American Government and Economic Systems Class Enduring Understandings and Essential Questions

Enduring Understandings of the Class Individuals Act (Self) (intra-personal) All Individuals have self-worth and natural rights. Individuals have different perspectives, preferences, and values. Only individuals make choices, only individuals act. Individual choices are limited by scarcity, the use of heurstics, involve trade-offs, thinking on the margin, and responding to incentives and feedback. Society consists of individuals Individuals Interact with others (Others) (inter-personal) Because there are other people, individuals interact. Social Cooperation generated by specialization and free trade improve standards of living. Voluntary exchanges are made between individuals because they believe that they will be mutually benefited. In free societies, personal interactions necessitate that self-regarding individuals are simultaneously others regarding. A Systems is a collection of individual actions and interactions (non-personal) 10. Institutions are the humanly devised constraints that structure human interaction 11. The concentration of power threatens liberty, free choice, and efficiency 12. Collective decisions are restricted by the same parameters that apply to individual decisions. In society, nothing occurs in isolation. Social systems are organic not mechanical.. Barriers restrict evolution and growth In the absence of evolution, inferior actions survive. 17. The true measure of any system or action is how well it improves the standards of living.

Enduring Understanding 1 All Individuals have self-worth and natural rights. All individuals are born with the natural rights of life, liberty, and pursuit of happiness. Individuals have the natural right to acquire and use private property Private property can refer to landed (material) and non-landed (time, talent, skill, knowledge, body, experience, intelligence, and ideas) Each individual is born with the right to make free choices to improve their individual situations Each individual has the right to protect themselves, property, and rights. Each individual is created equal in the eyes of their creator and must be viewed equally under the law. Each individual is to be treated equally under the law precisely because they are different. Because individuals are different there will be different outcomes and results. Each individual will face their own set natural barriers in life In free societies, government will not promote one individual’s opportunity at the expense of another person’s opportunity No individual is placed on this earth to serve someone else. The use of force doesn’t make the previous axioms any less true

Essential Questions to E.U. 1 1.1 a. Do all people have natural rights? b. To what extent are all people equal? 2.1 To what extent does the DOI, Constitution, and the Amendments recognize and protect the rights of the individual? 3.1 To what extent are the concepts of private ownership of property and free choice essential for free markets? 4.1 a. To what extent are economic indicators accurate measures of standards of living? b. How do economic polices impact individual rights? 5.1 a. How well are individual interests represented in the political process? b. Does the government hear all voices equally? c. To what extent are citizens represented equally? 6.1 To what extent does the Bill of Rights create harmony between individuals in society?

Enduring Understanding 2 Individuals have different perspectives, preferences, and values. An Individual’s experiences and perspective establishes their preferences and allows them to develop their own definition of subjective terms such as fairness, equality, morality, and value Individuals are different. They are differently physically, emotionally, and mentally. They have different experiences and perspectives. They have different wants and desires. They have different strengths and weaknesses. They have different situations. Individual differences lead to individual preferences. Individuals rank their preferences. Somethings are more preferred over others Different individuals have different preferences and different rankings of those subjective preferences Individuals develop their own definitions of subjective terms such as fairness, equality, morality and value. The definition of subjective terms is limited only by the number of people defining such terms. Individuals have the capacity to evolve. Individuals use heuristics (mental shortcuts) to overcome the scarcity of knowledge and time. Heuristics may lead to bias, irrational decisions, and fallacious arguments.

Essential Questions to E.U. 2 1.2 a. How do different individual perspectives on fairness, equality, and value impact society and public policy? b. How does our morality emerge, what implications does it have on economic and Political life? c. How do individual’s preferences impact their decisions? 2.2 a. Why do people differ in their beliefs on the proper role of government? b. Does our Government established by the Constitution promote morality, fairness, equality, and freedom? 3.2 a. How much do different perspectives on fairness, equality, morality, and value impact market outcomes? b. What determines value? 4.2 a. How much do different perspectives on fairness, equality, morality, and value impact government policies that deal with production and growth, prices and wages, and stable money? b. How do preference impact government policy? 5.2 How do different perspectives on fairness, equality, morality, and value impact people’s views on the political process, political messages, and positions on the political spectrum? 6.2 a. How much do different perspectives on fairness, equality, morality, and value impact society? b. Why do we need equal protection to promote our differences? c. How might out preferences impact our choices?

Enduring Understanding 3 Only individuals make choices. Only individuals act Action has a purpose. Action is a conscious decision to achieve a desired goal. Purposeful action is a result of underlying preferences Preferences are subjective Individuals act to improve their current situations. Individuals will resist forces that are detrimental to their lives. Individuals have ends and they employ the available means to achieve those ends. They will pursue mutually advantageous exchanges with others. The Individual is the basic unit of decision-making whether it is economic, social, or political. Government, Groups, teams, nations, etc. cannot make decisions, act, feel, have emotion, or preferences. Only individual members of the collective group can make decisions, act, feel, or have preferences. Individuals will decided to work together.

Essential Questions to E.U. 3 1.3 To what extent should the individual adhere to the group? 2.3 a. How should the Government balance individual rights (including your rights) with promoting the common good? b. How much are you willing to sacrifice? 3.3 a. To what degree can you influence markets both as a buyer and as a seller? b. How free are we in free markets? 4.3 a. To what extent are economic indicators accurate measures of standards of living per individual? b. How do economic polices impact individual rights? 5.3 a. How much does an individual’s vote matter? b. To what extent do politicians value the individual? c. Why should you care? 6.3 a. How can you make a difference in the United States? b. To what extent do your rights need to be protected in order for you to make a difference?

