AP Economics: 15 October 2009

Prayer:
As announced, a 20 Question multiple-choice Test (the Make-up Test) will be administered, Test #1, Chapter 2.

Current Events:

Larry Kudlow, and his expert from the Wall Street Times, states that the harm to the economy is deliberate.

Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/

Email: gmsmith@shanahan.org

The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.

LibraryThing has bibliographic resources.

I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.

Chapter Three Overview, Demand and Supply

Every Graph You Need to Know for the Exam: Supply and Demand (Illustrated)

The introduction of the idea of a market (using a number of examples, including
financial markets and textbook sales) is followed by the analysis of demand, supply, equilibrium, and the effects on market equilibrium when demand and supply
curves shift.

Chapter Outline

Markets

The Price System

Checkpoint: Markets

Demand

The Relationship Between Quantity Demanded and Price

The Law of Demand

The Demand Curve

Market Demand Curves

Determinants of Demand

Tastes and Preferences

Income

Prices of Related Goods

The Number of Buyers

Expectations About Future Prices, Incomes, and Product Availability

Changes in Demand Versus Changes in Quantity Demanded

Changes in Demand

Changes in Quantity Demanded

Checkpoint: Demand

Supply

The Relationship Between Quantity Supplied and Price

The Law of Supply

The Supply Curve

Market Supply Curves

Determinants of Supply

Production Technology

Costs of Resources

Prices of Other Commodities

Expectations

The Number of Sellers

Taxes and Subsidies

Changes in Supply versus Changes in Quantity Supplied

Checkpoint: Supply

Market Equilibrium

Moving to a New Equilibrium: Changes in Supply and Demand

Predicting the New Equilibrium When One Curve Shifts

Predicting the New Equilibrium When Both Curves Shift

Summarizing Shifts and Equilibrium

Checkpoint: Market Equilibrium

Putting Supply and Demand to Work

Excess Grape Supply and Two-Buck Chuck

Trek Bicycles and Lance Armstrong

Ideas for Capturing Your Classroom Audience

■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction
progresses. Consider products that students think will be highly desired as
opposed to other less popular products.

Chapter Checkpoints

Market: Financial Markets

From Friday: Questions for discussion on Shanawiki: Demand: Hybrid Cars
Question: Sales of hybrid cars are on the rise. The Toyota Prius, while priced above comparable gasoline-only cars, is selling well. Other manufacturers are adding hybrids to their lines as well. What has been the cause of the rising sales of hybrids? Is this an increase in demand or an increase in quantity demanded?

Supply: iPods, iTunes, and MP3 players
Question: What has been the impact of the iPod, iTunes, and MP3 players in general
on high-end stereo equipment sales? Has the same impact been at work with CD
music sales since downloading of individual songs was introduced by Apple?

Equilibrium: China and India
Question: As China and India (both with huge populations and rapidly growing
economies) continue to develop, what do you think will happen to their demand for
energy and specifically oil? What will suppliers of oil do in the face of this demand? Will this have an impact on world energy (oil) prices? What sort of policies or events could alter your forecast about the future price of oil?

Extended Examples in the Chapter

Putting Demand and Supply to Work

Both of the following examples use supply and demand analysis as a framework for
predicting how market participants will act, and what the resulting price and output might be.

Excess Grape Supply and Two-Buck Chuck

The great California wine of the 1990s put California wine on the map. Demand,
prices, and exports grew rapidly. Over planting of new grape vines was a result.
Driving along Interstate 5 or Highway 101 north of Los Angeles, grape vineyards
extend for miles as far as the eye can see, and most were planted in the mid to late 1990s. The 2001 recession reduced the demand for California wine, and a rising dollar made imported wine relatively cheaper. The result was a sharp drop in demand for California wine and a huge surplus of grapes. Bronco Wine Company President Fred Franzia made an exclusive deal with Trader Joe’s (an unusual supermarket that features exotic food and wine products), bought the excess grapes at distressed prices, and with his modern plant produced inexpensive wine under the Charles Shaw label. Selling for $1.99 a bottle, Two-Buck Chuck as it is known is available in Chardonnay, Merlot, Cabernet Sauvignon, Shiraz, and Sauvignon Blanc. Consumers have flocked to Trader Joe’s and literally haul cases of wine out by the carload. Today, Two-Buck Chuck sells well over a million cases a month. This is not rot-gut: the 2002 Shiraz beat out 2,300 other wines to win a double gold medal at the 2004 28th Annual International Eastern Wine Competition.

Two-Buck Chuck was such a hit that other supermarkets were forced to offer their
own discount wines. This good, low-priced wine has had the effect of opening up
markets. As an illustration can be demonstrated, people who previously avoided wine because of the cost have begun drinking more (demand curves do slope down and to the right).

As The Economist has noted, the entire industry may benefit because “Wine
drinkers who start off drinking plonk often graduate to upmarket varieties.”

For more information about this wine and conditions in the wine industry, visit the following Web sites:

From CBS News, a story titled “ ‘Two Buck Chuck’ Wine Cult” points out that it is
the surplus of grapes that makes the wine so inexpensive. On the web at: http://
www.cbsnews.com/stories/2003/06/02/eveningnews/main556620.shtml
KTVU.com (from the Bay Area of California) has a story titled “‘Two Buck Chuck’
Changing Wine Habits” which makes the point that “quality does not necessarily follow price.” http://www.ktvu.com/consumer/1954524/detail.html

Trek Bikes and Lance

When Lance Armstrong won his seventh Tour de France cycling championship in
July, 2005, he rode a bicycle made by Trek of the United States.2 So on the demand
side, we can expect demand for the victor’s brand of bicycles to go up. This in fact happened, in both the United States and Europe. On the supply side, U.S. bicycle manufacturers such as Trek and Cannondale were willing to increase output as shown in Figure 15 (note that the supply curve didn’t change, only quantity supplied).

This process worked well in the U.S. but proved tougher in Europe, not so
much in the actual production of the bicycles but in getting stores to stock them. Up to a few years ago, racing bicycles were almost exclusively made by European companies.

___
1 “California Drinking,” The Economist, June 7th, 2003, p. 56.
2 See Ian Austen, “U.S. Bike Makers Seek Dominance in Europe,” The New York Times,
December 30, 2003, p. W1.

The Market for Bicycles

Using our supply and demand analysis, we see that demand increased. Since no
determinant of supply changed, we know that just output will increase, and prices
for Trek bicycles will rise. Our supply and demand analysis gives us a useful framework for predicting how market participants will act, and what the resulting price and output might be.

For More Information

In an article titled “Trek Bicycle Coup: Tour de Force” in Baseline (on the web at
http://www.baselinemag.com/article2/0,1397,1618016,00.asp), the author details the
technology used in making the bikes, as well as providing data on prices and quantities.

The phrase “limitless tolerance on price” is a good introduction to the topic
of elasticity (to be covered in an upcoming chapter).

Examples Used in the End-of-Chapter Questions

Question 10 discusses the market for virtual goods. Based on Rob Walker, “The
Buying Game: A real market, overseen by a real corporation selling things that don’t really exist,” (The New York Times Magazine, October 16, 2005, p. 28), the question asks students to consider the markets for goods used in on-line games such as EverQuest II. This example encourages students to see that markets “really” exist even in “virtual” worlds.

For a further demonstration, visit the homepage of Second Life (at http://secondlife.com/) and see how much in U.S. dollars has been spent…in just 24 hours!

