Microeconomics

Africa, by almost any measure, is the wealthiest continent in terms of natural resources yet, a large percentage of the continent’s population lives in poverty and continually struggles with civil strife. The material you covered in this course can help us to explain why economic development in many African Countries is still lagging behind other nations of the world.

1. Compare/contrast the control of natural resources/minerals in many African countries with the United States. Specifically focus on the role of property rights and the control of these rights. Give examples and support your claim with evidence and economic theory.
2. Given the current situation in many African countries, do we see the Tragedy of the Commons occurring? Consider not only how the “tragedy” is impacting the current population but also how hit may be devastating to coming generations. Give examples and support your claim with evidence and economic theory.
3. Should political leaders have the ability to control natural resources? What advantages and disadvantages might there be to such control in theory? What has been the actual experience? What evidence is there of the theoretical advantages and disadvantages in practice? Who has benefited from resource allocation decisions?
4. What externalities result from the situation where political leaders control the resources and subsequently appropriate the income and wealth from these resources? Do political leaders have the same goals as citizens of a country in directing resources? You might consider actual and possible uses of resources including military, personal gain of leaders, infrastructure, public health, education, and any others you can think of. Where are resources currently directed? What are the opportunity costs of using resources in this way? Is the current allocation of resources efficient? Could resources be better allocated? Support your claims with evidence and economic theory.
5. What responsibility do developed countries have in alleviating the strife caused by the appropriation of resources by political leaders in African countries? Is there any validity to the claim that citizens of poorer countries are exploited by individuals in developed countries who make deals with political leaders for the nation’s resources? Is there action that can be taken by developed countries to help alleviate the problem? Has such action ever been taken? Be sure to support your claims with evidence from valid sources.
6. What market imperfections exist in the allocation of resources in African countries? What steps could be taken to either remove or ease the imperfections to allow the market mechanisms to function efficiently?