Sunday, October 03, 2010

Honors World History II: 4 October 2010

Prayer
Current Events:



February 16 2009 issue of Newsweek:

HW Avatar (also posted at the bottom of the daily blog post as well as on GradeConnect):


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Poll Everywhere


The "Pop" Quiz will be returned and grades posted ASAP (once the Make-Ups are done); Quiz 1 can be reviewed. You can also compare your performance with your colleagues at the Preliminary Quiz Assessment Page.

Cf. http://shanawiki.wikispaces.com/Honors+World+History+II+Fall+2010+Chapter+10+Section+1+The+Scientific+Revolution+Quiz+KEY

If you did not put your name on the Quiz it will not be returned.

Overview:

Section 3 The Impact of the Enlightenment


Haydn was one of the most important figures in the development of classical music. He helped develop forms for the string quartet and the symphony. Haydn had a close friendship with another famous composer, Wolfgang Amadeus Mozart. Mozart was a child prodigy who gained instant celebrity status as a composer and performer. His brilliant operas, graceful symphonies, and moving religious music helped define the new style of composition. Although he died in poverty at age 35, he produced an enormous amount of music during his lifetime. Mozart’s musical legacy thrives today.



Lives of the Majority Change Slowly


Most Europeans were untouched by either courtly or middle-class culture. They remained what they had always been—peasants living in small rural villages. Echoes of serfdom still remained throughout Europe despite advances in Western Europe. Their culture, based on centuries-old traditions, changed slowly.


By the late 1700s, however, radical ideas about equality and social justice finally seeped into peasant villages. While some peasants eagerly sought to topple the old order, others resisted efforts to bring about change. In the 1800s, war and political upheaval, as well as changing economic conditions, would transform peasant life in Europe.

War of the Austrian Succession
Though weakened by war, the Hapsburgs still wanted to create a strong united state. They kept the title “Holy Roman emperor,” but focused their attention on expanding their own lands. To Austria, they would soon add Bohemia, Hungary, and, later, parts of Poland and some Italian states.

Uniting these lands proved difficult. Not only were they divided by geography, they included a number of diverse peoples and cultures as well. By the 1700s, the Hapsburg Empire included Germans, Magyars, Slavs, and others. In many parts of the empire, people had their own languages, laws, political assemblies, and customs.

The Hapsburgs did exert some control over these diverse peoples. They sent German-speaking officials to Bohemia and Hungary and settled Austrians on lands they had seized in these provinces. They also put down revolts in Bohemia and Hungary. Still, the Hapsburgs never developed a centralized governmental system like that of France.

In the early 1700s, a new challenge threatened Hapsburg Austria. Emperor Charles VI had no male heir. His daughter, Maria Theresa, was intelligent and capable, but no woman had yet ruled Hapsburg lands in her own name. Charles persuaded other European rulers to recognize his daughter’s right to succeed him. When he died, however, many ignored their pledge.

Shortly after Charles’s death in 1740, Frederick II of Prussia seized the rich Hapsburg province of Silesia. This action sparked the eight-year War of the Austrian Succession. Maria Theresa set off for Hungary to appeal for military help from her Hungarian subjects. The Hungarians were ordinarily unfriendly to the Hapsburgs. But she made a dramatic plea before an assembly of Hungarian nobles. According to one account, the nobles rose to their feet and shouted, “Our lives and blood for your Majesty!” She eventually got further help from Britain and Russia, who did not want Prussia to upset the balance of power by gaining new lands.


Maria Theresa 1717-1780

Maria Theresa never succeeded in forcing Frederick out of Silesia. Still, she did preserve her empire and win the support of most of her people. Equally important, she strengthened Hapsburg power by reorganizing the bureaucracy and improving tax collection. She even forced nobles and clergy to pay taxes and tried to ease the burden of taxes and labor services on peasants. As you should understand, her son and successor, Joseph II, later extended many of her reforms.

The Seven Years' War

By 1750, the great European powers included Austria, Prussia, France, Britain, and Russia. These nations formed various alliances to maintain the balance of power. Though nations sometimes switched partners, two basic rivalries persisted. Prussia battled Austria for control of the German states, while Britain and France competed to develop their overseas empires.

On occasion, these rivalries resulted in worldwide conflict. The Seven Years’ War, which lasted from 1756 until 1763, was fought on four continents. Prussia, Austria, Russia, France, and Britain battled in Europe. Britain and France also fought in India and Africa. In North America, where the conflict is known as the French and Indian War, Native American groups took sides with the French or the British. The Treaty of Paris ending these wars gave Britain a huge empire, thus changing Europe’s balance of power for the next hundred years.