Question 11 is based on a Wall Street Journal story by Peter Sanders and Stephanie
Kang, (“Wipeout for Key Player in Surfboard Industry,” The Wall Street Journal,
December 8, 2005, p.B1) that discusses the closing of Clark Foam. The key point of
the example is that the firm was a manufacturer of a critical input needed to make
surfboards. It provides a good illustration about how a change in price and availability of a resource carries over into product markets.

For another story and some good visuals, see the page on the web at http://www.
transworldsnowboarding.com/twbiz/features/article/0,21214,1138359,00.htm.
Question 12 examines the effect of increased demand in the market for polysilicon,
used in making solar panels. It is based on the story by John Carey, “What’s Raining on Solar’s Parade” (Business Week, February 6, 2006, p. 78). The key point for discussion here is the impact of uncertainty, which is another way to talk about the role of expectations on demand and supply.

For more about the dynamics of the polysilicon market, see the story from IndustrialControl Designline on the web at http://www.industrialcontroldesignline.com/
showArticle.jhtml?printableArticle=true&articleId=163701891.

Question 13 provides a good example of how synthetic substitute products can be
developed when “natural” products become scarce. Based on the story by James
Altucher, “Supply, demand and edible orchids” (The Financial Times, September
20, 2005, p.12), it presents students with a data set, requires them to graph and analyze the data, and then illustrate the effects of changes in demand and supply.
Particular attention is given to the idea that even as supply is changing, demand may also be changing (in this case, due to the development of a synthetic).

Did you know that vanilla is the most labor-intensive agricultural product in the
world? You can find out just about everything there is to know about vanilla on the web at http://www.vanilla.com/html/facts-faq.html.

For Further Analysis

The Supply and Demand Effects of the Increased Use of Ethanol

Handout 3-1 is an in-class group exercise with your small group.

Students are asked to draw graphs illustrating shifts in demand and supply
and changes in quantity demanded and supplied. Asking students to document
research about specifics in this topic (for example, changes in planted acreage).

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery of graphing techniques; and reinforcement of critical thinking skills.

Web-based Exercise

What’s Been Driving Gasoline Prices?

This example can be used as an in-class group exercise.

Asking students to perform (and document) additional research allows you
to use it as a case study or group project as well. For example, students can be
asked to document gasoline sales to see if, as predicted, an increase in demand
results in both a higher price and a greater quantity sold.

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery of graphing techniques; and reinforcement of critical thinking skills.

The Supply and Demand Effects of the Increased Use of Ethanol

Draw a supply and demand graph showing the market for corn in equilibrium. Label the demand curve as “DOld” and the supply curve as “S”. Then illustrate the effect of an increased demand for corn due to its being used to produce ethanol. Explain the changes in price and equilibrium quantity using the vocabulary of “changes in quantity demanded,” and “changes in quantity supplied,” as well as “change in demand” and “change in supply.”

Use a supply and demand graph to illustrate and explain the impact of a higher price of corn on any one of a wide variety of food products; be sure to include the effect on the cost of high-fructose corn syrup.

You do not need to send HW in email to gmsmith@shanahan.org for this exercise.

1. ■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction progresses. Consider products that students think will be highly desired as opposed to other less popular products.

WH II: 13 October 2009

Prayer:
Test, 20 Question, multiple-choice Test on Chapter 10.

Current events:

Looks like recently there was a "Panic in Detroit."

Included here is a World Socialist report on Detroit.



Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/

Email: gmsmith@shanahan.org

The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.

The online version of a portion of the Textbook is available.

LibraryThing has bibliographic resources.

I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.

Sr. has advised students to check online teaching materials (as we have been doing since the first day of school).


We can consider the results of the Slideshare assignment.

Map of France

Chapter 11 (newer edition Ch. 18): The French Revolution and Napoleon, 1789–1815

Chapter Overviews

Poverty, social divisions, and economic crisis led to the French Revolution and a reign of terror. Napoleon Bonaparte took power in a coup d'etat and tried to overthrow Europe's old order. After his costly military campaigns, he was defeated at Waterloo, Belgium, and exiled.

Section 1 The French Revolution Begins

Poverty and deep social divisions were the backdrop of the French Revolution. On the eve of the revolution, financial crisis gripped the government of Louis XVI. Rather than accept higher taxes, the commoners in France's legislative body, the Estates-General, broke off to form a National Assembly. Anticipating an attack by the king's forces, commoners then stormed the Bastille prison, marking the start of the Revolution. The new Assembly took control of the Catholic Church and adopted the Declaration of the Rights of Man and the Citizen. The document was inspired in part by the American Declaration of Independence and Constitution. The Assembly then wrote a constitution establishing a limited monarchy and a Legislative Assembly. France was soon at war with Austria, where some feared the revolution might spread. Louis XVI was taken captive by the Paris Commune. The Commune called for a National Convention and forced the revolution into a more violent phase.

Section 2 Radical Revolution and Reaction

During the first years of the revolution, a republic was established, Louis XVI was executed, and thousands of people were killed on suspicion of opposing the revolution. While factions fought over control within France, European states fearing the spread of revolution made plans to invade France. The National Convention responded by forming a Committee of Public Safety. The committee led a 12-month Reign of Terror, executing close to 40,000 suspected enemies and expunging signs of Catholic influence. The committee also raised the largest army in European history and repelled the invading armies. With the crisis past, the National Convention ended the Reign of Terror and executed its zealous leader, Maximilien Robespierre. Power shifted into the hands of more moderate middle-class leaders who produced a constitution in 1795. The constitution called for a two-house legislative body and an executive committee, called the Directory. The Directory faced mounting problems. In 1799 a popular General, Napoleon Bonaparte, seized power in a coup d'état.

Section 3 The Age of Napoleon

Napoleon formed a new government, the consulate, in which he held absolute power. In 1802 he was crowned emperor and signed a peace treaty with Russia, Great Britain, and Austria. At home, he made peace with the Catholic Church and created a functioning bureaucracy. His Napoleonic Code preserved many of the rights gained in the revolution. War was soon renewed. By 1807, Napoleon had created a French empire. In parts of the empire, Napoleon sought to spread the revolution. However, his invasions had contributed to the spread of nationalism as well. This, along with British sea power, would spell his defeat. After a disastrous invasion of Russia, other European nations attacked Napoleon's army and captured Paris. Napoleon was exiled from France, and the monarchy was restored. Napoleon returned to power briefly, only to face final military defeat against a combined Prussian and British force at Waterloo and to be exiled once again.

After surveying the Chapter, we begin in Section 1 The French Revolution Begins

We can consider the "Causes of the French Revolution."

To cover the entire French Revolution is a lofty task but to deal with the subject as best we can there is a good reference in the "Detailed Guide to the Revolution."

One of the most interesting characters of the period is "Marie Antoinette."

Or, alternatively, we can listen to "Liberty, Equality, and Fraternity: Exploring the French Revolution" in song.

If someone is studying French, perhaps they can translate the anthem of the republican Revolution:

The Marseillaise (War Song for the Army of the Rhine)

Marseillaise
( Chant de guerre pour l'armée du Rhin)

Allons enfants de la patrie!
Le jour de gloire est arrivé;
Contre nous de la tyrannie
L'étendard sanglant est levé.
L'étendard sanglant est levé.

Entendez-vous dans les campagnes
Mugir ces féroces soldats?
Ils viennent jusque dans vos bras
Egorger vos fils, vos compagnes!

