DOCUMENT RESUME ED 053 048 SO 001 700 AUTHOR Wiggins, Suzanne; Sperling, John ., . TITLE ECON 12: Student Materials. Unit I. Test Edition. INSTITUTION San Jose State Coll., Calif. PUB DATE 68 NOTE 334p. EDRS PRICE EDRS Price MF-$0.65 HC-$13.16 DESCRIPTORS *Concept Teaching, Criterion Referenced Tests, *Economic Education, Experimental Curriculum, Grade 12, Inquiry Training, Instructional Materials, Learning Activities, *Problem Solving, *Programed Materials, Resource Units, Secondary Grades, Social Studies Units, Textbooks, Workbooks IDENTIFIERS *ECON 12 ABSTRACT This revision and expansion of the 1966 edition of the student materials, ED 040 101, is comprised of student workbook and text for Unit I. As an introduction to economics, it is designed to provide a frame of reference for the study of contemporary economic problems. It is a careful study of such concepts as scarcity, wants, resources, and decision-making with respect to the various economic activities found in all economies, and how these activities are organized into economic systems. Economic concepts and their relationships to the other social sciences are stressed incorporating the basic strategy of problem-solving through inquiry. The seven chapter text includes general discussions by the principal author; twenty-eight readings, including some historical resources, others from foreign countries, and several by the author, are keyed to most, of the chapters. The programmed student workbook contains seven programs, criterion tests, and twelve exercises. An extensive use of graphs is continued in the revision, but the unit test is not repeated. Unit II is described in SO 001 701. Other available related documents are: 1) the test editions of the Teacher's Materials for both Unit I and Unit II, ED 040 100; and, 2) the final report of the curriculum development project, ED 028 093. Addison Wesley Company will be publishing the future editions of the units.(SBE) DRAFT COPY: FOR RESTRICTED USE ONLY SOCIAL SCIENCE EDUCATION CONSORTIUM MATERIALS DEPOSITORY Anewre-ft-tteefferreesasimiimmew ECON 12 leel=ermmirtimaimusigo. STUDENT.WORKBOOK UNIT 1 FALL, 1967 TEST EDITION OF HEALTH, US. DEPARTMENT EDUCATION &WELFARE OFFICE,OF EDUCATION HAS BEENREPRO- THIS DOCUMENT AS RECEIVEDFROM DUCED EXACTLYORGANIZATION ORIG- THE PERSON OR OF VIEW OROPIN- INATING 1T. POINTS . DO NOTNECESSARILY IONS STATED OFFICE OF EDU- REPRESENT OFFICIAL OR POLICY. CATION POSITION CENTER FOR ECONOMIC EDUCATION SAN JOSE STATE COLLEGE SAN JOSE, CALIFORNIA TABLE OF CONTENTS UNIT I PAGE Lesson 1 Exercise 1: Scarcity Exercise 2: Choices and Calculating Alternative Costs 3 Lesson Criterion Test 4 Lesson 2 Program: Production Efficiency, Productivity 9 Program: The Law of Diminishing Returns 19 What's In A Word? 30 Lesson Criterion Test 61 Lesson 3 Exercise 1: Exchange and Barter 65 ,Exercise 2: What Is Money? (It's Functions and Qualities)67 Exercise 3: The U.S. Money Supply 71 Exercise 4: Types of Credit and Financial Institutions 73 Exercise 5: Interest Rates for Regular. Buying and Installment Buying 76 Program: Purchasing Power in Income, Wealth, and Credit 82 Program: Capital and Investment 97 Program: Saving 108 Lessor(lrviteellon tem Lesson 4 Exercise 1: The Relation Between Current Saving and Real Investment 123 Exercise .2: Economic Institutions 124 Lesson Criterion Test 127 Lesson 5 Exercise 1: The Circular Flow Diagram as a Model of an Economy 133 Exercise 2: Product and Factor Markets 135 Exercise 3: Measuring Economic Activity the Differences Between "Stocks" and "Flows" 136 Program: Systems 138 Lesson Criterion Test, Part I 154 Lesson Criterion Test, Part II 159 Lesson 6 None Lesson 7 Program: Definition of Economics 164 LESSON 1 UNIT I EXERCISE 1. SCARCITY In economics, scarcity means inadequate supply. A thing is scarce if the needs or desires to use it are greater than the, amount of it immediately available (if wants) resources). The condition of scarcity is a constant part of the human condition; it creates the need for people to organize into community life to better satisfy their wants. Since the purpose of all economic activity is to reduce scarcity, understanding how economists define scarcitywill give you a better insight into what economic choice And activities involve. A. For the following questions, decide whether or not the thing described is scarce. Explain your answer in the space provided by making sure that you can show that, in the particular case, wantslOavailable resources. 1. You are a pilot stranded alone on an island in the South Pacific. You are hungry and there are fish in the sea. You can see them. Are the fish scarce? 