New Allies

The War in Europe

The War in India

The War in North America

There are several key reasons for Britain’s rise to global prominence:

*Location placed England in a position to control trade. In the 1500s and 1600s, English merchants sent ships across the world’s oceans and planted outposts in the West Indies, North America, and India. From these tiny settlements, England would build a global empire.
*England offered a climate favorable to business and commerce and put fewer restrictions on trade than some of its neighbors.
*In the 1700s, Britain was generally on the winning side in European conflicts. With the Treaty of Utrecht, France gave Nova Scotia and Newfoundland to Britain. In 1763, the end of the French and Indian War and the Seven Years’ War brought Britain all of French Canada. The British also monopolized the slave trade in Spanish America, which brought enormous wealth to British merchants.
*England’s territory expanded closer to home as well. In 1707, England and Wales were united with Scotland to become the United Kingdom of Great Britain. Free trade with Scotland created a larger market for farmers and manufacturers. Ireland had come under English control during the 1600s. It was formally united with Great Britain in 1801.

In 1760, George III began a 60-year reign. Unlike his father and grandfather, the new king was born in England. He spoke English and loved Britain. But George was eager to recover the powers the crown had lost. Following his mother’s advice, “George, be a king!” he set out to reassert royal power. He wanted to end Whig domination, choose his own ministers, dissolve the cabinet system, and make Parliament follow his will. Gradually, George found seats in Parliament for “the king’s friends.” Then, with their help, he began to assert his leadership. Many of his policies, however, would prove disastrous.

Reading Check

Explaining

How did Great Britain become the world's greatest colonial power?

The Age of Absolutism: Know it? Show it:

Cf. http://www.phschool.com/atschool/worldhistory/tests/kisi/ch16/

Self-test with Vocabulary Practice
The Age of Absolutism (1550–1800)


Cf. http://www.phschool.com/webcodes10/index.cfm?fuseaction=home.gotoWebCode&wcprefix=naa&wcsuffix=1669

Review questions with answers:

The Age of Absolutism (1550–1800)

Results of the quiz.
1. What state initiated the Inquisition against non-Catholics?

* CORRECT: Spain
EXPLANATION: Spain was the source of the Inquisition.

2. The English Bill of rights gave the House of Commons control over what?

* CORRECT: spending
EXPLANATION: The House of Commons was given the "power of the purse."

3. What was the major war in Europe between Catholics and Protestants?

* CORRECT: the Thirty Year's War
EXPLANATION: The Thirty Year's War was mostly between Catholic and Protestant states.

4. What nation had the "golden century" of the arts and literature from 1550 to 1650?

* CORRECT: Spain
EXPLANATION: It is Spain's Siglo de Oro, or "golden century."

5. The influx of gold and silver into Spain from the Americas caused

* CORRECT: inflation.
EXPLANATION: It led to soaring inflation.

6. Who was Britain's first prime minister?

* CORRECT: Robert Walpole
EXPLANATION: Walpole was the first prime minister.

7. What ruler never married and had no heir?

* CORRECT: Elizabeth I
EXPLANATION: Elizabeth never married nor had children.

8. What ruler sought religious toleration for Protestants?

* CORRECT: Henry IV
EXPLANATION: Henry IV issued the Edict of Nantes to grant Protestants in France religious toleration.

9. Why did Peter the Great want a warm-water port?

* CORRECT: to facilitate trade with the West
EXPLANATION: Peter wanted the ability to trade with the West.

10. The Thirty Years' War began in

* CORRECT: Bohemia.
EXPLANATION: The Thirty Years' War began with the Defenestration of Prague in Bohemia.

11. Spain's struggle with England in the 1580s was over what issues?

* CORRECT: religion and piracy
EXPLANATION: Elizabeth I was Philip II's Protestant enemy and she allowed English captains to plunder Spanish treasure ships.

12. Which of the following was NOT a new political institution in England following the Glorious Revolution?

* CORRECT: Parliament
EXPLANATION: Parliament had already existed before the Glorious Revolution.

13. The English Levellers were the champions of what group?

* CORRECT: the poor
EXPLANATION: Levellers thought that poor men should have as much say in government as anyone else.

14. Many of the troops in the Thirty Years' War were

* CORRECT: mercenaries.
EXPLANATION: Roving armies of mercenaries, or soldiers for hire, killed without mercy.

15. The absolute monarchs of Europe all had to bring what sources of Medieval power under their control?

* CORRECT: lords
EXPLANATION: They all had to bring the landholding lords into their realm of control.

16. Who had the reputation of being the most self-indulgent ruler in Europe?

* CORRECT: Louis XIV
EXPLANATION: Louis XIV, the Sun King, built the immense palace of Versailles, where his every whim was catered to.