Refrain:

Aux armes, citoyens, formez vos bataillons,
Marchez, marchez, qu'un sang impur
abreuve nos sillons.

Que veut cet horde d'esclaves,
De traîtres, de rois conjurés?
Pour qui ces ignobles entraves,
Ces fers dès longtemps préparés?
Ces fers dès longtemps préparés?

Francais! Pour nous, ah quel outrage!
Quels transports il doit exciter!
C'est nous qu'on ose méditer
De rendre à l'antique esclavage?

Refrain

Amour sacré de la patrie,
Conduis, soutiens nos bras vengeurs
Liberté, Liberté chérie!
Combats avec tes défenseurs
Combats avec tes défenseurs

Sous nos drapeaux que la Victoire
Accourt à tes mâles accents:
Que tes ennemis expirants
Voient ton triomphe et notre gloire

Refrain

Refrain
One of the most arresting images of the Revolution, no pun intended, is the guillotine.

Chapter 11 Section 1 The French Revolution Begins

Objectives

*Describe the social divisions of France’s old order.
*List reasons for France’s economic troubles in 1789.
*Explain why Louis XVI called the Estates-General and summarize what resulted.
*Understand why Parisians stormed the Bastille.



Witness History

The Loss of Blood Begins (Audio)

On July 14, 1789, after a daylong hunting expedition, King Louis XVI returned to his palace in Versailles. Hours earlier, armed Parisians had attacked the Bastille. They had cut the chains of the prison drawbridge, crushing a member of the crowd, and poured into the courtyard. Chaos ensued as shots rang out, blood was spattered, and heads were paraded down the streets on spikes. When Louis heard the news, he exclaimed, “Then it’s a revolt?” “No, sire,” replied the duke bearing the news, “it’s a revolution!” The French Revolution had begun. Witness History relates the fall of the Bastille.

The Conquerors of the Bastille before the Hotel de Ville, painted by Paul Delaroche

Preview

Chapter Focus Question

What were the causes and effects of the French Revolution, and how did the revolution lead to the Napoleonic era?

Background to the Revolution

The Three Estates

Financial Crisis

Reading Check
Identifying
What groups were part of the Third Estate?

From Estates-General to National Assembly

Reading Check
Examining
Why did the Third Estate object to each estate's having one vote in the Estates-General?

The Destruction of the Old Regime

Declaration of the Rights of Man

The King Concedes

Church Reforms

A New Constitution and New Fears

War with Austria

Rise of the Paris Commune

Reading Check
Evaluating
What was the significance of the Constitution of 1791?

Preview

Section 2 Radical Revolution and Reaction

HW: email me at gmsmith@shanahan.org.

1. Using print and Internet sources (a reference to La Marseilloise is made above, an English translation is also available), familiarize yourself with the lyrics to The Marseillaise, God Save the Queen (not the pop version),



and The Star Spangled Banner. How do they vary in subject matter, tone, theme, and style, and how are they similar?

Not required, but if helpful, create a chart listing your findings.

Bibliographic resources for the French Revolution

Previous to or the buildup to the Revolution

Cf. The Coming of the French Revolution (Princeton Classic Editions)
by Georges Lefebvre.

The Fall of the French Monarchy 1787-1792 (The French Revolution)
by Michel Vovelle.

Great Fear of 1789
by Georges Lefebvre.

General works on the Revolution

The Crowd in the French Revolution (Galaxy Books)
by George Rude.

A Short History of the French Revolution, 1789-1799
by Albert Soboul.

The Abolition Of Feudalism: Peasants, Lords, And Legislators In The French Revolution, by John Markoff.

Interpreting the French Revolution
by Francois Furet.

Citizens: A Chronicle of the French Revolution
by Simon Schama.

The Radical Revolution

The Sans-Culottes
by Albert Soboul.

The Vendee: A Sociological Analysis of the Counter-Revolution of 1793
by Charles Tilly.

Revolutionary Themes After the Revolution

Reflections on the Revolution in France (Oxford World's Classics)
by Edmund Burke.

The Age of Revolution: 1789-1848
by Eric Hobsbawm.

Work and Revolution in France: The Language of Labor from the Old Regime…
by William H. Sewell Jr.

The Course in German History by A.J.P. Taylor.

AP Economics: 13 October 2009

Prayer:
As announced, a 20 Question multiple-choice Test will be administered, Test #1, Chapter 2.

Current Events:

Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/

Email: gmsmith@shanahan.org

The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.

LibraryThing has bibliographic resources.

I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.

Chapter Three Overview, Demand and Supply

Every Graph You Need to Know for the Exam: Supply and Demand (Illustrated)

The introduction of the idea of a market (using a number of examples, including
financial markets and textbook sales) is followed by the analysis of demand, supply, equilibrium, and the effects on market equilibrium when demand and supply
curves shift.

Chapter Outline

Markets

The Price System

Checkpoint: Markets

Demand

The Relationship Between Quantity Demanded and Price

The Law of Demand

The Demand Curve

Market Demand Curves

Determinants of Demand

Tastes and Preferences

Income

Prices of Related Goods

The Number of Buyers

Expectations About Future Prices, Incomes, and Product Availability

Changes in Demand Versus Changes in Quantity Demanded

Changes in Demand

Changes in Quantity Demanded

Checkpoint: Demand

Supply

The Relationship Between Quantity Supplied and Price

The Law of Supply

The Supply Curve

Market Supply Curves

Determinants of Supply

Production Technology

Costs of Resources

Prices of Other Commodities

Expectations

The Number of Sellers

Taxes and Subsidies

Changes in Supply versus Changes in Quantity Supplied

Checkpoint: Supply

Market Equilibrium

Moving to a New Equilibrium: Changes in Supply and Demand

Predicting the New Equilibrium When One Curve Shifts

Predicting the New Equilibrium When Both Curves Shift

Summarizing Shifts and Equilibrium

Checkpoint: Market Equilibrium

Putting Supply and Demand to Work

Excess Grape Supply and Two-Buck Chuck

Trek Bicycles and Lance Armstrong

Ideas for Capturing Your Classroom Audience

■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction
progresses. Consider products that students think will be highly desired as
opposed to other less popular products.

Chapter Checkpoints

Market: Financial Markets

From Friday: Questions for discussion on Shanawiki: Demand: Hybrid Cars
Question: Sales of hybrid cars are on the rise. The Toyota Prius, while priced above comparable gasoline-only cars, is selling well. Other manufacturers are adding hybrids to their lines as well. What has been the cause of the rising sales of hybrids? Is this an increase in demand or an increase in quantity demanded?

Supply: iPods, iTunes, and MP3 players
Question: What has been the impact of the iPod, iTunes, and MP3 players in general
on high-end stereo equipment sales? Has the same impact been at work with CD
music sales since downloading of individual songs was introduced by Apple?

Equilibrium: China and India
Question: As China and India (both with huge populations and rapidly growing
economies) continue to develop, what do you think will happen to their demand for
energy and specifically oil? What will suppliers of oil do in the face of this demand? Will this have an impact on world energy (oil) prices? What sort of policies or events could alter your forecast about the future price of oil?

Extended Examples in the Chapter

Putting Demand and Supply to Work

Both of the following examples use supply and demand analysis as a framework for
predicting how market participants will act, and what the resulting price and output might be.