Enduring Understanding 4 Individual choices are limited by scarcity, involve trade-offs, thinking on the margin, and responding to incentives. All resources are scarce There is nothing without costs Individual act purposefully or in other words, individual action has a purpose Individuals have subjectively Ranked preferences and subjective costs Private ownership of property serves as a powerful incentive and allows for the opportunity to trade Individual action derives from the idea that the individual can impact the future to improve their situation. Individual desire, motivation, incentives, and preferences are powerful influences Individual action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. Individual action is restricted by scarcity All individual action is an exchange (trade-off) that entails costs and benefits. Individuals consider the marginal (additional) costs and benefits of a decision and act based on the preferences. Trade-offs are often assessed by using prices. Stable money and market based prices serve as a guide and allow for accurate assessments of trade-offs Every decision has a level of uncertainty. There are inherent risks for every action. If an action results in greater benefit than cost (profits) then it will continue, if the action results in great costs than benefits (loss) it will be stopped or avoided. Accurate feedback is essential for proper alloaction

Essential Questions to E.U. 4 1.4. a. To what extent can the basic concepts of decision-making be applied to all aspects of life? b. How does the scarcity of resources impact all decisions? c. Is anything ever “free?” 2.4 a. Who has the power in America? b. Are trade-offs necessary when creating a government? c. To what extent has does our Constitution/B.O.R. strike to proper balance between competing ideals? (liberty and authority, freedom and equality, and efficiency and equity) 3.4 a. To what extent are individuals motivated by profit and loss? b. How much do government policies impact individual decision making? c. To what extent do individual decisions and preferences impact others? 4.4 a. How much influence does government policy have on individuals? b. How much influence do individuals have on government policy? 5.4 a. To what extent can the concept of individual (economic) decision-making be applied to all aspects of politics? b. Is anything ever “free?” 6.4 To what extent does the Bill of Rights create harmony between individuals in society?

Enduring Understanding 5 Society consists of individuals Societies, community groups, businesses, churches, government and all other forms of social gatherings are a collection of individual actors. Only individuals have the ability to think, feel, believe, make decisions, act, and have subjective values or preferences. “group” decisions and collective actions are nothing more that than individual decisions working through the group. How collective decisions are made differs depending on the group. Individuals within a groups are different. Identifying an individual and/or making an assessment about their situation by only using information about their associations will lead to incomplete and inaccurate conclusions. Inaccurate conclusions will result in misallocating resources.

Essential Questions to E.U. 5 1.5 a. To what degree do individuals voluntarily form society? b. How is harmony best enforced? c. What are the acceptable trade-offs between liberty and authority, freedom and equality, and Efficiency and Equity? 2.5 a. To what extent are varying perspectives and preferences represented in our Constitution and Amendments? b. How much do varying perspectives impact our government/society today? 3.5 a. How well do markets coordinate individuals? b. Why are there different outcomes for different individuals and is this acceptable? 4.5 To what degree do government policies aimed at influencing the aggregate market influence the individual’s standard of living differently? 5.5 a. Why should you vote? b. How do politicians decide what individual preferences to represent? 6.5 To what extent does the Bill of Rights create harmony between individuals in society?

Enduring Understanding 6 Individuals in society interact. Individuals have the capacity to interact with themselves. They develop a conscience, standards of morality, and personal views on what is proper and improper. Individuals develop within themselves self- control mechanisms that respond to feedback loops. Adam Smith even suggested people develop within themselves an impartial spectator. The individual’s self control mechanisms is combination of the person’s own personal preferences and outside influences. Individuals in society interact. Individual’s pursing their self-interest both compete and cooperate with others. Individuals will pursue mutually advantageous exchanges and avoid undesirable associations. People can evolve and the evolution is often the result of interactions with others It is within human nature for individuals to interact with others. Individuals have both internal and external motivations Individuals looking to improve their current situation will often compete and cooperate with others. Cooperation between two or more free individuals seeking the same benefit must be voluntary in nature

Essential Questions to E.U. 6 1.6 a. How might interaction both help and hinder the advancement of mankind? b. To what extent do individuals who pursue their own-interest benefit or hurt society? c. Does forced cooperation exist? 2.6 a. How effectively did the founding fathers recognize, protect against, and utilize the idea of self-interest when creating the Constitution and the Amendments? b. How do you interpret the quote “Ambition must be made to counteract ambition” 3.6 a. Is self-interest good for free markets? b. To what extent do markets force people to consider others? c. In what ways may government intervention redirect self-interest (change incentives)? 4.6 a. How much influence does self-interest have on government policy? b. Should groups make policy that help some at the expense of other? 5.6 a. To what extent do individuals and groups compete and cooperate in order to influence the political process? b. Why should you care? c. Is competition in the political market the same as competition in the economic markets? 6.6 a. Does exercising your rights benefit or hurt society? b. What happens when one person’s exercising of their rights comes in conflict with another person’s exercising?

