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What Role Does Texas Council on Economic Education Play?
The Texas Council on Economic Education (TCEE)
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ONLINE ECONOMICS AND
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GEN I REVOLUTION TEACHES
FINANCIAL LITERACY THROUGH
PROBLEM SOLVING
15
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Inflation
Deflation
Disinflation
Laura Ewing
President/CEO
Texas Council on Economic Education
www.economicstexas.org
www.smartertexas.org
Laura@economicstexas.org
713-655-1650
•1.
how Texans make a living
•2. where people settle
•1.
Land
•2. Labor
•3. Capital
•4. Entrepreneurship
What do you know about the
economy of the 13 colonies?
 Write at least three things about the economy of the 13
colonies.
 Share your answers with a partner.
 Listen as three students share their answers with the
class.
Visual 4.2: % of Distribution of
Total Colonial Trade (1768 to 1772)
% of Colonial
Imports of G & S
% of Colonial
Exports of G & S
United Kingdom
80%
56%
West Indies
18%
26%
2%
18%
0%
1%
Southern Europe
Africa
Role of property rights
 Use these concepts to explain the free enterprise








system in colonial America:
Property rights
Incentives
Productive
Specialization
Trade
Global economy
Investments
profits
What is the difference?
Good:
Service:
Which of the items on the list are goods and which
are services?
Rank order: which do you think most important to
least important.
The Costs and Benefits of American
Independence
 Review the lesson
 What are the key components of the lesson?
 What would you do differently?
What do you know about the US
Articles of Confederation and
U.S. Constitution?

Years?


Purpose?

Who wrote?

Why?
U. S. Constitution
 First Continental Congress met September 5, 1774 in
Philadelphia in response to the Coercive Acts
(Intolerable Acts) passed by Parliament which had
punished Boston for the Boston Tea party
 Agreed to petition King George for redress of grievances
 12/13 colonies attended with 56 people (only Georgia, the
convict state not included)
 First CC agreed to meet again next year
 Shot heard ‘round the world in Lexington 1775
Second Continental Congress
 Began meeting in Philadelphia May 1775
 Organized the war effort
 Commissioned writing of Declaration of
Independence
When in the course of human events, it becomes
necessary for one people to dissolve the political bands
which have connected them with another, and to
assume among the powers of the earth, the separate
and equal station to which the Laws of Nature and of
God’s Nature entitled them…should declare the causes
which impel them to the separation.
Declaration of Independence
 We hold these truths to be self-evident, that all men are
created equal, that they are endowed by their Creator with
certain unalienable Rights, that among these are Life,
Liberty and the pursuit of Happiness-that to secure these
rights, Governments are instituted among Men, deriving
their just powers from the consent of the governed, That
whenever any Form of Government because destructive of
these ends, it is the Right of the People to alter or to abolish
it, and to institute new Government…Right to revolt…after
a long train of abuses…
 List of grievances
 John Hancock’s signature
 Written by Thomas Jefferson
Economic Problems During the
Articles of Confederation
 Debt
 Taxation
 Tariff Battles
 Military Weakness
A New Nation in 1781:
One Nation or Thirteen?
 Guidelines for the activity:
 1. Individually read the problem and the predicting





