Productive resources are limited. Therefore, people can not have all the goods and services they want; as a result, they must choose some things and give up others.  Learn to identify what you gain and what you give up when you make choices 

You will be able to:

1. Compare the choices available to high school seniors from families with different income levels. Explain how choices will affect the students’ lifetime income

2. Explain how a senior school student's decision to work 20 hours per week during the school year could reduce her lifetime income. Also, explain why new highway construction may not reduce highway congestion.  

Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Many choices involve doing a little more or a little less of something: few choices are “all or nothing” decisions. Make effective decisions as consumers, producers, savers, investors, and citizens 

You will be able to:

1. Decide how many workers to hire for a profit maximizing car wash by comparing the cost of hiring each additional worker to the additional revenues derived from hiring each additional worker.

2. Use the concepts of marginal cost and marginal benefit to evaluate proposals for making your school building more attractive; select the best proposal and defend your decision.

3. Discuss how a business might evaluate an investment decision that costs Rs. 10,00,000 today and returns Rs 12,00,000 one year from now. 

Different methods can be used to allocate goods and services. People acting individually or collectively must choose which methods to use to allocate different kinds of goods and services. Learn to evaluate different methods of allocating goods and services, by comparing the benefits to the costs of each method.  

You will be able to:

1. Analyze competing viewpoints about the impact (on consumers, producers, workers, savers, and investors) of an increase in the minimum wage, a new tax policy, and a change in interest rates.

2. Compare and contrast the incentives an individual might face in serving as an elected official, the owner of a small business, the president of a large company, in the aftermath of cloud-burst devastation.

3. Provide an example of when you declined to participate in an activity in which you would otherwise have participated because you thought you had been treated unfairly. 

People usually respond predictably to positive and negative incentives. Prices, wages, profits, subsidies, and taxes are common economic incentives. Subsidizing an activity usually leads to more of it being provided; taxing or penalizing an activity usually leads to less of it being provided. You will be able to identify incentives that affect people’s behavior and explain how incentives affect your own behavior. 

You will be able to:

1. . Analyze competing viewpoints about the impact (on consumers, producers, workers, savers, and investors) of an increase in the minimum wage, a new tax policy, and a change in interest rates.

2. Compare and contrast the incentives an individual might face in serving as an elected official, the owner of a small business, the president of a large company, and the director of a local United Way office in the aftermath of hurricane devastation.

3. Provide an example of when they declined to participate in an activity in which they would otherwise have participated because they thought they had been treated unfairly. 

Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations. Learn to negotiate exchanges and identify the gains to themselves and others. Compare the benefits and costs of policies that alter trade barriers between nations, such as tariffs and quotas 

You will be able to:

1. Participate in a trading simulation where students represent people or organizations in different countries with specific goods to sell and specific goods they want to buy; explain how each nation pays for its imports with its exports. Learn how you might acquire additional imports after you had exhausted your export revenues. 

2. Analyze the political and economic implications of a proposed ban on imported products. 

When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase. Learn how you can benefit yourself and others by developing special skills and strengths. 

You will be able to:

1. Apply the concepts of opportunity cost and comparative advantage to the following problem: India can produce in one day either four drill presses or eight embroidered tablecloths. Using the same amount of resources, Portugal can produce either two drill presses or seven embroidered tablecloths. Which country should specialize in producing drill presses and import tablecloths, and why? Which country should specialize in producing table cloths and import drill presses, and why?  

2. Name three things, such as bananas, coffee and Eucalyptus oil, that could be produced in the continental United States, although production would be very costly. Explain in terms of opportunity costs why the United States is probably better off importing such goods.

3. Identify transaction costs associated with the purchase of a good or service. Also, explain why each of the following encourages more efficient exchange: (1) trucks that can carry larger loads for the same fuel costs; (2) automated teller machines; and (3) credit cards. 

4. Using an understanding of available resources, technology, and political and economic institutions in the India and other countries, explain why the India no longer has a comparative advantage in the production of XYZ item

A market exists when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services. Learn to identify markets in which you have participated as a buyer and as a seller and describe how the interaction of all buyers and sellers influences prices. Also, predict how prices change when there is either a shortage or surplus of the product available. 

You will be able to:

1. Explain what would happen to residential housing prices if the state government eliminated tax deductibility of mortgage interest. 

2. Explain why there is usually a shortage of batteries in areas where forecasters predict a hurricane.

3. Explain why there is often a late-season surplus of tickets available for the home contests of a cricket team that loses most of its games. 

4. Explain what happens (and why) to the price of concert tickets purchased from scalpers when, at prevailing prices, many more people want to attend those events than the number of seats available. Also explain what will happen to tomato prices during an unusually favorable growing season. 

