1. Mankiw’s 7 Principles of Economics: Student Stations Activity 7 Principles of Economics Addressed in this Activity: 1)People Face Tradeoffs 2)Our Choices have Costs and Benefits 3)Thinking at the Margin 4)Incentives are Important 5)Trade makes Everyone Better Off 6)Markets are a Good Place for Trade 7)Our Decisions have Future Consequences Activity: Students will develop their understanding of Mankiw’s 7 Economic principles by creating an Application Handbook. In order to complete each page of the handbook students will be required to visit 7 stations around the classroom, 1 station for each of the 7 Economic Principles, and will complete a unique activity at each station.

2. Teacher Directions: (Lesson will take approximately two -70 minute class periods) Before Class: 1)Put your desks into table groups of 4-5 students. You need to have at least 7 stations. (You could duplicate a station or 2 if you have a big class) 2)Make copies of the Applications Handbook Glossary worksheets (2 pages) & Decision Cards (enough for all of your students) 3)Print off one copy of this lesson, to divide up and put at each station. (You will put Economic Principle # 1/ Applications Handbook page 1 INFO at station # 1, all the materials for Economic Principle # 2 at station # 2 etc.) * Put in plastic sleeves if you want them to last* 4)Have enough computer paper available to be able to give each student a stack of 8 sheets (to staple together) to make their Applications Handbook. (or they can use their own lined paper if you prefer) 5)Here is what you need at each station: Station # 1 - a copy of all the handouts for station # 1/Applications Handbook page 1 (there are 3 for this station), a box of colored pencils/markers, a calculator (optional). Station # 2 - a copy of all the handouts for station # 2/Applications Handbook page 2 (there are 5 for this station), You may want to print out more than one copy of the article so students can read the article at the same time. Station # 3 - a copy of all the handouts for station # 3/Applications Handbook page 3 (there are 2 for this station), A computer/laptop/ or students can use their phones to access the video clip. **It’s helpful to have the video up and ready to play for students in advance. Station # 4 - a copy of all the handouts for station # 4/Applications Handbook page 4 (there are 2 for this station), Station # 5 - a copy of all the handouts for station # 5/Applications Handbook page 5 (there are 8 for this station), Cut out the JOB cards and items to trade in advance and place in separate envelopes. Put a box at station # 5 to put the envelopes in. Station # 6 - a copy of all the handouts for station # 6/Applications Handbook page 6 (there are 2 for this station), A computer/laptop/ or students can use their phones to access the video clip. **It’s helpful to have the video up and ready to play for students in advance. Station # 7 - a copy of all the handouts for station # 7/Applications Handbook page 7 (there are 3 for this station), Place a stack of DECISION CARD photocopies at station # 7 (enough for all of your students). Each student will need to cut out their own cards and glue them into their handbook. **Include a couple pairs of Scissors and Glue at this station and EITHER a copy of the book “If you Give a Mouse a Cookie” OR a computer where students can listen to the story read off YOUTUBE.

3. Teacher Directions Continued… During Lesson: 1) Pass out 8 sheets of paper (stapled together to make a handbook). 2)On the cover of the packet, have students write “Applications Handbook” and their name/period. Have them number the inside of the packet Pages 1-7. 3)Pass out the Application Handbook Glossary worksheet (2 pages) to each of your students. They can staple this to the back of their Application Handbook. 4)Project the 7 ECONOMIC PRINCIPLES (notes only from this powerpoint) on the LCD projector. Briefly go over each of the 7 economic principles with students and allow them to fill in their “Application Handbook GLOSSARY” worksheets while you go over it. 5)Say “Now that you have been introduced to Mankiw’s 7 Economic Principles, you will be visiting 7 stations. At each station you will read over all of the handouts at each station and complete the activities assigned in order to deepen your understanding of each of the principles. You will only have about 15-20 mins. at each station and then we will rotate, so please do not waste time. You will be writing the answers to the activities, at each station, into the Applications Handbook you just made.” 6)Have students begin at their first station. Set the timer and after about 15-20 mins. (you can walk around and gauge progress) have students move to the next station. 7)Students turn in their Applications Handbook to you when they have finished each station.

