Project Based Learning-
High School Food Court at the New Edna Karr High School-
( Hypothetical Situation)
Purpose and Overview
Time required 5–6 class periods
Project scenario
In a market economy, consumers and producers allocate resources according to the laws of demand and supply. Consumers make decisions about what goods and services they are willing and able to purchase based on price and taste. Producers set prices based on their costs, expected revenue, and profit. However, sometimes other, noneconomic factors influence what is produced and for whom goods are produced. To explore how economic and non-economic factors might interact, students are presented with the following problem-solving scenario in this project:
Edna Karr High School is constructing a new food court on its new campus. The school board has asked the student council to recommend which restaurants should be awarded contracts to serve food to students. The student council will be given 10% of the profits from the restaurants to fund its activities. The student council first must decide which restaurants will earn the most profit, balancing their potential funding against student demand for the various entrees to be offered. Complications arise when the school principal forwards voicemail messages from interest groups in the school community who advocate for certain restaurants. Since the school board members also hold varying views about which restaurants are appropriate, students must present convincing arguments based on both economics and political considerations.
Concepts to be learned
To successfully resolve the problem and complete the products required in this project, students need to understand and be able to apply the following economic concepts.
1.Costs (of production)
2.Demand
3.Demand schedule
4.Fixed costs
5.Opportunity costs
6.Profit
7.Scarcity
8.Total cost
9.Total revenue
10.Tradeoff
11.Variable costs
This project is designed to teach the following concepts:
Competing needs: Because resources are scarce, the redistribution of goods often means that one group (or individual) often gains only at another’s expense (that is, to make someone better off, someone else must be made worse off because individuals are competing for the same resources)
Costs (of production): The measure of what has to be given up in order to achieve or produce something. Total costs include both opportunity costs, or the cost of alternative uses of resources, and direct costs, or total money outlays.
Demand: Purchases of a good or service that people are actually able and willing to make, given price and choices available to them.
The law of demand states that there is a negative (or inverse) relationship between price and quantity demanded. That is, as price increases (decreases) the amount of a good purchased decreases (increases).
Consumers’ demand is determined by their tastes, income, and price of other goods.
The demand schedule is a table showing the quantities of a good that will be purchased at various prices.
The demand curve is a curve that relates the price of a product and the quantity of the product that individuals are able and willing to purchase.
Aggregate demand is the total demand for goods and services in the economy by households (for consumer goods), by firms and government (for investment goods), and by other countries (exports).
Economic profit: A firm’s total revenue (price times number of items sold) minus the total cost of production, which includes both direct and opportunity costs.
Negative economic profits are called losses.
Economic profits indicate that a firm is generating revenue above and beyond the next best use of its productive resources.
Equilibrium price: The price at which the quantity of the product that buyers are able and willing to purchase exactly equals the quantity of the product that sellers will sell
Equilibrium quantity: The quantity at which the amount that buyers are able and willing to purchase exactly equals the amount of the product that sellers will sell. This occurs at the equilibrium price.
Opportunity costs: The real sacrifice involved in achieving something. The value of the next best opportunity that would have to be foregone in order to achieve a particular thing
See the letter below from Mr. Lewis and the Inspire NOLA Charter School Board.
TO: Student Council
FROM: Mr. Lewis, Principal
RE: Food court in new student center at the New Edna Karr Campus
As you know, our school board and Inspire NOLA Charter Schools would like the student council to select the restaurants for the food court in our new student center at the New Edna Karr High School.
Twelve restaurants have applied for the four spaces available. The board has set the following parameters to help you make your decision:
1. Each restaurant will be required to give 10% of its profits to the student council. These funds will be the entire annual budget for the council—to pay for student activities, clubs, social events, and whatever else the council may wish to do that costs money. If the restaurants do not generate enough profits, you will have to cancel events or charge fees.
2. Your selections will be in effect for four years, according to the contract to be signed by each restaurant.
3. All restaurants will have the same space allocation. They will not be charged any set-up fees.
4. Each restaurant guarantees it will be able to serve food quickly enough to accommodate our student population and lunch schedule.
Also keep in mind the following:
1. While you are free to use any criteria you wish in making this decision, remember that you represent ALL the students at this school. You need to take into account the needs of our diverse student body—and because we have a closed campus, students must either use the cafe, food court or bring a lunch from home.
2. The president of the board has an economics degree, so be sure your decision is grounded in sound economic thinking.
3. To approve your recommendation, the board will need to reach a consensus decision—all members must agree. Give them convincing reasons as to why the restaurants you have chosen are both profitable and meet the needs of students. The board will hear your recommendation at their meeting in two weeks, so plan a five-minute oral presentation with posters and graphs.
Please note that you will not be allowed to exceed your time limit, and be prepared to answer questions from board members. The school district has prepared some information about the restaurants to help guide your decision, which you will receive soon.
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