5. Use the following scenarios to analyze the effects on trade of a change in exchange rates: In one year, the 70 Indian Rupee equaled 1 US Dollar; in the following year, the 65 INR equaled 1 USD; and in the third year, 60 INR equaled 1 USD. If a camera costs USD 1000$ and a radio costs USD 200$ (1) What will be the price in Rupees of these two products in each year for an Indian? (2) Will an Indian want to buy more or fewer American products in year one, in year two, or in year three? Explain. 

Prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives. Learn to predict how changes in factors such as consumers’ tastes or producers’ technology affect prices. 

You will be able to:

1. Predict the change in demand for a particular brand of jeans when an extensive ad campaign for the brand targets teenagers, their allowances double, the price of other pants increases, or jeans become a popular item among adults. 

2. Predict the changes in supply and market price for new cars when the cost of labor increases, more robotics are used to produce cars, the prices of trucks rise, or when the number of car manufacturers decreases. 

3. Identify products used in household production that have become more or less expensive (compared to other products) as a result of changes in supply and demand and explain how the price changes affected production and consumption decisions in the household. 

4. Describe what is likely to happen if the government imposes a price ceiling on fuel and a price floor on milk. 

Competition among sellers usually lowers costs and prices, and encourages producers to produce what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them. Learn how changes in the level of competition in different markets can affect price and output levels.

You will be able to:

1. Explain how people motivated by their own self-interest help market economies promote national well-being through active competition among buyers and sellers. 

2. Explain why, in the last ten years, there have been no Indian companies emerging to manufacture PQR, but many to manufacture XYZ. Also, predict what will happen to prices of new books if an active Internet market for used books is created. 

3. Evaluate the impact of the domination by a few firms in the Indian XYZ market. Identify other markets which are dominated by a few large firms. 

4. Explain why collusion is more likely to work among international airlines than among Indian farmers that produce wheat.

5. Create a timeline showing notable innovation prompted by entrepreneurs, corporate research, and government programs and write a brief essay on their impact on economic growth, competition, technological progress, and job opportunities. 

Institutions evolve and are created to help individuals and groups accomplish their goals. Banks, labor unions, markets, corporations, legal systems, and not-for-profit organizations are examples of important institutions. A different kind of institution, clearly defined and enforced property rights, is essential to a market economy. Understand the roles of various economic institutions and explain the importance of property rights in a market economy.

You will be able to:

1. Predict what might happen if there were no legal way to settle boundary disputes or if every state had its own system of weights and measures. Explain how strict producer liability for product defects affects the behavior of consumers and producers and how it affects the price of a good or service. 

2. Play the role of a business consultant hired to advise a partnership on the advantages it could enjoy by incorporating; write a letter outlining these benefits for their client. 

Most people would like to have more money. Students, however, often fail to understand that the real value of money is determined by the goods and services money can buy. Doubling the amount of money in an economy overnight would not, by itself, make people better off, because there would still be the same amount of goods and services produced and consumed, only at higher prices. 

Money makes it easier to trade, borrow, save, invest, and compare the value of goods and services. The amount of money in the economy affects the overall price level. Inflation is an increase in the overall price level that reduces the value of money. Understand how your lives would be more difficult in a world with no money, or in a world where money sharply lost its value. 

You will be able to:

1. Explain why deposits in checking accounts are considered money but assets such as stocks and bonds are not. Also explain why a credit card should not be considered money.

2. Demonstrate how successive deposits and loans made by commercial banks, resulting from one new deposit in the banking system, cause the money supply to expand and how repayment of loans causes the money supply to contract. 

3. Determine the current price for a pair of designer sunglasses that cost INR 50 in 1982-84, assuming the price has increased at the average rate of inflation.

4. Calculate the annual rate of inflation when the CPI changes from 200 to 205 in one year. 

5. Explain why inflation occurs after participating in two rounds of an auction where the number of goods available remains constant, but the money in circulation increases in round two. 

Understand the incentive effects of interest rates. Interest payments compensate savers for postponing current consumption; they compensate lenders for letting others use their resources and the risk that borrowers might default on their loan. Interest rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, which affects the allocation of scarce resources between present and future uses.

You will be able to understand situations in which you pay or receive interest, and explain how you would react to changes in interest rates if you were making or receiving interest payments.

1. Collect data on the rate of inflation and interest rates for various kinds of loans and savings instruments over the past 15 years. Using this information, estimate the real rate of interest in these different years. 

2. Collect data on interest rates, the rate of inflation, and new housing starts over the past 25 years. State how changes in real interest rates affect people’s decisions to borrow in order to buy a house. 