17. Who was able to win he support of most of the Hapsburg subjects in the War of the Austrian Succession?

* CORRECT: Maria Theresa
EXPLANATION: Maria Theresa was in her appeal for help against Frederick II of Prussia.

18. The English cabinet were advisors to the

* CORRECT: monarch.
EXPLANATION: The cabinet was led by the prime minister and advised the monarch.

19. Peter the Great fought what country in the Great Northern War?

* CORRECT: Sweden
EXPLANATION: In 1700, Peter began a long war against the kingdom of Sweden.

20. In what state did peasants become more and more tied to the land as serfs?

* CORRECT: Russia
EXPLANATION: Russian rulers Peter the Great and Catherine the Great each moved to tie serfs evermore to the land.

Review

Enlightenment Thinkers

*Thomas Hobbes: social contract in which people give power to the government for an organized society
*John Locke: natural rights—life, liberty, and property
*Baron de Montesquieu: separation of powers; checks and balances
*Voltaire: battled corruption, injustice, and inequality; defended freedom of speech
*Denis Diderot: Encyclopedia
*Jean-Jacques Rousseau: social contract in which people follow the “general will” for true liberty
*Adam Smith: free market; laissez faire

Study & Writing

Skillbuilder

Outlining

Important Composers included in this section: Bach, Handel, and Haydn, among others. Music is available on Songza.


Bach, Air on the G String (5:21)





Haydn, Deutschland Ueber Alles (3:35), and a bit of trivia about this composition. Do you know which 20th century German political group adopted this song to represent their movement and point of view? Traditional German music was transformed for political and propaganda purposes.





Checkpoint


During this time, why did change occur slowly for most Europeans?

Preview:

Chapter 10 Section 4 Colonial Empires and the American Revolution

In the sixteenth century, Portugal came to control Brazil, while Spain established an empire in the Western Hemisphere that included parts of North America and most of Latin America. Portugal and Spain held onto their Latin American colonies for over 300 years. During that time, they profited richly by exporting Latin American gold, silver, and other natural resources and farm products. Spanish and Portuguese officials and Christian missionaries played important roles in Latin American societies. In North America, British control over its colonies began to unravel over issues of taxation. Multiple crises led the Americans to declare their independence in 1776 and to fight Britain until its defeat in 1783. The Articles of Confederation that formed the United States were soon replaced with a Constitution, which created a stronger central government. The Bill of Rights added important freedoms derived from the natural rights expressed by the philosophes.

Main Ideas

The colonies of Latin America and British North America were developing in ways that differed from their European mother countries.

The American colonies revolted against Great Britain and formed a new nation.

Objectives

*Describe characteristics of Britain and the 13 English colonies in the mid-1700s.
*Outline the events that led to the American Revolution.
*Summarize the events and significance of the American Revolution.
*Analyze how the new Constitution reflected the ideas of the Enlightenment.

Terms, People, and Places

mestizo

mulatto

federal system

Additional Terms, People, and Places

George III

Stamp Act

George Washington

Thomas Jefferson

popular sovereignty

Yorktown, Virginia

Treaty of Paris

James Madison

Benjamin Franklin

federal republic

Brazil

Yorktown

Colonial Empires in Latin America

Economic Foundations

State and Church

Reading Check

Explaining

How did the Portuguese and the Spanish profit from their colonies in Latin America?

British and British North America

Reading Check

Explaining

What countries made up Great Britain in the 1700s? To whom does the British refer?

The American Revolution

The War Begins

Foreign Support and British Defeat

Reading Check

Explaining

Why did foreign countries support the American cause?

The Birth of a New Nation

The Constitution

The Bill of Rights

Reading Check

Contrasting

What was the main difference between the Articles of Confederation and the Constitution?

Eyewitness to History

The Mission



Pearson Success Net has an interesting note on a "Witness History" feature.

Paine’s Common Sense





Early in 1776, English colonists in North America eagerly read the newly published Common Sense, by Thomas Paine. This pamphlet called on them to declare their independence from Britain and echoed the themes of the Enlightenment.

“Tis repugnant to reason, to the universal order of things, to all examples from former ages, to suppose that this Continent can long remain subject to any external power.”

—Thomas Paine, Common Sense

Britain Becomes a Global Power (Audio)

There are several key reasons for Britain’s rise to global prominence:

*Location placed England in a position to control trade. In the 1500s and 1600s, English merchants sent ships across the world’s oceans and planted outposts in the West Indies, North America, and India. From these tiny settlements, England would build a global empire.

*England offered a climate favorable to business and commerce and put fewer restrictions on trade than some of its neighbors.

