Econ 136: Week 10 Tasks

ECON 136:  Week 10 Tasks

Reminder 1:   I update my office hours by the end of Friday of the previous week.   If  none of those times work for you, then email me with all of the times you might be able to make work and I’m sure we can work something out.

Reminder 2:  The Explaining an Externality Market Failure paper is due Monday night, March 31

Monday:  Valuing Public Art

Class Links

Philadelphia requires that developers devote 1% of the value of new building projects to public art.  Brief descriptions of the program are available here and on page 1 of this handout.

Query:   Is there a market failure justification for government funding of public art?

Wednesday:  Discounting & Present Value

I intend to go over the concept of discounting future costs and benefits to derive a common basis for comparison and use our remaining time to clarify issues raised earlier in the week.    

Preparing for class:

Work through this Net Present Value reading

Before you retire Tuesday night (or by 3am Wednesday, April 2)

Open up the attached Present Value spreadsheet, complete the following two problems and save to our shared Dropbox folder.

1)  You invest $2,000 now, receive 3 yearly payments of $100 each, plus $2,500 in the 3rd year.  The interest rate is 10%.   Find the net present value of the investment.

2)   You invest $2,000 now, receive 4 yearly payments of $300 starting in year 2, plus $2000 in year 6.   The interest rate is 10%.   Find the net present value of the investment.

Bring your laptop to class

Friday:  Investment

Nothing to prepare  (probably), but please bring your laptop.