3. Explain why people who save money receive interest payments while people who borrow money make interest payments. 

4. Explain why there are usually differences in interest rates for individuals with good and bad credit ratings. 

5. Identify periods when real interest rates increased and how this affected business investment and consumer spending. 

6. Analyze past changes in real interest rates and identify how changes in interest rates increase (or decrease) the incentive to borrow and also the incentive to save. 

7. Explain their answer to the following question: If you were going to lend INR 10,000 to someone for a year, would you ask for more or less interest if you expected the prices of most things you buy to rise faster than you previously thought? 

8. Correctly answer the following question: What is the present value of INR 1,00,000 you are promised to receive exactly four years from today if the annual rate of interest over the next four years is 2 percent? 

Income for most people is determined by the market value of the productive resources they sell. What workers earn primarily depends on the market value of what they produce. Understanding the forces affecting wages and other sources of income will be increasingly important in the future, when workers may change employers and careers more often than in the past. 

When you understand this you will appreciate the value of the skills you can acquire by completing senior school, and perhaps college or a vocational training program.

1. Explain how changes in the structure of the economy, including technology, government policies, the extent of collective bargaining and discrimination have influenced personal income over the last 25 years.  

2. Explain why it is difficult to predict the possible effects of an increase in the minimum wage on their ability to secure an after-school job.

3. Identify a successful entrepreneur from your region who grew up in modest circumstances.

4. Explain how a change in a resource price, such as computers, affects producers and workers in the accounting industry.

5. List three occupations that are expected to have new job openings over the next five years and explain why. List three occupations that are expected to experience a decline in job openings over the same period and explain why. 

Entrepreneurs take on the calculated risk of starting new businesses, either by embarking on new ventures similar to existing ones or by introducing new innovations. Entrepreneurial innovation is an important source of economic growth. 

Innovative entrepreneurs are responsible for much of the growth in our economy. Bringing us innovations such as the radio, airplane, and personal computer, these individuals change the way people live their lives, often fostering a more productive and efficient economy. Because entrepreneurship plays an important role in economic growth, public policies that affect the returns to entrepreneurship — from intellectual property rights to taxes to immigration regulations — often have a significant effect on consumers. 

You will be able to 

1. identify the risks and potential returns to entrepreneurship, as well as the skills necessary to engage in it. You will appreciate how public policies affect incentives for and, consequently, the success of entrepreneurship in India. 

2. Identify an entrepreneur and describe how the entrepreneur’s decisions affect job opportunities. 

3. Explain how government sponsored research may affect entrepreneurial activity. Explain how entrepreneurial activity is affected by a tax policy that affects income from profits and capital investment. 

4. Explain how the invention and diffusion of the personal computer has contributed to increases in gross domestic product. 

Investment in factories, machinery, new technology, and in the health, education, and training of people stimulates economic growth and can raise future standards of living.  Understand investment programs adopted by corporations, as well as public policies involving taxation, spending programs, and investment in infrastructure, education, and other things that will increase future standards of living. You will be able to predict the consequences of investment decisions made by individuals, businesses, and governments. 

You will be able to

1. Analyze real Gross Domestic Product (GDP) per capita data for several periods in history, identifying periods during which the United States experienced rapid economic growth; identify the factors that contributed to this growth.

2. Compare the standard of living of individuals living in the India in 1800, 1900, and 2000; explain the relationship between higher production levels, new technologies, and standard of living.

3. Discuss the advantages and disadvantages of buying a motor scooter to replace a bicycle used to earn income as a delivery person.

4. Explain why a decrease in interest rates may affect a business decision to buy new computers or a high school senior’s decision to enroll in college next year. 

Why does government pay private construction firms to build roads and highways? Why do the firms that build the roads not own them themselves and charge tolls to users? Why do markets work well to supply much of what we want, while failing to produce other things we want? 

There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also have direct or indirect effects on people’s incomes. You will be able to evaluate re-distributive effects of government programs, identify and evaluate the benefits and costs of alternative public policies, and assess who enjoys the benefits and who bears the costs. 

You will be able to

1. Identify at least three economic roles of our government and cite a specific example of each.

2. Predict what would happen to the value of apple orchards if owners were unable to prohibit apple theft. 

3. Analyze how issuing property rights in certain parts of the ocean will affect the size of fish harvests in those parts of the ocean.

4. Explain why there is a role for government in dealing with pollution, vaccinations and medical research; recommend what this role would be.

5. Explain why state and local governments use public money for elementary education and why tobacco and fuel are heavily taxed and some polluting firms are taxed and/or regulated. 