4. Applications Handbook Glossary : Principle # 1 ________________________________________________________________ Main Idea : Your desire for things is ___________________________, which creates a problem because resources to make what you want is __________________ or SCARCE. This requires you to make ___________________ as to what you really want or can live without. Example: Think of allocating your time or money. You may have 10 places you’d like to go but because time is LIMITED or scarce you must pick and choose. Whenever you choose to do one thing over another you are making a __________________. Related Terms : Scarcity-forces-tradeoffs Principle: This idea states that because things are scarce, people are forced to make choices as to what they really __________________. No-free-lunch Principle: This idea states that there is no such thing as a __________________________, FREE PHONE, etc. because even if the item was free for you, someone else or a business had to make a ___________________ to give that to you. Principle # 2 ___________________________________________________________________ Main Idea : Since resources are scarce (limited) and we must make choices, how do we make the choices that need to be made? Our choices are made based upon what it _______________ us (what we give up) and how we ____________________ (what we gain). Example : You have a huge test in math, but because you were sick you didn’t study. Your friend (who is a straight A student) sits next to you in math class. You have a choice to make: to take the test by yourself OR copy the answers from your friends test. The choice you make depends on the costs and benefits. If you take the test yourself, the benefit is you don’t get in trouble and you feel good about doing the right thing, but the cost is the bad grade (you give up your A in math). If you copy your friend, the benefit is a good grade but the cost is you could get caught (give up your good reputation) and you feel really guilty (give up your good mood). Do the benefits outweigh the costs? Related Terms : Costs: what we ______________________________ to get something (time, money, effort, another item) Benefit: what we ______________________ (money, more time, better stuff) Costs-versus-benefits principle: the idea that people will choose what has a greater ___________________ to us in proportion to the _________. (the benefit outweighs the cost) Cost- benefit Analysis: when a person compares the costs to the benefits either _____________________ or informally to make a choice. Principle # 3 ______________________________________________________________________ Main Idea : Many decisions we make involve _________________ one unit or subtracting one unit, such as time or money. From an economist’s point of view, when you decide how much more or less to add/subtract in small increments you are thinking at the margin. Making decisions by thinking at the _____________ is just like making any other decision. One must compare the opportunity costs and the benefits—what you will give up and what you will gain. Once the opportunity cost __________ the benefits, no more units should be added. Example : Examine the impact adding (or subtracting)1 unit of time has on the benefits and costs of making a decision: You can either work on your school project or go to the B-Day Party. At what point do feel that the Opportunity Costs are greater than the benefit? Related Terms : Margin: the starting _________ of your decision; where you can either add or subtract one or more units of time, money, effort etc. Thinking- at- the- margin principle: the idea that people make decisions after thinking about the costs and benefits of adding or subtracting more or less units of time, money, effort etc. Marginal Cost: what you _____________________ by adding or subtracting units of time, money, effort etc. Marginal Benefit: what you __________________ by adding or subtracting units of time, money, effort etc. Options in increments Benefit (what you gained) Opportunity Cost (What you gave up) 1 hour of work 75% grade on the project Missed 1 hour of B-day party 2 hours of work 85% grade on the project Missed 2 hours of B-day party 3 hours of work 89% grade on the project Missed 3 hours of B-day party 4 hours of work 91% grade on the project Missed the whole B-day party

