Question: 1.Explain an issue, problem or observation 2.Analyze it using the economic way of thinking - possible approaches include a.Cost-benefit analysis b.Externalities and unintended consequences analysis

1.Explain an issue, problem or observation

2.Analyze it using the economic way of thinking - possible approaches include

a.Cost-benefit analysis

b.Externalities and unintended consequences analysis

c.Asymmetric and information problems

d.Perverse incentives

3.Conclusion:

a.This is where you allow for your own judgment and recommendations to come in

A Brief Example:

Policy:Minimum Wage and its suggested increase

Analysis:Some workers get pay increase

Some lose their jobs

Some are replaced with equipment

Some enter the market looking for work due to the new higher wage

Biblical parable about vineyard owner paying his workers what is agreed between them

Conclusion:Varies

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