UNIT ONE: LEARNING OBJECTIVES:
North Clackamas School District Social
Studies Priority Standards:
 Econ 53. Describe characteristics of
command, market, traditional, and mixed
economies and how they affect jobs and
standards of living.
 Econ 59. Demonstrate the skills and
dispositions needed to be a critical
consumer of information.
WE WILL BE USING CORNELL NOTE
TAKING FORMAT TODAY!
Mr. Kirby’s Class: “The world of overused quotes and clichés!
Don’t be a victim…..
Own the Day!
LESSON TWO: DAILY LEARNING TARGET
I Can define and explain in writing:
Kirby’s Kickin Six
Economic Reasoning Principles
They’re good?
Know these Economic Reasoning Principles
And become: “King of the World!”
ECONOMIC REASONING
PRINCIPLES
(AKA “ERPS”)
.
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To start with, let’s be perfectly clear……These are not
Economic Reasoning Principles:
“A Penny Saved is a Penny earned!” (Ben Franklin)
“Black and White is Always right!” (A Fashion RuleUnknown)
Close only counts in horseshoes and hand grenades!
(Captain “Skip” “Lefty” Nichols-Civil War: Confederate
Army).
“How much would would a wood chuck chuck if a wood
chuck could chuck wood?” (A pointless question with no
answer-also a Geico commercial”
“Never Eat anything with the word “wiz” in it (“Cheese
Wiz” comes to mind”)
LIGHTENING NEVER STRIKES IN THE SAME SPOT
TWICE!! (SEE VIDEO CLIIP TO DISPROVE THIS THEORY!)
From 3!
From 3!
KIRBY’S ECONOMIC
REASONING PRINCIPLE #1

People choose, and
individual choices are
the source of social
outcomes.
IS
WHY DO PEOPLE HAVE TO MAKE A
CHOICE?

Scarcity forces us to choose

Unlimited wants > limited resources

Not making a choice is itself a choice

Based on perceptions of expected costs and
benefits of alternatives

Factors driving choices can be material,
behavioral, moral, or some combination of all
three.
TRADE-OFFS
Remember Trade Offs Here:
What
is given up whenever a course of
action is chosen over another.
All Individuals, Businesses,
Governments, and Large Groups of
People face Trade-offs (“Guns or
Butter”).
KIRBY’S KICKIN SIX
ECONOMIC REASONING PRINCIPLE #2
ALL CHOICES INVOLVE
COSTS:

People receive
benefits and
incur costs when
they make
decisions.
OPPORTUNITY COST
Opportunity Cost:
 The
cost of a choice is the value of the next-best
alternative foregone, measurable in time or money;
NOT NECESSARILY A MONETARY VALUE

It is not what “could” you do, but what “would” you do

Every decision/choice has an opportunity cost…no
matter what!
WOULD YOU PICK THESE UP IF YOU
APPROACHED THIS?
What would be the opportunity cost of this decision?
WOULD YOU PICK THIS UP IF YOU APPROACHED
THIS?
What is the incentive to pick up this
as opposed to the pennies?
KIRBY’S KICKIN SIX
ECONOMIC REASONING PRINCIPLE #3
PEOPLE RESPOND TO INCENTIVES IN
PREDICTABLE WAYS.
 Choices are influenced by
incentives, the rewards that
encourage and the punishments
that discourage actions. When
incentives change, behavior
changes in predictable ways.
KIRBY’S KICKIN SIX ECONOMICREASONING PRINCIPLE #3 (C0NT.)
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PEOPLE RESPOND TO
INCENTIVES IN
PREDICTABLE WAYS.:
Sales
Coupons
Free gifts/trips
Prizes/drawings/Give
-a-ways
Contests
Airline Mileage
KIRBY’S KICKIN SIX ECONOMIC REASONING
PRINCIPLE #4
 Institutions
are the
“rules of the game”
that influence
choices.
INSTITUTIONS INFLUENCE CHOICES:

•
•
•
Laws, customs,
moral principles,
superstitions, and
cultural values
influence people’s
choices within an
economic system
What to Produce?
How to Produce It?
For Whom to
Produce It?
CAN INSTITUTIONS CHANGE? OH YES!
About 30 years ago, China began legal changes
designed to mimic those of capitalism
 Result: per capita income now > six times
higher than it was
 About 30 years ago, Zimbabwe began undoing
the capitalist institutions that had made it
among richest in Africa
 Result: per capita income now roughly ninety
percent lower than it was

