Econ 202: Principles of Microeconomics
Instructor: Mona Ray
Topics for Term Paper
Paper Due: April 25th, 2022, Monday
Pick any one topic for your paper. This term paper covers 15% of your course
The paper should be 6 pages long (including Title page, bibliography, graphs,
tables etc.). It should be typed double-spaced in Times New Roman, font size 12
following the APA style with 1-inch margin on all sides. Don’t forget to include a
title page at the beginning and a bibliography at the end of your paper. Discuss the
issue in your paper as an economist. Upload your paper as MS Word document on
Title 5 points
Page numbering 5 points
Correct labeling of Figures, Tables
(Including source) 5 points
Content 20 points
Bibliography 5 points
APA style: https://apastyle.apa.org/style-grammar-guidelines/paper-format
Topic 1: How America’s talent wars are reshaping business – the labour shortages are forcing firms to get creative
The Economist | Feb 5, 2022, edition
Summary: Dcl logistics, like so many American firms, had a problem last year. Its
business, fulfilling orders of goods sold online, faced surging demand. But competition
for warehouse workers was fierce, wages were rising and staff turnover was high. So Dcl
made two changes. It bought robots to pick items off shelves and place them in boxes.
And it reduced its reliance on part-time workers by hiring more full-time staff. “What we
save in having temp employees, we lose in productivity,” explains Dave Tu, Dcl’s
president. Full-time payroll has doubled in the past year, to 280. Paycheques of
everyone from McDonald’s burger-flippers to Citi group bankers are growing fatter. This
goes some way to explaining why profit margins in the S & P 500 index of large
companies, which have defied gravity in the pandemic, are starting to decline.
Explain how this tug-of-war between the employers and employees is affecting the US
labor market in terms of elasticity of supply and demand of skilled labors and their
wages and changing the way of doing business in this country. Are we seeing similar
trends in the European, Asian or South American labor markets?
Topic 2: Oil Tops $130 a Barrel as Russian Attacks Escalate
WSJ | By Ryan Dezember | March 6, 2022
Summary: The biggest premiums on record are being paid for barrels of oil to be
delivered now rather than later. Prices for April delivery of crude oil have shot up since
Ukraine was invaded by Russia and buyers began to shun Russian oil exports. The main
U.S. crude oil price recently exceeded $110 a barrel for the first time in more than a
Because the supply for many products is relatively inelastic in the short run, an increase
in demand will result in a greater increase in price and a lower increase in quantity than
over a longer time period. Holding other factors constant, the demand for a product will
be more inelastic when there are no good substitutes for the product. With this simple
theory in hand, discuss how consumer behavior, labor market, and the inflation in the
US will be affected due to the escalating Russia-Ukraine war.
Topic 3: The New Sticker Shock
WSJ | By Mike Colias Nora Eckert | February 26, 2022
Summary: As supply chain problems prolong a shortage of new automobiles for a
second year, customers face near-empty dealer lots, high prices and long waits to buy
new cars. Although automobile manufacturers discourage dealers from charging more
than their cars’ sticker prices, many dealers say they have to be realistic about what the
market will bear. In extreme cases, dealerships have charged as much as $40,000 above
the manufacturer’s suggested retail price (MSRP) for some luxury cars.
Product shortages cause prices to rise and product surpluses cause prices to fall in the
free market. Under the current scenario of supply-chain crisis in the US, discuss the
general production and consumption opportunity cost (highest-valued alternative given
up to engage in an activity) likely to have an impact on the US GDP for the coming years.
Topic 4: Shoppers Are Caught Off Guard as Prices Change More Often
WSJ | By Charity L. Scott | February 4, 2022
Summary: More everyday items are being priced like airline tickets where sticker prices
are changed within hours or days. Retailers say this is a reaction to changes in costs and
continuing product shortages caused by the Covid-19 pandemic. The changes occur
online as well as offline.
Menu costs are costs firms incur when they change their prices. Menu costs may cause
some prices to be “sticky.” In the article Brian Elliott, a partner at the management
consulting firm McKinsey & Co. stated: “As a retailer, what I really care about is
loyalty…If the customer feels ripped off, they’re not going to come back to my store.”
Briefly explain why a market shortage may be allowed to persist because a retailer places
a priority on maintaining the loyalty of its customers. Which would benefit consumers
more: (a) a retailer allows a product shortage to persist, or (b) the retailer increases the
price of a product to eliminate the shortage? Discuss how rising prices are hurting the
consumers' purse and cost of living.
Topic 5: Taking stock as America moves into a new phase of the pandemic The Economist | March 12th 2022 edition
Summary: Two years ago on March 11th, the World Health Organization declared
covid-19 a pandemic. Americans are eager to leave the wretchedness behind them. Polls
suggest concern about covid is declining. Mask-wearing has waned. On March 26th,
Hawaii will become the final state to drop its indoor mask mandate, and the Centres for
Disease Control and Prevention (cdc) now recommends masks only for the 7% of
Americans living in high-risk counties.
The introduction of vaccines and now booster shots is reviving the economic activities in
every country. Which industries will thrive, and which ones are likely to perish under
the new norm of doing business in the post-pandemic era?