Laura Ewing President/CEO Texas Council on Economic Education

This workshop and the accompanying materials are made available to teachers through the generous support of State Farm and the Council for Economic Education.

COUNCIL FOR ECONOMIC EDUCATION NATIONAL CONFERENCE October 9-11, 2014 Big Dallas Renaissance Hotel Registration covers most meals Plan now to attend and ask for Oct. 10 to be staff development day

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(12) Economics. The student understands why various sections of the United States developed different patterns of economic activity. The student is expected to: (A) identify economic differences among different regions of the United States; (C) explain the reasons for the increase in factories and urbanization; and (D) analyze the causes and effects of economic differences among different regions of the United States at selected times in U.S. history.

1. how Texans make a living 2. where people settle

1. Land 2. Labor 3. Capital 4. Entrepreneurship

What do you know about the economy of the 13 colonies? Write at least three things about the economy of the 13 colonies. Share your answers with a partner. Listen as three students share their answers with the class.

Visual 1: Mystery of Colonial Prosperity Read Why Did the Colonists Prosper Between 1585 and 1763 on page 49? 1. Give three reasons why the colonies should not have prospered? 2. What evidence is given of the colonial prosperity? Please answer the three questions for reflection on page 49. What are 3 examples of entrepreneurial endeavors? What sets a free market economy apart from any other? What if England had controlled all colonial production?

Is the U.S. part of a global economy? Where are your clothes made? Where are electronics made? What is the difference between imports and exports? What role did imports and exports play in the U.S. colonies? Is the U.S. participation in the global economy a 21 st issue only? View Visual 4.2. What are three things you notice?

Visual 4.2: % of Distribution of Total Colonial Trade (1768 to 1772) United Kingdom West Indies Southern Europe Africa % of Colonial Imports of G & S 80% 18% 2% 0% % of Colonial Exports of G & S 56% 26% 18% 1%

Specialization and Trade 1. What is the definition of specialization? 2. What is the definition of trade? 3. How do these two concepts relate to each other? 4. How do they relate to the term: interdependence? 5. How do these concepts relate to a global economy? 6. What role does profit play?

Colonial and English Trade View Visual 4.3 as you answer these questions. 1. What pattern do you see in the value of the goods and services produced by the American colonists? 2. What pattern do you see in the value of the goods and services produced by England for consumption in the American colonies? 3. What do these patterns in export and import trade between the American colonies and England suggest about each economy’s ability to produce g and s for international consumers? 4. Colonies: rich natural resources/poor labor England: opposite situation What types of g & s would colonies export to England and what was likely to be imported?

Visual 4.4: The Population of Colonial America List three facts you see about the population of the colonies from 1700 to How did the changes in population change the colonial: A. Demand for products? B. Demand for workers? C. Use the information in the chart to explain the role these concepts played during that time period: specialization, trade, production, employment, income.

Role of property rights Use these concepts to explain the free enterprise system in colonial America: Property rights Incentives Productive Specialization trade Global economy Investments profits

Specialization and Trade Read the “biographies” in Activity 4.1. In small groups discuss the role of specialization and trade in each situation.

Closure: Activity 4.2 Read Activity 2 and answer the questions at the end. Discuss your answers in small group. Listen as several people provide their answers.

What is the difference? Good: Service: Which of the items on the list are goods and which are services? Rank order: which do you think most important to least important.

What do you know about the US Articles of Confederation and U.S. Constitution? Years? Purpose? Who wrote? Why?

Processing Activity on Articles of Confederation How did the Articles reflect the wishes of a people vying for less centralized power? What were issues with the Articles? What will happen as a result of the issues?

The U. S. Constitution: The Rules of the Game What is the role of the government in the U.S. market economy? Constitutional Convention May to September 1787 September 17, 1787 is Constitution Day

The U. S. Constitution: The Rules of the Game The new nation was in financial crisis. The new states sent 55 leaders to amend the Articles of Confederation. They met from May until September They quickly learned that they needed to make substantial changes. They wrote a new Constitution based on Adam Smith’s concepts of economic freedom. What were the new rules of the game?

The Constitution: Rules for the Economy As you participate in the activity, notice the new rules of the game, why they were established, and the expected outcomes. Read Economic Freedom and the Founders The Particular: Name and summary of statement Location In US Constitution Based on the rule, how would you decide on the question?

Rules of the Game and YOU What are three ways that the rules of the game affect you: Economically? Personally?

Timeline Continental Congress is “government” from 1775 to 1781 American Revolution 1775 to 1783 Declaration of Independence July 4, 1776 Treaty of Paris September 3, 1783 Articles of Confederation (1777) Ratified by all 13 in 1781 U. S. Constitution signed September 17, 1787 U.S. Constitution ratified with New Hampshire 1788 First presidential election 1789

U. S. Constitution First Continental Congress met September 5, 1774 in Philadelphia in response to the Coercive Acts (Intolerable Acts) passed by Parliament which had punished Boston for the Boston Tea party Agreed to petition King George for redress of grievances 12/13 colonies attended with 56 people (only Georgia, the convict state not included) First CC agreed to meet again next year Shot heard ‘round the world in Lexington 1775

Second Continental Congress Began meeting in Philadelphia May 1775 Organized the war effort Commissioned writing of Declaration of Independence When in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of God’s Nature entitled them…should declare the causes which impel them to the separation.

