1. Land $4 2 4 Labor $3 1 5 3 $2 Possible production techniques Capital
Resource
Resource prices
Method #1 #2 #3
Land $4 2 4
Labor $3 1
Capital 5 3
Entrepreneurship $2

2. Small group discussion
According to Adam Smith, how does self-interest benefit the economy as a whole?

3. Graphing activity
Draw a basic supply and demand graph for candy from M&M Mars.
Label P,Q, S1,D1, EP1, and EQ1.
Show what will happen to the graph when the company receives a subsidy for using methane from the landfill to power their machinery.
Indicate changes to P and Q.

4. Discussion
Reconstruct the circular flow model with government added into the model.
Indicate which parts of the model are affected when MISD uses money raised from a bond election to expand the high school in order to add more science classes.

5. Terms/concepts to study
Capital goods v. consumer goods (examples)
The invisible hand
Normal v. economic profits
Property rights (what is included)
Roundabout production
Specialization
Barter and the coincidence of wants

6. continued Main sources of tax revenue for the federal government
Public goods v. private goods
Three major forms of business organizations (percentages, advantages and disadvantages)
Externalities (spillover costs and benefits)
Fiscal federalism
Transfer payments
Distribution of income
Vertical integration (of firms)