*In the 1700s, Britain was generally on the winning side in European conflicts. With the Treaty of Utrecht, France gave Nova Scotia and Newfoundland to Britain. In 1763, the end of the French and Indian War and the Seven Years’ War brought Britain all of French Canada. The British also monopolized the slave trade in Spanish America, which brought enormous wealth to British merchants.

*England’s territory expanded closer to home as well. In 1707, England and Wales were united with Scotland to become the United Kingdom of Great Britain. Free trade with Scotland created a larger market for farmers and manufacturers. Ireland had come under English control during the 1600s. It was formally united with Great Britain in 1801.

In 1760, George III began a 60-year reign. Unlike his father and grandfather, the new king was born in England. He spoke English and loved Britain. But George was eager to recover the powers the crown had lost. Following his mother’s advice, “George, be a king!” he set out to reassert royal power. He wanted to end Whig domination, choose his own ministers, dissolve the cabinet system, and make Parliament follow his will. Gradually, George found seats in Parliament for “the king’s friends.” Then, with their help, he began to assert his leadership. Many of his policies, however, would prove disastrous.

Checkpoint for our Shanawiki page. (http://shanawiki.wikispaces.com/)

What led to Britain’s rise to global prominence in the mid-1700s?

Cf. References and exercises on Sec. 4.

As an exercise, we can play the part of an American spy as a Patriot working to free America from England's rule.

We can view an online exhibit about the Revolutionary War.

Also, we can view newspaper accounts of the American Revolution with a time line and quiz.

We might also explore an interactive portrait of George Washington.

I had asked you to consider other references and exercises on Sec. 4.

Of the three I had you to take a look at, which was the class favorite?

1. We can view an online exhibit about the Revolutionary War.

2. Also, we can view newspaper accounts of the American Revolution with a time line and quiz.

3. We might also explore an interactive portrait of George Washington.

Let's transition then to the other side, the British:

Britain Becomes a Global Power (Audio)

There are several key reasons for Britain’s rise to global prominence:

*Location placed England in a position to control trade. In the 1500s and 1600s, English merchants sent ships across the world’s oceans and planted outposts in the West Indies, North America, and India. From these tiny settlements, England would build a global empire.

*England offered a climate favorable to business and commerce and put fewer restrictions on trade than some of its neighbors.

*In the 1700s, Britain was generally on the winning side in European conflicts. With the Treaty of Utrecht, France gave Nova Scotia and Newfoundland to Britain. In 1763, the end of the French and Indian War and the Seven Years’ War brought Britain all of French Canada. The British also monopolized the slave trade in Spanish America, which brought enormous wealth to British merchants.

*England’s territory expanded closer to home as well. In 1707, England and Wales were united with Scotland to become the United Kingdom of Great Britain. Free trade with Scotland created a larger market for farmers and manufacturers. Ireland had come under English control during the 1600s. It was formally united with Great Britain in 1801.

In 1760, George III began a 60-year reign. Unlike his father and grandfather, the new king was born in England. He spoke English and loved Britain. But George was eager to recover the powers the crown had lost. Following his mother’s advice, “George, be a king!” he set out to reassert royal power. He wanted to end Whig domination, choose his own ministers, dissolve the cabinet system, and make Parliament follow his will. Gradually, George found seats in Parliament for “the king’s friends.” Then, with their help, he began to assert his leadership. Many of his policies, however, would prove disastrous.

What led to Britain’s rise to global prominence in the mid-1700s?

And now we can consider the situation of the 13 colonies.

For access at home:

Visit: PHSchool.com

Web Code: nap-1731

Map Skills

1. Locate
a) Philadelphia
b) Massachusetts
c) Boston

2) Which colony had two pieces of land?

3) What do almost all the colonial cities have in common based on the map?

Colonists Express Discontent (audio)

The Seven Years’ War and the French and Indian War in North America had drained the British treasury. King George III and his advisers thought that the colonists should help pay for these wars.

To increase taxes paid by colonists, Parliament passed the Sugar Act in 1764, which imposed import taxes, and the Stamp Act in 1765, which imposed taxes on items such as newspapers and pamphlets.

“No taxation without representation,” the colonists protested. They believed that because they had no representatives in Parliament, they should not be taxed.

Parliament repealed the Stamp Act in 1766, but then passed a Declaratory Act that said it had complete authority over the colonists.

Colonists Rebel Against Britain

A series of violent clashes intensified the colonists’ anger. In March 1770, British soldiers in Boston opened fire on a crowd that was pelting them with stones and snowballs.

Colonists called the death of five protesters the Boston Massacre. Then in December 1773, a handful of colonists hurled a cargo of recently arrived British tea into the harbor to protest a tax on tea. The incident became known as the Boston Tea Party.

