Alternative Assignment for Class 4-7

This assignment is open to ALL students in my Econ 122 classes. (Both MWF 11:45 and 1:00)

There is no class on Friday, April 7, 2006. As part of the collective bargaining agreement between faculty and "management", when a class is cancelled for any reason, we are required to offer some type of alternative assignment so that you, dear students, get your full money's worth.

If you do this assignment below you will NOT have to do the written problem on the test. Moreover, it will be worth a total of six points on the next test, Wednesday April 12, 2006, whereas the written problem on the test will be worth the standard five points.

Read the following article in Monday's New York Times. (These are hotlinked on the word version of this available on the I-drive as well as on my weblog.)

Labor Shortage in China May Lead to Trade Shift

http://www.nytimes.com/2006/04/03/business/03labor.html

You may have to register to access the New York Times. If you can't or don't want to register I can email a link to the article for you. (I will be out of town and will be unable to do this Thursday afternoon until Monday morning.)

Assignment:

1. One paragraph: summarize the article. Be sure to mention the key problems and what Chinese businesses and the government are trying to do to counter the labor shortage.

2. Draw a diagram of a “typical” firm in a competitive market in China in an initial long-run equilibrium (zero profit). Then show what happens when there is an increase in wages. Show how this will affect marginal cost, average total cost, and profit. (Assume the price of the good does not change.)

Explain your diagram and find a quote in the article that reflects what is going on in the diagram.

Try to fit this all onto one sheet of paper. Preferred presentation: Type out the summarization. Print it. Draw and explain the diagram on the lower half or back side of the paper.

Be sure to check the weblog for any comments or modifications.

This assignment is due Wednesday April 12 in class before the test. Only in class. No sliding under the door. No email. In class.