Excess Grape Supply and Two-Buck Chuck

The great California wine of the 1990s put California wine on the map. Demand,
prices, and exports grew rapidly. Over planting of new grape vines was a result.
Driving along Interstate 5 or Highway 101 north of Los Angeles, grape vineyards
extend for miles as far as the eye can see, and most were planted in the mid to late 1990s. The 2001 recession reduced the demand for California wine, and a rising dollar made imported wine relatively cheaper. The result was a sharp drop in demand for California wine and a huge surplus of grapes. Bronco Wine Company President Fred Franzia made an exclusive deal with Trader Joe’s (an unusual supermarket that features exotic food and wine products), bought the excess grapes at distressed prices, and with his modern plant produced inexpensive wine under the Charles Shaw label. Selling for $1.99 a bottle, Two-Buck Chuck as it is known is available in Chardonnay, Merlot, Cabernet Sauvignon, Shiraz, and Sauvignon Blanc. Consumers have flocked to Trader Joe’s and literally haul cases of wine out by the carload. Today, Two-Buck Chuck sells well over a million cases a month. This is not rot-gut: the 2002 Shiraz beat out 2,300 other wines to win a double gold medal at the 2004 28th Annual International Eastern Wine Competition.

Two-Buck Chuck was such a hit that other supermarkets were forced to offer their
own discount wines. This good, low-priced wine has had the effect of opening up
markets. As an illustration can be demonstrated, people who previously avoided wine because of the cost have begun drinking more (demand curves do slope down and to the right).

As The Economist has noted, the entire industry may benefit because “Wine
drinkers who start off drinking plonk often graduate to upmarket varieties.”

For more information about this wine and conditions in the wine industry, visit the following Web sites:

From CBS News, a story titled “ ‘Two Buck Chuck’ Wine Cult” points out that it is
the surplus of grapes that makes the wine so inexpensive. On the web at: http://
www.cbsnews.com/stories/2003/06/02/eveningnews/main556620.shtml
KTVU.com (from the Bay Area of California) has a story titled “‘Two Buck Chuck’
Changing Wine Habits” which makes the point that “quality does not necessarily follow price.” http://www.ktvu.com/consumer/1954524/detail.html

Trek Bikes and Lance

When Lance Armstrong won his seventh Tour de France cycling championship in
July, 2005, he rode a bicycle made by Trek of the United States.2 So on the demand
side, we can expect demand for the victor’s brand of bicycles to go up. This in fact happened, in both the United States and Europe. On the supply side, U.S. bicycle manufacturers such as Trek and Cannondale were willing to increase output as shown in Figure 15 (note that the supply curve didn’t change, only quantity supplied).

This process worked well in the U.S. but proved tougher in Europe, not so
much in the actual production of the bicycles but in getting stores to stock them. Up to a few years ago, racing bicycles were almost exclusively made by European companies.

___
1 “California Drinking,” The Economist, June 7th, 2003, p. 56.
2 See Ian Austen, “U.S. Bike Makers Seek Dominance in Europe,” The New York Times,
December 30, 2003, p. W1.

The Market for Bicycles

Using our supply and demand analysis, we see that demand increased. Since no
determinant of supply changed, we know that just output will increase, and prices
for Trek bicycles will rise. Our supply and demand analysis gives us a useful framework for predicting how market participants will act, and what the resulting price and output might be.

For More Information

In an article titled “Trek Bicycle Coup: Tour de Force” in Baseline (on the web at
http://www.baselinemag.com/article2/0,1397,1618016,00.asp), the author details the
technology used in making the bikes, as well as providing data on prices and quantities.

The phrase “limitless tolerance on price” is a good introduction to the topic
of elasticity (to be covered in an upcoming chapter).

Examples Used in the End-of-Chapter Questions

Question 10 discusses the market for virtual goods. Based on Rob Walker, “The
Buying Game: A real market, overseen by a real corporation selling things that don’t really exist,” (The New York Times Magazine, October 16, 2005, p. 28), the question asks students to consider the markets for goods used in on-line games such as EverQuest II. This example encourages students to see that markets “really” exist even in “virtual” worlds.

For a further demonstration, visit the homepage of Second Life (at http://secondlife.com/) and see how much in U.S. dollars has been spent…in just 24 hours!

Question 11 is based on a Wall Street Journal story by Peter Sanders and Stephanie
Kang, (“Wipeout for Key Player in Surfboard Industry,” The Wall Street Journal,
December 8, 2005, p.B1) that discusses the closing of Clark Foam. The key point of
the example is that the firm was a manufacturer of a critical input needed to make
surfboards. It provides a good illustration about how a change in price and availability of a resource carries over into product markets.

For another story and some good visuals, see the page on the web at http://www.
transworldsnowboarding.com/twbiz/features/article/0,21214,1138359,00.htm.
Question 12 examines the effect of increased demand in the market for polysilicon,
used in making solar panels. It is based on the story by John Carey, “What’s Raining on Solar’s Parade” (Business Week, February 6, 2006, p. 78). The key point for discussion here is the impact of uncertainty, which is another way to talk about the role of expectations on demand and supply.

For more about the dynamics of the polysilicon market, see the story from IndustrialControl Designline on the web at http://www.industrialcontroldesignline.com/
showArticle.jhtml?printableArticle=true&articleId=163701891.

Question 13 provides a good example of how synthetic substitute products can be
developed when “natural” products become scarce. Based on the story by James
Altucher, “Supply, demand and edible orchids” (The Financial Times, September
20, 2005, p.12), it presents students with a data set, requires them to graph and analyze the data, and then illustrate the effects of changes in demand and supply.
Particular attention is given to the idea that even as supply is changing, demand may also be changing (in this case, due to the development of a synthetic).

Did you know that vanilla is the most labor-intensive agricultural product in the
world? You can find out just about everything there is to know about vanilla on the web at http://www.vanilla.com/html/facts-faq.html.

For Further Analysis

The Supply and Demand Effects of the Increased Use of Ethanol

Handout 3-1 is an in-class group exercise with your small group.

Students are asked to draw graphs illustrating shifts in demand and supply
and changes in quantity demanded and supplied. Asking students to document
research about specifics in this topic (for example, changes in planted acreage).

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery of graphing techniques; and reinforcement of critical thinking skills.

Web-based Exercise

What’s Been Driving Gasoline Prices?

This example can be used as an in-class group exercise.

Asking students to perform (and document) additional research allows you
to use it as a case study or group project as well. For example, students can be
asked to document gasoline sales to see if, as predicted, an increase in demand
results in both a higher price and a greater quantity sold.

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery of graphing techniques; and reinforcement of critical thinking skills.

The Supply and Demand Effects of the Increased Use of Ethanol

Draw a supply and demand graph showing the market for corn in equilibrium. Label the demand curve as “DOld” and the supply curve as “S”. Then illustrate the effect of an increased demand for corn due to its being used to produce ethanol. Explain the changes in price and equilibrium quantity using the vocabulary of “changes in quantity demanded,” and “changes in quantity supplied,” as well as “change in demand” and “change in supply.”

Use a supply and demand graph to illustrate and explain the impact of a higher price of corn on any one of a wide variety of food products; be sure to include the effect on the cost of high-fructose corn syrup.

You do not need to send HW in email to gmsmith@shanahan.org for this exercise.

1. ■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction progresses. Consider products that students think will be highly desired as opposed to other less popular products.