consequences.
2. Succinctly state the problem in one sentence.
3. What do you think the consequences will be?
4. Work in a small group and compare your problem
sentences. As a group restate the problem statement.
5. As a group, restate what you predict the
consequences will be.
6. Share your answers with the class.
Processing Activity on
Articles of Confederation
 How did the Articles reflect the wishes of a people
vying for less centralized power?
 What were issues with the Articles?
 What will happen as a result of the issues?
The U. S. Constitution:
The Rules of the Game
 What is the role of the government in the U.S. market
economy?
 Constitutional Convention
 May to September 1787
 September 17, 1787 is Constitution Day
The U. S. Constitution: The Rules
of the Game
 The new nation was in financial crisis.
 The new states sent 55 leaders to amend the Articles of
Confederation.
 They met from May until September 1787.
 They quickly learned that they needed to make
substantial changes. They wrote a new Constitution
based on Adam Smith’s concepts of economic
freedom.
 What were the new rules of the game?
The Constitution:
Rules for the Economy
 As you participate in the activity, notice the new rules of the game, why
they were established, and the expected outcomes.
 Read Economic Freedom and the Founders
The Particular:
Name and summary of
statement
1.
2.
3.
4.
5.
6.
Location
In US Constitution
Based on the rule,
how would you
decide on the
question?
Rules of the Game and YOU
 What are three ways that the rules of the game affect
you:
 Economically?
 Personally?
ACTIVITY 19.1. THE COUNTERFACTUAL:
WHAT IF THE U.S. CIVIL WAR HAD NOT BEEN
AVOIDED?
• 1. What is Lebergott’s belief about the impact of
the Civil War on industrialization?
• 2. Give two reasons why you agree or disagree
with his statement.
• 3. Without the war, would the U.S. have
industrialized after 1865?
• 4. How would war resources have been otherwise
used?
• 5. What may have been the opportunity cost of the
Civil War?
PROCESS
• How did the Civil War stimulate the economy?
• How do you respond to this statement? Provide
reasons for your response.
We cannot confuse chronology with cause and
effect. The Civil War did precede an
unprecedented expansion of the U. S. economy
during a period of industrialization. However, this
does not mean that the Civil War caused the
economy to grow. How would the economy have
proceeded without the Civil War?
THE DEMAND FOR IMMIGRANTS
EXAMINE AN ECONOMIC MYSTERY AS TO WHY SWEDISH FARMERS MIGHT HAVE
COME TO THE U.S. IN 1880
STUDY VISUALS TO DETERMINE YOUR ANSWER
USE SUPPLY AND DEMAND ANALYSIS TO EXPLAIN WHY THE KING TRIED TO
CONVINCE THEM TO RETURN
WHY DID IMMIGRANTS COME TO THE U.S. LATE
1800’S?
1865 to 1920 = 28 million + to U.S.
Sought higher standard of living
Join family and friends
Needed jobs due to surplus labor abroad
Escape religious persecution
Read advertisements of promises for better life
Why do you think Swedish immigrants would have
abandoned their lands in the late 19th and early 20th
centuries to come to the U.S.?
DISCUSS VISUAL 22.I
Read the advertisement distributed to farmers in Sweden in the 1880’s by
representatives of Union Pacific Railroad.
RR companies wanted to sell land, establish farmers in west who would sell and buy
products distributed by the railroads. RR built ahead of demand.
Use visual 22.1 and Activity 22.1 to read and answer the questions in context of the
information given.
Three rules of economic decision-making include that people:
 Decide based on the most advantageous combination of costs and benefits
 Respond to incentives in predictable ways
 Must deal with the rule of the economic system and their influence on choices and
incentives
VISUAL TWO
REVIEW THE STATISTICS
ESTIMATE HOW MANY IMMIGRANTS ARRIVED IN THE U.S. BETWEEN 1871-1920.
WHAT HAPPENED IN THE 1870’S AND 1880’S AND 1916-1920 THAT HAD AN
IMPACT ON IMMIGRATION?
REMINDERS
THE MARKETS ALLOCATE SCARCE RESOURCES. WHAT ARE THE SCARCE RESOURCES
HERE?
WHAT ROLE DO IMMIGRANTS PLAY?
WHAT ROLE DO EMPLOYERS PLAY?
VISUAL 22.2: MIGRATION TO THE UNITED STATES
WHAT MIGHT HAVE BEEN PUSH FACTORS?
WHAT MIGHT HAVE BEEN PULL FACTORS?
WHAT WERE THE EXPECTED BENEFITS AND
COSTS FOR THE SWEDISH FARMERS?
IF YOU HAD LIVED THEN, WOULD YOU HAVE
MIGRATED TO THE U.S? EXPLAIN.
WHAT CAUSED A
RETURN TO SWEDEN?
WHY WOULD SUCCESSFUL SWEDISH FARMERS DECIDE TO RETURN TO SWEDEN?
VIEW VISUAL 3
P5
P4
P3
P2
P1
Q1
Q2
Q3
Q4
Q5
CLOSURE
IN WHAT WAYS CAN IMMIGRATION BE VIEWED AS ACTION TAKING PLACE WITHIN AN
INTERNATIONAL MARKET OF BUYERS AND SELLERS?
WHY DID IMMIGRANTS COME TO THE UNITED STATES?
WHY DO PEOPLE MOVE?
VISUAL 4.1
GEOGRAPHIC MOBILITY
What is significant about each
figure and why do you think these
changes happened?
•Figure 1?
•Figure 2?
•Figure 3?
TERMS
•Migration
•Immigrants
•Emigrants
•Benefits
•Costs
•Push and Pull
COSTS AND BENEFITS?
BABYSIT FOR $6.00 FOR UNRULY KIDS
OR BE WITH FRIENDS?
Costs
Benefits
PUSH AND PULL FACTORS
PUSH
PULL
Costs of present location that Benefits of new location
drive people away
because it has advantages
REASONS FOR MIGRATION
1.You will be assigned one card from Activity
4.1.
2.You will answer questions on Activity 4.2.
3. Complete the chart based on reading.
Push Factors for Migration
Pull Factors for Migration
AND THE POINT IS?
TEXAS COUNCIL ON ECONOMIC EDUCATION
1801 Allen Parkway
Houston, TX 77019
713.655.1650
www.economicstexas.org
VOCABULARY AND CONCEPTS
Human capital
Skilled workers
Unskilled workers
Emigration
Immigration
Brain drain
FOCUS: LET’S BEGIN
Why do people migrate?
What are the concerns about immigration?
What are the concerns about emigration?
CONTENT STANDARDS
1. How and why do people react to incentives?
2. What role do incentives play?
3. What determines the income people earn?
OBJECTIVES
Explore economic incentives that lead to migration,
both economic and non-economic
2. Describe the difference between skilled and
unskilled workers and the effects of immigration on
both
3. What are the economic effects of immigration
4. Define/discuss cause and effect of brain drain
