Answer:
Set up new Cornell Notes then answer this:
Should a rich person like Jeff Bezos be allowed to own the ocean? Why or why not?
The Market System 3:
Market Characteristics
EQ: What things are required for a market system?
The Market System
Problem: Overfishing in the ocean is leading to the endangerment of many species of fish.
What could we do to protect the fish?
Private Property – individual ownership and control of resources and products.
Encourages resources be used in their most valued manner so people care for them more.
The Market System
https://www.youtube.com/watch?v=dgct3Jn8pFA
Freedom of Choice
Within legal limits, individuals are free to open businesses and to produce and sell the good services of their choice. Individuals are also free to work where they want and to buy the goods and services they want with their earnings.
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Fancy a trade?
You have been given a sheet of paper. It is yours. It will not be collected. You’re welcome. It is exactly the same as everyone else’s paper in the room.
On a scale of 1-10, how much utility is this blank piece of paper providing for you right now?
Students given a piece of paper to create something. Open market to trade.
Maybe birka here?
http://www.econoclass.com/birka.html
I think we can do better. You will now have 5 minutes to improve your piece of paper.
You can draw on it, write on it, fold it, dab it with perfume, whatever you’d like to increase the amount of utility it provides you.
On a scale of 1-10, how much utility is your paper providing for you right now?
Your utility should have improved when you added your labor to the resource, but can we improve it even more?
Let’s try trading!
You may trade your creation with anyone in your usual 6- person group.
On a scale of 1-10, how much utility whatever paper you now own providing you?
It should be even more (otherwise, why did you trade?) But, could we get even more?
You may now trade whatever paper you have with anyone in the class.
Try to maximize your utils!
Now you’re all happy, but I’m not. My utils could definitely be increased.
Here is another piece of paper. This time you are going to write: “Mr. Roughton is great!” on it 5 times.
How much utility is it providing you?
Debrief
Did your utility decrease at any point? Why?
Why did most people’s utility increase throughout the game?
Why is it important to have Freedom of Choice in a market?
The Market System
https://www.youtube.com/watch?v=gSjM5B3QNlw
Self-Interest
Drives people to get the best job and get the most profit from their business. When everyone does this, ultimately society produces the most good for the most people.
�The Prisoner’s Dilemma
�You and two associates have been arrested for a crime. You’ve been given a chance to testify against your fellow criminals. You’re pretty sure they won’t be able to convict you as long as all three of you stay quiet. You’ve been placed in separate interrogation rooms and have not had a chance to speak to your accomplices.
�If none of you testify there is a high chance you will go free.
If either of the other prisoners testifies against you, you will go to jail.
If all three of you testify then all three of you will go to jail.
�What will you do?
�The Student’s Dilemma
�You and two associates have been offered extra credit. It is simply up to you to choose whether or not you will take the extra credit. Your economics teacher is a messed up dude so he’s added some stipulations.
If you all choose “all” then each students gets 1 points.�If two of you choose “self” then those students will get 4 points. The last gets none.
If only one persons chooses “self” they will get 10 points. The others get none.
If all three of you choose “self” no one gets any points.
�What will you do?
ALL
ALL
ALL
SELF
SELF
SELF
TESTIFY
SILENCE
TESTIFY
SILENCE
TESTIFY
SILENCE
The Market System
Limited Government – governments take minimal steps to correct market failures and protect rights.
The Market System
https://www.youtube.com/watch?v=oAht3YbqACA
Markets and Pricing
The forces of supply and demand, not the government, determine prices. If there is a surplus of goods available at the going price, the price will fall. If there’s a shortage, the price will rise.
The Market System
Competition
Competition keeps prices in line with the costs of production. If one seller attempts to increase prices, competition from other sellers will bring the price back down. Competition among buyers prevents any one buyer from controlling prices by refusing to buy something.
It drives innovation and creativity.
List all the possible uses of the mystery product.
Try to be unique. If you can come up with a way no one else does, you are more likely to succeed in the market.
Create a 1-slide Advertisement for your new product.
Imagine this was a pop-up web or magazine ad. Try to capture the attention of your audience. Clever slogan? Celebrity endorsement? Sell that stapler!