Course Description
In this course students will have an introduction to Microeconomics and Macroeconomics. They will learn how society manages its scarce resources, how people make decisions, how people interact in the domestic and international markets, and how forces and trends affect the economy as a whole.
Economics Grade Level Expectations:
1.
Productive resources – natural, human, capital – are scarce; therefore, choices are made about how individuals, businesses, governments, and societies allocate these resources.
2.
Economic policies affect markets
3.
Government and competition affect markets
E.1 Productive resources –natural, human, capital– are scarce; therefore, choices are made about how individuals, businesses, governments, and societies allocate these resources
E.2 Economic policies affect markets
E.3 Government and competition affect markets
Identify and analyze different economic systems
The distribution of resources influences economic production and individual choices
Economic freedom, including free trade, is important for economic growth
Economic policies affect markets
1.
Students understand that because of the condition of scarcity,*decisions must be made about the use of resources*.
2.
Students understand how different economic systems impact decisions about the use of resources and the production* and distribution of goods* and services.*
3.
Students understand the results of trade, exchange, and interdependence* among individuals, households, businesses, governments, and societies.

Basic economic problems faced by citizens
How does government and business make economic decisions?
Ways that people invest in the future
Buying decisions influenced by internal and external forces
Policy impact at individual sate national and world level connections that link various global economic issues and concerns such as resource depletion, global trade, population movements, air and water pollution, inflation, and unemployment. review alternative solutions by considering the economic, social, and political implications for each; and propose solutions.
It is but a very small part of man’s wants which the produce of his own labour can supply.
He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for. Every man thus lives by exchanging,

or becomes in some measure a merchant, and society itself grows to be what is properly a commercial society.
Adam Smith
Economic Fundamentals
Supply demand http://www.sambaker.com/econ/demand/demand.html
Cost benefit
What to produce
How to produce
For Whom to produce
Factors of production - Everything we produce require these factors.
Land
Labor
Capital
Entrepreneurship
Production Possibility Curve
Circular flow of economics
A market is a mechanism that allows buyers and sellers to exchange a certain economic product.
◦Factor Markets–are where productive resources are bought and sold.
◦Product Markets–are where producers sell their goods and services to consumers.

Productivity
Division of labor and specialization
Human capital
Broken Window fallacy - http://youtu.be/erJEaFpS9ls
Economic Systems
Traditional
Command
Market
Capitalism
1.Economic Freedom
2.Voluntary Exchange
3.Private Property Rights
4.Profit Motive - incentives
5.Competition
EVALUATINGECONOMICPERFORMANCE
1)Economic Freedom–freedom to make your own economic decisions
2)Economic Efficiency–benefits gained must be greater than costs incurred
3)Economic Equity–a strong sense of justice, impartiality, and fairness
4. Economic Security – protection from adverse economic events as layoffs and illnesses
5) Full Employment – to produce as many jobs as possible
6) Price Stability – steady prices, void of inflation
7) Economic Growth – to meet the needs of population growth
Free Enterprise
Standard of Living

Business, Banking and Finance
Measuring Economic Performance
GDP
Business Cycles
Unemployment
Teaser #3 : Libby: "The unemployment rate went up between May and June of 1991."
Conrad: "the number of people employed rose between May and June of 1991." Libby and Conrad seem to be contradicting each other, but both of their claims are correct. Can you explain why these statements aren't contradictory?
Solution : It's possible for both the unemployment rate and the number of persons employed to increase if the labor force expands. The unemployment rate is equal to the number of unemployed divided by the labor force (number of unemployed plus employed). In May of 1991, there were 125,232,000 people in the civilian labor force, of which 116,591,000 were employed and 8,640,000 were unemployed. The unemployment rate was 8,640,000/125,232,000 = 6.9%. In June, the civilian labor force had grown to
125,629,000, of which 116,884,000 were employed and 8,745,000 were unemployed.
While the number of employed persons increased over that period, the unemployment rate rose to 8,745,000/125,629,000 = 7.0%.
Inflation
Globalization
International Trade
Economic Interdependence
Economic Development
World Bank
Comparative advantage
Tariffs
Subsidies
Imports and exports

