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You can now easily assign the Weekly Review Quiz Questions to your students via an online interface. They'll complete the tests online and you'll have immediate access to their results.

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THIS WEEK'S ARTICLES
Hot Drink Debate: Paper or Plastic?
Wal-Mart Cries Foul on China Fines
In Equal-Pay Debate, Disparity Is in the Details
Housing Trouble Grows in China
A Price War Erupts in Cloud Services

Weekly Quiz Questions
Discipline-specific multiple-choice questions to help gauge your students' comprehension of Wall Street Journal content.

Hot Drink Debate: Paper or Plastic?
by: Laura Stevens
Apr 11, 2014
Click here to view the full article on WSJ.com

TOPICS: Environmental Issues

SUMMARY: Demand is growing for paper coffee cups like the kind used in Starbucks, mainly because of environmental concerns about plastic-foam cups. But both products have pros and cons. "Environmental advocates say paper is easier on the environment than plastic foam because the latter tends to break up in landfills and then is mistaken by animals for food.... The plastic-foam industry disputes the notion that foam is less environmentally friendly, chalking it up to misinformation."

CLASSROOM APPLICATION: Students can evaluate the following two economics issues presented in the article. The first is about consumer perceptions about the environmental impact of foam and plastic, and consumer preferences for using foam or plastic cups and also their preferences about the environmental impact of these products. The second is about the economic motivation of fast-food companies to use either paper or foam cups. The choice about the material of coffee cups depends on environmental impact, customer preferences, cup prices, and disposal costs.

QUESTIONS: 
1. (Introductory) Environmental impact of foam and paper

2. (Advanced) What factors affect the decisions by fast-food restaurants whether to use paper or plastic?

3. (Advanced) Research question. How would environmental economists measure the environmental impact of foam and paper cups?

Reviewed By: James Dearden, Lehigh University


Wal-Mart Cries Foul on China Fines
by: Laurie Burkitt and Shelly Banjo
Apr 14, 2014
Click here to view the full article on WSJ.com
Click here to view the video on WSJ.com WSJ Video

TOPICS: Regulation

SUMMARY: Fined by China for misleading pricing and selling poor-quality products, Wal-Mart paid fines and ratcheted up its testing and inspections, but it is also doing something rare for a Western company: Telling Chinese authorities they need to clean up their own act. One interesting point in the article: In the U.S. and most other countries, it is usually manufacturers, rather than retailers, that have primary responsibility for the quality of the products they sell, but in China, the retailers are accountable. With regard to consumer preferences about food safety, "Both the Chinese government and the food industry face rising pressure from the country's growing consumer class to clean up the food supply." As for the ability of China Food and Drug Administration, "Officials have pushed agricultural consolidation as well, attempting to create bigger farm operations that mirror those in the U.S. and are easier to supervise."

CLASSROOM APPLICATION: The article prompts an analysis of the improvement to economic efficiency of government inspections of the safety of food. The article notes the issue of whether it is less costly or safer to impose the risibility of food safety on food producers.

QUESTIONS: 
1. (Introductory) What is causing food producers and distributors operating in China to "clean up their acts"?

2. (Advanced) In the U.S. and most other countries, it is usually manufacturers, rather than retailers, that have primary responsibility for the quality of the products they sell. But in China, it is the retailers who are responsible. Research question: Why does the responsibility for food safety vary among countries?

3. (Advanced) A food safety expert for French food retailers Carrefour SA states, "Food safety in China is complicated, far more complicated than in other countries." What factor(s) complicate food safety in China?

Reviewed By: James Dearden, Lehigh University


In Equal-Pay Debate, Disparity Is in the Details
by: Josh Zumbrun
Apr 11, 2014
Click here to view the full article on WSJ.com

TOPICS: Labor Economics

SUMMARY: President Barack Obama sought to energize lawmakers and activists this week when he repeatedly highlighted that women earn 77 cents for every dollar men earn, galvanizing an army of statisticians and economists.

