A consequence of scarcity is that people must make choices and compete for resources. –Resources (human, natural, capital) are needed to produce goods and services. A rationing device is a way of determining who gets what and how much. – Price is a common rationing device.

As you watch the clip from Titanic, write down examples of scarcity, rationing devices and opportunity costs. With your partner, discuss the following questions and record your thoughts: 1.What are the scarce goods and how are they rationed among the passengers? 2.As the Titanic begins to sink, how does “life or death” scarcity change the way goods are rationed among passengers? 3.The cruise line chose not to have enough lifeboats for all the passengers. Using your knowledge of the movie, explain the opportunity cost of having the extra deck space.

4.Identify the rationing devices used in the following scenes from Titanic: –The tickets Jack and his friend obtain to board the Titanic –First class luxury seats –Boarding lifeboats in the early stages of the disaster, when people are unaware of, or ignored, the coming dangers. –Boarding lifeboats after the passengers were aware that the ship was sinking rapidly and there were too few lifeboats.

Cost v. Benefit – a person will do whatever he is considering only if the benefits are greater than the costs Trade off – more of one thing means less of something else

Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something: few choices are "all or nothing" decisions.

A situation in which more of one thing means less of something else. –Ex. If a country spends more on national defense than it will have less to spend on health care or education.

what did happenwhat would have been

Family Man

intended action  effects positive unintended negative

Read 1.2 Answer the following questions at the end of section. #1,3,5,7 Fill in the chart w/ details from Titanic or Another movie of your choice

Thinking in terms of:Example of this type of thinking: Costs & Benefits Trade-offs What would have been Unintended effects Global economy Micro/Macro