1. Play Dough Economics Cornell Cougar Company Lesson 5 2010-2011 Tuchek

2. Opportunity Cost: Part 2 - Produces Producers Have to Choose, Too Producers, as well as consumers are confronted with the problem of scarcity. The productive resources (land, labor & capital) that producers acquire can be used to produce a wide variety of goods & services. Producers, as entrepreneurs, must choose which goods & services to produce. If they use their scarce productive resources to produce one thing, then they must forego using these resources to produce another. The best production alternative that producers do not choose is their opportunity cost.

3. Producers Have to Choose, Too Producers must also decide how to produce these goods & services. They generally try to produce goods & services using the most efficient mix of productive resources (land, labor, and capital) possible. If producers do not do this, they may be unprofitable, and may be forced out of business by other more efficient businesses.

4. The focus of this lesson is on the “what to produce” choice faced by producers. The decision to produce one thing means not producing something else. Every production decision has an opportunity cost. What to Produce?

5. Play Dough Time… if you would like to be producers and make some goods using productive resources as in earlier lessons. Today you will use your productive resources (play dough, labor, and articles of capital) to produce one of two goods: * something to eat (food) OR * something to wear (clothing)

6. At this time, we need the “Paper People” at each table to please come up to get a play dough container for each person in their group.

7. As you finish, please place your goods on the brown back table. Let’s count & record how many items of food & clothing have been produced today: * Food: * Clothing: You may want to make some changes. Let’s take a vote to determine if the class would like more food or more clothing. Class voting results: * Food: * Clothing: Play Dough Time…What to Produce

8. The opportunity cost for producers is the good or service not produced as a result of producing something else. Opportunity Cost for Producers

9. Our Hand-On Learning Time Has Come to an End. One table group at a time will come to get their sculpture. Please make sure your table and floor areas are clean. Please make sure your top is on tightly to your play dough container. Thank you for being great learners today!