Beyond the sound bites:
Thomas Sowell: Federal Reserve a 'Cancer'
Economist Thomas Sowell explains why he supports Ron Paul's stance on abolishing the Federal Reserve. When asked by Peter Robinson what should replace the Fed, Sowell replies: "When someone removes a cancer, what do you replace it with?"
Thomas Sowell has studied and taught economics, intellectual history, and social policy at institutions that include Cornell University, UCLA, and Amherst College. Now a senior fellow at the Hoover Institution, Sowell has published more than a dozen books, the latest of which is a revised and updated edition of his classic volume, Basic Economics.
"Through its various editions," Sowell writes, "the fundamental idea behind Basic Economics remains the same: Learning economics should be as uncomplicated as it is informative."
Here, Sowell seeks to uncomplicate some of the economic issues confronting the country today, from the financial crisis and the role of the Fed to the economics of health care and trade imbalances. - Hoover Institution
Thomas Sowell is an American economist, political writer, and commentator. He is currently a senior fellow of the Hoover Institution at Stanford University. In 1990, he won the Francis Boyer Award, presented by the American Enterprise Institute. In 2002 he was awarded the National Humanities Medal for prolific scholarship melding history, economics, and political science.
Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits Hoover's quarterly journal, the Hoover Digest, and hosts Hoover's television program, Uncommon Knowledge.
China's President Lays Groundwork for Obama Talks
WSJ's Jake Lee speaks to Heard on the Street Asia Editor Mohammed Hadi about Chinese President Hu Jintao's comments on currencies, balancing the Chinese economy and China's growing clout abroad.
The Chapter 4 Section 2 Quiz Prep Page is available for the Quiz on Friday.
The Ch. 4 Sec. 1 Quiz Make-Up is available.
The Chapter 3 Section 3 Make-Up is available.
The Ch. 3 Sec. 2 Quiz Make-Up is today:
Cf. http://shanawiki.wikispaces.com/Honors+Business+Economics+Fall+2010+Chapter+3+Section+2+Quiz+Prep+Page
The Make-Up for the Chapter 3 Section 1 Quiz is today.
The Chapter 2 Make-Up Test is today.
Cf. http://shanawiki.wikispaces.com/Honors+Business+Economics+Chapter+2+Test+Prep+Page+Fall+2010
The Ch. 2 Sec. 3 American Free Enterprise Make-Up Quiz is today.
Standard feature:
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Click on the words "Access e-Inquirer" located on the gray toolbar underneath the green locker on the opening page.
Login:
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Chapter 5: Supply
Section 3: Cost, Revenue, and Profit Maximization
Reading Strategy
Complete the graphic organizer below by explaining how total revenue differs from marginal revenue. Then provide an example of each.
What are fixed costs? As applied to sneakers, explain fixed costs. Draw a sample graph as demonstrated in the video. Do the costs stay constant? Then, draw the second graph to understand the cost function. What if the cost is not stagnant? What is the difference between a linear and a non-linear revenue function? What is the formula for profit? What is the intersection of revenue and cost called?
Marginal Cost and Average Variable Cost
Draw the one graph demonstrated here. What is the first point that you should look for on the variable cost curve? When does the marginal curve reach a minimum? Where does the variable cost reach?
total costs
Micro average total cost
In-class assignment, working with a partner, answer the following questions.
What elements (they start from the very beginning of the clip) add up to the total cost?
As we add units, is the total cost going up, or down?
What happens when you add the fourth unit?
Do we have decreasing marginal return?
How much is the average total cost when we add the fourth unit?
Do the 5th and 6th units add to our production costs?
Why do production costs rise?
marginal costs
Deriving the Marginal Cost Curve
In-class assignment, with a partner, answer the following questions.
Draw the marginal cost curve.
Why does the marginal cost of production vary as you change the quantity you are producing?
e-commerce
e-commerce - evolution
In-class assignment, with a partner, answer the following questions.
How has commerce changed over the years?
What happened in 1994?
What happened in the early days? What was it like then?
What happened with growth?
What do we expect to happen when looking ahead?
Summarize the first ten years in ecommerce.
break-even point
total revenue
marginal revenue
marginal analysis
profit-maximizing quantity of output
Companies in the News
FedEx Saves the Day
Measures of Cost
Fixed Costs
Variable Costs
Figure 5.6 Production, Costs, and Revenues
Total Cost
Marginal Cost
Reading Check
Analyzing
If a firm's total output increases, will the fixed costs increase? Explain.
Applying Cost Principles
Costs and Business Operation
Break-Even Point
Reading Check
Contrasting
What are the differences between an e-commerce store and a traditional business?
The Global Economy and You
6 January 2011, Napolitano in Brussels
In-class assignment: with a partner, answer the following questions.
What is the U.S. doing to protect global supply?
What is the global supply chain?
What three areas does Napolitano address?
