PRIVATE PROPERTY CHOICES Sell Items Impossible Owning Buy CORRECT Owning Buy Sell Impossible Items

MARKETS & PRICES CHOICES Supply Exchange Demand Open Market Prices CORRECT Exchange Open Market Supply Demand Prices

INCENTIVES/SELF-INTEREST CHOICES Consumers Needs Wants Profit Self-Interest CORRECT Self-interest Profit Consumers Wants Needs

FREEDOM OF CHOICE CHOICES Services Choose Produce Consume Goods CORRECT Choose Produce Consume Goods Services

COMPETITION CHOICES Profits New Ideas Compete Attractive Prices CORRECT Compete Profits Attractive New ideas Prices

LIMITED GOVERNMENT ROLE CHOICES Government What How much Fair Compete CORRECT Government What How much Fair Compete

THE MARKET ECONOMY PRICES UP, PRICES DOWN ACTIVITY Find out how different situations can affect how much stuff costs!

Producer says… I manufacture the world’s best cupcakes! I just heard a storm wiped out the sugar cane crop. Now there’s going to be less sugar to meet everyone’s demands! Will the price of cupcakes go UP or DOWN? The price of sugar will go up, so my cupcakes will cost more to make. I’ll have to raise the price of cupcakes.

Producer says… I manufacture radios. I just installed a new high-tech machine that lets me make twice as many radios for half the cost! Will the price of radios go UP or DOWN? It won’t cost me as much to make the radios, so I’ll be able to sell them at a lower price. That means more people will buy them (hopefully)!

Producer says… I own an oil refinery. Summer is coming, and people are going to be driving everywhere! They’re going to need LOTS of gasoline. It’s going to be hard to keep up! Will the price of gasoline go UP or DOWN? I’ll have to raise the price of gasoline to keep up with the increased demand, especially if I can’t maintain the same supply.

Producer says… I sell landscape rocks. I just ordered TONS, but a new gardening show has got everyone decorating with gnomes instead. What am I going to do with all these rocks?? Will the price of rocks go UP or DOWN? I’ve got to get rid of all these rocks somehow. I’ll put them on sale and hope people will buy them at the lower prices!

Producer says… I’ll have to charge a lot for these chairs, because the new technology is expensive to make. But I don’t have any competition, so I won’t worry about the high prices. Will the price of self-folding chairs be HIGH or LOW? I just invented the world’s first self-folding chair! It folds itself up and puts itself away. Nobody else makes anything like it!

Producer says… Self-folding chairs are so popular, I decided to make some too. I can produce 9,000 chairs a day and distribute them to all the major stores! Mass-producing these chairs makes them cheaper to manufacture. I can charge a lower price. My competition will have to lower her price too, or she’ll go out of business! Will the price of self-folding chairs go UP or DOWN?

A. REVIEW

B. MOTIVATED Thumbs down Thumbs up Thumbs down Thumbs up Thumbs down

C. A CIRCULAR FLOW

D. WHAT’S THE OPPORTUNITY COST 1.The money she would have earned. 2.The 12 cent interest from the bank. 3.The more certain money from casual dresses. 4.The possibility of making an extra million dollars.

E. THREE KINDS OF ECONOMICS Market economy Command economy Traditional economy Private property Incentives What is produced Competition

E. THREE KINDS OF ECONOMICS Market economy Command economy Traditional economy Private property HFJ IncentivesKDB What is produced GAI CompetitionELC