A

1. Name as many motives for economic activities as you can.

2. Do these motives cause the same activities in all localities? in all groups?

3. What is the distinction between necessities and luxuries ?

4. Which of the following are luxuries ? which necessities ?

a. Bread.

b. Bicycle.

c. Watch.

d. Diamond ring.

e. Fountain pen.

f. Automobile.

g. Face powder.

h. Kodak.

i. Newspaper.

j. Magazine.

5. Just how is wealth power?

6. What is the difference between desire and demand?

7. Which is the more fundamental?

8. When is the demand for a good said to be elastic ? inelastic ?

9. Why does the price of potatoes usually fluctuate more widely than the price of pineapples ?

B

1. What motives for economic activity are the most noticeable among your acquaintances ?

2. Make a list of your wants arising from instinct; from habit; and from social standards.

3. Name any wants not included in the above list. Why do they arise ?

4. Mention eight articles of your own consumption which you consider luxuries; eight which you consider necessities.

5. How do producers in your community seek to increase the desire for goods ?

6. Examine store and shop windows and try to determine whether or not the effectiveness of their display could be increased.

7. Make a list of ten articles sold by your grocer; ten by your druggist; and ten by your hardware dealer. Arrange the articles in each list according to elasticity of demand.

8. Which of these articles, if any, have changed in elasticity during the past generation?

C

1. "The true welfare of society depends on all having the necessities of life before any has luxuries." a. What is meant by "true" welfare?

b. Would an equal distribution of goods necessarily supply all with necessities?

c. After all have been supplied with necessities, which luxury should be produced first ?

d. Does a demand for luxuries ever cause an increase in goods classed as necessities?

2. Explain the purpose of such advertising as, "Dollar and a half caps now ninety-eight cents"; "These gloves are worth two dollars, now a dollar and a quarter"; "Buy now, when this supply is gone no more can be obtained."

3. A stock-raiser recently complained that the use of the automobile as a pleasure vehicle tended to lower the price of driving horses.

a. Are driving horses worth more or less now than they were ten years ago?

b. Account for other forces that may have affected the price of driving horses.

c. Would the above statement be necessarily untrue if driving horses are worth more now than they were before pleasure cars came to be so widely used? Explain.

4. Suppose the supply of several goods be doubled, would the fall in price be the same for each ? Explain.

5. "The demand for a given commodity may be elastic at one price level and inelastic at another." Illustrate and explain.

6. The claim is often made that the storage of eggs results in lower prices during the winter months than would otherwise be the case.

a. How are summer prices affected?

b. How is the average annual price affected?

Supplementary Reading

Bullock, Introduction to the Study of Economics, 3d ed., pages 79 - 110,

Ely, Outlines of Economics, 3d ed., pages 103-110, 156-164.

Fetter, Economics, Vol. I, pages 46, 61.

Johnson, Introduction to Economics, pages 68, 69.

Seager, Principles of Economics, pages 70-80.

Seligman, Principles of Economics, 5th ed., pages 240-245.

Taussig, Principles of Economics, 2d ed., Vol. I, pages 138-158.