What determines a person's salary? Why do professional athletes make so much money? People who work as firefighters, police officers or teachers are clearly more important to our society, yet they make much less money than jocks. What explains this?
When Henry Ford announced he was going to produce an automobile that would be affordable to the masses, it is doubtful even he realized the far reaching impact such an achievement would have on life in the U.S. and eventually, the world. Ford’s use of mass production strategies to manufacture the Model T revolutionized industrial manufacturing and initiated a new era in personal transportation. This 3-part learning unit provides students with the story of Henry Ford and the Model T from an economics perspective. Parts 1 and 2 explore how the Ford Motor Company successfully introduced mass production strategies to the auto industry. Students learn how specialization and investments in capital (machines, people, etc.) increased productivity and allowed Ford to slash the price of his popular vehicle. Students chart a plan for the assembly line production of bookmarks, test their plan and make recommendations for improvements. Students also explore how Henry Ford used economic incentives to address a problem created by mass production techniques—worker turnover. An optional Part 3 explains how increased productivity resulted in shifts in the supply and demand for the Model T. Students analyze how a variety of non price determinants continue to influence the automobile market today. A wealth of extension activities is provided if additional time is available.
Over the last century, professional baseball has grown to become one of the most popular forms of American entertainment. Indeed, the sport's nickname - "America's Pastime" - has become embedded in the nation's lexicon. More than 73 million fans attended major league baseball games in 2014. However, America's love affair with baseball is not without controversy. However, the perception that greedy owners who control huge television and merchandise revenues run the game has alienated many fans. Recently, the United States Congress has considered several pieces of anti-trust legislation aimed at MLB that, if passed, might change the way the game is run and played forever. Most notably, fans and sportswriters around the country have criticized what many regard as grossly overpaid players. Indeed, many modern fans have difficulty justifying Los Angeles Dodgers player Clayton Kershaw's $31 million dollar salary over the next seven-years, $215 million deal signed last year. Newspaper accounts decry seven- and eight-figure salaries paid to grown men playing a boys' game. Fans seem to hearken back to the days when baseball was a working- class sport and when working-class people could relate to a working-class baseball player. Critics claim that, because few working-class people can imagine making $1 million, baseball has lost its original fan base and has destroyed the fan-player relationship. Are MLB players overpaid? Are the owners overpaying players and thus acting outside their own self-interest? Are owners paying players their true market worth? These are questions that economic analysis can shed light on. This lesson will help answer these questions and others concerning MLB salaries and the players' market.