Writing Assignment #1
1. From the list below, choose two commodities which start with the letters of either
your first or last name.
a. Where is it traded? What lot size is it traded in? What’s the daily volume?
b. What is the commodity typically used for? By whom?
c. Provide a price chart of the last 5 years
d. Choose two points where there has been a major change in price
e. Explain what may have caused the change using the supply and demand model
f. Draw supply & demand graphs to illustrate your points
Aluminum Hogs Rapeseed
Amber Lead Recycled Steel
Brent Crude Live Cattle Rubber
Cobalt Milk Silver
Cocoa Molybdenum Soybeans
Coffee Natural gas Sugar
Copper Nickel Tin
Corn Oats Wheat
Cotton Frozen orange Juice Wool
Ethanol Flax seed WTI Crude
Feeder Cattle Palm Oil Zinc
Gold Platinum
Heating oil Propane
2. Read the article “Sending Potatoes to Idaho? How the Free Market Can Fight
Poverty” which can be found on Canvas or at the link below, then answer the
following questions:
a. What is the authors basic argument about free markets?
b. Think of another market (not described in the article) where you could apply the
approach the author describes for food banks. Explain how you might apply the
approach as if you were outlining a proposal to a decision maker.
https://www.nytimes.com/2016/10/09/upshot/sending-potatoes-to-idaho-how-thefree-market-helps-food-banks.html
Note: there are lots of reader comments with the online version; you’re free to read
them, but if you use them make sure to give a citation.
3. For one important and interesting idea that you have learned so far in the course
based, write a one page essay beginning with one of the following statements:
Ø Although before this class I believed…….., in fact……..
Ø Although it is tempting to believe……., in fact…..
Ø Although it might seem that…………… is true, in fact……
a. Then explain why you or others could believe the idea that is fact incorrect. In
other words, what is logical or compelling about this incorrect idea.
b. Then explain why the original idea is incorrect.
c. Then explain why it is important that we understand the idea correctly.
d. Finally, use an example to illustrate why misunderstanding the concept leads to
a problem that is resolved if we understand the concept correctly.
4. For this problem, you will use an online calculator to see how PDV works. Go to:
http://www.moneychimp.com/calculator/present_value_calculator.htm
Imagine that you will have the opportunity to receive a large payment at some time in
the future (it could be your higher income for having completed college!) Choose the
amount and how many years this will be in the future. Then choose a reasonable
discount rate. Use the online calculator to find the present discounted value of your
payment.
Then repeat the calculation with a new, higher discount rate
a. What future payment did you choose? Why?
b. Explain why your original discount rate was reasonable.
c. Why might you want to make this calculation?
d. Explain why the PDV changed when you raised the discount rate.
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