Enduring Understanding 7 Social Cooperation generated by specialization and free trade improve standards of living. Resources are scarce. This includes resources for each individual. i.e. time, knowledge, skill, strength, talents, intelligence. Other people act Individuals are different. Each individual has varying levels of ability. Division of labor and specialization as compared to isolated work lead to higher levels of productivity and higher standards of living for all. The most adequate means of improving one’s life is division of labor and social cooperation. i. Less time wasted in transition ii. Economies of scale iii. Automation iv. Min. need for workers v. Natural and acquired aptitude Individuals will specialize in what they can produce at the lowest opportunity costs and trade for goods that they could only produce at higher opportunity costs The benefits of specialization are only reaped when people can freely trade with each other Free trade allows individuals to specialize in areas that are most beneficial Free trade benefits all, even nations where workers are more productive in every sector. (absolute and comparative advantage)

Essential Questions to E.U. 7 1.7 a. Why and how do we divide labor and specialize? b. On net Free trade improves standards of living, Yes or no? 2.7 a. How well does our government utilize the concepts of division of labor and specialization? b. Does specialization and division of labor increase or decrease the power of government? 3.7 Is division of labor and specialization important in order to improve productivity and standards of living? 4.7 How do government policies aimed at impacting the aggregate market impact specific markets? 5.7 a. To what extent can the concepts of division of labor and specialization apply to interest groups and politics? b. Does this improve standards of living for all? 6.7 Does the BOR and the idea of free choice promote Division of Labor and Specialization?

Enduring Understanding 8 Voluntary exchanges are made between individuals because they believe that they will be mutually benefited. Freedom necessitates the ability for an individual to act or not act Individuals develop and rank their preferences based on their perceptions and interpretations of available information Individuals act on their preferences In free societies association is voluntary People make decisions to improve their situations, people decide to associate with each other to improve their current situation. Individuals will attempt to avoid detrimental situations When provided choices, individuals will try to associate themselves with the option that is best coordinated with their preferences Individuals make exchanges to improve their current situations The laws of marginalism also apply to associations Voluntary associations necessitate that both parties believe that they are benefiting (improving their current situations) Voluntary exchanges must be positive sum (win-win) Forced exchanges are more likely to result in zero sum results and contradict free markets Forced exchanges are involuntary servitude The greater the need for force the greater the likelihood of zero sum results Less choices, imperfect information, imperfect competition, and the removal of the repeating games will result in less benefits.

Essential Questions to E.U. 8 1.8 a. To what extent do free exchanges (econ., socially, pol.) between individuals benefit both parties and society as a whole? b. To what extent are forced associations involuntary servitude? 2.8 a. To what extent are you voluntary giving up your freedom? b. To what extent does the ratification process, voting process, lawmaking process, and amendment process represent voluntary exchanges? 3.8 To what extent is our mixed markets still based on the concept of voluntary exchange? 4.8 To what extent are government polices an extensions of our individual wants? 5.8 a. To what degree do we have a political system based on “Quid pro Quo” (something for something)? b. What is the most fair way to elect officials? 6.8 To what extent does the Bill of Rights promote exchanges that result growth and increased standards of living?

Enduring Understanding 9 In free societies, intimate interactions necessitate that self-regarding individuals are simultaneously others regarding. Voluntary cooperation necessitates mutual benefits. Benefits are individually defined When provided with the opportunity people will cooperate with others who provide them with the greatest mutual benefit. The better the information, the more accurate the decision Reputation results from a collection of pieces of information from the past Desire for future exchanges (repeating games) forces individuals to be short term and long term thinkers In free societies individuals can only promote their own interest if they are in tune to the interest and reactions to others Feedback loops result in evolution Individuals want to avoid situations where they incur more costs than benefits. In the long run , Selfishness = self destruction in free societies with information and choice Sustained selfishness is the result of poor information, lack of choices, or force. The must be certain institutions (private property, contracts, and consent) that promote social cooperation. Specifically, private property, choice, competition, price signals, and profit and loss. When there is free choice, more perfect information, and the chance of a “repeating game” an individual can only promote their own interest, if they are in tune with the interest and reactions of others Selfishness = self destruction, +, + outcomes survive, zero sum die in free societies.

Essential Questions to E.U. 9 1.9 Do selfish behaviors result in self-destruction? 2.9 To what extent can a person in government promote their own self interest without regarding the interest of others? 3.9 Do mixed markets promote selfishness or unselfishness? 4.9 To what extent do government policies disrupt real market signals, money, and choice? 5.9 a. To extent do elections represent a repeating game? b. Does the ability to be re-elected increase or decrease the power of the elected official? 6.9 Should others have a say on what rights we have and don’t have?

Enduring Understanding 10 Institutions are the humanly devised constraints that structure human interaction Institutions are the humanly devised constraints that structure human interaction Institutions are devised to create order and reduce risks in exchange, particularly with regards to non-personal interactions. They are made up of formal constraints (e.g. rules, laws, constitutions, contracts, property rights) and informal constraints (e.g. norms of behavior, conventions, fairness, customs, tradition, taboo, and self-imposed codes of conduct) and the enforcement characteristics Effective institutions raise the benefits of cooperation and increase the costs of defection Institutions connect the past with the present and the future The constraints combined with the enforcement define the incentive structure of society. The institutions both add to and reduce the cost of exchanges and production. Institutions matter when they impact transactions costs Social systems refer a series of interrelations that form a whole How individual actions are coordinated with others defines both the political and economic systems How scarce resources are allocated and who does the allocating defines the economic system Institutional constraints are a mixture of formal rules, informal norms, and enforcement mechanisms. Institutions will impact economic performance. Informal Norms provide the “legitimacy” to formal rules Rules can be changed quickly, norms take longer to evolve. Therefore real change takes longer since developing norms is a lengthy process. Rules unsupported by social norms create instability. The degree to which rules are enforced determine their impact on society and the impact of informal norms. Successful political and economic systems involve adaptive institutions that can survive shocks.