5. Principle # 4 _______________________________________________________________________________________________ Main Idea : Anything positive or negative that motivates a person to do something (or not do it) is an ___________________. People respond to negative and/or positive incentives. Example : Your parents give you a 10 pm curfew to go to the movies with your friends. A ___________________ incentive to be home before 10 pm is that your parents will let you go out again. A _____________________ incentive to be home before 10 is that if you aren’t home by 10, you will be grounded for a month. Related Terms : Incentive: Anything positive or negative that _______________________ a person to do something/take action. Incentives-matter-principle: the idea that incentives are important to people and the ________________ is that people react _______________ to positive/negative incentives. Principle # 5 _______________________________________________________________________________________________ Main Idea : Since no one is expertly _______________ to make ALL of the daily necessities/wants of life (i.e. clothing, shoes, food, furniture, cell phones) people must make what they are skilled to make and then ________________ with others for what they are skilled to make. Example : You are a great chef. You make the best food at work and get a great paycheck. However, you are lousy at making clothing (you don’t even know how to thread a needle). So you use your skill to make money that you can use (for trade) at the mall to buy clothing from people who are good at making clothing. Related Terms : Trade-Makes-People-Better-Off-Principle: the idea that people should trade items that they have _______________________ made so that consumers (shoppers) get the choice of the best goods. (Instead of making all the necessities of life at a poor quality) Principle # 6 ________________________________________________________________________________________________ Main Idea : a market is _______________________ where trade occurs between buyers and sellers. The ________________________________________________________ store are all examples of markets. In a free market, the government ____________________ its interference in the trade of goods between sellers and consumers (shoppers). Example : You need a new shirt so you decide to go to the market to find one. The first market you go to is the mall, the second market is the flea market and finally you go to the market online. Eventually you decide to purchase a shirt from a clothing website. This process of shopping different markets was easy for you because the government did not really interfere in your shopping. You were allowed (by the government) to shop where you wanted, for what you wanted, at a price you were willing to pay. (free market system) Related Terms : Markets-Coordinate-Trade -Principle: the idea that markets (malls, grocery stores, flea markets, websites) usually are ___________________ than anyone or anything else at facilitating ___________________________ between sellers (producers) and consumers (buyers). Invisible hand: the invisible hand is essentially a _________________________________in which individuals will automatically (without interference) try to maximize their own good (and become wealthier) through trades and exchanges in a free market. Term coined by _____________________________________________. Principle # 7 ___________________________________________________________________________________________________ Main Idea : Most people only look at the ___________________________________ costs and benefits of a choice/decision but the choices and decisions you make today will have future, often unforeseen, consequences. Example : In the 1920’s, the sale, manufacture, and consumption of alcohol was prohibited by the United States Government with the 18 th Amendment. This amendment was intended to lower the crime rate caused by alcohol-related crimes. However, by the end of the decade it was clear that the decision made by the U.S. government in 1920 had completely unintended, future consequences. By 1930, the crime rate in the U.S. had actually increased, not decreased as a result of the 18 th Amendment. Related Terms : Future-Consequences-Count-Principle: the idea that the decisions a person makes today will have immediate and future _______________________________________. Law of Unintended Consequences: the idea that often the decisions an individual or government makes has consequences that are ____________________________ or unexpected (not done on purpose) either ________________________ or _____________________________________.

6. Principle #1: People Face Tradeoffs Main Idea: Your desire for things is UNLIMITED, which creates a problem because resources to make what you want is LIMITED or SCARCE. This requires you to make choices as to what you really want or can live without. Example: Think of allocating your time or money. You may have 10 places you’d like to go but because time is LIMITED or scarce you must pick and choose. Whenever you choose to do one thing over another you are making a tradeoff. Related Terms: Scarcity-forces-tradeoffs Principle: This idea states that because things are scarce, people are forced to make choices as to what they really want. No-free-lunch Principle: This idea states that there is no such thing as a FREE LUNCH, FREE PHONE, etc. because even if the item was free for you, someone else or a business had to make a choice to give that to you.

7. Apply what you have learned: You must plan a Birthday Party at your house for your little brother who is turning 6. You love your brother and want him to have the best party-ever! You have $500 to spend on his Birthday Party and you cannot go over budget. If you have money left over you get to donate it to your favorite charity. In your “Applications Handbook” page 1, plan your brothers birthday by making selections from the following choices. Then answer the following questions: Questions: 1)Describe the party that you have planned. (What selections did you make? List all of them.) At the bottom of the page draw a colored sketch of what the party scene will look like based upon your selections. 2)Why did you make the choices that you did? Did you spend all of your budget? 3)Were you able to choose everything that you wanted? Why or why not? 4)Name an example of a choice that you made for the party that required a tradeoff because your resources were scarce (limited). 5)Explain how this activity illustrates the Scarcity-Forces-Tradeoffs Principle.

8. Birthday Options : (Each option is enough for the all the guests at the party) Décor Options: 1)Low quality plastic table wear solid color $60 2)High Quality Cartoon Character table wear $100 3)Real China table wear $250 4)Bundle of Balloons solid color $25 5)Bundle of Cartoon Character Balloons $50 6)Guests sit on blankets on the ground $0 7)Rent tables and Chairs $100 8)Cartoon Character Centerpieces $25 9)No Centerpieces $0 Food and Dessert Options: 1)Cartoon character Cake $40 2)Cupcakes with sprinkles $25 3)Popsicles $15 4)Chips and Dip $25 5)Pizza $60 6)Hot Dogs and Fries $100 7)BBQ Chicken/ Corn on the Cob $150 8)Steak and Potatoes $200 Entertainment Options: 1)DJ for the whole party $200 2)DJ for half the party $100 3)Video Game Truck $200 4)Smiles the Clown $50 5)Harry the Magician $75 6)12 X 12 foot Bounce house for the entire party $100 7)24 foot Bounce House with waterslide for entire party $200 8)No entertainment, the kids can play in the yard. $0 Application Handbook page 1

