Ch. 10 Economics:
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If I had a Million Dollars
Terms
Scarcity – in short supply, something is
scarce if people will buy it for a price
Supply – quantities of a good producers
are able to supply
Opportunity cost – something given up in
order to obtain something else
Demand – quantities of a good consumers
are willing to buy
Terms
Hidden market – potential customers not
being served by existing goods or services
Consumers – people who will buy a good
or service
Substitution effect - tendency to buy a
cheaper substitute of a product
Economics – study of efforts to satisfy
unlimited wants through limited resources
Producers – people who produce a good
or service
Ch. 10 Economics
Write down what you would do with a
million dollars
Read pp. 140 – 143
Answer: 1) What is economics?
2) What is scarcity?
3) What is opportunity cost?
Complete: #1 a, b, c p.143, #3 p. 143
Choices
G:\Choices and Opportunity Costs lesson
plan.docx
Cosby Show - Economic Lesson
Ch. 10 Economics
Read pp. 144 – 145
Answer: At an auction, what happens to
the number of bidders as the price rises?
Table 10.1 – on a line graph, plot a
demand curve and a supply curve from the
data shown. What can you tell about your
market from the point at which the two
lines intersect?
Ch. 10 Economics
Read pp. 146 – 147
Answer # 1a, b,
Write up a quick budget for yourself. What
have you bought in the last two weeks,
and where did you get the money? How
did you decide what to spend the money
on?
Ad Analysis
You need to select three advertisements
you have seen on TV, in the paper,
magazine, online, etc.
Explain how the advertisements are
marketed toward them. How do they
appeal to students / public?
How would you do it differently? Explain.
Why Buy?
Explain why teens or adults buy a
particular
Brand of cereal
Model of car
Type of sneaker
Item of clothing
Brand of soft drink
What impacts their decision the most?
Why?
Sources of Income
What sources of income do you currently
have? What are some ways you may
increase it? What are the tradeoffs
between time and effort for increasing
income and funding other activities that do
not generate income?
i.e. part time job vs. sports
Ch. 10 Economics
Read 150 – 151
It’s a matter of interest: Which option? It
depends on the month.
In a 31 day month option 2 wins
Option 1: $7.75 million ($250,000.00 X 31)
Option 2: $10.74 million
(.01X.01=.02X.02=.04, etc.
Ch. 10 Economics
In a 30 day month option 1 wins
Option 1: $7.5 million
Option 2: $5.37 million (the doubling to
$10.74 million would not be in effect in a
30 day month)
Ch. 10 Economics
Principal – sum of money invested or
borrowed, not including additional interest
payments
Interest – money paid for the use of
money lent
Rate of interest – amount of interest paid
on the principal expressed as a %
Ch. 10 Economics
Compound interest – interest added to
the original invested or borrowed sum, so
that further interest is calculated on the
original amount, plus interest already
earned.
Ch. 10 Economics
The “rule of 72” is shown on fig. 10.10.
Using this rule you can calculate how long
it will take a saved or invested sum of
money to double at various interest rates
by dividing the number 72 by the interest
rate. Calculate how long it would take the
sum of $500.00 to double at the interest
rate of 18%.
Ch. 10 Economics
The answer is 4 years.
1) If Simion had $300.00, how many years
would it take for it to become $600.00 at
5% interest?
2) Elise was given $200.00 for a grad gift.
How long will it take to become $400.00 at
an interest rate of 13%?
Ch. 10 Economics
Answers:
1) 72 / 5 = 14.4 years
2) 72 / 13 = 5.5 years
Always divide 72 by the rate of interest.
“Rule of 72”
Ch. 10 Economics
Planning the prom activity:
Your task is to reach a decision about how
the funds should be used for the dance.
Prepare an answer for the discussion
question.
Consider what you want for the dance, but
acknowledge what you are giving up for
that decision
Ch. 10 Economics
Financial Fable pp. 152 – 154
In this story, Marie demonstrates the
importance for producers to know the
relationship between supply and demand.
How does Marie determine that there is a
demand for recycled toys?
Where does Marie find a supply source for
recycled toys?
Ch. 10 Economics
What type of work does Marie have to
provide before the recycled toys are ready
to sell? How does this improve the value
of her product?
What does Mr. Russell mean when he
says, “get interest working for you instead
of working against you and you’ll
prosper?”
Ch. 10 Economics
Know the following terms for your quiz:
Scarcity, supply, opportunity cost,
demand, interest, hidden market, rate of
interest, principal, consumers, substitution
effect, economics, compound interest,
producers
Know the supply and demand graph,
and understand the cause and effect
questions.