When Parliament passed harsh laws to punish Massachusetts for the destruction of the tea, other colonies rallied to oppose the British response.

As tensions increased, fighting spread. Finally, representatives from each colony gathered in Philadelphia and met in a Continental Congress to decide what action to take.

Among the participants were the radical yet fair-minded Massachusetts lawyer John Adams, who had defended the British soldiers involved in the Boston Massacre in their trial; Virginia planter and soldier George Washington; and political and social leaders from all 13 colonies.

Primary Source

Audio



stands as one of the most important documents in all of history. It still serves as inspiration for people around the world. Where did some of the ideas of the Declaration originate?

Primary Source

“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 becomes destructive of these ends it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

—Declaration of Independence, July 4, 1776

Colonists Declare Independence

In April 1775, the ongoing tension between the colonists and the British exploded into war in Lexington and Concord, Massachusetts. This war is known as the Revolutionary War, or the American Revolution.
What we did on our summer vacation, Summer 2009



USS Constitution is the oldest commissioned warship afloat in the world. It was first launched in 1797. Constitution is one of six ships ordered for construction by George Washington to protect America's growing maritime interests. The ships greatest glory came during the war of 1812 when she defeated four British frigates which earned her the nickname "Old Ironsides," because cannon balls glanced off her thick hull. The ship was restored in 1927 with contributions from the nation's school children.

The Charlestown Navy Yard was built on what was once Mouton's or Morton's Point, the landing place of the British army prior to the Battle of Bunker Hill. It was one of the first shipyards built in the United States. During its 174 year history, hundreds of ships were built, repaired and modernized, including the World War II destroyer USS Cassin Young. Today, thirty acres of the Navy Yard are preserved by the National Park Service as part of Boston National Historical Park.

Checkpoint:

Do research on the U.S.S. Constitution. What can you find out about this remarkable ship, nicknamed "Old Ironsides?"

The Congress met soon after and set up a Continental Army, with George Washington in command. Although many battles ended in British victories, the colonists were determined to fight at any cost. In 1776, the Second Continental Congress took a momentous step, voting to declare independence from Britain. Thomas Jefferson of Virginia was the principal author of the Declaration of Independence, a document that reflects John Locke’s ideas of the government’s obligation to protect the people’s natural rights to “life, liberty, and property.”

The Declaration included another of Locke’s ideas: people had the right “to alter or to abolish” unjust governments—a right to revolt. The principle of popular sovereignty, which states that all government power comes from the people, is also an important point in the Declaration. Jefferson carefully detailed the colonists’ grievances against Britain. Because the king had trampled colonists’ natural rights, he argued, the colonists had the right to rebel and set up a new government that would protect them. Aware of the risks involved, on July 4, 1776, American leaders adopted the Declaration, pledging “our lives, our fortunes, and our sacred honor” to creating and protecting the new United States of America.

Checkpoint

What Enlightenment ideas are reflected in the Declaration of Independence?


Biography

George Washington

When George Washington (1732–1799) was chosen to lead the American army, the British thought he would be a failure. Washington indeed faced many challenges, including an army that did not have weapons, uniforms, or bedding. He struggled to incorporate order and discipline and to instill pride and loyalty in his soldiers. Washington persevered to American victory. His success as a leader continued when he became the nation’s first President. How did Washington hold the army together through difficult times?

James Madison

James Madison (1751–1836) arrived at the Constitutional Convention in Philadelphia in May 1787 with his thick notebooks on history and government. Madison chose a seat in front of the president’s chair and kept detailed notes of the debates. Madison was greatly respected and quickly became the Convention’s floor leader. His notebooks remained unpublished for more than 50 years, but they are now our main source of information about the birth of the Constitution. What did the Framers of the Constitution have in common?

Benjamin Franklin

Benjamin Franklin (1706–1790) was a philosopher, scientist, publisher, legislator, and diplomat. Sent by Congress to France in 1776 to seek financial and military support for the war, he soon became popular in France because of his intellect and wit. Those who admired America’s goal of attaining freedom also admired Franklin. When Franklin returned to America after nine years, he served as a delegate to the Constitutional Convention as the eldest of the delegates. Why was Franklin admired in France?

Map Skills

Be sure to detail where the cities are located, e.g., state whether they are in the North, South, Mid-Atlantic, etc.

1. Locate
a) Philadelphia
b) Massachusetts
c) Boston

2) Which colony had two pieces of land?

3) What do almost all the colonial cities have in common based on the map?


References:

References

Abuses inherited as a result of a controlling aristocracy may be seen clearly in this work.