5. Illustrate impact of immigration on wages using
supply and demand diagram
1.
STUDENT FOCUS
1. Do you know anyone who was born in a different country?
2. Was anyone in your family born in a different country?
UNITED STATES: NATION OF IMMIGRANTS
Melting pot
Salad bowl
US 31 million
born elsewhere
11 % of US population
Define: Emigration & Immigration
Why do people come to the US?
VISUAL 1: U.S. IMMIGRANTS BY CLASS
OF ADMISSION, 2004
What are three facts that you can learn from the chart?
Summarize the point of the chart
Continue looking at the other charts
WHY IS IMMIGRATION TO US DIFFICULT?
Why do people need to be related to a citizen or resident?
Why else is it difficult to immigrate?
Doctor
WHO SHOULD BE ALLOWED TO
IMMIGRATE TO THE UNITED STATES?
Teacher
Construction worker
Agricultural worker
Computer programmer
WORKERS
What is the difference between skilled and unskilled workers?
“Most countries have adopted immigration policies that are at least partly based on
workers’ occupation or skill level.”
VISUAL 2: VISAS
What is a visa?
What are three facts you can learn from the chart?
How would you summarize the point of the chart?
WHAT ARE THE DIFFERENCES BETWEEN Permanent residence status
Temporary Worker Visas
ECONOMIC REASONS FOR IMMIGRATION INTO THE UNITED
STATES ARE –
WHAT IS HUMAN CAPITAL?
What impact do immigration and emigration have on
human capital in a market?
Why is human capital important in a global economy?
What role do wages play with immigration?
ROLE PLAY: 20 MINUTES
You will be assigned a particular role from Activity One.
(pages 190 to 195)
Follow the instructions on page 188:
Play the role but you can improvise
Interview 5 people to find out how each has been
affected by migration. Would they agree or disagree
with laws to limit immigration?
As you interview, complete the chart on page 189
Summarize the most important statements
Decide whether or not each would favor laws to make
migration easier.
DISCUSSION
Based on what you have learned, discuss who
gains and who loses from immigration?
Use these terms as you discuss your answers –
Host country
home, source, native country
Remittances (cards 9 and 14) – transfer
Returnees - reverse immigration
WHO IS HELPED? WHO IS HURT?
Why is immigration restricted in the US?
Discuss Visual 3
Why does the United States allow immigration
with the “negative” impact displayed on
Visual 3?
UNSKILLED WORKERS
What are the advantages and disadvantages of
allowing more unskilled immigrants into the
United States?
What are the advantages and disadvantages of
skilled workers?
COMPARE AND CONTRAST
1. Do you believe that the benefits of immigration by skilled workers are greater than
the benefits of immigration by unskilled workers?
How do you contrast the benefits of the immigration of skilled workers with the costs
of emigration by skilled workers?
How do you use the term brain drain in your examples?
BRAIN DRAIN
Read Visual 4 and describe the main points
Study Visual 5 and summarize the information
What do you notice about the information in Visual 6?
What is the message in Visual 7?
COMPARE AND CONTRAST
The supply and demand of labor in the host country before and after immigration with
The supply and demand of labor in source country before and after emigration
?
WHY DOES THE UNITED STATES
Attract so many workers, both skilled and unskilled?
Offer higher wages than many other countries?
DEBATE
Using topics A, B, and C on page 177, debate the pros and cons of each issue one at
a time.
AND THE POINT IS?
1.
2.
demand supply
price boomtown
goods and services profit
entrepreneur production
•25
new families moved into your
neighborhood and every neighborhood in
your area?
•there were so many more people…what
would you need?
•25
new families moved into your
neighborhood and every neighborhood in
your area?
•there were so many more people…what
would you need?
What do you see in these photos from 1901?
What do you think these photos represent?
Where is Beaumont, Longview?
•Beaumont
population grew from 9,000 people to 50,000 in three
months.
•Breckinridge population went from 600 in 1918 to 30,000 in 1919
•February 1931 Longview grew from 5,000 to 10,000 in 2 months
•How
would their lives have changed????
1.
2.
3.
4.
5.
6.
7.
You are going to be in six different groups.
Your group will read one primary source together.
What goods and services are limited in supply?
What factors caused an increased demand for G & S?
What new occupations developed? Why?
Are your lists of important goods and services the same as
those 100 years ago? Explain.
What examples of entrepreneurship are there? What are
examples of profit motive?
•Share
your answers with your expert group.
•Switch groups and share what you learned
about the new story
1.
2.
3.
Pretend that you live in a community that
will soon have a huge boom in population.
It is a fictional town in the panhandle of
Texas in Floyd County. There are 125
people now. You are close to highway 70.
Oil has been discovered and 1000
population is expected within 2 months
1.
2.
3.
Floyd County: 125 to 1000 population in 2 months
One gas station which sells groceries (mainly milk
and bread)
Work in small groups to:
1.
2.
3.
A. List problems
B. What goods and services will they need?
C. Make a list of actions needed to help people deal with
population boom.
. Please read your section of the article:
http://stateimpact.npr.org/texas/tag/fracking/?gclid=CO7
FraGdp7ACFWLktgodhx46Yw
Answer the following questions.
1.
What is fracking?
2.
Where is the fracking taking place?
3.
What are three important points about what is happening
4.
Using the map, what do you notice about locations?
Read your segment of the Eagle Ford Fracking Article and
provide pro and con arguments concerning fracking.
http://www.bloomberg.com/news/2011-12-20/eagle-forddrilling-rush-may-boost-texas-tax-revenue-15-fold.html
You will meet with several other students. Each person will
explain pros and cons of fracking. Make a list of the pros and
cons discussed. Next, choose one pro and one con. Make a list
of what you think the next steps should be for these?





