GLOBAL CONNECTIONSGLOBAL CONNECTIONS

ECONOMICSECONOMICS

Take out a piece of paper and answer the following questions on your own. Do not

turn in yet.

• If you won a $500 shopping spree, what would you spend your money on? Why?

• Why do some kids think “they gotta have the hottest brands”?

• When you buy anything is there any other cost than the price of the item and sales tax?

• Why do others buy “hot” items like the high-priced sneakers featured in this video clip? What benefits do you and others get from high fashion purchases? What are the costs incurred by you and other people buying them? Think about this carefully. Do the benefits outweigh the costs?

• What is the difference between a want and a need? Why can you not have everything you want or need because of the scarcity of money?

• Economics is about trade-offs. Money is limited and scarce. What does it mean when individuals who buy one good trade-off purchasing or paying for something else?

• Buying a $150 or $200 pair of sneakers means you can’t spend in other areas. Money is limited and scarce relative to what we want, need or desire. Based on the concepts of scarcity and opportunity cost, explain why Marbury’s mother would not let him or his siblings buy high-priced sneakers because of their high opportunity costs. What would Marbury and his siblings have to give up to purchase high priced sneakers? Why is the cost of buying popular sneakers greater than the benefits in Marbury’s family? Do you think the family made a good decision? Why or why not?

• A crisis in one area may create an opportunity for success in another. How did Marbury use his family’s struggles and individual experiences as a disadvantaged youth to create an opportunity for personal success in the future? Dos does Marbury’s personal success in responding to his family struggles impact today’s youth? What are the consequences of this situation?

ECON CHOICES

• OPPORTUNITY COST VALUE OF THE NEXT BEST ALTERNATIVE GIVEN UP FOR THE ALTERNATIVE THAT WAS CHOSEN

Opportunity Cost

INFLATION

• THE RISE OF PRICES OF PRODUCTS OVER A PERIOD OF TIME

Economic Systems

ECONOMIC SYSTEMS

• TRADITIONAL PEOPLE PRODUCE MOST OF WHAT THEY NEED TO SURVIVE BY HUNTING, GATHERING, FARMING, AND HERDING

ECON SYSTEMS (CONT)

• MARKET– BUSINESS PEOPLE DECIDE

WHAT TO PRODUCE BASED ON WHAT THEY BELIEVE CONSUMERS WILL BUY

– NO PURE MARKET ECONOMY EXISTS

ECON SYSTEMS (CONT)• COMMAND

– GOVERNMENT CONTROLS WHAT GOODS ARE PRODUCED, HOW THEY ARE PRODUCED AND WHAT THEY COST. INDIVIDUALS HAVE LITTLE ECONOMIC POWER

ECON SYSTEMS (CONT)

• MIXED–INDIVIDUALS MAKE SOME

ECONOMIC DECISIONS AND THE GOVERNMENT MAKES OTHERS

Example of a Mixed Economy• The U.S. is considered a mixed economy. Some examples of this

include:• People can own their own businesses, but political leaders make

policies concerning these. • The government controls the mail system. • The government controls most of the road networks. • Waste collection and treatment are usually provided as a service by the

local government. • The government has a virtual monopoly on the provision of policing. • The government tells manufacturers what to make if something is in

need during war time. • The FDA bans certain drugs. • The government has created a minimum wage law. • The government provides social welfare payments to some citizens. • A sizable part of pre-college education is government-provided.