Additional Vocabulary and Questions for AP US History

AP US History

1. Joint-stock companies: Merchants from England pooled resources to create a joint company. Many joint stock companies of the seventeenth century were created to last only a few years and then be sold quickly for a large profit; no one was thinking of a long-term investment of America. However, this out much pressure on American colonists because if they did not get riches to the company, they were abandoned. The companies were perfected in the 1600s, which allowed investors to pool together their money. An example of such a joint stock company was the Virginia Company of London that received a charter to settle America in the name of King James I.
2. Indentured servant: A person with little or no money who, in exchange for passage to America, was required to work for a certain number of years for the person who had paid for their voyage. A number of white indentured servants provided much of the labor on America’s tobacco crops in earlier settlement times. During the later part of the seventeenth century, these indentured servants began to be replaced by black slaves.
3. Melting pot: The term used to explain the blending of the many different cultures of the immigrants to America into one unifying culture. Although many of the settlers were English, there was always a mixing of many different cultures. Germans made up about six percent of the population, Scots-Irish about seven percent, Dutch about three percent, and finally about forty-nine percent English. Many of the original thirteen colonies were melting pots of people from many different cultures.
4. House of Burgesses: An assembly formed in 1619 authorized by The London Company that eventually allowed for the creation of many miniature parliaments to form in America. This was the first representative government of America that began in Virginia. However, James I was greatly opposed to this assembly and called it a “seminary of sedition.” In 1624, James revoked the charter of the Virginia Company and made Virginia a colony under his direct control partly because of their democratic views of government.
5. Primogeniture: A law that stated that only a man’s eldest son could inherit landed property. Because of this, younger sons who wanted to make a fortune were forced to think of other ways to do so. Although many were ineffective initially, the birth of the joint stock company allowed younger sons to break the bonds of primogeniture and allowed for the effort of English colonization of North America.
6. “Starving time”: The winter of 1609 to 1610 in Jamestown, Virginia where only sixty people survived the horrible living conditions. Many people were forces to eat “starving time foods” which included pets and even dead bodies. Although after this horrible time the remaining few tried to return to England, they were met by Lord De La Warr who imposed a harsh control and ordered the settlers to remain.
7. Maryland “Act of Toleration” (1649): Passed by the local representative assemble in 1649, the religious proclamation guaranteed religious toleration of all Christians. Because local Catholics were scared of the growing Protestant population, they greatly supported this movement. However, the document also stated death to all those who did not believe in the divinity of Christ including atheists and Jews. Although this meant less toleration than before, the Christian minority felt more at ease, allowing more Catholics to move to Maryland.
8. Barbados Slave Code: The Code of Slavery that was brought back with a group of English settlers from Barbados to America in 1670. This code denied many rights to slaves, while giving their masters almost complete control of their servants. The code eventually governed slavery throughout Britain’s mainland colonies, and a version was officially adopted by Carolina in 1696. This example shows the influence of the Caribbean islands on the slave system throughout America.
9. Iroquois Confederacy: A military alliance among Indians in current New York State that was called the “League of the Iroquois.” Made of five Indian groups, the Mohawks, the Oneidas, the Onondagas, the Cayugas, and the Senecas, the alliance was formed in the 1500s by the leaders Deganawidah and Hiawatha according to Indian legend. Although the Iroquois originally fought other Indians and other invaders, they were almost wiped out by new English settlers due to disease, alcohol, and guns. Although the five nations interacted and celebrated together, they were also quite independent. The alliance tried to take advantage of European rivals, but eventually was greatly destroyed by siding with the defeated British in the American Revolution. Many were relocated to reservations, where they suffered even more.

1. “visible saints”: The saved people according to Calvinism who led holy lives once they knew they had been chosen to go to heaven by God. These people underwent “conversion” where they had a personal experience with God where their destiny was revealed. These people felt grace within in, and were able to show other Puritans the grace. These “saints” became part of the church membership and were at first the only ones who were able to vote as they were the only ones considered “freemen.”
2. Anne Hutchinson: An intelligent woman who presented a challenge to Puritan orthodoxy. She believed in a challenging heresy called antinomianism that went to the extreme in terms of the Puritan belief of predestination. Antinomianism believed that the saved do not need to follow the rules of God or man. When she was arrested and brought to trial in 1638, she claimed to have a direct revelation from God, another heresy. She was then banished, and her family moved to first Rhode Island, then to New York. She and her family were eventually killed by Indians.
3. John Winthrop: A wealthy gentleman who became the first governor of the Massachusetts Bay Colony. He believed he was called by God to head the new religious experiment, and served for nineteen years. In part because of his leadership, Massachusetts was able to prosper. However, he objected to democracy, and did not have faith in the common people.
4. William Bradford: A prominent leader of the Puritans who was well renowned, especially in the languages. He was very popular, and was reelected thirty times to be governor for the Plymouth Colony. However, one of his greatest fears was that other settlers would come and “ruin” his religious experiment in America.
5. Plymouth Colony: The colony founded by the pilgrims who came on the Mayflower in 1620. The settlers were squatters because they were outside the region of the Virginia Company and had no legal right to own the land. However, this allowed the people to form a self-representative government by signing the Mayflower Compact. Although the first winter was hard, the following fall had a great harvest and the First Thanksgiving. Although the colony was always small and not a great area of trade, it had prominent leaders and was a center of religion.
6. Navigation Laws: The laws intended to make America more tied to England by preventing American trade with countries other than those owned by the English crown. The Dominion of New England helped improve efficiency of the laws in the colonies, and showed the rivalries among the colonies in the seventeenth century. The colonists rejected these laws, and commonly resorted to smuggling. Sir Edmund Andros headed the dominion of New England, who was considered immoral by the colonists and used violence as a preferred means of advance; he also enforced the Navigation Laws as much as possible. After the Glorious Revolution in England, the colonists revolted against the close hand of the British and sent Andros back to England. This led to the Navigation Laws only being weakly enforced.
7. “Great Migration” (1630s): A time when about seventy thousand people left England in part because of unrest in England. However, not all of these people were Puritans fleeing to Massachusetts. Many went to the West Indies where the main crop was sugar. Many educated gentlemen went to the Massachusetts Bay Colony to become part of a successful colony.
8. Massachusetts Bay Colony (1629): A colony established by a group of Puritans in 1629. The Puritans claimed to not want to break with the Church of England, but only wanted to escape the impurities, which was looked down upon from those in the Church in England. The colony had a great boost of people to start with, and many more came in the Great Migration of the 1630s. The colony became quite successful and had many educated leaders such as John Winthrop. Although there was a provincial government, it was not a democracy; commoners were generally not allowed in politics. Although religious leaders were powerful, there was the start of separation of church and state. The colony was also part of the first step towards unity within the colonies, the New England Confederation, and resisted the oppressive rule of England.
9. Mayflower Compact: A short document signed by the Pilgrim leaders in the Plymouth Colony that later became the precedent for later constitutions. Although not a constitution but an agreement to form a simple government enforcing the will of the majority of the people, this agreement was the first step towards self-government. It was signed by forty-one adult males, no females, and the male settlers soon made laws from open discussions.
10. New England Confederation (1643): When four colonies, all Puritan, joined together in 1643 in union. Because England was full of unrest, the colonies only could depend upon each other, and made the Confederation mainly as protection against the Indians, French, and Dutch. Each colony had two votes and the Confederation also dealt with colonial issues such as runaway slaves. This was the first step towards unity between the colonies, which is why Charles II tried to regain control of the colonies and the colonies, especially Massachusetts, resisted.
11. King Philip’s War (1675–1676): A war which was started when an Indian named Metacom, called King Philip by the English, made an alliance between different Indian tribes and attacked the English in a number of battles. Many people fled to Boston, and by the end of the war, fifty-two Puritan towns had been attacked and many had died. Metacom’s family was sold into slavery, and Metacom himself was killed and put on display. Because of this war, many settlers stopped penetrating western New England. However, the Indians were destroyed and could no longer truly resist colonists’ attempts to settle.
12. Society of Friends/“Quakers”: A religious group of dissenters who came about in England in the 1600s, and who were exiled and dismissed by the orthodox Puritans. The Quakers believed in peaceful resistance, and separation of church and state, which, among other beliefs, made them unpopular. Although exiled and outlawed in many places because of their beliefs, the Quakers were offered refuge in Rhode Island, established by Roger Williams, who allowed complete religious toleration even when he disagreed with the beliefs. Additionally, William Penn, a Quaker, established Pennsylvania as a place where Quakers could worship freely, and where they were able to rule democratically.