http://www.texastribune.org/2012/07/13/midla
nd-oil-boom-strains-housing-schools/
$1,500 for a 400 square foot cabin in Midland
oil prices are hovering above $80 a barrel, more
than double their level of early 2009,
Permian Basin accounts for 14 percent of the
nation’s oil production.
population has swelled by about 8 percent in the
last two years, to about 120,000. There is talk of
eventually hitting the 150,000 mark.
Unemployment in Midland in May stood at just
3.8 percent — the lowest for a metro area in the
state — followed by nearby Odessa at 4.3 percent.





oilfields offer generous pay, starting around
$15 an hour
Besides subdivisions, cabins and RV parks,
which are sometimes dubbed “man camps,”
hotels are rapidly going up.
Modessa — it’s going to happen eventually
traffic fatality rate for the Permian Basin area
in 2010 was 2.5 times higher than in the rest of
the state
housing shortages, busy roads and bursting
schools.

http://www.statesman.com/weblogs/salsaverde/2014/aug/13/texas-fracking-has-includeddiesel-fuel-according-/

http://stateimpact.npr.org/texas/tag/fracking/

http://earthjustice.org/features/texas-and-fracking


http://www.sourcewatch.org/index.php/Texas_and_
fracking
http://stories.weather.com/fracking
Beaumont early
1900
What was the discovery?
Compare the roles that technology played in the
discovery.
Compare the roles that geography played in the
discovery.
What impact did these discoveries have on
urbanization?
What were similar lifestyle and social changes and how
the people handled them?
What were differences in lifestyles and social changes
and how people handled them?
Small towns
2000s


