Advanced Placement Economics Summer Assignment – 2014
Robert.puterio@lcps.org
Economics is taught in the Social Studies department, but it is different from any other
class students have ever taken within the department. Up to now, social studies classes have been
all about history, and the skills necessary to be successful were reading, writing and critical thinking.
All these skills are necessary in economics too, but added to them are
mathematical skills. There is no prerequisite minimum level of math and the math used
in economics does not often rise above the level of simple algebra. However, the ability to
quickly grasp mathematical concepts and use them to analyze real-life situations is
crucial. This combination of math and verbal expertise makes the study of economics
unique among social studies courses. Economists look at the world in a unique way, and
this way of thinking is new for most students. At its most fundamental level, Economics is way to
think about the world. For many of you, this course will provide a new perspective on things that are
part of your everyday life.
Summer Assignment A – Must be completed by any student who HAS NOT YET TAKEN
ECONOMICS as a semester course or have had a meeting with AP teacher to determine if they need
review.
Introduces students (or reviews students) to the economic way of thinking they will practice all year in
this course. The students will learn the basic principles economists use to study the way people make
economic decisions and will use those principles to analyze interesting real-world problems. Each
and every reading, assignment, project, etc. has value and will help the student review and grasp the
basic concepts needed to get started in the course.
1. Read and Answer Questions from Common Sense Economics or TCI Economics Alive
Must pick up TCI TEXTBOOK FROM AP INSTRUCTOR
2. Article Work
Summer Assignment B- Must be completed by students who have already taken semester economics
course and the AP teacher has deemed they are exempt from Assignment A based on a strong
background in the semester economics course. Many students have now had a semester of an
economics course and will be able to apply the subject at a different level. Assignment B will be
1. Read a recommended book and create an Abstract for a field experiment
Students will be assessed as they pick up the summer assignment. If students do not pick up
the summer assignment in person from the AP instructor, they must complete BOTH
Asiignment A and Assignment B
Please remember that this is a college-level class and the expectations are higher than for
other high school courses. Students are expected to accept responsibility for completing
assignments independently and come to class prepared to contribute.
Required course activities include, but are not limited to, the following:
 Completion of summer assignment
 Keeping a course book. Will either be provided or a notebook will be created
 Participation in class discussion
 Independent reading of required material BEFORE coming to class
 Reading quizzes with EVERY chapter
 All work assigned will be graded, either formative or summative, and it is expected it
will be completed BY THE DUE DATE. Late work will be expected but not awarded
credit. Students will not be eligible to retake any assessments if all work not completed
 Prepare to take TWO AP Exams – 1 in Macroeconomics and 1 in Microeconomics
The AP Exam is given in May by the College Board and offers student the opportunity to earn
college credit for what they have learned. The registration fee is between $80-90 PER EXAM.
Because this class is taught and graded on the college level, most students will find it is more
difficult to make A’s. It is EXTREMLY important that students maintain good attendance and
promptly makeup any missed work due to absences.
The summer assignment is due by the START OF CLASS on the first day of school.
Questions, comments, concerns- EMAIL ME ASAP! DO NOT WAIT until the day this
assignment is due!!
Summer Point of Contact is Rob Puterio
Email: robert.puterio@lcps.org
PFHS #: 571-434-3200
SUMMER ASSIGNMENT- PART A DIRECTIONS
1. Students will need to purchase or borrow from the local libraryCommon Sense Economics by Gwartney, Lee, and Stroup (St. Martin’s Press, © 2005)
IBSN 10: 0-312-33818-X
IBSN 13: 978-0-312-33818-3
**This book can be found on both Amazon.com and Half.com for $5.00-$15.00
2. Read each part of Common Sense and complete the corresponding questions (found at
the end of this document). You must type both the questions and your answers. Your
answers MUST BE in your own words or no credit will be given for this part
**Open the word document found on the PFHS home page and you won’t have to type the
questions over again.
3. Be prepared to participate in a detailed discussion of the book within the first week of
class!