1. head right system: This system encouraged the immigration of servant workers from England to fill the labor shortage growing tobacco. The system allowed the person who paid for the voyage of the worker to have fifty acres of land, which meant only masters received benefits and not the workers. This system also allowed the masters to amass great amounts of land, and make much money growing tobacco. This in turn ate up available land for the servants, and while the masters gained a work force, the laborers were trapped working for low wages.
2. middle passage: The passage was the sea voyage that brought slaves to America. The journey began with a march to the African coast, and ended with a hike through America’s interior. The middle part of the journey was hard and treacherous, which is where the passage got its name. This passage was also usually the leg of the triangular trade that brought people from Africa to be slaves in America.
3. Bacon’s Rebellion: A rebellion against Virginia’s Governor William Berkeley led by Nathanial Bacon. Many single, poor men lived in the governor’s region who were upset with the Governor’s inaction towards the Indians. Bacon led an upheaval that resulted in the killing of many Indians, chasing Berkeley out of town, and burning the town. A wild uproar ensued, but when Bacon suddenly died, the governor fiercely executed many rebels. Partly because of this rebellion, landowners grew wary of the laborers and looked to African slaves as their new labor source.
4. Half-Way Covenant: A new way for Puritan church membership in 1662 because of a decreasing number of the elect and conversions. This covenant allowed the unconverted children of members to receive baptism, but not full communion. This also weakened the spilt between the people and the elect and made the elect seem less pure than before. Eventually, everyone was welcome was welcome into church whether a member or not, and there was no longer a distinction between regular people and the elect. The Puritans therefore sacrificed purity to gain more participants.
5. Congregational Church: The group of Puritan adult males who belonged to different Puritan congregations, which eventually became one church. The Church that grew out of Puritanism became quite influential and became established in all of the New England colonies except Rhode Island. The Congregationalists had the highest percentage of people in a single religion, with about seventy thousand more than Anglicans. They were tax supported by England, and usually controlled education in New England. Eventually, however, they were highly involved in the Revolution, and the ministers frequently preached about politics.
6. Salem witch trials (1692): A witch-hunt that resulted from a group of girls in Salem, Massachusetts claiming some older women had bewitched them. Twenty people were hanged in 1692 who were accused of witchcraft. There was already a witch-hunt in Europe, which had also spread to the colonies. The event came from superstition, age prejudice, and from social and religious unrest in Salem. The hunt ended in 1693 when the governor stopped the persecution, and twenty years later made retribution for their deeds.
7. Anne Hutchinson: An intelligent woman who presented a challenge to Puritan orthodoxy. She believed in a challenging heresy called antinomianism that went to the extreme in terms of the Puritan belief of predestination. Antinomianism believed that the saved do not need to follow the rules of God or man. When she was arrested and brought to trial in 1638, she claimed to have a direct revelation from God, another heresy. She was then banished, and her family moved to first Rhode Island, then to New York. She and most of her family were eventually killed by Indians.
8. Roger Williams: A popular Puritan minister who posed a threat to Puritan leaders. Because he was a separatist, he wanted to make a complete break with the Church of England and questioned the Bay Colony as being unfair to the Indians. He was also against the government regulating religious behavior, and because of his ideas, was banished in 1635. Williams fled to Rhode Island in 1636 to build the first Baptist Church where there was complete religious toleration. Williams created a safe place for the outcasts of society where they enjoyed many freedoms and rights, and became individualistic and independent.

1. melting pot: The term used to explain the blending of the many different cultures of the immigrants to America into one unifying culture. Although many of the settlers were English, there was always a mixing of many different cultures. Germans made up about six percent of the population, Scots-Irish about seven percent, Dutch about three percent, and finally about forty-nine percent English.
2. tenant farmer: A person who farmed the landowner’s land and paid rent with cash or by a portion of the crops produced. Tenant farming was important in America from the 1870s to today, and the tenants usually used their own tools and animals. A tenant farmer was different than a hired hand and a sharecropper and was an in between stage between being hired as additional labor as a younger person while gaining knowledge through experience. The tenant farmer was motivated while gaining experience and possessed an incentive to purchase their own land to become interdependent in the farming community.
3. triangular trade: A trade route in the shape of a triangle that was quite profitable for those who controlled it. Usually a sailor might go to Africa with rum to trade for slaves, and then transport the slaves to the West Indies to trade for molasses, which he would bring to New England to be made into rum, then he would repeat the cycle; the sailor would be able to make a profit at each stop.
4. George Whitefield: A parson that began a different type of evangelical preaching in America, which affected the spiritual life in the colonies because of his great oration. His belief was of human helplessness and of divine power, and people became entranced with his message. People soon copied his style of preaching, abusing sinners and exciting the attendees. He was able to become inspired by Jonathon Edwards, and began preaching in 1738.
5. John Pete Zenger: A newspaper printer who was part of a popular legal case in 1734 to 1735. Based in New York, Zenger’s newspaper criticized the corrupt governor and was arrested. Zenger was defended by a former indentured servant and Philadelphian lawyer, Andrew Hamilton. Zenger claimed he only printed the truth, and eventually the jury declared him not guilty. Zenger’s case helped further the cause of freedom of the press and democracy, even if what was printed was about public officials.
6. Great Awakening (1730s—1740s): A religious revival in the colonies in the 1700s that quickly spread throughout America. Beginning in Northampton, Massachusetts by a pastor named Jonathan Edwards, people responded favorably to his preaching in 1734. Later, parson George Whitefield also revolutionized preaching with fiery passion, which also was later imitated. Although orthodox, “old lights” where against the new emotional preaching, “New light” ministers embraced the ideas. Many Congregationalists and Presbyterians split over the new preaching style, and the Awakening had a lasting impact on America that included undermining the old authority, beginning the competition of American churches, and encouraging missionaries. Lastly, the Great Awakening was the first mass movement that united the American people across divisions.
7. Old and New Lights: The Old Lights were the orthodox clergy who were against the Great Awakening because of its emotion and theatrics. However, the New Light ministers defended the Great Awakening because they believed its revitalized religion in America. While this issue sometimes split religions such as Congregationalists and Presbyterians, the Great Awakening overall allowed the American people to unite across geographical and denominational lines.
8. Jonathan Edwards: The pastor that began the Great Awakening in Northampton, Massachusetts. Edwards was against the idea of salvation through good works and believed completely in the need for dependence on God’s grace. He completely abused sinners and pained a horrible picture of hell through his words. However, people became mesmerized by his words, and Edwards soon had people following his style of preaching. He had a warm reception in his parish in 1734, and four years later George Whitefield became inspired by his preaching skills.
9. Pennsylvania “Dutch”: A primarily Lutheran sect of German immigrants who were about one third of America’s population. They were numerous enough that in Philadelphia, the street signs were in both English and German. The Dutch, because they had no loyalty to the British crown as they were never English, stuck primarily to their own German language and customs. The Dutch moved into the backcountry of Philadelphia and are known for their industry and prosperity through their impressive stone barns.
10. Poor Richard’s Almanack: The paper written by Benjamin Franklin edited from 1732 to 1758, which he was best known for by his contemporaries. The Almanack contained sayings from thinkers of the time as well as emphasizing thrift, industry, morality, and common sense. Franklin was able to shape the expectations of an American, and his paper was well known in both Europe and America.

