Monday, February 14, 2011

Honors Business Economics: 15 February 2011

Beyond the Sound Bites:

Feb. 14 (Bloomberg) -- Ethan Ilzetzki, a lecturer at the London School of Economics, talks about the proposed fiscal 2012 budget that Barack Obama will present today as his administration and Congress negotiate boosting the $14.3 trillion debt ceiling. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse".

The Ch. 5 Sec. 1 Quiz is on Wednesday.

The Ch. 5 Sec. 2 Quiz is on Thursday.

The Ch. 5 Sec. 3 Quiz is on Friday.

Skip #16 and #35; do not answer on the Test.

The Chapter 4 Test Make-up is today.


The Ch. 4 Sec. 3 Quiz Make-up is today.

Standard feature:

The electronic edition of the Philadelphia Inquirer is available. We have the Sunday edition, available on Mondays, in addition to the Tuesday through Friday editions on the other days.

Please follow the steps below:

Click on the words "Access e-Inquirer" located on the gray toolbar underneath the green locker on the opening page.
Password: 10888


Chapter 7: Market Structures

Ch. 7 Sec. 1 Review

In-class assignment, with a partner, use the graphic organizer to identify the characteristics of imperfect competition.

Section 2: Market Failures

There are five common forms of market failures. The first is inadequate competition, which can lead to oligopolies or monopolies. The second is inadequate information, which denies people an awareness of better prices or opportunities in other markets. The third is resource immobility, which occurs when factors of production cannot or refuse to move to other markets. The fourth is the failure of the market to provide public goods. The fifth is the presence of externalities, positive or negative economic side effects to uninvolved third parties.

Section Preview

Content Vocabulary

market failure

Introduction to Market Failure, 5:07

In-class assignment, with a partner, answer and fill in the following.

When does a market failure occur?
The mnemonic device may aid your memory.
Remember: PIMM FACED
Define each of the following parts of the mnemonic.
P-ublic good
M-erit good

F-actor Immobility
C-yclical Instability
D-emerit Good

public goods

Public Goods, 3:38

In-class assignment, with a partner, answer or define the following.

What are private goods?
Define excludibility.
Define rivalry.
What are public goods?
Define nonrivalry.
What example illustrates a public good?
Who pays for a public good?
What is free ridership?
What is the government's role?
What happens when you can't prevent people from consuming a commodity, even if they haven't paid for it? Who ends up providing these kinds of goods and services?


In-class assignment, with a partner, answer the following questions.

When do externalities occur?
What do they involve?
What is involved in negative externalities?
What does the example of a cell phone demonstrate?
Are there any costs to others when a cell phone is used while driving?
Do users consider all the costs?
What entity is involved as a result?
What is the government solution to negative externalities?
What about positive externalities?
What field is an example of positive externality?
What is the government solution to a positive externality?

Externalities, 7:39

negative externality

positive externality

Academic Vocabulary

Ch. 7 Sec. 2 Reading Strategy

In-class assignment, with a partner, complete the graphic organizer about why maintaining adequate competition is a worthwhile goal. Use the graphic organizer to list some of the effects of competition.

Companies in the News


enron the smartest guys in the room - Trailer, 2:04

In-class assignment, with a partner, answer the following.

What was Enron's fatal flaw?
How would you characterize the type of people at Enron?
What did they find to make a profit?
What is the corporate crime of the century?

Types of Market Failures

Market Failures, 3:13

What is the definition of a market failure?
What are externalities?
Recall the cell phone example from externalities.
What is the second type of market failure?
What are two examples?
What is the next type of market failure?
What is one example?
What is the fourth type of market failure?
What is one example?

Inadequate Competition

Inadequate Information

Resource Immobility

Did You Know?

Expensive Memories

Sherman Antitrust Act

Public Goods


Reading Check


What type of market failure do you think is most harmful to the economy?

Dealing With Externalities

Correcting Negative Externalities

Correcting Positive Externalities

Reading Check


If externalities are positive, why should they be corrected?

BusinessWeek Newsclip

Lord of the Rings

Ch. 7 Sec. 2 Review

In-class assignment, with a partner, use the graphic organizer to identify and describe both types of externalities.


Section 3 The Role of Government

The role of government has expanded to preserve competitive markets. This has taken the form of antitrust legislation that outlaws trusts and various forms of price discrimination. As a result, the economy has been modified so that it is now a mixture of different market structures, different forms of business organizations, and some degree of government regulation.

Content Vocabulary


price discrimination

cease and desist order

public disclosure

Academic Vocabulary

Ch. 7 Sec. 3 Reading Strategy

In-class assignment, with a partner, complete the graphic organizer by describing how governments try to avoid market failures.

Products in the News

Electric Bass Recalled

Maintain Competition

Antitrust Legislation

Government Regulation

Reading Check


Why are some government regulations beneficial for consumers?

Improve Economic Efficiency

Promote Transparency

Provide Public Goods

Reading Check


What negative things could happen in a market without disclosure?

Modified Free Enterprise

Reading Check


Why do we use the term modified to describe the American free enterprise economy?

Ch. 7 Sec. 3 Review

In-class assignment, with a partner, use the graphic organizer to identify how the federal government can maintain competition and improve economic efficiency.

Case Study Pixar and Disney


Ch. 5 Prep

Chapter 5 Supply Multiple Choice Quiz


Chapter 5 Puzzle


Chapter 5 Supply Flashcards


Ch. 6 Prep

Chapter 6: Prices and Decision Making
Multiple Choice Quiz


ePuzzle Concentration


Academic, Glossary, People/Places/Events


Weather Report-Teen Town, 3:43

Email (or hand in hard copy) to

Tuesday HW
1. What would happen if consumers did not have easy access to information about products and services?
2. p. 170, What conditions for perfect competition are met in this photograph, and how?
3. p. 171, What would happen if the equilibrium price increased to $22.50?