"Prices and Decision Making"Introduction
Students have learned that prices are the signals that help
us make our economic decisions. They have also learned that
markets are more efficient when there are large numbers of
buyers and sellers and when the information about products
in the market is relatively good. All of this results in a
situation that results in more competitive prices and more
satisfied consumers! The World Wide Web is helping consumers
in this regard by allowing them to compare prices before they
purchase. Lesson Description
For this activity, students will find information on prices
from three popular bookstores on the World Wide Web. They
will then be asked to compare the prices and determine where
a purchase could or should be made. Previous Knowledge Expected
Students should be familiar with the following terms:
market: meeting place or mechanism allowing buyers
and sellers of an economic product to come together
price: monetary value of a product as established by
supply and demand
competition: the struggle among sellers to attract
consumers while lowering costs Applied Content Standards (from the Council for Economic Education)
Standard 7: Markets exist when buyers and sellers interact.
This interaction determines market prices and thereby allocates
scarce goods and services.
Standard 8: Prices send signals and provide incentives
to buyers and sellers. When supply or demand changes, market
prices adjust, affecting incentives.
Standard 9: Competition among sellers lowers costs
and prices, and encourages producers to produce more of 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.
Instructional Objectives
- Students will find prices for a particular good using three
Web sites.
- Students will compare and contrast the three prices.
- Students will analyze the effect of free flow of information
on prices due to the World Wide Web.
Student Web Activity Answers
1-3: Answers will vary.
4: Answers will vary, but might include better prices for
consumers and ease of finding prices. Extending the Lesson
Ask students if other factors—cost of shipping, method
of payment, time needed for delivery, etc.—should be
considered when placing an order.
Encourage students to research prices for other products such
as toys, games, airline tickets, music CDs, etc. What patterns
do they find in the prices?
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