Exchange rates
Free trade and world trade
Macro Economics
Systems
Business organizations and structures
Goals
Entrepreneurship
Indications
Business cycle
Money supply
Credit and banking
Monetary policy and federal reserve
Fiscal policy
Types of tax
Role of government – revenue and spending
Protector
Provider and Consumer
Regulator
Promoter
Micro Economics
Supply and demand
Diminishing marginal utility

Externalities
Competition
Income distribution
Supply and Demand
Setting Prices
Fraud
Elasticity
Price as a signal discuss logical fallacies and misleading statistics .
Debate topics are best if they’re topical and controversial. An excellent list of topics and readings is maintained by John Kane on this website: http://www.swcollege.com/bef/econ_debate.html
.
Here are some additional topics, with links to selected readings.
Resolved: Gasoline price-gougers should be punished.
Pro:
 Big oil's bigtime looting by Derrick Z. Jackson
 New Jersey Finds 25% Of Gas Stations Overcharging
 States Probe Gas Price Jumps
Con:



'Price gouging' keeps supply from drying up in the long run by Lott and
Jones
Gouge On: A defense of gas profiteering by Jerry Taylor
Pump it Up by Austin Goolsbee
ANOLDECONOMICQUESTION
Getting cargo from point to point, on time and in good condition

Back in the 1700s, the British government paid sea captains to take felons to Australia. About a third of the males on one particularly horrific voyage died. The rest arrived beaten, starved, and sick. I mean, they were hobbling off, those who were lucky enough to survive.
This was a scandal back in England, so the government tried to fix it with all different kinds of rules. Force the captains to bring a doctor along. Require them to bring lemons to prevent scurvy. Have inspections. Raise captains’ salaries.
Apply the Invisible Hand Concept
Instead of paying for each prisoner that walked on the ship in Great Britain, the government should only pay for each prisoner that walked off the ship in Australia. And in fact, this was the suggestion which in 1793 was adopted and implemented. And immediately, the survival rate shot up to 99%.
The Profit Motive at Work
Before the captains were paid to keep the convicts alive, they had different incentives —"like keep food from the prisoners, and then sell the food in Australia,― they were already paid for the prisoners. he passengers alive, and —voila! —they arrive alive
****1. Compile a record of your economic activities for one week.
What did you earn? What goods and/or services did you buy? At the end of the week, analyze your list. What were your economic needs? What were your economic wants?
2. Select ten common items for sale at local grocery stores.
Compile a record of price changes, if any, in at least two different stores over one month. Analyze overall price changes and the variations from store to store. The objects chosen must be the exact same item (ex 10 oz. can of Campbell's chicken noodle soup).
3. Analyze how similar products are advertised on television or in newspaper advertisements. How does each try to create a demand for its product? Is price mentioned? Is nonprice competition important?
4. Study the classified section of a local newspaper for

employment opportunities. Analyze the information for one week and present a report on job opportunities in your community.
5. Choose a business you would like to own and operate, and then decide whether it should be a sole proprietorship or partnership. After giving this consideration, answer the following questions: (a) What good or service would you like to provide? (b)
What types of skills or training could you bring to the business? (c)
What are the advantages and disadvantages of the ownership form you choose?
6. Survey the local stores in your community which honor credit cards. Which cards are used? At what kind of firm is each card used? Compile the data collected and reproduce it in the form of a chart or table to indicate the number and type of firms that use credit cards. Analyze what you discovered and come to a conclusion about credit card usage.
7. Visit a local food store offering no-name generic items. Select
12 grocery items and compare the cost of generic, and several name brand goods. Be sure to compare items of equal size and packaging. Compare the cost per ounce, per serving or per unit price. Display the results in the form of charts. Include an analysis of your findings
****8. Obtain and fill out correctly the following applications: resume, credit card, car loan, college entrance, and financial aid.
(Note: If there are other forms of applications you wish to fill out, see Mr. Buszta for the approval to substitute that application for one of those listed above.)
****9. Prepare a budget for your senior year high school expenses.
Include all possible expenses that you may incur for during this school year. You should include the following expenses, but do not limit yourself to just these: dances, athletic events, graduation expenses (pictures, ring, announcements, obligations, dues, party, etc), and educational trips. Analyze this budget. How will you pay for these? What savings do you have that can be used?
10. Prepare a budget for your post secondary expenses. Include both expenses that you will incur as a senior as well as those throughout your college career. You should include the following expenses, but do not limit yourself to just these: College visits,
Application fees, Testing fees (SAT, ACT, etc), Housing deposits, tuition, Matriculation/holding fees, and textbooks. Analyze this budget. How will you pay for these? What savings do you have that can be used?
****11. Prepare your Federal and state income tax for the 1999 tax year (taxes due April 15, 2000). Analyze what you prepared. Did you expect the results you received? Why? What can you do to get the results that you want on an income tax return? You must turn in a copy of your tax return with the project.
Stock Market