4. Be prepared for a Quiz on basic content from the book on the first day of school!
Summer Assignment – Part A (Option 1)
Common Sense Reading Questions
DO NOT complete/ submit the same answers as someone else in class, you must complete this
assignment on your own and in YOUR OWN WORDS. Plagiarized or copied assignments will receive a
ZERO – NO EXCEPTIONS
1. What are incentives, and how do they influence behavior? Why do the
authors say that, “All of economics rests on (this) one simple principle”?
2.Why do you buy many goods and services from others rather than
producing them yourself? Would Americans, in general, be better off if we
were self sufficient and produced everything we consumed rather than
traded with people abroad?
3.Will hard work guarantee a substantial income? Why or why not?
4 .Describe Adam Smith’s “invisible hand” principle. How does self-interest actually work to help others (even
when the consequences are unintended)?
5. “Private ownership forces resource users to confront the cost of utilizing resources. Without private
ownership, it is difficult to see how the benefits of resource use could be balanced against the costs incurred.”
Evaluate this statement.
6.What are the five freest economies in the world? Are countries with more economic freedom more
prosperous than those that are less free?
7. Describe the protective and productive functions of government.
8 .If federal, state and local governments had no power to tax, what goods and services would you have to
give up or secure privately?
9 .Identify ways the authors believe that budget deficits could be reduced or eliminated.
10.“When government controls what is bought and sold in an economy, the first thing that will be bought and
sold will be the legislators.” Evaluate this statement.
11.“The first law of economics is scarcity. The first law of politics is to deny the first law of economics.” What is
meant by this statement? Do you think this is true?
SUMMER ASSIGNMENT- PART A (Option 2) Book Number: ______________
Use TCI Economics Alive to complete the following questions in detail.
Must pick up TEXTBOOK FROM AP INSTRUCTOR
Copy this document and type your answers.
1. What is scarcity and why is it the basic problem of economics? (Ch. 1)
2. Why are all goods and services scarce? (Ch. 1)
3. What are the factors of production? Be able to give an example of each. (Ch. 2)
4. What is opportunity cost? (Ch. 2)
5. What is the purpose of a production possibilities frontier (PPF)? Be able to interpret a PPF to calculate
opportunity cost. (Ch. 2)
6. What is the difference between comparative and absolute advantage? Why is comparative advantage the basis
for trade? (Ch. 4)
7. What are the three fundamental questions that all economic systems must answer? (Ch. 3)
8. What economics goals are important in each economic system? (Ch. 3- Refer to chart on p.46)
9. What is the law of demand? What is the law of supply? Be able to give an example of each. (Ch. 5)
10. What are the demand and supply shifters? How are increase and decreases in demand and supply represented
on a graph? (Ch. 5)
11. Be able to read and interpret supply and demand graphs. How are equilibrium price and quantity affected when
supply or demand shifts? (Ch. 6)
12. How does government intervention affect markets? Be able to graphically identify the market effects of price
floors and price ceilings and calculate surplus and shortage. (Ch. 6)
13. How do the four market structures differ in terms of number of producers, similarity/type of product, ease of
entry into the market and ability to control prices? (Ch. 7)
14. Why does the government grant patents and copyrights? (Ch. 7)
15. What is a public good and why does the government provide them? Be able to give examples. (Ch.7)
16. What is the main reason for government enforcement of antitrust laws? (Ch. 7)
17. What roles does the government play in a market economy? (Ch.11)
18. What are the 3 basic functions of money? (Ch. 8)
19. What are the 6 characteristics of money? (Ch. 8)
20. What is the difference between commodity money and fiat money? (Ch. 8)
21. What is included in M1 and M2? (Ch. 8)
22. What does the FED do? (Ch. 8)
23. Define and describe the 3 different business organizations and the ways in which they compete. (Ch. 9)
24. How do labor unions affect workers’ wages? (Ch. 10)
25. How can you increase your human capital? (Ch. 10)
26. What is gross domestic product (GDP)? Be able to give examples of goods and services that are and are not
included in its calculation. (Ch. 13)
27. How does GDP growth make people better off and increase their standard of living? (Ch. 13)
28. What are the economic costs of inflation and how does inflation affect purchasing power? (Ch. 13)
29. What type of unemployment increases when economic activity declines? (Ch. 13)
30. What is happening to the unemployment rate during each of the four phases of the business cycle? Be able to
identify each phase on the business cycle model. (Ch. 13- Refer to chart on p.267)
31. How does the government pay for the public goods and services it provides? (Ch. 12)
32. What is a progressive tax and how does it reflect the ability-to-pay principle? (Ch. 12)
33. What is deficit spending? Why did Keynes think deficit spending was necessary during periods of recession (such
as the Great Depression)? (Ch. 14)