Whigs and Hunters: The Origin of the Black Act by E.P. Thompson

HW: email (or hard copy) me at gmsmith@shanahan.org.

1. Monday HW
p. 317

Using the guidelines above, create a formal outline for Section 3 of this Chapter.


Get a Voki now!

Honors World History II: HW for Next Week, Mon. - Fri.

Honors World History II: HW for Next Week, Mon. - Fri.

1. Monday HW

p. 317

Using the guidelines above, create a formal outline for Sec 3 of this Chapter.

Only email your answers (if you voluntarily choose to participate):

Last week what I liked least about the class was . . .

Last week what I enjoyed most about the class was . . .

1. Tuesday HW

p. 324, Using Key Terms, #1-5

1. Wednesday HW

p. 324, Using Key Terms, #6-10

1. Thursday HW

p. 324, Reviewing Key Facts, #11-13

1. Friday HW

p. 324, Reviewing Key Facts, #14-16

Honors Business Economics Chapter 1 Section 3, 4 October 2010

Prayer
Current Events:


Vizerra lets you visit the best world landmarks without ever leaving home.

Why do innovators and entrepreneurs attempt to build a better mousetrap?

In practice, all firms and all economies operate below their production possibilities frontier. Firms and economies, however, generally attempt to get as close to the frontier as possible.

Points above the production possibilities frontier cannot be produced using current resources and technology. To produce beyond the frontier, a more productive point is not obtainable unless more or higher quality resources--human capital--become available or technological change--entrepreneurship or innovation--occurs.

If you were an investor in entrepreneurs, would you fund Vizerra for virtually offering the best world landmarks without ever leaving home?
Yes 12 Votes 46%
No 14 Votes 54%
Total number of people voted: 26

To participate, you can only vote online:



If you were an investor in entrepreneurs, would you fund Vizerra for virtually offering the best world landmarks without ever leaving home?

Poll Everywhere

Chapter 1: What Is Economics?

Section 3: Economic Choices and Decision Making, p. 19

Choices are explained in terms of trade-offs, or alternatives that are available whenever a decision is made. The cost of every decision is measured in terms of its opportunity cost, which is the cost of the next best alternative use of money, time, or resources when one choice is made rather than another. Trade-offs can be analyzed with a production possibilities frontier, a diagram representing various combinations of goods and services an economy can produce when all its resources are in use. Furthermore, economists use cost-benefit analysis to evaluate choices.

If you did not screen the video from last Friday, nor do the assignment, I posted it again here:

HW: email (or hard copy) me at gmsmith@shanahan.org.

1. Writing

How to Fix Health Care: Lasik Surgery For The Medical Debate

Based on the information contained in the Lasik surgery video answer the question: can capitalism save American health care? Since the video has a fair bit of information, take notes now and write two paragraphs as your HW answer.

Here are screen shots as a summary of the video as well:







The New Health Care Plan Diagrammed

The original video: How to Fix Health Care: Lasik Surgery For The Medical Debate



The opportunity cost of any alternative is defined as the cost of not selecting the "next-best" alternative. Last week I reviewed a few examples of opportunity cost--a person deciding to rent a building, sell it, or operate the space for a business; and, we also reviewed the costs of attending college. We need to weigh the alternatives.

When economists discuss the costs and benefits associated with alternative activities, the discussion generally focuses on marginal benefits and marginal costs. The marginal benefit from an activity is the additional benefit associated with a one-unit increase in the level of an activity. Marginal cost is defined as the additional cost associated with a one-unit increase in the level of the activity. Economists assume that individuals attempt to maximize the net benefit associated with each activity.

If marginal benefit exceeds marginal cost, net benefit will increase if the level of the activity rises. Therefore, rational individuals will increase the level of any activity when marginal benefit exceeds marginal costs. On the other hand, if marginal cost exceeds marginal benefit, net benefit rises when the level of the activity is decreased. There is no reason to change the level of an activity (and net benefit is maximized) at the level of an activity at which marginal benefit equals marginal cost.

Reading Check

Summarizing

How are trade-offs and opportunity cost related?

Production Possibilities, p. 21




Scarcity implies the existence of tradeoffs. These tradeoffs can be illustrated quite nicely by a production possibilities frontier.

For simplicity, it is assumed that a firm (or an economy) produces only two goods (this assumption is needed only to make the representation feasible on a two-dimensional surface -- such as a graph on paper or on a computer screen). When a production possibilities curve is drawn, the following assumptions are also made:

1. there is a fixed quantity and quality of available resources,
2. technology is fixed, and
3. there are no unemployed nor underemployed resources

Very shortly, we'll also see what happens when these assumptions are relaxed.