Questions

Question: How does this material fit with the idea of America as a “new world” different from England? Was there a fundamental difference between those Englishmen who essentially tried to re-create their world way of life and those who saw life in America as a radical departure? What tensions might have resulted between these two groups?

Q: Compare and contrast the New England and Southern colonies. Consider the motives for founding, religious and social composition, and/or political development. Note specifically differences between Southern and New England Society. (Consider that many of these distinctions constituted the seeds of future discord and many of them persist to this day.)

WH II: Results of the Poll

Leonard Stern, The Enlightenment, 15 (24%)

The Enlightenment, Dr. Gerald Lucas, 1 (1%)

So You Say You Want a Revolution?, 7 (11%)

The Enlightenment, The Age of Reason, 31 (50%)

Mr.J, Enlightenment Philosophers, 7 (11%)

Votes: 61
Poll closed

Test Postponed Until Tuesday

Sr. announced that the school is closed on Monday; therefore, the Test will be re-scheduled for Tuesday.

WH II: 8 October 2009

Prayer:
Current events:

Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/

Email: gmsmith@shanahan.org

The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.

The online version of the Textbook is available.

LibraryThing has bibliographic resources.

I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.

This is just a reminder about your "Slideshare" assignment. We can see how the polling is progressing.

Along these lines, we can consider the Slideshare about The Enlightenment and the Founding of America. (http://www.slideshare.net/mhammond/enlightenment-presentation)

Next, 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.

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

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

Colonists Express Discontent

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 (in-class)

The Declaration of Independence

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

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?

HW: email me at gmsmith@shanahan.org.

You have a 20 question, multiple choice Test on Monday on Chapter 10 material. (I will not be in tomorrow on Friday; I am attending a National Honor Society induction for a very unique person).

AP Economics: 8 October 2008

Prayer:

Current Events:

Today's lesson plan and HW is available on the blog: http://gmicksmithsocialstudies.blogspot.com/

Email: gmsmith@shanahan.org

The Shanawiki page (http://shanawiki.wikispaces.com/) has updated class information.

LibraryThing has bibliographic resources.

I moved the "Blog Archive" to the top right on the blog page so it should be easier to find the daily lesson, HW, and other class material.

We are addressing Chapter 2 in particular for the parts not covered in the Quiz. We will cover the non-Quiz material in Chapter 2 for a Test on Chapter 2.

The Test on Chapter 2 will be on Monday

You can also start checking Shanawiki (http://shanawiki.wikispaces.com/) for Test #1 multiple choice preview questions.

Before the Test, you should have 75 potential multiple-choice questions that may appear on the Test posted on Shanawiki. At this point, you will answer 20 randomly selected questions on Test 1, in later Tests there may be more questions on a Test.

In any event, after the Tests are graded and handed back, I will provide an answer key to all 75 multiple-choice questions that you can use as a Study Guide for the actual AP Test.

Chapter Overview

The introduction of the idea of a market (using a number of examples, including
financial markets and textbook sales) is followed by the analysis of demand, supply,
equilibrium, and the effects on market equilibrium when demand and supply
curves shift.

Chapter Outline

Markets

The Price System

Checkpoint: Markets

Demand

The Relationship Between Quantity Demanded and Price

The Law of Demand

The Demand Curve

Market Demand Curves

Determinants of Demand

Tastes and Preferences

Income

Prices of Related Goods

The Number of Buyers

Expectations About Future Prices, Incomes, and Product Availability

Changes in Demand Versus Changes in Quantity Demanded

Changes in Demand

Changes in Quantity Demanded

Checkpoint: Demand

Supply

The Relationship Between Quantity Supplied and Price

The Law of Supply

The Supply Curve

Market Supply Curves

Determinants of Supply

Production Technology

Costs of Resources

Prices of Other Commodities

Expectations

The Number of Sellers

Taxes and Subsidies

Changes in Supply versus Changes in Quantity Supplied

Checkpoint: Supply

Market Equilibrium

Moving to a New Equilibrium: Changes in Supply and Demand

Predicting the New Equilibrium When One Curve Shifts

Predicting the New Equilibrium When Both Curves Shift

Summarizing Shifts and Equilibrium

Checkpoint: Market Equilibrium

Putting Supply and Demand to Work

Excess Grape Supply and Two-Buck Chuck

Trek Bicycles and Lance Armstrong

Ideas for Capturing Your Classroom Audience

■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction
progresses. Consider products that students think will be highly desired as
opposed to other less popular products.

Chapter Checkpoints

Market: Financial Markets

Questions for discussion on Shanawiki: Demand: Hybrid Cars
Question: Sales of hybrid cars are on the rise. The Toyota Prius, while priced above
comparable gasoline-only cars, is selling well. Other manufacturers are adding
hybrids to their lines as well. What has been the cause of the rising sales of hybrids? Is this an increase in demand or an increase in quantity demanded?

Supply: iPods, iTunes, and MP3 players
Question: What has been the impact of the iPod, iTunes, and MP3 players in general
on high-end stereo equipment sales? Has the same impact been at work with CD
music sales since downloading of individual songs was introduced by Apple?

Equilibrium: China and India
Question: As China and India (both with huge populations and rapidly growing
economies) continue to develop, what do you think will happen to their demand for
energy and specifically oil? What will suppliers of oil do in the face of this demand? Will this have an impact on world energy (oil) prices? What sort of policies or events could alter your forecast about the future price of oil?

Extended Examples in the Chapter

Putting Demand and Supply to Work

Both of the following examples use supply and demand analysis as a framework for
predicting how market participants will act, and what the resulting price and output
might be.

Excess Grape Supply and Two-Buck Chuck

The great California wine of the 1990s put California wine on the map. Demand,
prices, and exports grew rapidly. Over planting of new grape vines was a result.
Driving along Interstate 5 or Highway 101 north of Los Angeles, grape vineyards
extend for miles as far as the eye can see, and most were planted in the mid to late
1990s. The 2001 recession reduced the demand for California wine, and a rising dollar made imported wine relatively cheaper. The result was a sharp drop in demand
for California wine and a huge surplus of grapes. Bronco Wine Company President Fred Franzia made an exclusive deal with Trader Joe’s (an unusual supermarket that features exotic food and wine products), bought the excess grapes at distressed prices, and with his modern plant produced inexpensive wine under the Charles Shaw label. Selling for $1.99 a bottle, Two-Buck Chuck as it is known is available in Chardonnay, Merlot, Cabernet Sauvignon, Shiraz, and Sauvignon Blanc. Consumers have flocked to Trader Joe’s and literally haul cases of wine out by the carload. Today, Two-Buck Chuck sells well over a million cases a month. This is not rot-gut: the 2002 Shiraz beat out 2,300 other wines to win a double gold medal at the 2004 28th Annual International Eastern Wine Competition.