What is the point?
What are the similarities and differences
between Spindletop and today?
VE 4 LESSONS ON EARLY RECESSIONS
Teaching Financial Crises:
Lesson 1: A Comparison of the Panic of 1907 to the Crisis that Began in 2007
Lesson 2: How Economic Performance from 2007 to 2009 Compares to Other
Periods in U. S. History
Lesson 3: Manias, Bubbles, and Panics in World History
Lesson 4: The Japan Comparison
Understanding Economics in U.S. History
Lesson 28: Money Panics and the Establishment of the Federal Reserve System
Lesson 30: Whatdunnit? The Great Depression Mystery
Lesson 31: Did the New Deal Help or Harm the Economy?
WHATDUNNIT? THE GREAT DEPRESSION
MYSTERY LESSON
The lesson will focus on the causes of the Great Depression.
What do you know about the causes of the Great Depression?
It began with a recession caused by a fall in spending.
You will receive Occupation Cards from Activity 30.2. Do not reveal your occupations to others.
Prosperity in the 1920’s was based on the sales of houses and automobiles because they could buy on the
installment plan for the first time. When people bought homes and cars, what happened to the economy
and jobs? What action did the government take as more cars and homes were sold?
As more people worked, they spent more money, which caused a multiplier effect. What do you think that
means?
When the economy entered into a recession and people began to buy less, what happened with the multiplier
effect?
OCCUPATION CARDS
Machinery-producing industry workers stand up and then…
Car sales people stand up and then…
Auto factory workers stand up and then…
Housing construction workers stand up and then…
Furniture store workers and suppliers stand up and then…
Clothing sales persons stand up and then…
Restaurant workers stand up and then…
Grocer y store workers stand up and then…
Now, what happens if people have to replace their cars…
1929 RECESSION
Visual 30.1: Explain the significance of the business cycle. What does it portray?
Typical of a business cycle: what goes up must come down. But people thought the
prosperity of the 1920’s would remain high.
Why did the recession of 1929 become the Great Depression?
As the Stock Market began to see increased prices in 1030, the cost of other goods
began to fall and reduced money in people’s pockets.
1930 to 1933 Record closing of banks. See Visual 30.2. People lost their money.
Regional Federal Reserve Banks would only loan to safe banks, so many failed.
Gold standard tied hands of governments.
.
QUESTIONS AND ANSWERS
1. Compare the information in Visual 30.2 and 30.3
2. Answer 30.3 Questions
3. Process: What are three things that consumers and the government could have
done to lessen the impact of the Great Depression?
LESSON 31: THE NEW DEAL
Teacher Background:
1. Roosevelt initiated his Bank Holiday the day after his inauguration, and it
immediately began to restore confidence in the banking system.
2. Roosevelt pushed through the Federal Emergency Relief Act which gave states
$500 million for projects that would provide people with jobs. Unemployment
began to decline.
3.
Federal work projects also helped the unemployment rate.
4.
The government set prices in an effort to encourage production, but the higher
prices meant people could not afford the products.
5.
Social Security provided income to blind, old and others unable to work.
6.
Agencies loaned people money so they could keep their farms and homes.
TODAY YOU WILL DETERMINE IF THE NEW DEAL
HELPED OR HARMED THE GREAT DEPRESSION
RECOVERY
In 1933 Franklin D. Roosevelt was sworn in as president at the lowest point of the
economy.
Unemployment 28%
Most banks had been closed to halt an “epidemic of bank failures.”
Citizens were demanding the government take action.
FDR promised “a New Deal for the American people” and followed through with
legislation and work programs.
Did the New Deal end the Great Depression?
Unemployment began to decline in 1933, but the depression lingered on until after
Pearl Harbor and the U. S. involvement in World War II.
HOW TO INCREASE DEMAND FOR GOODS AND
SERVICES?
Raise prices so that businesses could afford to do business.
Higher prices mean higher wages for the workers in those fields.
What happens to the consumer’s ability to pay for the higher prices?
ACTIVITY 31.1 PART I: SOME NEW DEAL
POLICIES
The goal of the New Deal policies was to encourage people to spend money. The
more they spent, the more they were demanding products. The more products
demanded, the more workers would be needed. The more workers meant more
demand…
So, please place an I if you think the policy will increase aggregate aggregate (total)
demand.
Place a D if you think it will decrease aggregate demand.
