by becoming better
educated and professionally trained. Rising productivity has increased women's wage rates.
Those higher wages have raised the opportunity costs - the forgone wage earnings - of staying
at home. Women have therefore substituted employment in the labor market for more
expensive traditional home activities. This substitution has been particularly pronounced
among married women (single woman have always had high labor-force participation rates).
Furthermore, changing lifestyles and the widespread availability of birth control have freed up
time for greater labor-force participation by women. Women not only have fewer children,
but those children are spaced closer together in age. Thus women who have lived their jobs
during their children's early years return to the labor force sooner.
Greater access to jobs by women has also been a significant factor in the rising labor-force
participation of women. Service industries - teaching, nursing, and office work, for instance that traditionally have employed many women have expanded rapidly in the past several
decades. Also the population in general has shifted from farms and rural region to urban areas,
where jobs are more abundant and more geographical accessible. An increased availability of
part-time jobs has also made it easier for women to combine labor market employment with
child-rearing and house hold activities. Also, antidiscrimination laws and enforcement efforts
have reduced barriers that previously discouraged or prevented women from taking traditional
male jobs such as business managers, lawyers, professors, and physicians. More jobs are open
to women today than a half-century ago.
In summary, women in the United States are better educated, more productive, and more
efficiently employed than ever before. Their increased presence in the labor-force has
contributed greatly to U.S. economic growth.
Technological advance has been both rapid and profound. Gas and diesel engines, conveyor
belts, and assembly lines are significant developments of the past. So, too, are fuel-efficient
commercial aircraft, integrated microcircuits, personal computers, xerography, and
containerized shipping. More recently, technological advance has exploded, particularly in the
areas of computers, photography, wireless communications, and the Internet. Other fertile
areas of recent innovation are medicine and biotechnology.
Based on these evolutions in the United States, what can you say about the relationship
between women, the labor-force and economic growth in Romania? Perhaps some
statistics can be useful for you!