Jan. 2, 2011: More Colorado families in poverty; Oil prices fall but reversal seen

Help broaden your students’ understanding of the underlying economic principals behind current events, as well as other more basic economic concepts.


FOR THE WEEK OF Jan. 2, 2011

Elementary

Article Link: "More Colorado families in poverty, report says" and "By the numbers" Tuesday, Dec. 28, 2010, The Denver Post, 6B

Economic terms:

• Recession:  a prolonged period of decline in a country’s economy as measured by the value of goods and services sold within the country.
• Personal income:  the total of all income received through wages, investments, interest, and government payments.
• Earn:  to receive money payment for work.
• Basic needs:  food, shelter, clothing, sanitation, health care and education.
• Poverty (relative):  having significantly less access to income than other members of a society.
• Unemployment: this is a measure of how many people are looking for work but cannot find a job. 
• Adult basic education:  at least a high school diploma or GED certificate.
  
  

Economic Concepts:

• Federal poverty level (FPL):  the government's definition of poverty is not tied to an absolute value of how much an individual or family can afford, but is tied to a relative level based on how much the average individual makes.  Poverty levels are different in different parts of the U.S.
  
  

• Cartel:  It is a formal organization of producers that agree to fix prices, marketing, and production.  Cartels usually occur where there is a small number of sellers and usually involve similar products. Cartel members may agree on such matters as price fixing, total output, and the division of profits.  The aim of such collusion (also called the cartel agreement) is to increase individual members' profits by controlling production.
• Dollar-denominated commodity:  Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodity exchanges, in which commodities are bought and sold in standardized contracts.  All standard contracts for commodities are traded in U.S. dollars.  This article about the oil market reports that one barrel is trading for about $91/bbl.  This is the price of crude oil before it is refined for consumption.
  
  

Economic Concepts:

• Utility:  the usefulness of a product or service to a consumer.
• Experience good:  a consumer good that is not tangible.  For example, concerts, sports events, or movies are experience goods.  In this article, going to Disney World is an experience good.
• Value:  the price that a good or service commands and reflects its usefulness in satisfying human wants and it must be in limited supply (scarce).
• Choice:  a process of judging the costs and benefits of taking an action.  In this case the father is weighing the costs and benefits of taking the family to Disney World or going on a different vacation.

Everyday Economics is written by Dennis Grogran, Program Director, Colorado Council for Economic Education. For information about CCEE's other programs, call 303-752-2323 or e-mail dgrogan@ccee.net.