Essential Questions to E.U. 10 1.10 a. How do laws and social norms constrain action? Do these constraints promote or hinder efficiency? b. Why do we coordinate? c. What is the best method to coordinate individuals in order to promote individual rights and improved standards of living for everybody? d. To what extent do we need government to coordinate society? e. How much of themselves should an individual give up to society? 2.10 a. How do our institutions create constraints? Do these constraints increase or decrease costs? b. How much does the Constitution and the Amendments create harmony amongst individuals? c.. In this country how are collective decisions reached? d. Is the minority still protected? 3.10 a. How do formal and informal constraints impact markets? b. Who coordinates best? Consider knowledge, incentives, and harmony c. What is the proper role of government in markets? d. To what extent can the government impact market forces? e. What system best allocates resources to improve standards of living? 4.10 a. How does the concept of money both create and reduce constraints? b. Who coordinates best? c. What is the proper role of government in dealing with economic issues? d. How healthy is the American Mixed Market economy? 5.10 a. Does our political system create or reduce efficiency? Is there a better way to coordinate the wants of the people outside of government with the policies created by people inside government? b. How healthy is the American Political System? 6.10 a. Does the recognition of our rights increase or decrease costs in society? b. How well does government secure the Blessings of Liberty to ourselves and our Posterity? c. How well does the government coordinate the rights of all people in the nation?

Enduring Understanding 11 The concentration of power threatens liberty, free choice, and efficiency Individual actions derives from purpose Individuals act to improve their situations In free societies individuals interact with each other to endure mutual benefits Institutions that promote competition, appropriate informational feedback, and repeating games result in increase efficiency In free societies, If one or both parties are not benefitted then the interaction will stop. During interactions, if one or both parties are not benefitted, but the interaction continues there must be a lack of choice, poor information or force. Individuals will attempt to use government to reduce private transaction cost. Influencing lawmakers to eliminate competition via special privilege and artificial barriers. Concentration of powers results from a lack of competition and results in imbalance and inefficiency Concentrated interest even when in the minority will be more powerful than dispersed interests. The concentration of power threatens liberty and free choice. Absence of liberty and free choice creates an environment where deviant and selfish actions are rewarded.

Essential Questions to E.U. 11 1.11 How can we prevent power from being concentrated economically and politically? 2.11 a. Why and How does the Constitution and the Amendments prevent concentrations of power? b. How well has the plan succeeded? 3.11 a. How well do free markets prevent concentrations of power? b. How well does government prevent economic concentrations of power? 4.11 How much economic power should be in the hands of the government? 5.11 a. How concentrated is political power in our system? b. Why do politicians appeal the concentrated interest more than dispersed interest? 6.11 To what extent does the Bill of Rights protect the power of the people to ensure that the government is abiding by the Constitution and not becoming abusive?

Enduring Understanding 12 Collective decisions are restricted by the same parameters that apply to individual decisions. All resources are scarce. There is nothing without costs Although collective action can benefit from synergy, actions performed by individuals through the group are still limited by scarcity and involve trade-offs. All individual action even if done through a group must involve costs. There is no such thing as a free lunch. Knowledge is a scarce resource and is limited regardless of whether or not the individual is working through a group. People in government also have self-interest, incentives, and limited personal resources. We use money as a median of exchange, as a measurement, as a piece of information to help us make better decisions. Money is used to assess trade-offs Unstable money creates misunderstandings in terms of costs and benefits The government’s manipulation of the monetary system comes at a cost. Although collective decisions my change incentives, they cannot change the reality of scarcity or the underlying reasons why individuals act or interact with each other.

Essential Questions to E.U. 12 1.12 a. To what extent does scarcity of resources impact collective decisions? b. To what extent do you agree with the quote, “There is no such thing as a free lunch.” 2.12 To what extent do the principles of the Constitution promote or hinder efficiency in our government? 3.12 How might government use of resources impact the market? 4.12 To what extent is government policy intended to impact the aggregate market influenced by fallacious arguments? 5.12 According to economist Thomas Sowell, “The first lesson in economics is scarcity . . .and the first lesson in Politics is to forget about the first lesson of economics.” How much truth is there to his statement? 6.12 a. To what extent does the Bill of Rights prevent government from fulfilling its purposes? b. If there needs to be a trade-off between individual liberty and government power who should win?

Enduring Understanding 13 In society, nothing occurs in isolation. All resources are scarce. There is nothing without costs The unseen costs are just as important as the seen costs and benefits. Decisions have both short term and long term impacts. Nothing happens in isolation. Government decisions have both intended and unintended consequences. The merit of an action must be judged on its outcomes not its intentions. Results are always more important than rhetoric. Government decisions will be impactful. There will be costs and benefits. Each individual is different and has subjective views on all government policies. Ignoring or not recognizing the unseen costs does not make them any less real. Involuntary participation will result in zero sum outcomes Individuals will try to avoid detrimental outcomes. If an action results in greater benefit than cost then it will continue, if the action results in great costs than benefits it will be stopped or avoided. The true measure of success is how well a policy improves the standard of living for all people and not just specific groups of people at the expense of others. All decisions result in both private and social impacts, nothing occurs in isolation. What is unseen is just as important as what is seen.

