Kummer 1

Kara Kummer

Professor Joe Howell

Economics 1740

24 August 2016

Free or Equal: Questions

1. If the government gives everybody the same freedom to work and reap the rewards, some

will do better than others. The result will be ____________________, but not

____________________.

Answer #1 equality of opportunity

Answer #2 equality of outcome

2. Immigrants who arrived in the late-1800s/early-1900s found that America was truly a land

of opportunity. Describe the factors these immigrants encountered which helped them

thrive.

Factors: Since there were few government programs to turn to and no one expected them,

there were fewer rules and regulations and so the immigrants found a free market with no

licenses, permits or red tape to restrict them.

3. Although Hong Kong had no prospects, no natural resources & little land that could be

cultivated, it became an economic powerhouse. How?

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Hong Kong: The British government couldnt be bothered with Hong Kong affairs so Hong Kong

was given economic freedom. Since the governor of Hong Kong favored free markets he never

introduced of the policies that other governments did and since there was no government

intervention, Hong Kongs economy was able to evolve in a natural way.

4. Estonian Prime Minister Mart Laar decided to imitate the Hong Kong model with

__________, __________ and _______________. Estonia is widely seen as the most ________

of the former communist economies.

Answer #1 zero tariffs

Answer #2 a flat tax

Answer #3 minimum of regulations

Answer #4 successful

5. Explain how the lead pencil & the smartphone are examples of invisible hands.

Invisible Hands: The things we use every day and take for granted are the result of a complex

interaction with thousands of people all over the world. It takes the cooperation of thousands

of people, and many different hands, from people all around the world to create and supply the

demand for products.

6. Explain the concept of creative destruction as described in the Free or Equal video.

Creative Destruction: When something new comes on the market, a company can either fail or

adapt. If they can adapt they will create new jobs. To increase wealth and opportunities, we
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have to stop doing old things in old ways and start doing innovative things in new and better

ways or be creative. Destruction happens when a business fails because they cannot adapt to

the constant renewal of the economy. When and old way of doing something is no longer

needed and people lose their businesses. These old factories and old shops close down and

then people lose their jobs.

7. Johan Norberg describes how his home country of Sweden taxes heavily & then redistributes

wealth. Describe the benefits & drawbacks that this approach has on the Swedish population,

as described in the video.

Benefits: The government provided more benefits to the people of Sweden.

Drawbacks: The rewards for working hard and taking risks was reduced and the unemployment

rate was high. People tended to stay home sick and collected 80% of their income in

government sick benefits instead of working and building the economy.

8. Explain the statement Free markets regularly turn luxuries into consumer goods, as

described in the video.

Consumer Goods: People with a lot of money can afford buy the expensive goods and be early

adopters. This creates a bigger market for these luxury goods and companies get more

revenue. Then, these companies can streamline the production of these high cost goods and

in turn create lower cost versions that everyone can afford to buy.
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9. As Milton Friedman said, The society that puts equality before freedom will

_______________________. The society that puts freedom before equality will end up with a

__________________________________.

Answer #1 will end up with neither

Answer #2 great measure of both

10. Professor Friedman uses the analogy of a race to explain the concepts of Equality of

Opportunity and the Equality of Outcome:

Equality of Opportunity

o All race participants are given the opportunity to begin the race at the same starting

line at the same time.

o Also known as Free Market Capitalism.

Equality of Outcome

o All race participants are guaranteed to finish at the same time.

o Also known as Fair Shares for All.

In this class, we apply the Equality of Opportunity concept. All students begin on the same day,

receive the same course information & have the same amount of time to complete the

coursework. While there is no guarantee that students will earn a respectable grade, all

students are given the opportunity to earn a respectable grade.

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Classroom

Hypothetically, if we applied the Equality of Outcome concept in this class, all

students would be guaranteed to receive the class average grade.

The grade would be determined by combining all points earned (by the class as a

whole) & dividing them equally among each student. All students would earn the same

grade regardless of their performance.