2. Suppose that right now, there are 1,000,000 new automobiles waiting to be sold in the U.S. They are being stored by dealers, or, they are en route from the assembly plants to the auto dealers. Are new automobiles scarce in the U.S.? 3. A scientist discovers a new, rare element which, at present, has no use in any production process. Is the element scarce? 4. Is ocean water scarce for a citizen in an inland city like Denver, Colorado? 3 5. Is your time scarce this week? B. Below are statements about scarcity. Check the true statements. (a) all rare things. (b) all things which are produced with the use of scarce resources. (c) all things which are scarce today have always been scarce. (d) Anything which has an alternative cost. (e) all things sold for a price. C. What circumstances must you take into consideration to determine whether or not a thing is scarce? 4 UNIT I EXERCISE 2 LESSON 1 CHOICES AND CALCULATING ALTERNATIVE COSTS John graduated from high school; he has taken a full-time job for $320 per month, and he is looking for an apartment to rent. He has found two apartments that he likes: One is a furnished studio apartment (one room, kitchenette and bath), renting for $75 per month; the other is a furnished one-bedroom apartment with a swimming pool and a nice view from the living-room window, but it rents for $125 per month. He hasn't bought a car yet, and doesn't really need one to get to work. Of course, a car would simplify transportation and dating and he wantsla used Mustang at $50/month. He wants a Hi Fi set which will cost $15/month, and could run up bills for clothes to a limit of $35/month. There is also a possibility of a two-week vacation in Alcapolca (his boss will give him the time off),'but it will cost him $35/month for the next 12 months. 4 1-ela.rnavIt4tvatiS egioidate 1. What are two.alternatiVb cost. of renting the more expensive apartment ? a. b. 2. 01401 two alternative costs of buying the Mustang? a. b. 3. If John tried to make tine most reasonable choice he could, on what basis should he decide whether or not to rent the more expensive apartment? 711MIIM12MM -3- UNIT I LESSON NO. 3 .LESSON CRITERION TM. 1. (In this question, you will notice that each blank that you are to fill in is numbered.The numbers correspond to the correct answers that are listed at the end of the test. Do not check your answers until you have completed this section.) Men's wants are a mixture of (1. wants and (2. wants. A person is rarely completely (3. ,'and if he is, he doesn't stay that way long. A (4. want is a basic need for food, clothing, and shelter, while a (5. want is a desire for greater comfort of the mind and body. Wants are satisfied through the production of (6. and the entire process of satisfying wants has been illustrated by the (7. If what people want is greater than the (8. available to fill the want, then there is (9. This condition of (10. means that people cannot have everything they (11. , and they mustbe selec- tive about what they (12. most.The things we give up in order to use a resource to satisfy a particular want is called the (13. of that satisfaction. This is the real cost of something. One function society serves is to set up ways in which people can (14. disputes over the use of scarce resources. 2. Place the following list of words along side of proper bowor circle in the want-satisfaction chain shown below. Identify which of these boxes or circles represents an economic activity. distribution satisfaction wants physical outputs psychological inputs consumption production 7 3. The list below includes items which ere either inputs or outputs, or are both inputs and outputs. If the item is an input, place a check in the column labeled inputs; if it is an output, place a check in the column labeled output; if it is both, check both columns. Input Output printing press sports car vacation flight to Los Angeles services of ,a barber wild mink wheat commercial airliner operation by a doctor office building surfboard farm tractor oil deposit 4. If mg means equal to :p means greater than ICmeans less than Place the proper sign between the pairs of, items listed below: a. 4 3 a. A +B B+A+C (if C = 10) b. 3 4 f. B4A4C CLEStzial c. 3+4 4+3 g. d. 7+8+6 6+8+6 h. )2 (k)2 5. You are alone on a desert island with a Pocket full of diamonds. Are the diamonds scarce?Explain by describing the scarcity conditions you are assuming in giving your answer. 8 -6- 6. Check the following true statements about scarcity. Whether or not a thing is scarce depends on the persons whose. .wants are 114qmg considered. If a thing is scarce for soMe'People, it is ccarce for everyone.