Declaration of Independence We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness-that to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government because destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government…Right to revolt…after a long train of abuses… List of grievances John Hancock’s signature Written by Thomas Jefferson

Economic Problems During the Articles of Confederation Debt Taxation Tariff Battles Military Weakness

A New Nation in 1781: One Nation or Thirteen? Guidelines for the activity: 1. Individually read the problem and the predicting consequences. 2. Succinctly state the problem in one sentence. 3. What do you think the consequences will be? 4. Work in a small group and compare your problem sentences. As a group restate the problem statement. 5. As a group, restate what you predict the consequences will be. 6. Share your answers with the class.

Processing Activity on Articles of Confederation How did the Articles reflect the wishes of a people vying for less centralized power? What were issues with the Articles? What will happen as a result of the issues?

The U. S. Constitution: The Rules of the Game What is the role of the government in the U.S. market economy? Constitutional Convention May to September 1787 September 17, 1787 is Constitution Day

The U. S. Constitution: The Rules of the Game The new nation was in financial crisis. The new states sent 55 leaders to amend the Articles of Confederation. They met from May until September They quickly learned that they needed to make substantial changes. They wrote a new Constitution based on Adam Smith’s concepts of economic freedom. What were the new rules of the game?

The Constitution: Rules for the Economy As you participate in the activity, notice the new rules of the game, why they were established, and the expected outcomes. Read Economic Freedom and the Founders The Particular: Name and summary of statement Location In US Constitution Based on the rule, how would you decide on the question?

Rules of the Game and YOU What are three ways that the rules of the game affect you: Economically? Personally?

President/CEO Texas Counci l on Economic Education (TCEE)

President/CEO Texas Counci l on Economic Education (TCEE)

President/CEO Texas Counci l on Economic Education (TCEE)

President/CEO Texas Counci l on Economic Education (TCEE)

President/CEO Texas Counci l on Economic Education (TCEE)

Describe how the free enterprise system works

President/CEO Texas Counci l on Economic Education (TCEE)

Market Price: Changes in Supply and Demand

President/CEO Texas Counci l on Economic Education (TCEE)

How do changes in demand affect market price? How does the market price guide what producers or suppliers produce?

Why must costs be subtracted from revenues to determine profits? How can certain events cause costs to change, which can affect profits?

1. What is meant by demand? 2. What are three things you demand economically? 3. How much will you pay for them? 4. What determines if you demand/buy them?

1. We will divide into factories with 4 to 6 workers in each factory. 2. Choose a production manager. 3. Choose an accountant

1. There will be 3 rounds of 5 minutes each. 2. You will produce any amount, but at least one of the apple, hammer, shirt and cup/saucer in 2 inch dimensions. 3. Each product must have 2 colors.

1. Each product must have 2 colors. 2. You may only use your hands – no capital. 3. You may specialize. 4. Produce at least one of each but as many as possible.

1. Each product must have 2 colors. 2. You may only use your hands – no capital. 3. You may specialize. 4. Produce at least one of each but as many as possible.

1. Count the quantity produced of each product. 2. Record the quantities on the “Revenues Worksheet” 3. We will do a class total. 4. We will draw a demand card. 5. We will determine prices and factory earnings.

Supply, Demand and Market Price Chart Goods Supplied by Class Resulting Market Price With NO Change in Demand Resulting Market Price with Decrease in Demand Resulting Market Price with Increase in Demand 0-8$10$8$ $7$5$ $5$3$ $3.50$2$4 Over 20$2$1$3

1. Tally your round one results 2. Plan your production strategy for round The production manager has the final authority on what to produce.

1. Each product must have 2 colors. 2. You may only use your hands – no capital. 3. You may specialize. 4. Produce at least one of each but as many as possible.

1. Count the quantity produced of each product. 2. Record the quantities on the “Revenues Worksheet. 3. We will do a class total. 4. We will draw a demand card. 5. We will determine prices and factory earnings.

Supply, Demand and Market Price Chart Goods Supplied by Class Resulting Market Price With NO Change in Demand Resulting Market Price with Decrease in Demand Resulting Market Price with Increase in Demand 0-8$10$8$ $7$5$ $5$3$ $3.50$2$4 Over 20$2$1$3

1. What patterns do you see in the Supply, Demand, and Market Price Chart? 2. In a market, what two things are needed for a price to be determined? 3. What caused price to change?

4.How did price influence your production decisions? 5. How did other groups influence your strategy and plans?

President/CEO Texas Counci l on Economic Education (TCEE)

How do changes in demand and supply affect market price? How does market price help producers determine what to produce?

1. What trends do you see ? 2. What are three things you have learned about how the market or free enterprise system operates? 3. What concepts and TEKS would this activity teach?

President/CEO Texas Counci l on Economic Education (TCEE)

President/CEO Texas Counci l on Economic Education (TCEE)