Unless the class average were unusually high or unusually low, the most likely

result would be all students would earn a grade in the C range (C+, C or C-). Grades in

the C range are generally considered to be average grades.

1. Would you approve of using the Equality of Outcome method in calculating your final grade?

Why or why not?

2. What are the pros & cons to the student in using this method?

3. Address the above two (2) questions in a minimum of 2 paragraphs.

Equality of Outcome in the Classroom

Pros & Cons

No, I would not approve of using the Equality of Outcome in calculating my final

grade. I do think that everyone should get the same opportunity to achieve a good grade in the

class but I think it should be up to the student have to work for the grade they desire. Weather

that be an A or a C. for example: If the student works hard they should be able to achieve and

A. Conversely, if the student does not work that hard they will get the subsequent grade.
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Pro: Equality of Outcome in the Classroom would benefit the students that are

struggling in the class and are not able to keep up, either because they dont understand the

coursework, or they cannot keep up with the time constraints or deadlines. In the end they will

still complete the class with a passing grade.

Con: Equality of Outcome in the Classroom will in turn have a negative effect for

the students that are able to follow the coursework, time constraints and deadlines, should not

have to settle with just a passing grade if they can end up with an A or B.

Workplace

If the Equality of Outcome concept were applied at your workplace, all

employees would be paid the same wage, regardless of their job duties, education,

performance or skill.

Consider the example of Gravity Payments, a Seattle-based credit card

processing company. In April 2015, CEO Dan Price set a $70k minimum salary for all 120

employees. He also announced that he was taking a pay cut from $1 million to $70k.

1. Would you approve of using the Equality of Outcome method in calculating your salary? Why

or why not?

2. What are the pros & cons to the employee & the business in using this method?

3. Address the above two (2) questions in a minimum of 2 paragraphs.

Equality of Outcome in the Workplace

Pros & Cons

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No, I would not approve of using the Equality of Outcome method in calculating

my salary. I think employees should be paid based on their knowledge, skill and education. If

the employee has made the effort to become knowledgeable in their field, either through

schooling or on the job training, they should be rewarded with a competitive pay.

Pro: If employers used the Equality of Outcome method in calculating salaries,

employees would not need to fight for higher paying jobs or have to prove they deserve a

higher pay. Employees would feel that everyone is being treated equal and there would not be

conflict in the workplace in regards to salary.

Con: If employers used the Equality of Outcome in calculating salaries, and all

the employees were being paid the same salary, employees would start producing less.

Employees would not feel that they needed to excel in their job to make more money.

Conversely, employees may also be required to do duties that they are not qualified for may

end up being overburdened with duties while others did the bare minimum.

Reflective Writing

1. Learning Outcome #1 (Paragraph #1)

Develop Computer & Information Literacy

2. Learning Outcome #2 (Paragraph #2)

Communicate Effectively

I was able to further develop my computer and information literacy while

working on this assignment. To complete the assignment, I used many different methods. I
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watched the video on a computer with dual monitors. Being able to have the video playing on

one monitor enabled me to have the questions open in a google doc on the other monitor. This

made it easy to follow along and answer the questions as they were addressed in the video. I

prefer to use google docs while working on assignments, that way I can access them on any

computer or my phone. Last, I downloaded the google doc to word doc on my laptop so I could

format it. Students were given the freedom the format our answers however we chose. So, I

chose to do a simple double line spacing and easy to read font and size, along with numbering

and bullet points. This made my document easy to read and uniform.

To communicate effectively, I made sure all my answers were easy for my

professor to understand. I also made sure to follow the requirements of the assignment when

answering the questions. Students were asked to answer the fill in the blank questions with the

precise language that was used in the video. Also, for the short answer questions, students

were to summarize in their own word. When summarizing in my own word, I made sure I was

giving my own voice to the answer and not just quoting the video. For the few times I was using

quotes from the video, I made sure to put them in quotation marks.