9. Principle # 2:Our Choices have Costs and Benefits Main Idea: Since resources are scarce (limited) and we must make choices, how do we make the choices that need to be made? Our choices are made based upon what it costs us (what we give up) and how we benefit (what we gain). Example: You have a huge test in math, but because you were sick you didn’t study. Your friend (who is a straight A student) sits next to you in math class. You have a choice to make: to take the test by yourself OR copy the answers from your friends test. The choice you make depends on the costs and benefits. If you take the test yourself, the benefit is you don’t get in trouble and you feel good about doing the right thing, but the cost is the bad grade (you give up your A in math). If you copy your friend, the benefit is a good grade but the cost is you could get caught (give up your good reputation) and you feel really guilty (give up your good mood). Do the benefits outweigh the costs? Related Terms: Costs: what we give up to get something (time, money, effort, another item) Benefit: what we gain (money, more time, better stuff) Costs-versus-benefits principle: the idea that people will choose what has a greater benefit to us in proportion to the cost. (the benefit outweighs the cost) Cost- benefit Analysis: when a person compares the costs to the benefits either formally or informally to make a choice.

10. Apply what you have learned: Read the article “Benefits of College Still Outweigh Costs” and examine the following statistics. On page 2 of your Applications Handbook, copy the Cost-Benefit Analysis (chart) below and complete using the sources provided and your personal experiences. Cost (what you give up)Benefit (what you gain) 1) 2) 3) 4) 1) 2) 3) 4) Going to College Based on your completed Cost/Benefit Analysis, do you think you should go to college? Do the benefits outweigh the costs?

11. Benefits of College Still Outweigh Costs, Fed Study Says By Katherine Peralta (June 24, 2014) Declining wages of those with just a high school diploma help boost the wage premium of higher education. College graduates earn more than $20,000 more than high school graduates per year on average, according to a recent study. Even in the face of rising student loan delinquency rates, increasing tuition costs and still-tough employment prospects for recent college graduates, the benefits of a degree outweigh the cost, according to a New York Federal Reserve study released Tuesday. The earnings of a college degree – bachelor’s or associate – have fluctuated over time but have had average returns of about 15 percent over the past 10 years, the report showed. This is in large part because wages for those without a college degree have steadily declined, which boosts the college wage premium while worsening the prospects of the less educated, according to the report. “Despite the recent struggles of college graduates, investing in a college degree may be more important than ever before because those who fail to do so are falling further and further behind,” the report read. The “falling behind” can be felt in joblessness and wage disparity by level of education. The unemployment rate for those at least 25 years old with just a high school degree was 6.5 percent in May, compared with the national rate of 6.3 percent, according to the Bureau of Labor Statistics. On the other hand, the jobless rate for Americans that age with a college degree is less than half that, or 3.2 percent. Other recent data suggest that the education-wage gap has grown with time. Americans 25 to 32 with a college degree made an average of $17,500 more annually than their peers with just a high school degree in 2012, whereas in 1979 they made just $9,690 more, a February Pew Research Center report showed. Jaison Abel and Richard Deitz, co-authors of the Fed report, weighed the benefits and total costs of investing in college to determine that wage premium. They found that the “sticker price,” or the published tuition and fees for attending college, has more than tripled for a bachelor’s degree, from about $4,600 per year in the 1970s to nearly $15,000 a year in 2013. For an associate degree, the published costs rose from about $1,100 a year in the 1970s to more than $3,000 a year in 2013. Though the price of education has risen, the out-of-pocket amount students pay is lower than the “sticker price,” given the amount of aid students receive that they don’t have to pay back, such as in grants and tax benefits, the report showed.