THE POVERTY OF SOME NATIONS AND THE WEALTH OF
OTHERS IS NOT AN ACCIDENT; IT IS THE RESULT OF CHOICES
KIRBY’S KICKIN SIX ECONOMIC REASONING
PRINCIPLE #5
VOLUNTARY
TRADE CREATES
WEALTH:
I
VOLUNTARY TRADE CREATES WEALTH:
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Trying to produce
everything yourself
limits both production
and consumption
What do you “do
best”?
• Sell what you
produce
• Buy what you can’t
KIRBY’S KICKIN SIX ECONOMIC REASONING
PRINCIPLE #6
 CONSEQUENCES
OF OUR
CHOICES LIE IN
THE
I FUTURE.
Bryan Lee Curtis
Diagnosed with
Lung cancer at age 31
from smoking.
WHY DO WE TRADE?
Directions: Get out a piece of notebook paper-We will debrief
after simulation and turn in as an ”Exit Ticket” on the way
out the door.
Step # 1: Brainstorm a list of reasons we trade
(buy/sale/trade)?:
WHY DO WE TRADE?
Possible Answers:
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Get new stuff
Better stuff-Trade up
Get rid of stuff-” pawn it off on someone”
Old stuff, unwanted junk
Sometimes we trade down (“down size”)
Economize
New Choices/New Opportunities
Better lifestyle
Make Money!!!
Get a good deal!
Take advantage of someone
Allocating Resources Evenly?
Economic systems influence individual choices.
Systems (governments) ask three main questions
when allocating resources……….
WHAT?
How? For Whom?
Step #2: Allocating Resources Evenly?
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Your table group/our class as a whole is part of an
economic system.
Resources are scarce-we have only one at this
time…….
How can I allocate this candy bar to the various
members of the class? (evenly and/or unevenly?)
Each of you write down the possibilities as you
brainstorm with your group.
Allocating Resources Evenly?
Possible Responses Given:
 Divide evenly into equal parts
 Give it as a reward/incentive
 Trade for something (I like skittles/starbursts)
 Give it to someone who is needy/hungry
 Lottery
 Auction-out loud or silent the highest bidder
Imagine the
Possibilities!
The Gift That Keeps on Giving?
“A brown bag activity”
RULES:
 Pick out a bag-It is a gift from me to you!
 You cannot: shake it, touch it, open it or look
inside OR
 I will take your bag back.
 Set it on your desk and imagine the possibilities
inside!
Now Rate your Bag on your paper on a
scale from 1-5
without looking inside of it yet.
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A Score of 5 means this bag is exactly what I want! I am
extremely satisfied with this gift.
A Score of 1 says: “Thanks for nothing chump!”
2,3,4 means something in the middle
Round ONE Trading
RULES: WITHOUT OPENING YOUR
BAG,YOU CAN MOVE AROUND
FREELY ABOUT THE ROOM FOR
ONE MINUTE AND TRADE OR
STAY SEATED AND NOT TRADE.
NO TALKING, ONLY HAND
GESTURES! GO!!!
NOW PEEK INSIDE!!!
Now Rate your Bag on your paper on a
scale from 1-5
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A Score of 5 means this bag is exactly what I want! I am
extremely satisfied with this gift.
A Score of 1 says: “Thanks for nothing chump!”
2,3,4 means something in the middle
Round TWO Trading
RULES: YOU CAN MOVE AROUND
FREELY ABOUT THE ROOM FOR
TWO MINUTES- TRADE IF YOU
WOULD LIKE-NO TALKING, ONLY
HAND GESTURES! GO!!!
Round THREE Trading
RULES: YOU CAN MOVE AROUND
FREELY ABOUT THE ROOM FOR
TWO MINUTES- TRADE IF YOU
WOULD LIKE-TALK,BARTER-BE A
REAL PERSAUSIVE USED CAR
SALESMAN HERE!
Now Rate your Bag ONE LAST TIME on
your paper on a scale from 1-5
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A Score of 5 means this bag is exactly what I want! I am
extremely satisfied with this gift.
A Score of 1 says: “Thanks for nothing chump!”
2,3,4 means something in the middle
Final Reflection Questions:
1. Why did you or didn’t you trade in round
one?
2. Did your attitude change after you looked at
it? Why?
3. What motivates people to trade?
4. Why do think trades happen?
Trades Must be mutually beneficial to
both parties for them to take place!
There must be an offer and an acceptance
A Win Win Proposition!
Unless ……….someone in power is taking advantage of someone
else