AGED 570: Teaching H.S. Agricultural Economics Day 5: Teaching Consumer Economic Concepts

Todays agenda Review of Some Key Production Concepts Terms Share Pair Taste and Preference Activity Term Activity Muddiest Concept General Terminology Discussion Terms for Tomorrow

What is this graph depicting?

What is this graph depicting?

What is this graph depicting?

Terms Share Pair Utility Marginal Rate of Substitution Inverse Price Ratio Utility Maximization Demand Schedule Substitute Goods Effective Demand Demand Curve Complementary Goods Goods Ceteris Paribus Income Effect Bads Substitution Effect Marginal Utility Budget Law of Diminishing Marginal Utility Budget Constraint Indifference Curve Budget Line

Utility consumption Activity Objective: To understand that each individual has tastes and preferences that affect their satisfaction and how consumption of a good affects their level of happiness Each individual will choose his her favorite song The song that is the shortest will get to be played Each individual will rank their enjoyment of the song from 10 to -10 where a 10 means you are in heaven, a zero means you have had enough and one more song will not make you happier, and -10 means you would pay anything not to hear the song again

Utility consumption Activity Note that negative numbers represent willingness to do something to avoid consumption, while positive numbers represent a willingness to consume more of the good What changed for you after listening to (consuming) the song? How many individuals had positive numbers, negative numbers, and zero? If two individuals give the same number, does that mean that they have the same level of happiness?

Utility consumption Activity We will now listen to the song again What was your ranking of the song on the scale from 10 to -10 after listening to it again? How many individuals values increased, stay the same, and decreased? What do we call this change in your happiness?

Utility consumption Activity We will now listen to the song again What was your ranking of the song on the scale from 10 to -10 after listening to it again? How many individuals values increased, stay the same, and decreased?

Utility consumption Activity Now we will listen to a song about marginal utility: https://www.youtube.com/watch?v=LKcODEu-_sA Does the song capture the idea of marginal utility? Is the song somehow misleading regarding marginal utility?

Term Activity Objective: To demonstrate the similarities between the producer concepts and the consumer concepts and test the understanding of the producer and consumer concepts An individual will be randomly selected The individual selected will be required to examine the terms on the next page and choose the producer concept that is most similar to the consumer concept The individual will then choose a different individual in the class for each term

Term Activity Each of the chosen individuals will define the term in her or his own words If the individual is uncertain the individual has one opportunity to “phone a friend” and one opportunity to ask the group, and one opportunity to ask the instructor The original individual will then explain how the two terms are related

Term Activity Marginal Utility Marginal Rate of Technical Substitution Marginal Physical Product Law of Diminishing Marginal Utility Marginal Rate of Substitution Utility Supply Curve Law of Diminishing Marginal Returns Indifference Curve Profit Maximization Good Isoquant Utility Function Utility Maximization Output Input Budget Line Iso-Cost Line Demand Curve Production Function

What kind of examples could you use in your classroom to help students with these concepts?

Muddiest Point and Terms Discussion

Terms to know for Next Class Supply Market Supply Quantity Supplied Market Demand Shift in Supply Law of Supply Demand Quantity Demanded Law of Demand Shift in Demand