1) Select ten stocks from the New York Stock Exchange and chart their progress for 30 days.
2) Research each of the companies selected and write a one to two page report on each stock. You should try to include the following:
A) History of the company (when founded, etc.)
B) What does the company do?
C) What are some of the major products/services that the company provided
D) Other pertinent information you deem necessary
3) At the end of the three weeks, analyze each of the companies' performance. Would this have been a good investment? Why or why not?
Possible Topics for Term Paper
1) Business relocation (must include from city to city, state to state and country to country)
2) Impact of the Federal Reserve System
3) Effect of starting a business
4) Immigration, emmigration and economics
5) Education and the economy
6) Rise of Internet trade
7) Corporate recalls (ex; Firestone tires)
8) Corporate Mergers
9) Lakor Strikes
10) Child and/or sweatshop labor
11) Financing college education (Or any major purchase)
12) Role of government in housing market
13) Crime and economics
Teaser #4 : A $100 sweater at Mendoza's Department Store is on sale for 50% off. An identical
$100 sweater at Hoffman's Department Store was originally market down 40%, but Hoffman's is having a clearance sale this week and is subtracting an additional 15% from its sale prices. At which store is the sweater cheapest?

Solution : At Mendoza's, the sweater is $100 - .5($100) = $50. At Hoffman's, the sweater was originally marked down to $100 - .4($100) = $60. With an additional 15% reduction, the new price is $60 - .15($60)= $51. It's cheaper at Mendoza's.
Teaser #6 : Tom sells 1,000 light bulbs a day in the US for $1 each. Since his total cost is $800 a day, he makes $200 in profit per day. One day, he learns of an opportunity to sell 1,000 additional light bulbs in France for $.50 each. If he boosted production to 2,000 light bulbs a day, his total cost would rise to $1,200, or $.60 per bulb. Should he sell $.60 light bulbs to the French for only $.50? (Assume that he can still sell 1,000 bulbs per day in the US for $1 each.)
Solution : Tom should produce the extra 1,000 light bulbs. His marginal revenue from each of the extra bulbs is $.50. But his marginal cost is ($1,200 - 800)/1,000, or $.40 per bulb. He'll make
$.10 on each of the 1,000 extra bulbs he produces. His average total costs are high because of high sunk costs, but these, of course, should be ignored.
Teaser #9 : Which is more valuable: a 2' X 2' X 2' box filled with 1-ounce Gold Eagle coins
(worth about $430 each) or a 3' X 3' X 3' box filled with 1/4-ounce Gold Eagles (worth about
$110 each)?
Solution : The larger box holds far more gold, so it's more valuable. (It doesn't matter that a 1ounce coin is more valuable than a 1/4-ounce coin. The 1/4-ounce coin is smaller so there are more of them per cubic foot.)
Teaser #10 : A professor asked her research assistant to find out if the average wage for females rose or fell over a ten-year period. That afternoon, the assistant returned and said, "I wasn't able to find anything on females, but I found out that the average wage for all workers fell during that period while the average wage for males rose. It must be therefore be true that the average wage for females fell." "Not necessarily," sniffed the professor. "It's possible that the average wage for females rose during that period, too." How could that happen?
Solution : As an example, suppose that 70% of the labor force was male and 30% was female and that their average wage rates were $10 and $7 respectively. The average wage for all workers would be (70% X $10 + 30% X $7) = $9.10. Now suppose that over the ten-year period the composition of the labor force changed so that 30% was male and 70% was female, and that their average wage rates rose to $11 and $8 respectively. The average wage for all workers would fall to (30% X $11 + 70% X $8) = $8.90.
Teaser #14 : When a woman working for a consumer polling firm asked three shoppers about their favorite ice cream flavors, two said they prefer chocolate to vanilla and two said they prefer vanilla to strawberry. After answering the woman's questions, the shoppers were treated to a free serving of ice cream, but they could choose between only two flavors: chocolate and strawberry.
To the woman's surprise, two of the shoppers picked strawberry. Had they lied to the woman about their preferences?
Solution : Not necessarily. The shoppers could have ranked the flavors this way:

One prefers chocolate to vanilla and vanilla to strawberry.
One prefers vanilla to strawberry and strawberry to chocolate.
One prefers strawberry to chocolate and chocolate to vanilla.
While two of the shoppers prefer chocolate to vanilla and two prefer vanilla to strawberry, it's also true that two prefer strawberry to chocolate. (Economist Kenneth Arrow used this sort of paradox to demonstrate that voting can sometimes lead to arbitrary results.)
Teaser #16 : A professor asked her research assistant to find out the average hourly wage of librarians in 2002. The research assistant looked for the information in Occupational Outlook , and found that the annual salary for librarians was about $43,000 a year. To calculate the hourly wage from that, he reasoned as follows: Out of 365 days, librarians don't work 16 hours a day, which comes to 243 days a year. They also have weekends off, which comes to 104 days a year.
They also get 10 days of vacation, and they're off on New Year's Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas, or 6 days a year. This means that librarians work only 365-243-104-10-6 = 2 days or 16 hours a year, so their hourly wage must be
$20,000/16 hours = $1,250/hour. When he showed that result to the professor, she said that he must be wrong. What was his mistake?
Solution : The 16 hours a day that librarians shouldn't have been taken off a second time for the
104 weekend days and the 10 vacation days and 6 holidays. Librarians work 365-104 - 10 - 6 =
245 days a year. On these days, they don't work 16 hours, which is the equivalent of 16/24 (245)
= 163.33 24-hour days. This means that they work an equivalent of 245 - 163.33 days, or 81.67
24-hour days, or 1,960 hours a year. The salary, then, would be $43,000/1960 hours =
$21.94/hour. This isn't a conventional way of calculating hourly salaries, though, since salaried workers are normally paid for vacations and holidays.
Teaser #18 : The Food Barn sells candy bars at a price of 5 for $1. Margaret bought $12 worth of candy bars there and resold half of them at a price of 3 for $1 and half at a price of 2 for $1. How much profit did she make (assuming her labor costs are zero)?
Solution : $13. She bought 60 candy bars for $12. Her revenue on the 30 candy bars she sold at
3/$1 is $10; her revenue on the 30 she sold at 2/$1 is $15. Total revenue less total cost is $25 -
$12, or $13.
Teaser #20: Andrew bought some shares of ABC Corporation and XYZ Corporation. A year later, he sold the ABC shares for $3,000 and the XYZ shares for $3,000. When he asked his broker if he’d made money on the stocks, she told his that the ABC shares had gone up by 50% and the XYZ shares had gone down by 50%. “Oh well,” sighed Andrew. “I guess I broke even.”
Did he?
Solution: No. Andrew must have bought the ABC stock for $2,000 and the XYZ stock for
$6,000. This means that the value of his portfolio dropped from $8,000 to $6,000 over the year.

Do unskilled immigrants hurt the American Economy?
Is Wal-Mart good for the economy?
Are Credit Card companies exploiting American consumers?
Bailouts Should our government bail out banks or companies? Why ar why not? How should our government make them accountable?
Should we have a government run bank?
Minimum wage is a price floor. Should we eliminate minum wage and let the factors of supply and demad determine wages? Why or why not?
An Economy without paper currency?
To aid or not to aid?
Fairness of salaries?
You are the leaders of a third world country. You have a major problem: You do not have enough resources to feed and take care of the healthcare needs of your people. You must make decisions. Who do you feed or provide healthcare for?
 FoodHealthcare
 1 -10 years old 30% ??
 11 – 60 years old50%??
 61 – 85 years old20%??
 You cannot exceed 100% You have a population of 1 million.

