Money and mankind ECONOMICS TUTORIAL THREE Surf Coast Secondary Year 9 2016

Learning Intention To understand how to values and ethics impact on economic decisions and supply To understand the opportunity cost of behaving ethically To understand how a business can behave ethically with values

What is a business? Answer the following questions in your books What is the main purpose of a business: (a) for the owner of the business? (b) for the customers of the business? (c) Who sets the price for goods sold by the business? (d) What determines if a business is successful? Have a discussion with students and write any questions they still have about businesses - try and answer or write in here and we will look at writing into next tutorial.

The canteen is going to start selling macaroons The canteen is going to start selling macaroons! How much should they charge for 1 macaroon, what about 3 macaroons? JUSTIFY the price that you come up with, with at least 3 reasons for your price. THINK! Cost Time Profit Supply Demand Justification needs to be about the profit, or what they think the cost might be, equilibrium price etc… In the discussion - what was the highest price? What was the lowest price? Why was there a difference? Can the class agree on a price? Why? Why not?

VALUES DILEMMA Most businesses are based on the goal of making a profit. Consumers may seek the best bargain, but generally there is an understanding that payments for goods and services are set at a level which allows the owner/s of a business to make money. Even ‘not-for- profit’ businesses need to cover costs and make money to put back into the organisation.

NOT-FOR-PROFIT BUSINESSES With the person next to you answer the following questions What is the goal of a not-for-profit business? Why would people set up a not-for-profit business? Can you think of any not-for-profit businesses in your community? Individually, describe what you think would happen if our school cafe operated on the basis of students paying what they thought the food was worth?

A RESTAURANT THAT ASKS CUSTOMERS TO PAY WHAT YOU THINK THE MEAL IS WORTH WHAT WOULD YOU PAY? Ask if anyone has heard of lentil as anything. This is the business we are going to use as a case study. They allow their customers to pay what they think there meal is worth - no prices on their menu! Video on next slide

THE IMPACT OF VALUES ON DECISION MAKING Why did some people choose to pay nothing for their food? Why did some people choose to pay for their food? What do you think the founder of Lentil as Anything was trying to achieve by not setting the price for food? Work in a group of three to come up with 3 positives, 2 negatives, and 1 question you still have about Lentil as Anything. As a class discuss the positives, negatives and questions. Good discussion point is how could they make sure their costs are covered if they don’t know how much money is going to come in. Also could raise the article in the age this week about Lentil as Anything in Abbotsford convent which has had to change it’s rules a little bit about wearing shoes and not just living in the restaurant http://www.heraldsun.com.au/leader/north/lentil-as-anything-makes-changes-aimed-at-moving-on-freeloaders-at-abbotsford-convent/news-story/959d936fd75777085fbd3a32a8eb2678

Ethical shopping - what value do you place on…. When buying a mobile phone do you put value on…. For each question below, would you be willing to pay more or less pending on the answer? How much more of less? Does the company have an overall positive environmental record? Do they use nuclear power in manufacturing their phone? What is the company's stance on animal testing/welfare? Do they support countries with not a good human rights record? Do they have a code of conduct for people making their phones (or parts)? Do they contribute or support companies/countries that make armaments? Do they make big political donations? GOOD SHOPPING GUIDE - this link shows how some companies compare. The good shopping link highlights that apple and samsung both behave pretty bad ethically - why are we still willing to buy them though?

INVESTIGATE - Extension: Choose one of the following businesses to investigate Patagonia (clothing) National Australia Bank (banking) Jasper and Eve (homewares) How does the company you chose behave ethically? Write a 100 word (minimum) response about some values you think this company has, and why they put an emphasis on NON ECONOMIC (profit) values? 2. Does behaving ethically impact on the supply or demand of a good? Can you use a supply/demand curve to explain the impact you think it would have? Extension: Why is it worth money to businesses to behave ethically? Find an example of a business who has been shown to have bad ethics, what were some of the consequences for the business? HINT: BHP and Johnson & Johnson have both been in the news lately.