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Unit 1 Resources: Foundations of American Citizenship - Deerlake ...

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Name Date ClassEconomics Activity 3Economic Checks and BalancesAmerica’s founders foresaw the need to balance power among parts <strong>of</strong>government. To keep any one part from becoming too powerful, they setup a system <strong>of</strong> checks and balances. Our economy has a built-in system<strong>of</strong> checks and balances as well. It is called competition. In business, competitionis the rivalry among companies for consumer dollars. Companiestry to gain a large market share. A company’s market share is its portion<strong>of</strong> all sales made <strong>of</strong> a type <strong>of</strong> product for a certain time period.Because <strong>of</strong> competition, you can choose among similar products<strong>of</strong>fered by different companies. To win your dollars, companies try to<strong>of</strong>fer better features, higher quality, or lower prices than their competitors.The ultimate winner is you, the consumer. As a result <strong>of</strong> competition,you have a wide variety <strong>of</strong> products at reasonable prices fromwhich to choose.CHAPTER 3Copyright © by The McGraw-Hill Companies, Inc.DIRECTIONS: The graph below shows the market shares <strong>of</strong> the top sellers<strong>of</strong> athletic shoes in a recent year. For example, <strong>of</strong> all athletic shoes soldthat year, 15 percent were Adidas shoes. Study the graph and answerthe following questions on a separate sheet <strong>of</strong> paper.1. How does competition benefit you as aconsumer?2. Explain the meaning <strong>of</strong> this statement:New Balance: 9%Reebok has an 11% share <strong>of</strong> the athleticshoe market.3. According to the chart, what percentage<strong>of</strong> the market for athletic shoes isReebok: 11%shared by all other companies? (Hint:The whole market 100%.)4. Assume that consumers purchased $14billion worth <strong>of</strong> athletic shoes that year.Adidas: 15%How many dollars did they spend onNike shoes?5. CRITICAL THINKING ACTIVITY As a class,select a product with many features,such as a computer, portable radio, orbicycle. Then divide into small groups.Each group represents a competingcompany <strong>of</strong>fering the same basic product. Your goal is to add featuresto your product to attract the most consumers. With your group,brainstorm features you would include. Think about things like colorchoices, handy functions, convenient sizes, and fun shapes. Don’t letyour competitors hear what you are planning! Have someone takenotes for your group. Then present your group’s features to the class.Record each group’s features on the board. As a class, vote on theproduct you would buy. Which company won the most consumers?Market Share for Athletic ShoesNike: 39%Other: ?41

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