The student will understand the fundamentals
of the market system.
 The student will understand the definition of
Economics.
 The student will understand why people have
to make choices and that with choosing
comes consequences.
 The student will understand that with every
benefit there is always a cost.

Economics
 Scarcity
Market
Economy
 Opportunity Cost
 Entrepreneurship
 Incentives
 Supply
Demand
 Price
 Benefits
 Costs
 Utility
Labor
Standard 1 : Scarcity
Productive resources are limited. Therefore,
people can not have all the goods and services
they want; as a result, they must choose some
things and give up others.
 Standard 2 : Marginal Cost/Benefit
Effective decision making requires comparing the
additional costs of alternatives with the
additional benefits. Most choices involve doing a
little more or a little less of something: few
choices are "all or nothing" decisions.



Standard 3 : Allocation of Goods and Services
Different methods can be used to allocate
goods and services. People acting individually
or collectively through government, must
choose which methods to use to allocate
different kinds of goods and services.
Standard 4 : Role of Incentives
People respond predictably to positive and
negative incentives


6-12, Knowledge in the Disciplines
Content area teachers outside of the ELA
classroom emphasize literacy experiences in
their planning and instruction. Students learn
through domain-specific texts in science and
social studies classrooms – rather than
referring to the text, they are expected to
learn from what they read.


Academic Vocabulary
Students constantly build the vocabulary they
need to access grade level complex texts. By
focusing strategically on comprehension of
pivotal and commonly found words (such as
“discourse,” “generation,” “theory,” and
“principled”) and less on esoteric literary
terms (such as “onomatopoeia” or
“homonym”), teachers constantly build
students’ ability to access more complex
texts across the content areas.


Text-based Answers
Students have rich and rigorous
conversations which are dependent on a
common text. Teachers insist that classroom
experiences stay deeply connected to the text
on the page and that students develop habits
for making evidentiary arguments both in
conversation, as well as in writing to assess
comprehension of a text.
A Cost is something
you give up in
making a choice
A Benefit is
something you
gain.
What would be the
costs and the
benefits of doing
this now?
Why have you
chosen to do
this instead?
What are the
costs and
benefits?
WHY MUST YOU CHOOSE?
BECAUSE OF SCARCITY
SCARCITY TELLS ME I
CAN’T DO BOTH, I
HAVE TO MAKE A CHOICE.
SINCE YOU CAN’T HAVE
EVERYTHING YOU WANT
ECONOMICS HELPS US
GET THE MOST OUT OF
WHAT WE CAN HAVE.
Have you ever heard the phrase:
“There is no such thing as a free lunch”?
EVEN THOUGH
THE SIGN SAYS
SO, IS IT TRULY
FREE? I MAY NOT
GIVE UP MONEY,
BUT WHAT AM I
GIVING UP BY
ATTENDING?
What is the Opportunity Cost of the following
choice?
 Buying a gift for a friend.
 Working at a job after school.
 Waiting on line for an hour to buy a new cell
phone.
 Playing on your X-Box for two hours after
dinner.
Did you all have the same answers? Why not?
Economics is the
study of how
people make
choices. When you
make a good
economic decision
the benefits will be
greater than the
costs.
He made a good decision
He made a bad decision
INCENTIVES are
things such as
rewards that
motivate a person
to do something.
Punishment is
meant to be a
disincentive.
WHY DO PEOPLE MAKE THE DECISION TO GO
INTO BUSINESS FOR THEMSELVES?
WHAT ARE THE INCENTIVES?






PROFIT
BE YOUR OWN BOSS
FREEDOM
FILL A NEED
HAVE MORE CONTROL
OVER MY WORK
SCHEDULE
PAID MORE FOR MY
WORK
BENEFITS




GREAT CHANCE OF
FAILURE
NO ONE TO SHARE THE
COSTS WITH
NO ONE TO SHARE
RESPONSIBILITIES OR
SKILLS
DO THE JOB OF THE
WORKER AND THE
BOSS
COSTS
THERE WAS A TIME WHEN THE MAJORITY OF
ADULT AMERICANS SMOKED AND PEOPLE
THOUGHT IT LOOKED COOL.
WE GOT EDUCATED
NOW LESS THAN 25%
OF THE U.S.
POPULATION
SMOKES AND THE
NUMBERS HAVE
BEEN SHRINKING
FOR DECADES.
WHAT CHANGED?






SCARCITY TELLS US WE CAN’T HAVE EVERYTHING
WE WANT
EVERY DAY OF OUR LIVES WE HAVE TO MAKE
CHOICES
IN MAKING CHOICES WE WEIGH THE BENEFITS
AGAINST THE COSTS
NOTHING IS FREE, THERE IS ALWAYS AN
OPPORTUNITY COST
A GOOD ECONOMIC DECISION CREATES MORE
BENEFITS THAN COSTS
INCENTIVES HELP US TO CHOOSE
When the word
MARKET is said,
what are some
examples or
images that
come to mind?








