1. Consider the concept of efficiency and inefficiency and the Production Possibility Curve (PPC) from chapter one.
Think about your place of work, your household or your school. Then, come up with 2 examples of efficiency (i.e, what you/they do well) and explain why you consider it efficient, AND 2 examples of inefficiency (i.e, what you/they do NOT do as well as you are capable of) and explain why it is inefficient. For the inefficiency, explain how you would solve each of those problems (correct the inefficiencies).
2. In the early 1980’s just as serious health effects were being noted about sugar consumption, Kellogg’s changed the name of Sugar Pops to Corn Pops (the sugar content did not change) and the name of Sugar Frosted Flakes to Frosted Flakes (still sugar content remained the same) while Tony the Tiger still touted the product; General Mills produces two cereals (Total and Wheaties) that are identical in content yet markets them as two different cereals (one for the healthy and one for the athletic) with different prices to different consumers. Most car ads tout the speed of the car (yet tell you not to drive that fast), stack champagne glasses on the hood of the car (does anyone you know drive that way?) and shows SUV’s driving through the mud and woods, yet most people use them for commuting on highways. This begs the question about the role of advertising in markets. While economists freely admit that advertising can earn millions for firms, economists often view advertising as wasteful since it does very little to inform consumers. Think about that last 5 ads you have seen (TV, radio, Internet, subway) and discuss what was the role of the advertising for the marketplace