For now, though, let's consider a simple example. Suppose that a student has four hours left to study for exams in two classes: introductory microeconomics and introductory calculus. The output in this case is the exam score in each class. The assumption of a fixed quantity and quality of available resources means that the individual has a fixed supply of study materials such as textbooks, study guides, notes, etc. to use in the available time. A fixed technology suggests that the individual has a given level of study skills that allow him or her to translate the review materials into exam scores. A resource is unemployed if it is not used. Idle land, factories, and workers are unemployed resources for a society. Underemployed resources are not used in the best possible way. Society would have underemployed resources if the best brain surgeons were driving taxis while the best taxi drivers were performing brain surgery.... The use of an adjustable wrench as a hammer or the use of a hammer to pound a screw into wood provide additional examples of underemployed resources. If there are no unemployed or underemployed resources, efficient production is said to occur.

The table below represents possible outcomes from each various combination of time studying each subject:

Notice that each additional hour spent studying either calculus or economics results in smaller marginal improvements in the grade. The reason for this is that the first hour will be spent studying the most essential concepts. Each additional hour is spent on the "next-most" important topics that have not already been mastered. (It is important to note that a good grade on an economics examination requires substantially more than four hours of study time.) This is an example of a general principle known as the law of diminishing returns. The law of diminishing returns states that output will ultimately increase by progressively smaller amounts as additional units of a variable input (time in this case) are added to a production process in which other inputs are fixed (the fixed inputs here include the stock of existing subject matter knowledge, study materials, etc.).
To see how the law of diminishing returns works in a more typical production setting, consider the case of a restaurant that has a fixed quantity of capital (grills, broilers, fryers, refrigerators, tables, etc.). As the level of labor use increases, output may initially rise fairly rapidly (since additional workers allow more possibilities for specialization and reduces the time spent switching from task to task). Eventually, however, the addition of more workers will result in progressively smaller increases in output (since there is a fixed amount of capital for these workers to use). It is even possible that beyond some point workers may start getting in each others way and output may decline ("too many cooks may spoil the broth...." sorry.... I couldn't resist).

In any case, the law of diminishing returns explains why your grade will increase by fewer points with each additional hour that you spend studying.

The points in the table above can be represented by a production possibilities curve (PPC) such as the one appearing in the diagram below. Each point on the production possibilities curve represents the best grades that can be achieved with the existing resources and technology for each alternative allocation of study time.


Let's consider why the production possibilities curve has this concave shape. As the diagram below indicates, a relatively large improvement in economics grade can be achieved by giving up relatively few points on the calculus exam. A movement from point A to point B results in a 30-point increase in economics grade and only a 10-point reduction in calculus grade. The marginal opportunity cost of a good is defined to be the amount of another good that must be given up to produce an additional unit of the first good. Since the opportunity cost of 30 points on the economics test is a 10-point reduction in the score on the calculus test, we can say that the marginal opportunity cost of one additional point on the economics test is approximately 1/3 of a point on the calculus test. (If in doubt, note that if 30 points on the economics exam have an opportunity cost of 10 points, each point on the economics test must cost approximately 1/30th of 10 points on the calculus test -- approximately 1/3 of a point on the calculus test).

Now, let's see what happens a second hour is transferred to the study of economics. The diagram below illustrates this outcome (a movement from point B to C). As this diagram indicates, transferring a second hour from the study of mathematics to the study of economics results in a smaller increase in economics grade (from 30 to 45 points) and a larger reduction in calculus grade (from 75 to 55). In this case, the marginal opportunity cost of a point on the economics exam has increased to approximately 4/3 of a point on the calculus exam.

The increase in the marginal opportunity cost of points on the economics exam as more time is devoted to studying economics is an example of the law of increasing cost. This law states that the marginal opportunity cost of any activity rises as the level of the activity increases. This law can also be illustrated using the table below. Notice that the opportunity cost of additional points on the calculus exam rises as more time is devoted to studying calculus. Reading from the bottom of the table up to the top, you can also see that the opportunity cost of additional points on the economics exam rises as more time is devoted to the study of economics.

One of the reasons for the law of increasing cost is the law of diminishing returns (as in the example above). Each extra hour devoted to the study of economics results in a smaller increase in the economics grade and a larger reduction in the calculus grade because of diminishing returns to time spent on either activity.
A second reason for the law of increasing cost is the fact that resources are specialized. Some resources are better suited for some some types of productive activities than for other types of production. Suppose, for example, that a farmer is producing both wheat and corn. Some land is very well suited for growing wheat, while other land is relatively better suit for growing corn. Some workers may be more adept at growing wheat than corn. Some farm equipment is better suited for planting and harvesting corn.