34. When the government follows expansionary fiscal policy, what happens to spending levels and tax rates? (Ch.
14- Refer to chart on p. 279)
35. How is the money supply changed when the Federal Reserve uses tight-money policy to slow down economic
growth? (Ch. 14-Refer to chart on p.284)
36. How would the Federal Reserve adjust the discount rate if it wanted to encourage banks to make more loans to
customers? (Ch. 14)
SUMMER ASSIGNMENT- Assignment A and B DIRECTIONS
REQUIRED for Assignment A and Assignment B
ARTICLE COMPONENT
As a participant in a senior-level AP Social Studies course, it is critical that you remain current
on national and international events. Throughout the school year, you will be making
connections between AP Economics content and current events. This portion of the summer
assignment is designed to prepare you for sharpening this important skill during the school
year.
1. Select economic issues that you find interesting and important. Some suggestions
for issues to track are listed below; however you are not limited to these
suggestions.
2. Carefully follow the news related to economics throughout the summer.
 Read newspapers (Washington Post, Washington Times, Wall Street Journal)
 News magazines (The Economist, TIME, Newsweek, etc.)
 Search for articles on reputable news websites (CNN, MSNBC, FOX)
3. Clip, copy, or print articles you find particularly important to economics.
You are required to obtain 3 articles from the following date ranges.
You must obtain one article published during each of the following date ranges:
 6/30-7/12
 7/13-7/26
 7/28-8/9
4. Each of the four articles should be accompanied by a typed summary (in your own
words) of approximately one half of a page.
The summary should illuminate the key ideas of the article and may also explain
your reaction to the events/issues described.
ECONOMICS AREAS TO CONSIDER READING ABOUT (YOU ARE NOT LIMITED TO THESE TOPICS):
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Overall Health of the Economy
The Unemployment Rate
The Role of Government in the Economy/ Sequester/ budget process
The Economic Impact of natural disasters, like Hurricanes, Tornados, wildfires, drought
Economic Issues in Virginia
International Economic Issues (Middle Eastern Conflicts, Iran, China, Europe, etc.)
SUMMER ASSIGNMENT ”B” DIRECTIONS
REQUIRED for Assignment B
Students will need to purchase or borrow one (1) of the following from the local library-
Freakonomics : by Steven D. Levitt, Stephen J. Dubner ($10.11 Barnes and Noble.com)
Super Freakanomics : by Steven D. Levitt, Stephen J. Dubner ($10.11 Barnes and Noble.com)
The Why Axis: by Uri Gneezy, John List, and Steven D. Levitt ($14.57 Kindle)
The Assignment:
1. Innovate 1 idea for a field experiment that could be run inside our school building. You can use ideas
that blend psychology and sociology, behavioral economics, etc. Be sure your experiment is:
a. Feasible- If we tried to run your experiment, could we do it? Since we can’t offer monetary
incentives, jail time, etc., the study should be realistic in a high school setting.
b. Safe!- We don’t want anyone to get hurt from the experiment. Emotional or physical damage
would not be acceptable.
2. Innovate 1 idea for a field experiment that could be run in the community. You can use ideas that
blend psychology and sociology, behavioral economics, etc. Same rules apply as above.
For each experiment, you should create an abstract with the following criteria:
a. Approximately 1 page long
b. Include the following:
1. The Problem (What is the reason for the study)
2. Basic ideas about sample size, time it would take to administer, materials needed.
3. The control and variables
4. YOUR hypothesis and expected results
5. 2 of the 7 economic principles your study might prove (consult Semester course notes)
6. Explain how your study might pertain or relate to one performed in the book you chose.
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