Please answer the questions on page 374.
Share answers with another person.
WHAT ROLE DID WORLD WAR II PLAY IN
ENDING THE GREAT DEPRESSION?
Was it the war itself of spending on the war?
Would spending on the people have done the same thing?
GOALS OF THE NEW DEAL
List examples from Visual 31.3
Relief: Providing immediate aid to people who had lost income
Recovery: Restoring GNP to the full employment level
Reform: Providing greater security or benefits for groups of people
ACTIVITY 31.2 THE US ECONOMY: 1928 TO 1940
Review the chart.
What is the relationship among the Real GNP, unemployment rate, and federal
spending?
Did the New Deal achieve its goals? Why or why not?
DEFINITIONS
GDP: THE TOTAL MARKET VALUE OF ALL FINAL
GOODS AND SERVICES PRODUCED IN AN
ECONOMY IN A GIVEN YEAR.
GNP: THE TOTAL MARKET VALUE OF ALL FINAL
GOODS AND SERVICES PRODUCED BY AN
ECONOMY IN A GIVEN YEAR
WHY FINAL VALUE?
VALUE OF SUGAR, FLOUR, EGGS
VALUE OF FINISHED PRODUCT: COOKIES
WHY?
WHICH COUNTRY IS RICHER?
COUNTRY A GDP
$100,000,000
COUNTRY B GDP
$200,000,000
WHICH COUNTRY IS RICHER?
GDP
COUNTRY A $100,000,000
COUNTRY B $200,000,000
POPULATION
COUNTRY A = 1,000,000 PEOPLE
COUNTRY B = 3,000,000 PEOPLE
PER CAPITA GDP
THE TOTAL MARKET VALUE PER PERSON OF ALL
FINAL GOODS AND SERVICES PRODUCED IN
AN ECONOMY IN A GIVEN YEAR.
What is U.S?
What is Texas GSP?
WHAT IS U.S. GDP VS. TX GSP?
U.S.
2007
2008
2009
2010
$46,459
$47,015
$45,793
$
Source: http://data.worldbank.org/indicator/NY.GDP.PCAP.CD
2010 U.S. $47,482
#1 DC
# 2 Delaware
#24 Texas
#50 Idaho
$174,500
$ 69,667
$ 45,940
$ 34,250
http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP
ACTIVITY 1: GDP
PLEASE READ THE ARTICLE
WHAT IS THE DEFINITION OF GDP HERE?
WHAT ROLE DOES MEASURE OF VALUE PLAY?
WHAT IS DOUBLE COUNTING?
WHAT ARE FLOW OF PRODUCT APPROACH AND
EARNINGS AND COST APPROACH?
GDP
GDP = C + I + G + (X-M)
C
= CONSUMERS
I
= INVESTMENTS
G
= GOVERNMENT
EXPORTS = EXPORTS – IMPORTS
U. S. POPULATION IN 1993 = $24,683
WHAT DOES GDP NOT TELL US?
SOUTH AMERICAN MAP
THE GDP PER CAPITA OF CANADA IS BETWEEN
$_____ AND $_____.
FOUR COUNTRIES WITH GDP PER CAPITA
BETWEEN $15,000 AND $19,999 ARE:
THE NATIONS OF SOUTH AMERICA HAVE GDP
PER CAPITA BETWEEN $___ AND $___.
HOW WOULD YOU SET UP A
CHOROPLETH MAP OF SOUTH AMERICA? PAGES
58 AND 59
ENRICHMENT: CHOOSE A COUNTRY WITH A LOW
GDP AND ONE WITH A HIGH GDP. SET UP A
CHOROPLETH MAP TO SHOW THE
DIFFERENCE. ALSO, VISUALLY DEPICT THE
CAUSES OF THESE DIFFERENCES.
VISUAL 4.1
GEOGRAPHIC MOBILITY
What is significant about each
figure and why do you think these
changes happened?
•Figure 1?
•Figure 2?
•Figure 3?
Describe how the free
enterprise system works
President/CEO
Texas Council on Economic Education
(TCEE)
www.economicstexas.org
Laura@economicstexas.org
713-655-1650
Market Price: Changes in Supply and Demand
•How do changes in demand affect market price?
•How does the market price guide what producers or
suppliers produce?
•Why must costs be subtracted from revenues to
determine profits?
•How can certain events cause costs to change, which
can affect profits?
What is meant by demand?
2. What are three things you demand
economically?
3. How much will you pay for them?
4. What determines if you demand/buy them?
1.
We will divide into factories with 4 to 6 workers
in each factory.
2. Choose a production manager.
3. Choose an accountant
1.
There will be 3 rounds of 5 minutes each.
2. You will produce any amount, but at least one of
the apple, hammer, shirt and cup/saucer in 2
inch dimensions.
3. Each product must have 2 colors.
1.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
Count the quantity produced of each product.
2. Record the quantities on the “Revenues Worksheet”
3. We will do a class total.
4. We will draw a demand card.
5. We will determine prices and factory earnings.
1.
Supply, Demand and Market Price Chart
Goods
Supplied by
Class
Resulting
Market Price
With NO
Change in
Demand
Resulting
Market Price
with
Decrease in
Demand
Resulting
Market Price
with Increase
in Demand
0-8
$10
$8
$13
9-12
$7
$5
$10
13-16
$5
$3
$7
17-20
$3.50
$2
$4
Over 20
$2
$1
$3
Tally your round one results
2. Plan your production strategy for round 2.
3. The production manager has the final
authority on what to produce.
1.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
Count the quantity produced of each product.
2. Record the quantities on the “Revenues Worksheet.
3. We will do a class total.
4. We will draw a demand card.
5. We will determine prices and factory earnings.
1.
Supply, Demand and Market Price Chart
Goods
Supplied by
Class
Resulting
Market Price
With NO
Change in
Demand
Resulting
Market Price
with
Decrease in
Demand