Essential Questions to E.U. 13 1.13 a. Are we all connected? b. Why is it important to recognize the seen and unseen outcomes of decisions? c. To what extent should cost and benefits be equally shared amongst individuals in society? 2.13 a. Does the government do a good job of recognizing ALL costs and benefits of a policy? b. To what extent should the costs and benefits of public policy be equally shared amongst individuals in society? 3.13 a. Why is it important to recognize the seen and unseen outcomes of decisions? b. To what extent does the market account for the seen and unseen costs? 4.13 a. How well do people in and outside the government recognize the seen and unseen costs of economic policies? b. How much do economic policies impact future generations? 5.13 a. How might a politician’s desire to promote the interest of one group hurt another group? b. How might promoting the interest of a concentrated group hurt the rest of us groups? c. Do elections matter? 6.13 a. How much do free individuals with rights impact others in society? b. How much government involvement is acceptable?

Enduring Understanding 14 Social systems are organic not mechanical. Individuals are organic adapt, mature, and evolve. They respond to feedback. Social systems are comprised of individuals Individuals in Social systems adapt in response to information that is received from both inside and out-much in the same way that organic systems do. Individuals will respond differently There is an interdependence of similar and diverse parts that mature, learn, and adapt. All organic systems must stay in balance or equilibrium. No Authority can create a policy or law and expect all individuals to respond the same way. Society is not programmable. Social systems with greater interaction with its environment result in great growth. Systems evolve over time

Essential Questions to E.U. 14 1.14 a. How much does the structure of a system impact its function? b. To what extent do we have an open system? c. How do we use feedback loops and how much have we evolved? 2.14 a. To what extent does our Constitution create an Open or Closed system? b. To what extent does our government function as it was intended? c. How much are the fundamental principles still relevant today? d. To what extent is the Constitution a “living document?” Should it evolve? 3.14 a. To what extent do markets force participants to respond to feedback? b. To what extent is our economic system open or closed system? c. To what extent does government distort feedback? d. How much does the government open or close our economic system? 4.14 a. How well does government respond to feedback loops? b. Does government involvement in the economy promote or hinder progress? 5.14 a. To what extent is our political system open or closed? b. Do feedback loops matter? 6.14 To what extent does the Bill of rights provide us with the continuous opportunities of free choice, more perfect information, and the ability to provide feedback?

Enduring Understanding 15 Barriers restrict evolution and growth There are both natural and man-made barriers Barriers restrict the movement of resources (people, ideas, information, goods and services, natural resources, etc.) Barriers provide security for those behind the barrier. Barriers of entry restrict competition, decrease choice, increase price, and slow down evolution. Some individuals are benefited by barriers as other individuals are simultaneously hurt by them. Individuals and groups of individuals will use the power of government to create barriers. Individuals create their own personal barriers. Barriers restrict both inputs and outputs Barriers prevent feedback loops. Barriers prevent evolution. In the absence of evolution and competition, inferior decisions survive longer, resulting in a slow down of growth.

Essential Questions to E.U. 15 1.15 What are natural and man made barriers? 2.15 To extent does the Constitution and BOR create and/or remove barriers? 3.15 To what extent do free markets and government create and remove barriers? 4.15 To what extent should the government create and remove barriers in the aggregate market? 5.15 To what extent does our political system create and remove barriers? 6.15 To what extent do free societies create and remove barriers?

Enduring Understanding 16 In the absence of evolution, inferior actions survive. On net barriers lower standards of living for all Barriers restrict supply which creates an artificial scarcity and prevents abundance Increase scarcity removes choice Barriers prevent competition which in turn promotes less choice, more selfish actions, higher prices, less innovation, and inefficiency Barriers provide safe-haven for inferiority Being shielded from loss and restricted from gains distorts feedback loops. Barriers eliminate cooperation from outside the system leaving only competition with those outside the system There are some natural monopolies due to scarcity, but there are many more artificial monopolies created by man made scarcity (i.e. government action) Closed systems eventually die out, artificial barriers help some in society but on net lower standards of living. Nothing works in isolation. Barriers of entry reward inefficiency, protect the wasteful, and support selfish actions. Man made barriers are supported by force. In the absence of evolution, inferior actions survive. Selfish actions which would normally go extinct are provided an environment to flourish.

Essential Questions to E.U. 16 1.16 a. What type of systems best promote free choice, accurate information, and responses to feedback? b. What types of systems reward selfish behavior and what types of systems punish selfishness? 2.16 To what extent does our system of government promote and environment for choice, accurate information, and the opportunity to respond to feedback? 3.16 a. How might actors in the market use government to protect themselves from competition? b. Do mixed markets promote free choice, accurate information, and appropriate responses to feedback? c. Between decisions made in the market and decisions made by government which is more likely to result in zero sum outcomes? d. Do you support protectionist policies? Including tariffs, quotas, licenses, price supports, etc. 4.16 a. Does government pick winners and losers? b. Who has better information, people inside the government or people outside the government? c. How do fallacies lead to a misallocation of resources? 5.16 a. Have our politicians created a system of barriers to protect themselves from competition? b. Do officials who are elected and well known respond to feedback differently than faceless officials who are not elected? c. Where do you think the highest threat of abuse may come from? 6.16 a. How effectively do individuals who exercise their rights provide feedback loops to others?

Enduring Understanding 17 The true measure of any system or action is how well it improves the standards of living. Improved standard of living is subjective Economic and political systems must be judged on they environment that they create to increase valued productions, lower costs, promote efficiency, that results in economic growth and higher standards of living Actions that produced goods and services that others value will improve standards of living Each individual makes decisions that will impact their personal standard of living Pareto improvements are not zero sum Providing government handouts to one group does not improve the standard of living on net. Impact on standard of living can only be measured by looking at the results of policies and not by listening to the promises of the policy maker. When government gives to one group they must take from another it is not a Pareto improvement Free trade with mutual benefits leads to positive sum outcomes and improved standards of living. Citizens may also be chartable with their property to improve someone else’s standard of living. The true measure of any system or action is how well it improves the standards of living for all people. Any activity that involves benefitting one at the expense of another cannot be classified as an improved standard of living for all.