12. Even though bachelor's degree holders enter the workforce at a later age and forgo “opportunity costs,” -- or money they could have made during those years instead of being in school -- over the course of their lifetimes, they made an average of over $1 million more than someone with just a high school degree, and those with associate degrees made $325,000 more than those with high school diplomas. College degrees are also stepping stones for postgraduate degrees, which offer even bigger payoffs, Abel and Deitz wrote. One other unquantifiable benefit, the wrote, is that college instills in students “aptitudes, skills and other characteristics that make them different from those who do not go on to college.” For those who do opt to take out loans for education, aggregate student loan debt exceeded $1 trillion at the end of 2013, and more than 10 percent of balances were 90 days delinquent, according to a research note from Lindsey Piegza, chief economist at Sterne, Agee & Leach Inc. in Chicago. This compares with a 3.3 percent delinquency rate for auto loans and 3.7 percent for mortgages. However, Americans who took on student debt for higher education between 1992 and 2010 saw their incomes increase enough so that 2.4 years of that higher income would cover the increased student debt incurred, according to another report released Tuesday from the Brookings Institution. Lastly, the New York Federal Reserve report found that college major does, unsurprisingly, make a difference in terms of potential wages. Majors that require technical training, such as engineering and mathematics, have returns of 21 percent and 18 percent, respectively, while those majoring in the liberal arts fields such as leisure and hospitality and education all have below-average returns of 11 percent and 9 percent, respectively. Piegza said when it comes to publicly subsidizing education, the federal government must take major into account. “From a political standpoint you can’t necessarily say, ‘we have to more evenly divide among majors,’” she says. “It’s not politically viable to say every little girl can’t be a ballerina. If we are going to be backing these students going to college, they have to be investments for broader economy. We do have to start looking into individual sectors these students are going into.” Graduation rates are the highest they’ve ever been and are slated to grow. Institutions of higher education will have graduated 1.84 million bachelor’s degrees and 1 million associate degrees in 2014, according to the National Center for Education Statistics, and those figures are expected to reach 2 million and 1.09 million, respectively, by 2022. Source: http://www.usnews.com/news/articles/2014/06/24/benefits-of-college-still-outweigh-costs-fed-study-says

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14. Principle # 3: Thinking at the Margin Main Idea: Many decisions we make involve adding one unit or subtracting one unit, such as time or money. From an economist’s point of view, when you decide how much more or less to add/subtract in small increments you are thinking at the margin. Making decisions by thinking at the margin is just like making any other decision. One must compare the opportunity costs and the benefits—what you will give up and what you will gain. Once the opportunity cost outweighs the benefits, no more units should be added. Example: Examine the impact adding (or subtracting)1 unit of time has on the benefits and costs of making a decision: You can either work on your school project or go to the B-Day Party. At what point do feel that the Opportunity Costs are greater than the benefit? Options in increments Benefit (what you gained) Opportunity Cost (What you gave up) 1 hour of work 75% grade on the project Missed 1 hour of B-day party 2 hours of work 85% grade on the project Missed 2 hours of B-day party 3 hours of work 89% grade on the project Missed 3 hours of B-day party 4 hours of work 91% grade on the project Missed the whole B-day party Related Terms: Margin: the starting point of your decision; where you can either add or subtract one or more units of time, money, effort etc. Thinking- at- the- margin principle: the idea that people make decisions after thinking about the costs and benefits of adding or subtracting more or less units of time, money, effort etc. Marginal Cost: what you GIVE UP/ LOSE by adding or subtracting units of time, money, effort etc. Marginal Benefit: what you GAIN by adding or subtracting units of time, money, effort etc.

15. Apply what you have learned: Watch: “Everybody Loves Raymond” Season 7 Episode 22 : “The Suitcase Episode” watch all 9 minutes (Teachers- this video can be found on YOUTUBE: Type in “Full video Raymond Suitcase Fork and Spoon”. Synopsis: Ray and Debra get home from a trip and put their suitcase at the bottom of the stairs. Both think its the other person’s responsibility to bring the suitcase up. Ray and Debra both use the Thinking- at- the- Margin Principle the idea that people make decisions after thinking about the costs (what they might give up) and benefits (what they might gain) of adding or subtracting more or less units of effort to decide whether or not they will bring up the suitcase. ***Copy the chart below to your Applications Handbook page 3, then use the video to complete. From Ray’s point of view: Options in increments Benefit (what Ray gains) Opportunity Cost (What Ray gives up) Put the bag away immediately _______________________________ _____________________________________________ Ignore the bag _______________________________ _____________________________________________ Tell Debra to put the bag away _______________________________ _____________________________________________ From Debra’s point of view: Options in increments Benefit (what Debra gains) Opportunity Cost (What Debra gives up) Put the bag away immediately _______________________________ _____________________________________________ Ignore the bag _______________________________ _____________________________________________ Tell Ray to put the bag away _______________________________ _____________________________________________

16. Principle # 4: Incentives are Important Main Idea: Anything positive or negative that motivates a person to do something (or not do it) is an incentive. People respond to negative and/or positive incentives. Example: Your parents give you a 10 pm curfew to go to the movies with your friends. A positive incentive to be home before 10 pm is that your parents will let you go out again. A negative incentive to be home before 10 is that if you aren’t home by 10, you will be grounded for a month. Related Terms: Incentive: Anything positive or negative that motivates a person to do something/take action. Incentives-matter-principle: the idea that incentives are important to people and the proof is that people react predictably to positive/negative incentives.