The law of demand states that:
Answer a. price and quantity demanded are inversely related. b. the larger the number of buyers in a market, the lower will be product price. c. price and quantity demanded are directly related. d. consumers will buy more of a product at high prices than at low prices
____ 3. Which of the following lists the four factors of production? a. land, labor, wants, entrepreneurs c. land, labor, capital, scarcity b. labor, needs, capital, entrepreneurs d. land, labor, capital, entrepreneurs
____ 4. Which of the following is NOT a capital good? a. a bulldozer at a construction site b. an oven at a bakery c. a cash register at a clothing store d.

a television set for sale at an appliance store
____ 1. Which of the following best describes the relationship between trade-offs and opportunity costs? a.
Opportunity costs are incurred when trade-offs are made. b.
Opportunity costs are the opposite of trade-offs. c.
Trade-offs lower the opportunity costs of an economic decision. d.
Trade-offs occur when there are no opportunity costs.
____ 3. Which of the following is NOT a characteristic of a production possibilities frontier? a.
It illustrates the concept of opportunity costs. b.
It is based on full employment of all resources. c.
It is used by economists as a tool for description and analysis. d.
It indicates the ideal production levels for goods and services.
One person’s benefit in the market is someone else’s loss.
Raising the minimum wage is the best way to help unskilled workers.

The Best Deal Challenge: This interactive activity or PDF worksheet will ask students to pick the best deal.

GLOSSARY
This is a list of technical terms used in the discipline of economics in contrast to terms used in everyday language. barter - the direct trading of goods and services between people without using money as an intermediate step. budget deficit - when the amount a household or government spends is greater than their revenues in a given period. capital resources - resources made by someone which are used to produce other goods or services; for example, machines, tools, factories. Also called physical capital and capital goods. command economy - an economy in which economic decisions are made largely by an authority such as a government planning agency. comparative advantage - the principle that a person, firm or country will be better off if it specializes in providing goods and services at a lower opportunity cost. competition - see "pure competition" complement - a good or service that is purchased in some proportion to another good or service, such as hot dogs and mustard. consumers - people who buy and use goods and services; also called buyers. corporation - a business organization having a continuous existence independent of its members
(owners), and power and liabilities distinct from those of its members. cost - something expended to obtain a benefit or desired result (opportunity cost) credit - an extension of money or promise by one party to pay another for money borrowed or for goods. currency - coins and paper money demand - the different quantities of a resource, good, or service that will be purchased at various possible prices during specific time period. division of labor - the process whereby workers specialize and perform only a single or a very few steps of a major production task; for example, adding grated cheese to a taco. economic freedom - consumption and production preferences are individually determined. economic growth - an increase in real gross domestic product.

economic incentives - factors that motivate and influence human behavior. For example: wages, interest, profits. economic system - a society's means of deciding what goods and services to produce, and how to produce and distribute them. economics – Social science concerned chiefly with the way society chooses to employ its limited resources, which have alternative uses, to produce goods and services for present and future consumption. efficiency - productive efficiency is getting as much output for as few resources as possible. equity - economic equity is the application of economic concepts of what is "fair" and what is
"unfair" to economic policy. People differ in their conception of what represents equity or fairness. Equity is not synonymous with equality. exchange rate - the price of one country's currency expressed in terms of another country's currency; the domestic price of a foreign currency. externality - benefit or cost effects on third parties that people did not take into account when they consumed or produced a good or service. For example: air pollution is a cost generated by consuming gasoline in an automobile. factors of production – human and nonhuman productive resources of an economy usually classified into four groups: land, labor, capital and enterpreneurialship. fiscal policy - a policy that uses changes in taxes and government spending to affect the level of aggregate demand in the economy. franchise - privilege given to sell products or services in a given area, for example, McDonalds,
Office Depot. free trade - unrestricted trade; trade without tariffs, quotas, or barriers. gross domestic product (GDP) - the market value of the total output of final goods and services produced in a given year within a nation's borders.
GDP per capita - gross domestic product divided by a nation's population. goods - objects that can satisfy people's wants. growth - see: "economic growth". human resources - workers or labor resources. incentives – something that arouses or stirs one to action.

