Microeconomics Discussion Questions

PART ONE – INTRODUCTION TO ECONOMICS

  1. Review difference between micro- and macroeconomics. Provide examples for each.
  2. Ask participants to explain in their own words the link between scarcity and choice.
  3. Discuss examples of non-financial choices that maximize well-being.
  4. We assume voluntary transactions make us better off. Discuss and find examples of the difference between voluntary and involuntary situations.
  5. Discuss examples of consumer profit and producer profit.
  6. Practice taking some normative statements and making them into positive statements.

PART TWO – BASIC ECONOMIC QUESTIONS

  1. Think of your school as an economy. What are you producing? How are you producing it? For whom are you producing it? (Remember these responses. At the end of the first year of implementation, you will begin to think about establishing an actual student economy in your school. The responses to this question will be useful when you organize this alternative economy.)
  2. Describe something at your school that has an allocation mechanism.
  3. Discuss how your school’s value system influences the allocation systems within it.

PART THREE – PRODUCTION POSSIBILITIES

  1. Think about ways to grow each of the following determinants of production in both quality and quantity: (Fill in table below)
    1. Natural Resources
    2. Human Resources
    3. Capital Resources (plant and equipment)
    4. Entrepreneurship
  2. How could you use an understanding of opportunity cost to motivate your students to improve?
  3. In order to grow an economy, sometimes people need to forego current consumption to allow for future gain. How does this idea apply to your life and the lives of your students?
Determination of Production How to Grow Quality How to Grow Quantity
Natural Resources
Human Resources
Capital Resources
(plant and equipment)
Entrepreneurship

PART FOUR – REVIEW OF INTRODUCTION TO ECONOMICS, BASIC ECONOMIC QUESTIONS, AND PRODUCTION POSSIBILITIES

(Before moving on make sure everybody feels comfortable with the concepts presented.)

PART FIVE – THE LAW OF DEMAND

  1. Explain the Law of Demand in your own words.
  2. Complete your own demand schedule showing how many bags of chocolate candies you would purchase at the following price points: $0.25, $0.50, $0.75, $1.00.
  3. Draw the demand curve for the schedule.

PART SIX – THE DETERMINANTS OF DEMAND

For each of the following examples, indicate which direction the demand curve shifts and why.

  1. Draw the aggregate (national) demand curve for Christmas cards. If the government announces a 50% increase in the cost of stamps, which way will the demand curve shift, and why?
  2. Draw the demand curve for MP3 players. This year real incomes are expected to grow at a whopping 10%. Which way will the demand curve shift, and why?
  3. Draw the demand curve for vitamin enhanced water. A new study has come out showing that drinking vitamin enhanced water causes weight gain. Which way will the demand curve shift, and why?
  4. Draw the demand curve for Medicare. When the first baby boomers turn 65, which way will the demand curve shift, and why?

PART SEVEN – THE LAW OF SUPPLY

  1. Restate the Law of Supply in your own words.
  2. An application of the Law of Supply is, “We tax what we want less of and we subsidize what we want more of.” How does government implement this rule? How do you implement it in your classroom or school?

PART EIGHT – DETERMINANTS OF SUPPLY

If you consider your school as an economy and your product as educated students, which Determinants of Supply will most affect your willingness and ability to supply your “product”? How will they affect it?

PART NINE – MARKET EQUILIBRIUM

  1. Describe what a shortage is and what causes it.
  2. When a price is too low, explain who initiates movement toward price equilibrium and how.
  3. Instruct teachers to partner up, and choose a market. Knowing that a graph is a picture, have them draw an equilibrium graph for the market they chose. Have them explain to each other what this graph is a picture of.

PART TEN – CHANGES IN SUPPLY AND DEMAND

You have practiced graphing the changes in supply and demand that affect market equilibrium. We know that markets always tend toward equilibrium, but are not static. Considering the frequent shifts in the market for gasoline, discuss some of the different countervailing determinants (opposing forces) that create these shifts.

PART ELEVEN – PRICE ELASTICITY OF DEMAND

  1. Elasticity is the percentage change in the quantity demanded divided by the change in price. Ask teachers to put this in terms their students will understand.
  2. Without using a rubber band or underwear, come up with a way to explain and illustrate to your students the difference between elasticity of demand and inelasticity of demand.
  3. How does the concept of elasticity translate to things that motivate or fail to motivate students? How can use this idea to evaluate the things your school uses to motivate students?