Resulting
Market Price
with Increase
in Demand
0-8
$10
$8
$13
9-12
$7
$5
$10
13-16
$5
$3
$7
17-20
$3.50
$2
$4
Over 20
$2
$1
$3
What patterns do you see in the Supply,
Demand, and Market Price Chart?
2. In a market, what two things are needed for a
price to be determined?
3. What caused price to change?
1.
4. How did price influence your
production decisions?
5. How did other groups
influence your strategy and
plans?
President/CEO
Texas Council on Economic Education
(TCEE)
www.economicstexas.org
Laura@economicstexas.org
713-655-1650
1. What trends do you see ?
2. What are three things you have learned about
how the market or free enterprise system
operates?
3. What concepts and TEKS would this activity
teach?
President/CEO
Texas Council on Economic Education
(TCEE)
www.economicstexas.org
Laura@economicstexas.org
713-655-1650
Did the incumbent win?
Did the “in office” party win?
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.1
SOME KEY ECONOMIC INDICATORS
• Unemployment Rate: The percentage of people in the labor force
who are unemployed
• Inflation Rate: The percentage increase in the overall price level
• Real GDP: The value of all final goods and services produced in a
country in a year, expressed in terms of constant dollars.
TWO STATISTICS BASED ON THESE INDICATORS
• Misery Index: The sum of the unemployment rate and the inflation
rate.
• Growth rate in real GDP per capita: The percentage change in the
real GDP per person.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.2
AN ECONOMIC RULE THAT DOES NOT WORK WELL
A Real GDP per capita growth rule:
The incumbent party usually wins if…
The growth rate of real GDP per capita is greater than 0% during the
year of the election
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
A Real GDP per capita growth rule:
The incumbent party usually wins if…
The growth rate of Real GDP per capita is greater than or equal to 2.5%
during the year of the election.
A Misery Index rule:
The incumbent party usually wins if…
The Misery Index has not increased from the year prior to the election.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
Students:
• Write winners of elections.
• Apply rules.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Predict who you think will win based on the data on
Activity 8.2.
Write two or more rules that demonstrated how to
apply the data
Share your rules and evaluate them.
Review the “rules” on 8.2 and 8.3.
Which of these rules serve as a strong predictor?
Which ones do not?
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
A Real GDP per capita growth rule:
The incumbent party usually wins if…
The growth rate of Real GDP per capita is greater than or equal to 2.5%
during the year of the election.
The Real GDP per capita growth rule predicted 10 of last 13 elections…
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
The Misery Index rule has predicted 11 out of the last 13 elections…
A Misery Index rule:
The incumbent party usually wins if…
The Misery Index has not increased from the year prior to the election.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL FOR STEP 16 – Predicting the Next Election
Year Growth
in Real
GDP
per
Capita
Unempl Infla
oyment -tion
Rate
Rate
Misery
Index
2009 -4.3
9.3
-0.4
8.9
2010
2.2
9.6
1.6
11.2
2011
0.9
8.9
3.2
12.1
2012
???
???
???
???
Growth Misery
Rule
Index
Rule
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Candi Incumdates bent
Party
Wins or
Loses?
Obama vs.
Romney
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL FOR STEP 16 – Predicting the Next Election
Year
Growth
in Real
GDP
per
Capita
Unem
ploy
ment
Rate
Inflation
Rate
Misery
Index
2009
-4.3
9.3
-0.4
8.9
2010
2.2
9.6
1.6
11.2
2011
0.9
8.9
3.2
12.1
2012
???
???
???
???
Current 0.6
Data
Growth
Rule
Romney
Win
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Misery Candida Incum
Index tes
bent
Rule
Party
Wins
or
Loses?
Obama
vs.
Romne
y
???
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL FOR STEP 16 – Predicting the Next Election
Year
Growth
in Real
GDP
per
Capita
Unem
Ploy
ment
Rate
Inflation Misery
Rate
Index
2009
-4.3
9.3
-0.4
8.9
2010
2.2
9.6
1.6
11.2
2011
0.9
8.9
3.2
12.1
2012
???
???
???
???
Current 0.6
Data
8.1
1.7
9.8
Growth
Rule
Romne
y
Win
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Misery
Index
Rule
Obama
Win
Candi
dates
Obama
vs.
Romne
y
Incum
bent
Party
Wins or
Loses?
???
Spring 2008
Spring 2012
Do economics play a role in
presidential elections?
Do you believe the data we have studied shows that
economic conditions impact presidential
elections?
Is it fair to blame or give credit to the incumbent ?
What Should We Do About Sweatshops?
Lesson Two
Features Of Sweatshops