Essential Questions to E.U. 17 1.17 How do we measure standards of living? How do we improve standards of living? 2.17 To what extent does the Constitution and the BOR improve standards of living for all Americans? 3.17 To what extents do free markets and/or government interaction in the free markets promote higher standards of living? 4.17 How do we measure over-all standard of living and how does government policy impact standard of living? 5.17 To what extent does our political system promote or hinder improved standards of living for all Americans? 6.17 To what extent is individual liberty a perquisite to improve standards of living?

Enduring Understandings of the Class Individuals Act (Self) (intra-personal) All Individuals have self-worth and natural rights. Individuals have different perspectives, preferences, and values. Only individuals make choices, only individuals act. Individual choices are limited by scarcity, involve trade-offs, thinking on the margin, and responding to incentives and feedback. Society consists of individuals Individuals Interact with others (Others) (inter-personal) Because there are other people, individuals interact. Social Cooperation generated by specialization and free trade improve standards of living. Voluntary exchanges are made between individuals because they believe that they will be mutually benefited. In free societies, personal interactions necessitate that self-regarding individuals are simultaneously others regarding. A Systems is a collection of individual actions and interactions (non-personal) 10. Institutions are the humanly devised constraints that structure human interaction 11. The concentration of power threatens liberty, free choice, and efficiency 12. Collective decisions are restricted by the same parameters that apply to individual decisions. In society, nothing occurs in isolation. Social systems are organic not mechanical.. Barriers restrict evolution and growth In the absence of evolution, inferior actions survive. 17. The true measure of any system or action is how well it improves the standards of living.

Essential Questions of the Class/Unit 1 Intro. The Individual (Self) Do all people have natural rights? To what extent are all people equal? How do different individual perspectives on fairness, equality, and value impact society and public policy? How does our morality emerge, what implications does it have on economic and Political life? How do individual’s preferences impact their decisions? To what extent should the individual adhere to the group? To what extent can the basic concepts of decision-making be applied to all aspects of life? How does the scarcity of resources impact all decisions? Is anything ever “free?” To what degree do individuals voluntarily form society? How is harmony best enforced? What are the acceptable trade-offs between liberty and authority, freedom and equality, and Efficiency and Equity? How Individuals interact (Others) How might interaction both help and hinder the advancement of mankind? To what extent do individuals who pursue their own-interest benefit or hurt society? Does forced cooperation Why do we divide labor and specialize? On net Free trade improves standards of living, Yes or no? To what extent do free exchanges (econ., socially, pol.) between individuals benefit both parties and society as a whole? Do selfish behaviors result in self-destruction? Systems 10. How do laws and social norms constrain action? Do these constraints promote or hinder efficiency? What is the best method to coordinate individuals in order to promote individual rights and improved standards of living for everybody? 11. How can we prevent power from being concentrated economically and politically? 12. To what extent does scarcity of resources impact collective decisions? To what extent do you agree with the quote, “There is no such thing as a free lunch.” 13. Are we all connected? Why is it important to recognize the seen and unseen outcomes of decisions? To what extent should cost and benefits be equally shared amongst individuals in society? How much does the structure of a system impact its function? To what extent do we have open or closed system? How do we use feedback loops and how much have we evolved? What are natural and man made barriers? What type of systems best promote free choice, accurate information, and responses to feedback? What types of systems reward selfish behavior and what types of systems punish selfishness? 17. How do we measure standards of living? How do we improve standards of living?

Essential Questions of Unit 2 To what extent does the DOI, Constitution, and the Amendments recognize and protect the rights of the individual? Why do people differ in their beliefs on the proper role of government? Does our Government established by the Constitution promote morality, fairness, equality, and freedom? How should the Government balance individual rights (including your rights) with promoting the common good? How much are you willing to sacrifice? Who has the power in America? Are trade-offs necessary when creating a government? To what extent has does our Constitution/B.O.R. strike to proper balance between competing ideals? (liberty and authority, freedom and equality, and efficiency and equity) To what extent are varying perspectives represented in our Constitution and Amendments? How much do varying perspectives impact our government/society today? How effectively did the founding fathers recognize, protect against, and utilize the idea of self-interest when creating the Constitution and the Amendments? How do you interpret the quote “Ambition must be made to counteract ambition” How well does our government utilize the concepts of division of labor and specialization? This increase or decrease the power of government? To what extent does the ratification process, voting process, lawmaking process, and amendment process represent voluntary exchanges? To what extent can a person in government promote their own self interest without regarding the interest of others? How do our institutions create constraints? Do these constraints increase or decrease costs? How much does the Constitution and the Amendments create harmony amongst individuals? In this country how are collective decisions reached? Is the minority still protected? Why and How does the Constitution and the Amendments prevent concentrations of power? How well has the plan succeed? To what extent do the principles of the Constitution promote or hinder efficiency in our government? Does the government do a good job of recognizing ALL costs and benefits of a policy? To what extent should the costs and benefits of public policy be equally shared amongst individuals in society? To what extent does our Constitution create an Open or Closed system? To what extent does our government function as it was intended? How much are the fundamental principles still relevant today? To what extent is the Constitution a “living document?” To extent does the Constitution and BOR create or remove barriers? To what extent does our system of government promote and environment for choice, accurate information, and the opportunity to respond to feedback? To what extent does the Constitution and the BOR improve standards of living for all Americans?

