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The Stock Market: Risks & Rewards

Lesson Plan: Scarcity, Choice, and Decisions

Activity 1: Planning the Prom

Name _____________________________________

Your class has been engaged in various fund-raising projects during the past several years, and you now have a total of $9,635 to spend on a big bash - your last school dance. You may not spend more than this amount on the dance, but you do not have to spend all of it on the dance. Any money "left over" can be used for a class project, designed to help your school or community.

You have decided that there are three categories of expenditures for the dance. 1) hiring a band, 2) renting a place to hold the dance, and 3) providing refreshments and decorations. A committee has provided the following information:

Bands Availabel:
Cost Name
$1,000 Plain, Loud, and Cheap, a local rock and roll band.
$2,500 Busting Gourds, rock with an English twist
$4,000 Granite - good hard rock
$5,000 The National Debt - "getting bigger every day" - a popular new group.
$6,500 Philadelphia Transit Authority (the PTA) - nationally known, 2 gold albums.
$8,000 The Rolling Rocks - well known touring group from England

Places Available:
Cost Name
$200 School Gym
$600 American Legion Hall
$1,500 The Inn on the Hill
$2,000 The Two Seasons Hotel
$3,000 The Valley Country Club

Refreshments and Decorations:
Cost Name
$500 Home Economics classes fix sandwiches and make decorations
$1,000 Catered - snacks and decorations
$3,000 Catered - fancy snacks and fancy decorations
$5,000 Package deal -snacks and decorations at dance; and an after-dance meal at a restaurant.

Your task now is to decide, with the other members of your class, which band to hire, where to hold the dance, and what type of refreshments and decorations to provide. Your class must select one item from each expenditure category.

Discussion Question

In what ways is this problem similar to economizing problems faced by your family? In what ways is it different?