FLEA MARKET
STOCK MARKET
FARMERS’ MARKET
GROCERY STORE
BOSTON MARKET
WAL-MART
HOUSING MARKET
JOB MARKET
Buyers arrive
with money
looking to
purchase things.
 Sellers offer
goods or services
in exchange for
money.

What are some
characteristics
that all of these
examples have
in common?



Buyers won’t be satisfied if they value the
money in their pockets more that the items
for sale.
Sellers won’t be satisfied if they value the
items for sale more than the buyers are
willing to pay.
Both buyers and sellers have an incentive to
reach a compromise price in order to be
mutually satisfied.
THE WORLD’S
ECONOMIES
PROVIDE US
WITH A LOT OF
CHOICES AND
THE WORLD’S
SHOPPERS HAVE
A LOT OF
DIFFERENT
INTERESTS.
IN AMERICA, WE
HAVE A LOT OF
FREEDOM TO
DECIDE WHAT
WE WANT TO DO
WITH OUR LIVES
AND HOW WE
WANT TO SPEND
OUR MONEY
SUPPLY
DEMAND
WHY DOES THIS GUY
MAKE $30,000,000?
WHY DOES THIS GUY
MAKE $7.25?




WE LOVE BASKETBALL, ESPECIALLY HIGH
FLYING AND ACROBATIC DEFYERS OF
GRAVITY ( HUGE DEMAND)
THERE’S ONLY ONE LeBRON (TINY SUPPLY)
WE LOVE FAST-FOOD THOUGH WE KNOW IT’S
NOT GOOD FOR US (HUGE DEMAND)
THERE ARE SEEMINGLY ENDLESS CHOICES FOR
IT AND THE PROCESS OF MAKING IT DOESN’T
REQUIRE UNIQUE SKILLS. JUST ABOUT
ANYONE CAN FILL THE JOB. ( EVEN BIGGER
SUPPLY)
It’s the Motorola DynaTAC
8000X , the world’s first
cell phone. It went on
sale March 6, 1983 and
the initial price was
$3995 ($9322 in current
dollars). It had enough
battery life for 30
minutes of talk, its
memory could store 30
phone numbers, and
there was a waiting list of
thousands anxious to
buy it.
Today we have cellular technology that allows for all
kinds of communication, video streaming, and
downloads with more computing power and memory
then the technology that sent all of our astronauts to
the Moon. Many are given away with service contracts.
HOW DID THAT HAPPEN?




IN 1983, ONE COMPANY MADE CELL PHONES WITH
VERY EXPENSIVE PARTS AND A GREAT AMOUNT OF
COSTLY LABOR (TINY SUPPLY)
PEOPLE WERE CRAZY ABOUT IT AND WAITED FOR
MONTHS BEFORE DELIVERY (BIG DEMAND)
IN 2011, MANY COMPANIES MAKE A VARIETY OF
PHONES WITH VERY INEXPENSIVE PARTS AND VERY
LITTLE HUMAN LABOR INVOLVED (HUGE SUPPLY)
MOST CONSUMERS HAVE A PHONE AND SPEND
MOST OF THEIR MONEY ON SERVICES (DEMAND IS
SLOWING DOWN)
1.
2.
3.
4.
5.
A TICKET TO SEE YOUR FAVORITE FOOTBALL
TEAM NOW THAT THEY’VE MADE THE PLAYOFFS
A GALLON OF GASOLINE AFTER A HURRICANE
SHUTS DOWN OIL DRILLING PLATFORMS IN THE
GULF OF MEXICO.
A BUSHEL OF CORN AFTER FARMERS IN IOWA
DISCOVER A MORE POWERFUL FERTILIZER.
A PAIR OF DESIGNER JEANS AFTER EVERYONE’S
FAVORITE CELEBRITY IS SEEN WEARING THEM
THE NIGHT BEFORE ON AN AWARDS SHOW.
A BIG MAC AFTER RESEARCHERS DETERMINE
THAT EATING TOO MUCH FAST FOOD CAUSES
STUDENTS TO GET LOWER GRADES.

IN ORDER FOR THE MARKET
TO WORK IT MUST BE OPEN
TO EVERYONE




MARKETS ARE CREATED TO
ALLOW BUYERS AND
SELLERS TO PROFIT.
SELLERS MAKE MONEY AND
BUYERS GET THE ITEMS
THEY’RE LOOKING FOR.
THE PRICE HELPS BUYERS
MAKE DECISIONS ON WHAT
THEY WILL PURCHASE AND
HELPS SELLERS DETERMINE
WHAT THEY SHOULD
PRODUCE.
WAGES ARE DETERMINED BY
THE SUPPLY AND DEMAND
FOR THE JOB SKILLS
OFFERED.