Essential Questions Unit 3 To what extent are the concepts of private ownership of property and free choice essential for free markets? How much do different perspectives on fairness, equality, morality, and value impact market outcomes? What determine value? To what degree can you influence markets both as a buyer and as a seller? How free are we in free markets? To what extent are individuals motivated by profit and loss? How much do government policies impact individual decision making? To what extent do individual decisions and preferences impact others? How well do markets coordinate individuals? Why are there different outcomes for different individuals and is this acceptable? Is self-interest good for free markets? To what extent do markets force people to consider others? In what ways may government intervention redirect self-interest? Is division of labor and specialization important in order to improve productivity and standards of living? To what extent is our mixed markets still based on the concept of voluntary exchange? Do mixed markets promote selfishness or unselfishness? How do formal and informal constraints impact markets? What is the proper role of government in markets? To what extent can the government impact market forces? What system best allocates resources to improve standards of living? How well do free markets prevent concentrations of power? How well does government prevent economic concentrations of power? How might government use of resources impact the market? Why is it important to recognize the seen and unseen outcomes of decisions? To what extent does the market account for the seen and unseen costs? To what extent do markets force participants to respond to feedback? To what extent is our economic system open or closed system? To what extent does government distort feedback? How much does the government open or close our economic system? To what extent do free markets and government create and remove barriers? How might actors in the market use government to protect themselves from competition? Do mixed markets promote free choice, accurate information, and appropriate responses to feedback? Do you support protectionist policies? To what extents do free markets and/or government interaction in the free markets promote higher standards of living?

Essential Questions of Unit 4 Should some individuals be expected to give more to society than others? How much do different perspectives on fairness, equality, morality, and value impact government policies that deal with production and growth, prices and wages, and stable money? How do preferences impact government policy? To what extent are economic indicators accurate measures of standards of living? How do economic polices impact individual rights? How much influence does government policy have on individuals and how much influence do individuals have on government policy? To what degree do government policies aimed at influencing the aggregate market influence the individual’s standard of living differently? How much influence does self-interest have on government policy? Should groups make policy that help some at the expense of other? How do government policies aimed at impacting the aggregate market impact specific markets? To what extent are government polices an extensions of our individual wants? To what extent do government policies disrupt real market signals, money, and choice? How does the concept of money both create and reduce constraints? Who coordinates best? What is the proper role of government in dealing with economic issues? How healthy is the American Mixed Market economy? How much economic power should be in the hands of the government? To what extent is government policy intended to impact the aggregate market influenced by fallacious arguments? How well do people in and outside the government recognize the seen and unseen costs of economic policies? How much do economic policies impact future generations? How well does government respond to feedback loops? Does government involvement in the economy promote or hinder progress? To what extent does government create and remove barriers in our economy? Does government pick winners and losers? Who has better information, people inside the government or people outside the government? How do fallacies lead to a misallocation of resources? How do we measure over-all standard of living and how does government policy impact standard of living?

Essential Questions of Unit 5 How well are individual interests represented in the political process? Do? To what extent are citizens represented equally? How do different perspectives on fairness, equality, morality, and value impact people’s views on the political process, political messages, and positions on the political spectrum? How much does your vote matter? To what extent do politicians value your vote? Why should you care? To what extent can the basic concepts of economic decision-making be applied to all aspects of politics? Is anything ever “free?” Why should you vote? How do politicians decide what individual preferences to represent? To what extent do individuals and groups compete and cooperate in order to influence the political process? Why should you care? Is competition in the political market the same as competition in the economic markets? To what extent can the concepts of division of labor and specialization apply to interest groups and politics? Does this improve standards of living for all? To what degree do we have a political system based on “Quid pro Quo” (something for something)? What is the most fair way to elect officials? To extent do elections represent a repeating game? Does the ability to be re-elected increase or decrease the power of the elected official? Does our political system create or reduce efficiency? Is there a better way to coordinate the wants of the people outside of government with the policies created by people inside government? How healthy is the American Political System? How concentrated is political power in our system? Why do politicians appeal the concentrated interest more than dispersed interest? According to economist Thomas Sowell, “The first lesson in economics is scarcity . . .and the first lesson in Politics is to forget about the first lesson of economics.” How much truth is there to his statement? How might a politician’s desire to promote the interest of one group hurt another group? How might promoting the interest of a concentrated group hurt the rest of us? Do elections matter? To what extent is our political system open or closed? Are citizens part of the system or the surroundings? Do feedback loops matter? To what extent does our political system create and remove barriers? Have our politicians created a system of barriers to protect themselves from competition? Do officials who are elected and well known respond to feedback differently than faceless officials who are not elected? Where do you think the highest threat of abuse may come from? 17. To what extent does our political system promote or hinder improved standards of living for all Americans?