6. Explain why the NCLT might oppose the purchase of one large corporation by its closest competitor and what the effects might be on consumers, producers, and workers if the merger were allowed. 

7. Explain why there is usually only one local water and sewer supplier, natural gas distributor, or electric service.

8. Explain how the ____ Act of 19XX has affected labor markets. 

9. Describe a government assistance program, explain why government provides it, and determine which groups in the economy benefit and which groups bear the costs.

10. Analyze the following situation: A government has to raise INR 1 billion of revenues. It can do so through a sales tax or a progressive income tax. Explain the effect of each tax on a low income and a high income family. 

11. Discuss the costs and benefits of public education and identify who gains and who bears the costs. 

Businesses that fail to satisfy consumer wants go bankrupt; how do we change or eliminate failed government programs? 

Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued. You will be able to identify some public policies that may cost more than the benefits they generate, and assess who enjoys the benefits and who bears the costs. Explain why the policies exist. 

You will be able to

1. Analyze the costs and benefits of _____ program. Make a recommendation on whether or not implementing this program is a good economic decision. 

2. Explain why a political leader would support an idea that helps only a few, such as _____

3. Explain the statement: _____ is good economics but bad politics. Also, explain who would gain and who would lose as a result of _______

Fluctuations in a nation’s overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy. Recessions occur when overall levels of income and employment decline. 

You will be able to

1. Gather current and historical data on nominal GDP and real GDP and describe why the annual changes may differ. Collect real GDP per capita for India,United States, Japan, Peru, and South Korea and use these data to describe a relationship between real GDP per capita and material standards of living. 

2. Explain why it might be difficult for Sub-Saharan Africa countries to reach a level of real GDP that approaches the level of Western European countries within the next 25 years. 

3. Select a particular business cycle in Indian history and identify its phases as well as the long run trend in real GDP around this cycle. 

4. List possible causes of recent recessions and recent expansions. 

5. Describe the effect on the overall price level when total consumption, investment, government spending, and net exports exceed the value of a nation’s output of final goods and services. 

Unemployment imposes costs on individuals and the overall economy. Inflation, both expected and unexpected, also imposes costs on individuals and the overall economy. Unemployment increases during recessions and decreases during recoveries. Learn to make informed decisions by anticipating the consequences of inflation and unemployment. 

You will be able to

1. Explain how the fact that there are people who are discouraged from seeking jobs helps us understand why unemployment sometimes increases while employment is rising during an economic recovery.

2. Locate data pertaining to unemployment rates for young people and minorities, and provide possible explanations of why unemployment rates for these groups differ from the unemployment rates for other groups in the economy.

3. Give examples of each type of unemployment and identify which types cause more serious problems in the economy.

4. Identify why people might be unemployed even when the economy appears to be at full employment.

5. Using data on employment and real GDP, identify the relationship between the two.

6. For each of the following cases, explain who would be harmed and who would benefit from an unexpected 10 percent inflation: (1) Mike’s retirement income is fixed at $24,000 a year; (2) Bonnie borrowed $5,000 last year and must pay it back at the end of this year; (3) John lent the $5,000 to Bonnie last year and will be paid back at the end of this year.

7. Identify assets people can buy to protect themselves against inflation and discuss how much time people spend with this problem in times of high inflation compared to times of low inflation. 

Central government budgetary policy and the Reserve Bank of India's monetary policy influence the overall levels of employment, output, and prices. You will be able to anticipate the impact of such macroeconomic policy decisions on yourself and others. 

You will be able to

1. Identify historical examples of fiscal policies and explain why these policies were adopted.

2. Outline the fiscal policies they would recommend to correct rising unemployment and explain their recommendation. Explain why an additional $20 billion of federal spending on highways, financed by federal government borrowing, can reduce private investment spending in the economy in the long run.

3. Determine what is likely to happen to the federal budget deficit or surplus when the economy is growing and when economic activity is declining.

4. Explain that federal deficits are financed through the sale of government securities.

5. Distinguish between deficits and debt. Explain how federal budget deficits and surpluses affect the national debt.

6. Write an article for the business section of the local newspaper explaining how changes in monetary policy affect the money supply, interest rates, and the path of economic activity in their community.

7. Playing the roles of members of the Federal Open Market Committee, decide for each of the headlines below whether an expansionary policy or a contractionary policy would be more appropriate and whether government securities should be purchased or sold. Newspaper headlines: Unemployment Rate Soars; New Housing Starts Rise; CPI Rises At Faster Pace for Third Consecutive Month.

8. Identify a recently announced change in the federal funds rate target and determine how and why this change was made.

9. Compare and contrast monetary policy during the 1979-82 period with monetary policy during 2008-09.