Low Wages
Long Working Hours
 Health And/Or Safety Hazards
 Arbitrary Discipline
 No Job Security
 Physical Abuse, Threats, And
Intimidation
 Workers Have No Voice


Child Labor
Contributing Factors
Dense Populations
 Limited Education
 High Unemployment
 Few Job Alternatives
 Extreme Poverty
 Workers With Low Productivity
 No Social Safety Net
 Corrupt, Weak Or Undemocratic Government
 Secrecy And Lack Of Workspace Transparency, Often In Places
Without A Free Press
 No System Of Justice To Protect Basic Rights

Sweatshops: Then and Now

PBS American Experience: The
Triangle Fire
7 min. excerpt beginning at 5:40

John Stossel : 20/20 Sweatshops
Characteristics Of A Competitive
Labor Market
 Many
Buyers Of
Labor
 Many Sellers Of
Labor
 Free Entry Or Exit
 Voluntary Exchange
 Good Information
For Both Buyers And
Sellers
Characteristics of Less Competitive
Labor Markets






One Buyer Of Labor Or Collusion
of Several Buyers Acting As One
Many Sellers of Labor
Entry Of Competing Firms Blocked
High Costs For Workers To Search
For Jobs
Coercive Exchange Because
Other Job Options For Workers Are
Artificially Blocked
Asymmetric Information or
Bargaining Power
Approaches To Ethical Issues
Outcomes Matter
(Outcomes Based Ethics)
Duty Matters
(Duty Based Ethics)
Character Matters
(Virtue Based Ethics)
Examine The Outcomes In People’s Lives
Ask Whether The Basic Dignity Of All
Human Beings Is Upheld
Decide Whether Sweatshops Contribute
To The Formation Of Good Character And
Virtues For Workers, Managers, And
Consumers
Frederic Bastiat
“There is only one difference
between a bad economist and a
good one: the bad economist
confines himself to the visible
effect; the good economist takes
into account both the effect that
can be seen and those effects
that must be foreseen.”
Frederic Bastiat
1801-1850