income - payments (wages, rents, interest, profits) received for the provision of resources. inflation - a sustained increase in the average price level of the entire economy, measured by a rate expressed as a percent. interdependence - a situation where people or nations are mutually dependent because of trade. interest - the income paid to savers; also the cost for the use of credit. interest rate -percentage figure representing the price paid for the use of credit. investment - spending for the production and accumulation of capital resources. market - an institutional arrangement that helps bring about exchange between buyers and sellers. market economy -an economic system where most goods and services are exchanged through transactions between households and businesses. market structure - the physical characteristics of the industry market within which firms interact.
For example: the number of firms in the industry. medium of exchange - anything (usually money) that is accepted as payment for goods and services. mixed economy - economic system that contains elements of traditional, command, and market decision making. monetary system - a system that organizes the production and distribution of money and near moneys. money - any medium of exchange that has a standard of value, and a store of value. monopolistic competition - a market structure characterized by many firms producing differentiated products in a market with easy entry and exit. monopoly - control of the production and distribution of a product or service by one firm or a group of firms acting in concert; the absence of competition. national debt - the sum of all deficits experienced to date. See budget deficit. natural resources - things in a natural state that are used to produce goods and services. For example: land, minerals, and trees.

non-tariff barriers - legal and administrative obstacles to international trade placed on foreign goods and services which slow their importation into a country. These could include safety and environmental standards. oligopoly - a market structure containing just a few sellers. opportunity cost -the highest valued alternative that must be given up when another option is chosen. partnership - a business owned by two or more individuals. physical capital - see capital resources. price - the quantity of money paid for a good or service. property rights - legal rights to private property include the right to use goods in any manner so long as other people's property rights are not violated, the right to exchange private property, and the right to deny the use of private property to others. producers - people who combine natural, human, and/or capital resources to make goods or provide services. production - the output or goods and services resulting from the utilization of economic resources. productivity - the amount of output produced per unit of input; often measured as output per worker per hour. profit - the amount of a firm's total revenues in excess of its total costs. progressive tax - a tax system in which tax rates rise as incomes rise. proportional tax - a tax whose rate remains constant as the tax base grows larger. Also called a flat tax. proprietorship - the most simple type of business organization with usually a single person owning the firm. pure competition/perfect competition - a market structure characterized by many buyers and sellers, firms producing identical products, and no barriers to producers to enter and exit. quotas - a limit on the quantity of a good that may be imported in a given time period. regressive tax - a tax system in which tax rates fall as income rises. rent - a payment made for a natural resource, such as land.

restricted trade - trade with tariffs, quotas, or barriers. resources - inputs or factors used in the production of goods and services. Resources are generally categorized as land (natural resources), labor, and capital (man-made resources). saving - disposable income not spent for consumer goods. scarcity - the condition which exists because resources are in fixed or limited supply relative to demand. Thus a cost must be borne in order to obtain a resource when this condition exists. services - activities that can satisfy human wants; something that one person does for someone else, usually for a wage. specialization - a situation that occurs when people produce a narrower range of goods and services than they consume. Occurs when different people do very specific jobs to make a product or provide a service. sole proprietorship - see proprietorship. stability - stability in an economy implies low inflation and steady growth rates. substitute - a good or service that can replace one another, such as butter or margarine. supply - the different quantities of a resource, good, or service that will be offered for sale at various possible prices during a specific time period. tariff - a tax or duty imposed on imported goods. tax - a non-voluntary payment to a government for which no good or service is directly received in turn. technology - the application of scientific knowledge and activities to the production of goods and services. trade-off - accepting or choosing less of one thing to get more of something else. traditional economy - both production and distribution is based on procedures devised in the distant past and maintained by law, custom, or belief. unemployment rate - the amount of people in the labor force without jobs; can be measured as a rate and expressed as a percent. unfunded mandates – an official command, order, or charge by the government to do something with no funds provided. wages - payment for human resources or labor; this payment is also known as salaries.