Two-Buck Chuck was such a hit that other supermarkets were forced to offer their
own discount wines. This good, low-priced wine has had the effect of opening up
markets. As an illustration can be demonstrated, people who previously avoided wine because of the cost have begun drinking more (demand curves do slope down and to the right).

As The Economist has noted, the entire industry may benefit because “Wine
drinkers who start off drinking plonk often graduate to upmarket varieties.”

For more information about this wine and conditions in the wine industry, visit the
following Web sites:

From CBS News, a story titled “ ‘Two Buck Chuck’ Wine Cult” points out that it is
the surplus of grapes that makes the wine so inexpensive. On the web at: http://
www.cbsnews.com/stories/2003/06/02/eveningnews/main556620.shtml
KTVU.com (from the Bay Area of California) has a story titled “‘Two Buck Chuck’
Changing Wine Habits” which makes the point that “quality does not necessarily follow price.” http://www.ktvu.com/consumer/1954524/detail.html

Trek Bikes and Lance

When Lance Armstrong won his seventh Tour de France cycling championship in
July, 2005, he rode a bicycle made by Trek of the United States.2 So on the demand
side, we can expect demand for the victor’s brand of bicycles to go up. This in fact
happened, in both the United States and Europe. On the supply side, U.S. bicycle
manufacturers such as Trek and Cannondale were willing to increase output as
shown in Figure 15 (note that the supply curve didn’t change, only quantity supplied).

This process worked well in the U.S. but proved tougher in Europe, not so
much in the actual production of the bicycles but in getting stores to stock them. Up to a few years ago, racing bicycles were almost exclusively made by European companies.

___
1 “California Drinking,” The Economist, June 7th, 2003, p. 56.
2 See Ian Austen, “U.S. Bike Makers Seek Dominance in Europe,” The New York Times,
December 30, 2003, p. W1.

Figure 15 The Market for Bicycles

Using our supply and demand analysis, we see that demand increased. Since no
determinant of supply changed, we know that just output will increase, and prices
for Trek bicycles will rise. Our supply and demand analysis gives us a useful framework for predicting how market participants will act, and what the resulting price and output might be.

For More Information

In an article titled “Trek Bicycle Coup: Tour de Force” in Baseline (on the web at
http://www.baselinemag.com/article2/0,1397,1618016,00.asp), the author details the
technology used in making the bikes, as well as providing data on prices and quantities.

The phrase “limitless tolerance on price” is a good introduction to the topic
of elasticity (to be covered in an upcoming chapter).

Examples Used in the End-of-Chapter Questions

Question 10 discusses the market for virtual goods. Based on Rob Walker, “The
Buying Game: A real market, overseen by a real corporation selling things that don’t
really exist,” (The New York Times Magazine, October 16, 2005, p. 28), the question
asks students to consider the markets for goods used in on-line games such as
EverQuest II. This example encourages students to see that markets “really” exist
even in “virtual” worlds.

For a further demonstration, visit the homepage of Second Life (at http://secondlife.
com/) and see how much in U.S. dollars has been spent…in just 24 hours!

Question 11 is based on a Wall Street Journal story by Peter Sanders and Stephanie
Kang, (“Wipeout for Key Player in Surfboard Industry,” The Wall Street Journal,
December 8, 2005, p.B1) that discusses the closing of Clark Foam. The key point of
the example is that the firm was a manufacturer of a critical input needed to make
surfboards. It provides a good illustration about how a change in price and availability of a resource carries over into product markets.

For another story and some good visuals, see the page on the web at http://www.
transworldsnowboarding.com/twbiz/features/article/0,21214,1138359,00.htm.
Question 12 examines the effect of increased demand in the market for polysilicon,
used in making solar panels. It is based on the story by John Carey, “What’s Raining
on Solar’s Parade” (Business Week, February 6, 2006, p. 78). The key point for discussion here is the impact of uncertainty, which is another way to talk about the
role of expectations on demand and supply.

For more about the dynamics of the polysilicon market, see the story from Industrial
Control Designline on the web at http://www.industrialcontroldesignline.com/
showArticle.jhtml?printableArticle=true&articleId=163701891.

Question 13 provides a good example of how synthetic substitute products can be
developed when “natural” products become scarce. Based on the story by James
Altucher, “Supply, demand and edible orchids” (The Financial Times, September
20, 2005, p.12), it presents students with a data set, requires them to graph and analyze the data, and then illustrate the effects of changes in demand and supply.
Particular attention is given to the idea that even as supply is changing, demand may also be changing (in this case, due to the development of a synthetic).

Did you know that vanilla is the most labor-intensive agricultural product in the
world? You can find out just about everything there is to know about vanilla on the
web at http://www.vanilla.com/html/facts-faq.html.

For Further Analysis

The Supply and Demand Effects of the Increased Use of Ethanol

Handout 3-1 is an in-class group exercise with your small group.

Students are asked to draw graphs illustrating shifts in demand and supply
and changes in quantity demanded and supplied. Asking students to document
research about specifics in this topic (for example, changes in planted acreage).

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery
of graphing techniques; and reinforcement of critical thinking skills.

Web-based Exercise

What’s Been Driving Gasoline Prices?

This example can be used as an in-class group exercise.

Asking students to perform (and document) additional research allows you
to use it as a case study or group project as well. For example, students can be
asked to document gasoline sales to see if, as predicted, an increase in demand
results in both a higher price and a greater quantity sold.

Learning objectives: application of concepts of changes in quantity demanded
and quantity supplied versus changes in demand and supply; demonstration of mastery
of graphing techniques; and reinforcement of critical thinking skills.

The Supply and Demand Effects of the Increased Use of Ethanol

Draw a supply and demand graph showing the market for corn in equilibrium. Label the demand curve as “DOld” and the supply curve as “S”. Then illustrate the effect of an increased demand for corn due to its being used to produce ethanol. Explain the changes in price and equilibrium quantity using the vocabulary of “changes in quantity demanded,” and “changes in quantity supplied,” as well as “change in demand” and “change in supply.”

Use a supply and demand graph to illustrate and explain the impact of a higher price of corn on any one of a wide variety of food products; be sure to include the effect on the cost of high-fructose corn syrup.

You do not need to send HW in email to gmsmith@shanahan.org for this exercise.

However, bear in mind you have a 20 question, multiple choice Test on Monday on Chapter Two material.

1. To this end, what you should do is to collaborate with at least one other study partner in the class and answer at least the first 20 (20) possible questions on the Shanawiki (http://shanawiki.wikispaces.com/) site for Test #1 multiple choice preview questions. Feel free to discuss and disagree on Shanawiki as to the possible answers.

After the Test is graded and handed back for credit I will supply an Answer Key for all 75 Chapter Questions; this is your Chapter 2 Study Guide for the actual AP Test.

2. ■ Track a product on eBay. Work with at least one other study partner, or members in your small group. Students should select an item and watch it as its auction progresses. Consider products that students think will be highly desired as opposed to other less popular products.