What are the consequences?
What might people lack?
Marginal Analysis and Profit Maximization
Total Revenue
Marginal Revenue
Marginal Analysis
Profit Maximization, 2:14
In-class assignment, with a partner, answer the following questions.
What do economists assume about businesses?
What is the formula?
How do firms maximize profits?
How do firms in perfect competition perform?
Reading Check
Summarizing
Why do people, especially business owners, use marginal analysis?
Steve and Barry's Rules the Mall
In-class assignment, with a partner, fill in the graphic organizer.
Use the graphic organizer to identify examples of both fixed and variable costs.
Chapter 6 Prices and Decision Making
Why It Matters
The Big Picture
Section 1 Prices as Signals
Price is the monetary value of a product, which is normally established by supply and demand and is an important economic concept. Prices can be described as signals to both producers and consumers. High prices are signals for businesses to produce more and for consumers to buy less. Low prices signal the reverse. Prices have the advantage of being neutral and flexible. In addition, they permit freedom of choice, have no administrative costs, are highly efficient, and are easily understood by everyone. Non-price allocations systems such as rationing exist, but they suffer from a number of problems, including the issue of allocating ration coupons in a fair and equitable manner. Therefore, economists prefer the price system.
In-class assignment: in two groups, we will do the:
Student Web Activity.
Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit2/chapter6/student_web_activities.html
"Prices and Decision Making"
Introduction
You have already learned that prices are the signals that help us make our economic decisions. You have also learned that markets are more efficient when there are large numbers of buyers and sellers and when the information about products in the market is relatively good. All of this results in a situation that results in more competitive prices and more satisfied consumers! The World Wide Web is helping consumers in this regard. For example, you can visit several bookstores to check prices without ever leaving home.
Destination Title:
Barnes and Noble
Cf. http://www.barnesandnoble.com/
Amazon
Cf. http://www.amazon.com/
half.com
Cf. http://www.half.ebay.com/
Directions
Start at the Barnes and Noble Web site.
1. Select a book of your choice from the Barnes and Noble Web site. What book did you select, and how much does it cost?
2. Next, go to the Amazon.com Web site. In the search box, type the same name of the book that you selected previously on the Barnes and Noble site. How much does the same book cost on the Amazon.com Web site?
3. Now, go to the half.com Web site. In the search box, type the same name of the book that was selected previously on the other retailer sites. How much does the same book cost on this site?
4. Compare the three prices. Which was the lowest? The highest? Why do you think there were or were not differences in the prices? How do you think the free flow of information on the World Wide Web will affect consumer prices?
Ch. 6 Sec. 1 Reading Strategy
In-class assignment: with a partner, complete the graphic organizer by explaining the advantages of prices.
Section Preview
Content Vocabulary
price
rationing
In-class assignment, while working with a partner, in this satirical look at the possibility of health care rationing, what problem (s) (as noted in the textbook) are they pointing out?
Health Rations and You, 2:22
ration coupon
rebate
Academic Vocabulary
neutral
criteria
Reading Strategy
Products in the News
Katrina Fallout
The Economic Impact of the BP Oil Spill, 7:27
In-class assignment: working with a partner, answer the following questions.
Is the Gulf Oil spill worse than Hurricane Katrina?
Could the damage be worse on the area?
How much did the Hurricane cost?
What three reasons could make it worse than Katrina?
What is the economic disruption?
What are the three drivers of the economy in New Orleans?
How will the decimation of these industries affect the economy?
How will tourism be effected?
How many are employed in this industry?
How is the oil and gas industry effected?
How much off-shore drilling in the U.S. takes place in the Gulf?
What is the lesson to be learned in this disaster?
Has there been innovation in preventing a disaster?
Brookings expert Amy Liu has been tracking the recovery of the Gulf Coast ever since Hurricane Katrina hit in 2005. In this week's @Brookings podcast, she discusses the enormous economic impact of the catastrophic BP Deepwater Horizon oil spill on New Orleans, the Gulf Coast region, and the nation.
The Global Economy and You
Advantages of Prices
Reading Check
Summarizing
In what way do prices perform the allocation function?
Allocations without Prices
Rationing
Problems with Rationing
Reading Check
Contrasting
What are the differences between the price system and rationing?
Prices as a System
Reading Check
Identifying
How do prices allocate resources between markets?
Ch. 6 Sec. 1 Review
In-class assignment: with a partner, identify the problems associated with rationing.
I Bought It On eBay
Section 2 The Price System at Work
Economists develop economic models of markets with supply and demand curves in order to analyze and predict outcomes. In a competitive market, the forces of supply and demand establish prices. A temporary surplus drives prices down; a temporary shortage forces prices up. Eventually, the market reaches the equilibrium price where there are neither shortages nor surpluses. Changes in supply or demand can disturb the market, but the market will tend to find its new equilibrium with the help of temporary shortages and/or surpluses. Whenever supply or demand for a product fluctuates, the elasticity of the two curves affects the size of the price change. Competitive markets represent the ideal, but the lessons learned from them apply to other markets as well.
