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2. Understanding Cause and Effect Copy the twodiagrams of the production possibilities frontiersshown below. Then, write captions that explainwhat each diagram is showing.ButterAplying Eco 0 ic ConceptsEFFEaButter1. Scarcity What three choices must a society makebecause of scarcity?2. Utility How is a product's utility related to itsvalue?3. Cost-Benefit Analysis How would you apply theconcept of cost-benefit analysis to the decision tofinish high school? To further your <strong>edu</strong>cation?MatracticeAcity administrator with a $100,000 annual budgetis trying to decide between fixing potholes or directingtraffIC at several busy intersections after school.Studies have shown that 15 cars hit potholes everyweek, causing average damages of $200. Collisions atthe intersections are less frequent, averaging one permonth at an average cost of $6,000, although nonehave ever caused injuries or deaths. Use this informationto answer the following questions.1. What are the annual costs from the pothole damage?2. What are the annual costs due to damage fromcollisions?3. Given the size of the annual budget, make yourrecommendation as to which project should beundertaken. Explain you answer in terms of dollarbenefits per dollar spen t.Thlnki, 9Len Econo•ISUse a problem-solving process to gather informationabout the alternatives, trade-offs, and opportunitycosts facing the city administrator. List and considerpossible options the administrator may choose toimplement. Consider the advantages and disadvantagesof implementing the possible solutions.Technologyi IUsing a Spreadsheet Keep track of your economicdecisions for one week. Use your data to create aspreadsheet, highlighting your weekly spending habits.1. In cells B1 through E1, type Food, Clothing,Entertainment, and Other. In cell F1, type Total.2. In ceJJs A2 through A8, type the days of the week,starting with Monday in cell A2. In cell A9, type Total.3. In cells B2 through E2, enter the amount spent ineach category On Monday.4. In cell F2, use a formula such as =SUM(B2:E2) tocalculate total expenditures on Monday. Click anddrag this formula to cells F3 through F8 to find theother weekday sums.5. Compute total expenditures for cells B9-F9.Buildinkills-.......--tSequencing and Categorizing InformationIdentify a reasonably large purchase yourecently made or are about to make. Whatare the trade-otfs involved, and what are thecriteria you use to evaluate the alternatives?On a separate sheet of paper, illustrate yourdecision in the form of a decision-makinggrid like the one below.Decision-Making GridCriteria Criteria Criteria CriteriaAlternatIves 1 '2 3 4Practice and assess key socia Istudies skills withthe Glencoe SkiJIbuilder Interactive Workbook,Level 2.
Setting Up the WorkshopFor this activity you will need:• small paper "lunch" bags• miniature chocolate bars• marshmallows• graham crackersc<strong>edu</strong>r,esorFrom the classroom of. ..Douglas IdeMt. Ararat High SchoolTOpsham, Maine9 ·····he c cityOur resources are limited while ourwants are relati7Jely unlimited. In thisworkshop> you will experiment with methodsto 07JerCome the problem of scarcity.lOu will also answer the threefundamentalquestions of economics: what to produce,how to produce it, and how to distributewhat you produce. Finally, you will analyzewhy it is important to determine theanswers to these questions.Review the conceptof scarcity with yourgroup. Remember thatscarcity is the economicterm that descri bes a situationwhere there are notenough products available tosatisfy people's needs or wants.Discuss why scarcity always exists.Review the concept of production. Note thatproduction-the creation of goods and services-requiresfour factors.The Four Factors of Production:c, Natural Resources• Labor• CapitalEntrepreneursh ipYour teacher will provide you with your group's"resources." Do not open the bag.30 UNIT 1 FUNDAMENTAL ECONOMIC CONCEPTS
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