Good Day! DRAW A LINE SEPARATING TODAY & YESTERDAY 1) Write: Date: 01/15/10 , Topic: Market Failures 2) On the next line, write “ Opener #7 ” and then: 1) Plot your mood, reflect in 1 sent . 2) Respond to the opener by writing at least 2 sentences about : Your opinions/thoughts OR/AND Questions sparked by the clip OR/AND Summary of the clip OR/AND Other things going on in the news. Announcements: None Intro Music: Untitled
Agenda 1) When do markets fail? 2) Public Goods 3) Basic Research End Goal, you will be able to… 1) How do we contribute to market failure? Reminder 1) Find & complete your 4 news pods
Work #7a , “ Taxing Externalities (internalizing) ” Ask your partner if we should place a tax or fee on the following, and use that tax money to help those harmed ( include their name ): 1) Should we place a tax on crying sick children on planes to compensate those who sit near them? 2) Should we place a tax on those who throw away more trash than average? 3) Should we place a tax on ppl who live unhealthy lives to pay for their public health care services? 4) Should we place a tax on regular looking ppl to pay beautiful ppl for making regular ppl happy? 5) Should we place a tax on cans/bottles to give money to those who pick up cans/bottles ? (wait, we already do that )
Review: Suppliers only care about their own cost. Customers don’t pay when they don’t have to. So the MARKET FAILS to take care of externalities.
Notes #7a , Title: “ Market Failures ” 1) Public Good : Goods that are hard to exclude people who won’t pay. We all benefit, but someone has to pay. Exp: National defense, clean environment, roads, public radio. a) Free Rider : The person who benefits but doesn’t pay.
Review: If ppl don’t pay, the service can’t be maintained, gov has powers to collect money in ways private business doesn’t (taxes). Or else the MARKET FAILS because of free riders.
2) Basic Research : Science research that benefits society, but aren’t directly profitable (or best left free) Exp: NASA, Particle Accelerator, Human Genome Project, Stem Cell Research. MEDICINE RESEARCH=PROFITS DISCOVERING HOW YOUR BODY WORKS = NO DIRECT PROFITS
Work #7b , “ Space Exploration Debate ” 1) Read the 2 sides, choose 1 side, and write which you choose and explain why . 2) Then write down what your partner thinks ( include their name at the end ). 1 2 3 4 5 CON: Cut NASA 1) 17 billion is better spend on problems on Earth 2) Whatever benefits NASA does run across, it can be discovered cheaper in other ways PRO: Keep NASA’s 17 bil budget 1) NASA discoveries do have benefits here on Earth 2) Price can be put on human curiosity and mankind's need to explore
Work #7b , “ Basic Research Debate ” 1) Read the 2 sides, choose 1 side, and write which you choose and explain why . 2) Then write down what your partner thinks ( include their name at the end ). 1 2 3 4 5 CON: Leave to Private Funding 1) Private money doesn’t raise taxes and is used more efficiently 2) Desire for profits is the most powerful incentive to bring about progress PRO: Gov Fund Stem Cell Research 1) Gov can raise money faster to help more ppl 2) Knowledge of the working of the human body belongs to all, and shouldn’t be package/sold
Notes #7b , Title: “ Market Failures ” 3) Oligopolies : Few companies (suppliers) control most the market. More pricey to start biz. Exp: airlines & cars. 4) Price Fixing : If they work together ( collusion ) to set prices , they can force buyers to pay their prices. Illegal .
Notes #7c , Title: “ Market Failures ” 5) Anti-trust laws : Gov power to force biz to break up.
Selling Simulation: “Friday Marketplace” Many people get experience earning money at a job, fewer people experience earning money through their own business. Have fun with it! No illegal, non-school appropriate, offensive, living, rotting, broken, or potentially messy items allowed Market: Each Friday’s Market Takes Place in 2 Rounds (1 Seller Round, 1 Buyer Round) 1) Sellers and buyers negotiate prices. 2) Take home all items you brought/bought at the end of the marketplace. 3) Carefully store your money and eventually deposit in bank. 4) Buyers beware, things sold “as is”, sellers persuade them of the utility of your items. .
Work #7c , Title “ Marketplace ” Before the Simulation: 1) Write down your company name. After the Simulation: 2) Record your profits at end of the simulation 3) Reflect on what can be done better to increase business next time, focus on what products are in demand (not mean you can or want to supply it) and how marketing can be improved next time (branding+advertising). Remember, buyer beware!
Work #7f , “ Closer ” Before the governor (Mr Chiang) signs the bills, he wants the voters input. 1) How capitalist, socialist, or communist are the current bills that are proposed? 2) Would you support or be against the real CA’s legislature, if it wrote laws with the same intents as conveyed in the bills before you? 3) What do you predict to be the long term pros/cons of this legislation? 4) What changes do you think should be made to the bills?
Work #7f , Title “ Closer ” Pick the 1 most important thing you learned so far to share with your partner. 5) Write down a brief summary of what your partner said ( include their name ). 6) Rate 1-10 (1: confused, 10: too easy) how well you well you mastered the last 2 weeks.
Laptop Block: 4 Participation points for the two per group who bring laptops
Homework: 1) Study today’s notes + work sections for a possible workbook quiz . 2) Pick and listen to your 4 news podcast by next Monday. 3) If assigned, please bring laptops on block day (Tuesday/Wednesday) Workbook Check: If your name is called, drop off your workbook with Mr. Chiang ( if requested, points lost if your workbook is not turned in )