Economics Focus
The film A Bug's Life runs the gamut of basic Economic considerations. These first questions deal with Macroeconomic issues. All answers require an assertion with justification.
1. At the start of the movie, what are the resources of Ant Island? What resource do they lack most of all? What changes in the Ants' resources do we see through the film? Are the Grasshoppers entrepreneurial talent or are they just annoying?
2. Is Ant Island at full employment at the start of the film? When they are working on making the bird? At the end?
3. What would a production-possibility graph for Ant Island look like at the start of the film? When they are working on making the bird? At the end?
4. What would a circular-flow chart for Ant Island look like at the start of the film? When they are working on making the bird? At the end?
5. Is a circular-flow model sustainable if the Grasshoppers take in factors and return nothing in a traditional economy? In a command economy? In a market economy?
6. When the Grasshoppers demanded more food, the Ants increased their output of food. Is this an artificial example of the laws of supply and demand?
7. At the end of the movie, have the Ants begun to specialize? What economic benefits would they reap from specialization?
8. Who makes production decisions for the Ants at the start of the film? When they are working on making the bird? At the end?
9. What will have to happen for the Ants to have corporations? Enforcement of contracts? National defense? Development of trade? Economic stability?
10. Assume the Ants contact a friendly, but highly advanced nation of Termites. The Termites make everything the Ants make at double the quantity the Ants produce, but with the same usage rate of resources. Will it be to anyone's advantage to trade? What would be a profitable exchange rate for the Ants? For the Termites?
11. Is there an underground economy on Ant Island? What would be involved in an underground Antian economy?
12. Who is part of the Antian labor force? As the Ants continue to industrialize, who will become unemployed?
Will new jobs be created for those workers?
13. What would happen to the economy of Ant Island if diggers expanding the mound discovered a vast fungal forest of seemingly limitless quantities of edible and tasty fungi?
14. If the Ants have zero investment at the start of the movie, what would that imply about their real interest rates? If the Ants manage to decrease interest rates, how will that affect demand for investment?
15. Considering the case of a primitive Ant economy and an advanced Termite economy, which economy is likely to have a positive balance of trade? How will faster economic development in that economy affect the balance of trade?
16. Based on your answers in #15, which is likely to be a bigger issue in the near future for Ant Island, high inflation or unemployment?
17. What fiscal policies could an Ant government pursue to correct the problem in #16? If Flick was...