CLASSROOM APPLICATION: Students can evaluate the 77 cents on every dollar statistic, and also examine whether and how to control for differences for example in occupations, job tenure, and work hours per week in measuring the wage inequality between men and women. Even though this issue is beyond the scope of the measurement of wage inequality and therefore beyond the scope of the article, students can discuss whether occupational choices by men and women are influenced by discrimination.

QUESTIONS: 
1. (Advanced) In comparing the wages of men and women, should economists control for occupational choices, hours worked per week, and educational and skill levels?

2. (Advanced) Assume there is discrimination or bias against women in both educational choices (e.g., college majors) and also labor markets. Also, skills (attained through college majors) affect wages. Would it be important for economists to disentangle the effects of these two types of discrimination or bias : on college major choices and on wages : against women?

3. (Introductory) Is the 77 cents on every dollar statistic an appropriate representation of discrimination against women in the labor market?

Reviewed By: James Dearden, Lehigh University


Housing Trouble Grows in China
by: Bob Davis and Esther Fung
Apr 15, 2014
Click here to view the full article on WSJ.com

TOPICS: Housing Markets

SUMMARY: Overbuilding by Chinese real-estate developers has left many of the country's smaller cities with a glut of apartments for sale, driving down prices and posing an economic threat. The reason for the housing price declines in these cities is that home construction is racing well ahead of population growth. One interesting note is that a dramatic housing collapse such as the U.S. suffered a few years ago isn't thought likely here. Chinese families don't borrow as heavily for home buying as Americans, putting at least 30% down. The article offers two conjectures about the cause of empty housing in these cities. First, "an unusually high percentage of Chinese household wealth is tied up in real estate-about two-thirds, estimates economist Li Gan at Texas A&M University. Americans, at the peak of the U.S. housing boom, had only about half that much of their family wealth in real estate. The figure is high in China partly because of few appealing investment alternatives, with the domestic stock market performing poorly for years and interest on savings deposits at banks fixed at a low rate." Second, "China's private real-estate market dates only to the late 1990s, when the Communist Party started to privatize housing owned by state-owned companies.... Around the same time, Beijing tightened restrictions on real-estate purchases in first- and second-tier cities to try to keep prices in those places from skyrocketing too high."

CLASSROOM APPLICATION: This supply and demand article offers a good case about the effect of an increase in supply on equilibrium prices. Students can evaluate the reasons why investors would construct housing that is either sold at a loss or is sitting unsold.

QUESTIONS: 
1. (Introductory) What factors have caused the overbuilding of housing in China's mid-size cities?

2. (Advanced) Why did the Chinese government want to promote housing construction? Have China's government policies caused the country's falling housing prices in its mid-size cities?

3. (Advanced) What is the effect of the dramatic fall of housing prices in China's mid-size cities on the decisions of homeowners to sell their properties?

Reviewed By: James Dearden, Lehigh University


A Price War Erupts in Cloud Services
by: Shira Ovide
Apr 16, 2014
Click here to view the full article on WSJ.com

TOPICS: Price Wars

SUMMARY: Amazon.com, Microsoft and Google are battling over the future of corporate computing, and companies that use their services are reaping the benefits. The article reports facts about the consequences of the price war, but does not report on the reasons for the price war. It does present factors that affect company decisions whether to rent or purchase and manage computing power.

CLASSROOM APPLICATION: Students can evaluate the decision by firms whether to rent or purchase computing power. With regard to the price war, it "is already delaying the day of reckoning for companies that thought they would one day own their own computing centers.... Consultants say such savings are tempting some bigger companies to rent, rather than own, more of their computing power." However, "there are obstacles to the rental model that may limit growth."

QUESTIONS: 
1. (Advanced) What are possible causes of the price war in the market for leasing computing power?

2. (Introductory) Which companies are threatened by the growth of the market for leasing computing power?