17. Apply what you have learned: Pretend you own your own clothing store. How can you get your employees to perform at their best? Copy the following chart into your Applications Handbook, page 4 and then complete. Scenario Negative IncentivePositive Incentive Scenario # 1 Your employee Matt is always late to work, but you can’t fire him because he is your brother. Give an example of 1 positive and 1 negative incentive you could use to get Matt to work on time. Scenario # 2 You want to increase your sales on shirts next month and increase profits. Give 1 positive and 1 negative incentive you could give employees to increase sales. (Firing them is not an option) Scenario # 3 Your store is a mess. Give 1 positive and 1 negative incentive you could give employees to keep the store tidier. Firing them is not an option. (DO NOT repeat any incentives used in scenario # 1 or # 2)

18. Principle # 5: Trade Makes Everyone Better Off Main Idea: Since no one is expertly skilled to make ALL of the daily necessities/wants of life (i.e. clothing, shoes, food, furniture, cell phones) people must make what they are skilled to make and then trade with others for what they are skilled to make. Example: You are a great chef. You make the best food at work and get a great paycheck. However, you are lousy at making clothing (you don’t even know how to thread a needle). So you use your skill to make money that you can use (for trade) at the mall to buy clothing from people who are good at making clothing. Related Terms: Trade-Makes-People-Better-Off-Principle: the idea that people should trade items that they have skillfully made so that consumers (shoppers) get the choice of the best goods. (Instead of making all the necessities of life at a poor quality)

19. Apply what you have learned: How does trade make you better off? In your table group, follow the following step-by –step directions (DO NOT GO OUT OF ORDER). Step 1- Have everyone at your table draw an envelope from the box. Inside the envelope is your special skill (what you are good at) and some items you have made with your special skill (these items can be used for trade). Step 2- Write these questions on page 5 of your handbook and answer them: “What special skill did you get? What can you make well? Can you survive on being able to make these items? Why or why not? What other types of necessities do you need to survive or would just like to have? (list 5) Step 3- Have your group discuss the special skills assigned to them. Who is good at what? Step 4- Now conduct a trade. You have several items you have created that you can use as payment for other items you need/and or want. Negotiate with your table partners. Are they willing to trade your item for one or two or three of theirs? Physically TRADE items (cards) with your table partners. Try to get a deal, remember everyone wants to profit from trade to become wealthier. You must make at least 1 exchange! Step 5- Write the following questions in your handbook, page 5, and answer: “What items did you trade yours for? Why? Were these items you needed for survival or just wanted? Were you able to profit from your trade? How satisfied are you with your trade? How are you better off than you were before you traded? How did this simulation illustrate the “Trade-makes-people-better-off-principle”? Step 6- Before you leave your table, put all the cards you received back into the correct envelope. Put all envelopes back into the box.

20. Teachers- cut these out and put each group of cards in separate envelopes by group Baker Special Skill: desserts Cake Cookies Pie Chocolate Pudding

21. Teachers- cut these out and put each group of cards in separate envelopes by group Basket Weaver Special Skill: Makes storage baskets Small basket Fancy Basket Handy Basket Beautiful Basket

22. Teachers- cut these out and put each group of cards in separate envelopes by group Tailor Special Skill: casual clothing Shirt Tie T-shirt Pants

23. Teachers- cut these out and put each group of cards in separate envelopes by group Farmer Special Skill: Growing Food Corn Beans Wheat Squash

24. Teachers- cut these out and put each group of cards in separate envelopes by group Jeweler Special Skill: Makes Jewelry Necklace Earrings Ring Bracelet Chain

25. Teachers- cut these out and put each group of cards in separate envelopes by group Cobbler Special Skill: makes footwear Tennis Shoes Heels Sandals Flip Flops Loafers