The diagram below illustrates the PPC curve for this farmer.


At the top of this PPC, the farmer is producing only corn. To produce more wheat, the farmer must transfer resources from corn production to wheat production. Initially, however, he or she will transfer those resources that are relatively better suited for wheat production. This allows wheat production to increase with only a relatively small reduction in the quantity of corn produced. Each additional increase in wheat production, however, requires the use of resources that are relatively less well suited for wheat production, resulting in a rising marginal opportunity cost of wheat.

Now, let's suppose that this farmer either does not use all of the available resources, or uses them in a less than optimal manner (i.e., either unemployment or underemployment occurs). In this case, the farmer will produce at a point that lies below the production possibilities curve (as illustrated by point A in the diagram below).

In practice, all firms and all economies operate below their production possibilities frontier. Firms and economies, however, generally attempt to get as close to the frontier as possible.

Points above the production possibilities cannot be produced using current resources and technology. In the diagram below, point B is not obtainable unless more or higher quality resources become available or technological change occurs.

An increase in the quantity or quantity of resources will cause the production possibilities curve to shift outward (the curve should shift outwards for both wheat and corn). This type of outward shift could also be caused by technological change that increases the production of both goods.
Thus, for the production of both goods: an increase in the quantity or quantity of resources will cause the production possibilities curve to shift outward.

Cf. http://www.oswego.edu/~economic/eco101/chap2/chap2.htm


In some cases, however, technological change will only increase the production of a specific good. The diagram below illustrates the effect of a technological change in wheat production that does not affect corn production.




Identifying Possible Alternatives

Fully Employed Resources

The Cost of Idle Resources

Opportunity Cost, p. 22

Economic Growth

Reading Check

Synthesizing

How can the production possibilities frontier be used to illustrate economic growth?

Thinking Like an Economist, p. 23

Build Simple Models

Apply Cost-Benefit Analysis, p. 24

Cost/Benefit Analysis, 5:24

Here's a short little video that explains the economic concept of Cost/Benefit Analysis, made by high school students for their economics class. We do not own the music, "My Life Would Suck Without You" by Kelly Clarkson. Also, our use of an H.E.B. store as our filming location was a matter of convenience. We did not intend to promote or disparage the store in any way.


How to Fix Health Care: Lasik Surgery For The Medical Debate, 8:43
Take notes for your In-class assignment today; then,

based on the information contained in the Lasik surgery video answer the question: can capitalism save American health care? Since the video has a fair bit of information, take notes now and write two paragraphs as your HW answer.



Can a market-based health care system work? We can begin to answer this question by looking at Lasik, a medical procedure that's not covered by health insurance. And has gotten better—and cheaper—over time.

"How to Fix Health Care" proposes three simple reforms that will put us on a path to a health-care system that's better, more affordable, and more accessible. And get this—these market-based reforms can be implemented without creating new government programs or raising taxes.

Take Small, Incremental Steps

The Road Ahead

Topics and Issues

Economics for Citizenship, p. 25

Understand the World Around Us

Reading Check

Determining Cause and Effect

How do you think our society would be different if citizens did not study economics?
In an interconnected world of finite resources, understanding the principles that govern the allocation of goods and services—economics—is essential. Although economics has not traditionally been a part of the liberal arts core, informed citizenship in the 21st century requires instruction in economic principles and the fundamentals of the marketplace.

Yet, most colleges and Universities do not require Economics study. Schools receive credit for Economics if they require a course covering basic economic principles, preferably an introductory micro- or macroeconomics course taught by faculty from the economics or business departments.

In which colleges can I study Economics?

Consult the list of colleges that require Economics.

Case Study

Gap, Inc.

References

Sustainable Energy Systems: Scale, Tradeoffs, and Co-Benefits, 1:03:53

October 14, 2009 - Sally Benson, director of the Global Climate and Energy Project, Pamela Matson, dean of the Stanford School of Earth Sciences, Lynn Orr, director of the Precourt Institute for Energy, Stephen Schneider, Stanford professor of Interdisciplinary Environmental Studies, James Sweeney, director of the Precourt Energy Efficiency Center, and Buzz Thompson, co-director of the Woods Institute for the Environment, discuss the interconnected aspects of future sustainable energy systems with a focus on the scales, tradeoffs, and co-benefits involved.




HW: email (or hard copy) me at gmsmith@shanahan.org.
Ch. 1 Sec. 3

1. What is the meaning of the term frontier when used by economists?

2. Imagine a scenario in which it would be useful for a company to construct a production possibilities frontier. It can be anything: i.e., a company is producing CDs and cassettes. (In this example, can you explain what the possibilities are?)