Essential Questions of Unit 6 How well does the Bill of Right protect individuality, self-worth, and each person’s natural rights? How much do different perspectives on fairness, equality, morality, and value impact society ? Why do we need equal protection to promote our differences? How might out preferences impact our choices? How can you make a difference in the United States? To what extent do your rights need to be protected in order for you to make a difference? What is the proper balance between Individual liberty and the common good? Who is responsible for the protection of your rights? Are your rights “free?” To what extent does the Bill of Rights create harmony between individuals in society? Does exercising your rights benefit or hurt society? What happens when one person’s exercising of their rights comes in conflict with another person’s exercising? Does the BOR and the idea of free choice promote Division of Labor and Specialization? To what extent does the Bill of Rights promote exchanges that result growth and increased standards of living? Should others have a say on what rights we have and don’t have? Does the recognition of our rights increase or decrease costs in society? How well does government secure the Blessings of Liberty to ourselves and our Posterity? . How well does the government coordinate the rights of all people in the nation? To what extent does the Bill of Rights protect the power of the people to ensure that the government is abiding by the Constitution and not becoming abusive? To what extent does the Bill of Rights prevent government from fulfilling its purposes? If there needs to be a trade-off between individual liberty and government power who should win? How much do free individuals with rights impact others in society? How much government involvement is acceptable? To what extent does the Bill of rights provide us with the continuous opportunities of free choice, more perfect information, and the ability to provide feedback? To what extent do free societies create and remove barriers? How effectively do individuals who exercise their rights provide feedback loops to others? To what extent is individual liberty a perquisite to improve standards of living?

Enduring Understandings

Essential Questions

Enduring Misunderstandings

A fallacy is an invalid conclusion drawn from observation or facts A fallacy is an invalid conclusion drawn from observation or facts. Fallacies derive from faulty logic/reason. The 2 main causes of fallacy are ignorance and laziness.

Economic fallacies can be distilled down to 5 main errors. Forgetting Costs – Nothing without cost – seen or unseen Forgetting that nothing works in isolation – Both time and place Forgetting that improvements in standard of living can only be measured in the how much we value the goods and services that are produced. Forgetting about individuals. Money is not wealth, it has no intrinsic value, it is only a measure of wealth.

The Free Lunch Fallacy The invalid conclusion based on the assumption that goods and services can be provided without a cost. This fallacy is often applied to government programs that offer something “free” to the public.

The Broken Window Fallacy The invalid conclusion based on the assumption that government spending, war, and disasters grow the economy. The fallacy originates from those who only focus on the seen (observable outcomes) and not the unseen (opportunity costs) of a decision.

Production for the sake of Production Fallacy The invalid conclusion based on the assumption that if we produce more goods and services standards of living will increase. The reality is we need to produce goods and services that others value and want to consume. Work for the sake of work waste resources. Digging ditches doesn’t make us richer.

The open-ended Fallacy The invalid conclusion that derives from the advocacy of desirable things without the regard for the fact that, at any given time, resources are limited, and that there are always tradeoffs to be made between desirable alternatives. Safety is great, for instance, but safety at all costs would make air travel (and car travel, for that matter) grind to a halt.

The zero sum (fixed pie fallacy) The invalid conclusion based on the assumption that one person's gain must entail another person's loss. This in turn leads to the invalid conclusion that there is a fixed amount of wealth and that it cannot grow it can only be redistributed.

The Protection Fallacy The notion that certain economics actors must be protected from market forces and that by protecting them it will have a positive impact on others. The idea that we must protect competitors and not just competition leads to bailouts, tariffs, regulations, less competition and inefficiency.

The Isolation Fallacy The belief that a policy will only impact the specific group it has targeted and only during the a specific time period.

The Fallacy of collective terms. The invalid conclusions based on the assumption that using abstract, collective, non-living terms can provide an accurate portrayal of a social issue. Examples of collective terms are “society,” “community,” “nation,” “class,” “families,” “households,” “percentiles” and “us.” The important thing to remember is that they are abstractions, figments of the imagination, not living, breathing, thinking, and acting entities. The fallacy involved here is presuming that a collective is, in fact, a living, breathing, thinking, and acting entity and all variables are the same.

The Fallacy of Composition The invalid conclusion based on the assumption that what is true of a part must be true of the whole.

The Fallacy of Decomposition The invalid conclusion based on the assumption that what is true of the whole must be true of its parts.

The Chess Piece Fallacy The invalid conclusion that some authority can achieve desired results as though he were moving chessmen on a board, ignoring people’s desires and incentives. As Adam Smith pointed out more than two hundred years ago, “In the great chessboard of human society, every piece has a principle of motion of its own, altogether different from that which the legislature might choose to impose upon it.”

Money is Wealth Fallacy The invalid conclusion based on the assumption that money has intrinsic value. Promoters of this fallacy believe that all one needs to do is print more money to boost standards of living. This assumption ignores the fact that the only true wealth creators are those who produce goods and services that improve standards of living. Money is a median of exchange ad measures value so when you manipulate the amount of money you distort the assessment of exchanges.

The Post-Hoc Fallacy Post-Hoc is the invalid conclusion based on the assumption that since “A” occurs before “B”, “A” caused “B”. In other words, Post-Hoc is an invalid cause-effect argument based on correlation and not causation.

The immediate effect fallacy The idea that only thing to consider is the short term impacts of a policy. Policy must be evaluated on more than just phase 1. As policy matures it must continue to be evaluated. Eventually it must be judged on it effects and not just the intentions.

Fallacy Violation of Basic economic Principles Connection to course

Fallacy Violation of Basic economic Principles Relation to course

Fallacy Violation of Basic economic Principles Relation to Course

M. Immediate effect policy Fallacy Violation of Basic economic Principles Relation to Course L. Isolation Fallacy Nothing happens in isolation. Economic policy has an impact on more that just the primary group. Seen and the unseen M. Immediate effect policy Policy must be evaluated on more than just phase 1. As policy matures it must continue to be evaluated. Eventually it must be judged on it effects and not just the intentions. N. Protection Fallacy We must protect competitors and not just competition.