26. Principle # 6: Markets are a Good Place for Trade Main Idea: a market is ANYPLACE where trade occurs between buyers and sellers. The mall, flea market, or an online store are all examples of markets. In a free market, the government limits its interference in the trade of goods between sellers and consumers (shoppers). Example: You need a new shirt so you decide to go to the market to find one. The first market you go to is the mall, the second market is the flea market and finally you go to the market online. Eventually you decide to purchase a shirt from a clothing website. This process of shopping different markets was easy for you because the government did not really interfere in your shopping. You were allowed (by the government) to shop where you wanted, for what you wanted, at a price you were willing to pay. (free market system) Related Terms: Markets-Coordinate-Trade -Principle: the idea that markets (malls, grocery stores, flea markets, websites) usually are better than anyone or anything else at facilitating transactions between sellers (producers) and consumers (buyers). Invisible hand: the invisible hand is essentially a natural process in which individuals will automatically (without interference) try to maximize their own good (and become wealthier) through trades and exchanges in a free market. Term coined by Adam Smith.

27. Apply what you have learned: Watch the YOUTUBE video: “African travel. African market - Ngarenanyuki village, Tanzania, Africa.” OR “Ahero: An African bush market” Then answer the following questions on your Applications Handbook, page 6: Questions: 1)Describe the “markets” common in the smaller villages of Africa. 2)What type of products were sold at individual booths? 3)Why do you think the African people were selling the items they were? (Give at least 3 reasons) 4)Why was each African only selling 1-2 items/products? What does that tell you? 5)Are the African “sellers” and “buyers” in the market self-sufficient (able to produce everything they need - and want- to survive)? How do you know this? 6)How are African “markets” bringing buyers and sellers together? Do we see this type of market in the United States? Where? 7)How does the “invisible hand” work in an African village market?

28. Principle # 7: Our Decisions have Future Consequences Main Idea: Most people only look at the immediate costs and benefits of a choice/decision but the choices and decisions you make today will have future, often unforeseen, consequences. Example: In the 1920’s, the sale, manufacture, and consumption of alcohol was prohibited by the United States Government with the 18 th Amendment. This amendment was intended to lower the crime rate caused by alcohol-related crimes. However, by the end of the decade it was clear that the decision made by the U.S. government in 1920 had completely unintended, future consequences. By 1930, the crime rate in the U.S. had actually increased, not decreased as a result of the 18 th Amendment. Related Terms: Future-Consequences-Count-Principle: the idea that the decisions a person makes today will have immediate and future consequences. Law of Unintended Consequences: the idea that often the decisions an individual or government makes has consequences that are unintended or unexpected (not done on purpose) either short-term or long-term.

29. Apply what you have learned: Read the book, on your table, If You Give a Mouse a Cookie by Laura Numeroff. Than complete the activities below on page 7 of your applications handbook. Answer: (From the book If you Give a Mouse a Cookie) 1) Explain how this book illustrates the Future-Consequences-Count-Principle and the Law of Unintended Consequences. Activity: 1)Cut out each of the following “Decisions” cards and glue them to your applications handbook page 7. 2)Under/next to each “Decision” card, describe: a possible immediate (short –term) consequence of the decision on people in the community a possible future (long term) consequence of the decision on people in the community a possible unintended consequence of the decision on people in the community ***Teachers: “If You Give a Mouse a Cookie” is a very popular book which can be checked out from most libraries OR if you go to YOUTUBE there are several videos of teachers reading the story on video, you could have your students watch one of these videos instead.

30. Decision Card Ban on skate- Boarding in the city Sources: http://thegreenleaf.staradvertiserblogs.com/files/2013/01/say-no-to-plastic-bag.jpg http://www.familycourtchronicles.com/glossary/caselaw/skateboarding.gif http://rlv.zcache.com/high_school_dropout_hat-r07cbe79d9fc54684a6b66297acc85d5a_v9wfy_8byvr_324.jpg http://www.trustedcarbuyers.com/blog/wp-content/uploads/2014/02/drink-driving.jpg Decision Card http://cdn2.hubspot.net/hub/155878/file-18055636-png/images/effective-radio-advertising- commercials-portland-maine.png https://s-media-cache- ak0.pinimg.com/236x/4b/72/63/4b7263c2ae2bfd3001ecb7b749ea71b8.jpg Decision Card Stealing Decision Card You decided to Stop smoking. Ban on Plastic Bag use Ned’s habitual Drinking and driving You not finishing high- school