3. (Advanced) Characterize the types of firms that lease computing power and the types that own their computing power. What are the possible impediments to the growth of the market for leasing computing power?

4. (Introductory) Why are some firms delaying their purchase and installing of their own computing power?

Reviewed By: James Dearden, Lehigh University


Weekly Quiz Questions

ECONOMICS MICRO for the week of 04/17/2014



Hot Drink Debate: Paper or Plastic?
by Laura Stevens
04-11-14
Click here to view the full article on WSJ.com


1. McDonald's has been using double-walled paper cups at about 2,000 restaurants along the West Coast since 2012. Now it is expanding into the Midwest and parts of the East Coast. While the paper cup is more expensive than the foam cup, McDonald's says its overall cost of drink cups will not increase because it is less expensive for the company to
(a) vertically integrate into paper cup manufacturing.
(b) convince customers of the environmental benefits of using paper cups.
(c) ship paper cups.
(d) store paper cups.
(e) dispose of paper cups.

2. According to a restaurant industry analyst interviewed by the Wall Street Journal, the main challenge for food companies in switching from plastic to paper disposable cups is to find a paper cup that functions as well as plastic foam and
(a) can be stored for months without yellowing.
(b) does not cost the consumer more.
(c) consumers prefer.
(d) customers do not reject.
(e) does not harm the taste of coffee and tea.


Wal-Mart Cries Foul on China Fines
by Laurie Burkitt and Shelly Banjo
04-14-14
Click here to view the full article on WSJ.com


3. The Wall Street Journal reports that in the U.S., much of the responsibility for food safety is on ________ as well as ________.
(a) the federal regulators; the plants that package food
(b) the federal regulators; the consumers
(c) the federal regulators; the farms
(d) the consumers; the plants that package food
(e) the farms; the plants that package food

4. Both the Chinese government and the food industry face rising pressure from the country's ________ to clean up the food supply.
(a) farmers
(b) international food retailers
(c) growing consumer class
(d) political elite
(e) food regulators


In Equal-Pay Debate, Disparity Is in the Details
by Josh Zumbrun
04-11-14
Click here to view the full article on WSJ.com


5. "Equal pay for equal work-it's not that complicated," Mr. Obama said Tuesday as he renewed a push for legislation aimed at combating gender discrimination and signed an executive order protecting employees who want to discuss their pay from retaliation. The Wall Street Journal reports that the "77 cents" statistic is
(a) "complicated indeed."
(b) "not that complicated, as the president suggests."
(c) "misleading."
(d) "an inappropriate representation of the extent of discrimination against women."
(e) "right on the mark."

6. The Wall Street Journal reports that in a 2012 paper about male-female wage gaps, Harvard economists Claudia Goldin and Lawrence Katz dubbed pharmacy as
(a) "the least egalitarian of all professions."
(b) "the most egalitarian of all professions."
(c) "the profession that is most accommodating to women."
(d) "the profession that is least accommodating to women."
(e) "the perfect profession for women."


Housing Trouble Grows in China
by Bob Davis and Esther Fung
04-15-14
Click here to view the full article on WSJ.com


7. The Wall Street Journal reports that in China as developers grow short of money, some are using ________ instead of cash to pay their bills to construction companies.
(a) apartments
(b) construction equipment
(c) land
(d) bank loans
(e) credit


A Price War Erupts in Cloud Services
by Shira Ovide
04-16-14
Click here to view the full article on WSJ.com


8. ________ pioneered the notion of leasing computing power.
(a) Amazon.com Inc.
(b) Google Inc.
(c) Hewlett-Packard Co.
(d) International Business Machines Corp.
(e) Microsoft Corp.

9. There are obstacles that may limit the growth of the market for leasing computer power. One impediment is that it is often cheaper and more reliable for large companies, especially those with ________, to own or control their own computing backbone.
(a) predictable computing needs
(b) deep pockets
(c) many divisions sharing central computing facilities
(d) international operations
(e) 24 hour computing needs



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