Economics Chapter 3 Sections 2 and 3

Monday October 3

Today’s Goal: How does Free Enterprise Allocate Resources?

Learning Targets:

I can explain how consumers help determine the way resources are used.

I can explain how producers help determine the way resources are used.

Bell Work: Grab a book and read pages 78 and 79 then answer the following questions in your notes: 

1.  What is the role of consumers in a free enterprise system?

2.  How do consumers help determine the way resources are used?

3.  What is the role of producers in a free enterprise system?

4.  How do producers help determine the way resources are used?

Chapter 3 Section 2 Notes:  How Does Free Enterprise Allocate Resources?

1.  What is the role of consumers in a free enterprise system?

- Consumers buy products for personal use.

- Consumers look to get the best deal for their money spent.

2.  How do consumers help determine the way resources are used?

- When consumers choose to buy a product they are “voting” for their choice against competing products. 

- These “votes” help determine what will be produced in the future since producers, who want to earn a profit try to provide what consumers want.

3.  What is the role of producers in a free enterprise system?

- Producers make or provide goods or services.

- They are looking to profit from most transactions.

4.  How do producers help determine the way resources are used?

- Seeking opportunities to earn profits is one way producers help allocate scarce resources in the economy.

Profit: The financial gain a seller makes from a business transaction. (The money left over after the costs of producing a product are subtracted from the income gained by selling that product.)

• Begin School Order Project – GET ARTICLE from Mrs. Kroll

Tuesday October 4

Today’s Goal:  Practice entrepreneurship

Learning Targets: 

I can explain how consumers help determine the way resources are used.

I can explain how producers help determine the way resources are used.

Bell Work: Imagine that your school is going to allow students to order and receive goods and services from delivery companies during the school day. What types of things do you think students would like to order and have delivered to them? Create a list in your journal, and for each item or service, briefly explain.  (5 – 10 minutes) 

Continue with:  Order in the School Project AtlasStuff.com – GET WORKSHEET FROM MRS.KROLL

HOMEWORK: After all of the initial planning has been completed, each group should create a print advertisement (8.5 x 11″ size) for their new businesses. Students should try to include as much information about the service as possible in a way that is appealing to their audience, clear and concise, well-organized and persuasive. In a future class, completed advertisements should be photocopied and distributed to the class, presented by the groups and critiqued by the “audience.”

Wednesday October 5

Today’s Goal:  Government and Free Enterprise

Learning Targets: 

I can understand the role of government in the U.S. economy is to address market failures.

Analyze why governments provide public goods and infrastructure.

Explain how governments seek to decrease negative externalities and increase positive externalities.

Bell Work: Journal – Would you support a tax for a new waterpark in Milwaukee?  Why or Why not?

Chapter 3 Section 3 Notes: Government and Free Enterprise

• Providing Public Goods
  • In general:
    • Most production decisions are made in the market place through interactions of buyers and sellers. This is the free enterprise sector of our economy.
    • Other decisions are made by different levels of government.  This is the public sector of our economy.
    • Market Failure:  occurs when people who are not part of the marketplace interaction benefit from it or pay part of its costs.
    • When market failure occurs, the government sometimes provides the good or service.
    • Public Goods:  are products provided by the federal, state, and local governments and consumed by the public as a group.
      • They are funded by taxes.
  • Characteristics of Public Goods
    • People cannot be excluded from the benefits of the product even though they do not pay for it.
    • One person’s use of the product does not reduce its usefulness to others.
  • Free Riders
    • There is no incentive for businesses to produce public goods because people will not voluntarily pay for them.  This is because people receive the benefits of these products whether they pay for them or not.  This is called the free rider problem.
    • Free rider:  a person who avoids paying for a good or service but who benefits from the good or service anyway.
  • Public and Private Sectors-Shared Responsibilities
    • Some goods can be provided by either the public sector or private sector.  They are often toll goods consumed by the public as a group, but where people cannot be excluded for using them.
    • The initial funding for toll goods is often provided by the public sector and their day-to-day operation is often the responsibility of the private sector.
    • The private and public sectors share responsibility for the nation’s infrastructure.
    • Infrastructure: consists of all the goods and services that are necessary for the functioning of society.
      • Examples:  highways, mass transit, power systems, water systems, sewer systems, education, health care, police/fire protection.
    • A solid infrastructure is essential to economic health.
• Managing Externalities
  • In general:
    • Externality:  a side effect of a product that affects someone other than the producer or the buyer.
    • Negative Externality:  an externality that imposes costs on people who were not involved in the original economic activity.
    • Positive Externality:  an externality that creates benefits for people who were not involved in the original economic activity.
  • Paying for Negative Externalities
    • Limiting negative externalities is an important role of the government in the American economy.
  • Spreading Positive Externalities
    • The government tries to increase positive externalities.
    • Subsidy:  a government payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole.
• Public Transfer of Payments
  • In general:
    • Safety net:  consists of government programs designed to protect people from economic hardship.
  • Redistributing Income
    • Although the United States is the world’s wealthiest nation, many of its people live in poverty.
    • Modern society attempts to address the issue of poverty through economic growth and transfer payments:
    • Transfer Payment:  transfers of income from one person or group to another even though the receiver does not provide anything in return.
      • Examples:  Birthday check and  inheritance.
    • Public transfer payment:  transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return.
      • Example: Social Security

Thursday October 6

• Today’s Goal:  Review Chapter 3
• Learning Targets:  I can successfully recall the key concepts of the American Free Enterprise System
• Bell Work: Grab a book.
• Chapter 3 Review – counts as a quiz grade
• Absent?  - ASK MRS. KROLL FOR A COPY (WORTH 25 POINTS)

Friday October 7

• Today’s Goal:  Review Unit 1
• Learning Targets:  I can successfully recall the important parts of Unit 1: 
• Bell Work: Have your notebook out and grab a book
• Have students work on test review – may ask questions, but should be a quiet work time.
• ABSENT?  GET REVIEW!!! TEST ON TUESDAY!!!