In-class assignment, working with a partner, answer the following.
In your own words, explain the price system.
Does one person make a pencil?
Do it take many people and cultures to produce even simple goods such as pencils?
Does it take cooperation?
Is it likely that the differences between people would make them hate each other if they met?
Then what brought all these people together?
What does the price system foster if left unregulated according to Friedman?
Milton Friedman, Free to Choose (explains the price system), 2:11
Guide to Reading
Section Preview
Content Vocabulary
economic model
equilibrium price
surplus
In-class assignment, with a partner, answer the following.
As illustrated in the video, draw the graph.
Which direction does the demand curve go?
Which direction does the supply curve go?
Why (for each curve)?
What is the intersection of the curves called?
What does the idea of the surplus entail?
What is the red (in the video) section called?
What lines define the consumer surplus?
Can prices be determined as a result?
Equilibrium price and surplus, 6:27
Description of equilibrium price, consumer surplus, producer surplus and social surplus using supply and demand diagrams.
shortage
Academic Vocabulary
Reading Strategy
Companies in the News
Want prime seats? Get ready to bid?
The Price Adjustment Process
A Market Model
Figure 6.1 Market Equilibrium
Surplus
Shortage
Figure 6.2 Surpluses and Shortages
Cf. http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/epp/EPP_p150.swf
Equilibrium Price
Reading Check
Summarizing
How do surpluses and shortages help establish the equilibrium price?
Explaining and Predicting Prices
Change in Supply
Figure 6.3 Changes in Prices
Change in Demand
Change in Supply and Demand
The Importance of Elasticity
Careers
Real Estate Agent
Prices and Competitive Markets
Reading Check
Explaining
How does the elasticity of a good affects its price?
Business Week Newsclip
What's Raining on Solar's Parade?
Section 3 Social Goals and Market Efficiency
Prices work as a system to allocate resources between markets. However, if prices are fixed in one market, temporary shortages and surpluses tend to become permanent. A price ceiling, such as rent control, is one form of fixed price; a price floor, such as the minimum wage, is another example. Agriculture is especially hard-hit by price changes, because demand and supply tend to be inelastic, while weather often causes the supply curve to change. Therefore, to help farmers, the federal government established the Commodity Credit Corporation (CCC), an agency in the Department of Agriculture. The CCC then used a target price, which is essentially a price floor, to help stabilize farm prices. As a result, over the years, the government has established other forms of support for agriculture in the economy.
Guide to Reading
Section Preview
Content Vocabulary
Academic Vocabulary
Reading Strategy
Issues in the News
Minimum Wage Rise Hurts Students
Ch. 4 Prep
Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit2/chapter4/
Multiple Choice Quiz
Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit2/chapter5/self-check_quizzes.html
Crossword Puzzle
Cf. http://www.glencoe.com/olc_games/game_engine/content/gln_ss/epp_08/ch05/index.html
Flashcard
Cf. http://www.glencoe.com/qe/efcsec.php?qi=15424
Ch. 5 Prep
Chapter 5 Supply Multiple Choice Quiz
Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit2/chapter5/self-check_quizzes.html
Chapter 5 Puzzle
Cf. http://www.glencoe.com/olc_games/game_engine/content/gln_ss/epp_08/ch05/index.html
Chapter 5 Supply Flashcards
Cf. http://www.glencoe.com/qe/efcsec.php?qi=15424
Ch. 6 Prep
Chapter 6: Prices and Decision Making
Multiple Choice Quiz
Cf. http://glencoe.mcgraw-hill.com/sites/0078747643/student_view0/unit2/chapter6/self-check_quizzes.html
ePuzzle Concentration
Cf. http://www.glencoe.com/olc_games/game_engine/content/gln_ss/epp_05/chapter06/index.html
Academic, Glossary, People/Places/Events
Cf. http://www.glencoe.com/qe/efcsec.php?qi=15429
Ian Hunter, How's Your House, for the New Orleans Musicians Relief Fund
Email (or hand in hard copy) to gmsmith@shanahan.org.
Tuesday HW
1. p. 129, Reading Check, Analyzing, Why does the production function represent short-run production?
2. p. 130, Reading Check, Interpreting, What is unique about the third stage of production?
3. p. p. 131, #1-2
Wednesday HW
1. p. 134, Reading Check, Analyzing, If a firm's total output increases, will the fixed costs increase? Explain.
2. p. 135, Reading Check, Contrasting, What are the differences between an e-commerce store and a traditional business?
3. p. 137, Reading Check, Summarizing, Why do people, especially business owners, use marginal analysis?
Thursday HW
1. p. 140, #1-10
2. p. 140, #19-20
Friday HW
1. p. 140, #21-23
