Online Lesson

EconomicsMinute
Guess Who's Coming to Dinner

Key Economic Concepts:

• Cost/Benefit Analysis
• Decision Making
• Maintaining Competition
• Regulation
• Role of Government

Description:

This lesson introduces regulation and information as two tools used by government to promote fair competition and complete information in a market economy. Using the 1906 Pure Food and Drugs Act as a case study, students explore the reasons buyers and sellers asked the federal government to intervene with respect to food safety and quality. In a second activity, students examine how government has improved consumer access to food and nutrition information, more specifically, how government requires sellers to provide accurate, standardized information and how it provides information directly through federal agencies. Students then use this information to make a choice between two food products.

Lesson Objectives:

Students will:

• Identify the cost/benefits of government regulation and information in a market economy.
• Identify and interpret the information provided on food labels.
• Use this information when making purchasing decisions.

Introduction:

In a perfectly competitive market system, all goods and services are allocated to their optimal use. In order for perfect competition to occur, certain conditions must exist:

1. There must be many buyers and sellers in the marketplace, with no particular buyer or seller having control. As a result of this condition, no one has an unfair advantage.

2. Participants have complete information on choices. Sellers know the quantity that will be demanded at various prices. Buyers have price and relevant performance information about what is offered for sale.

One role of government in a market economy is to facilitate an environment in which these conditions exist. To achieve this goal, government has two options. One approach is simply to provide information to participants in the marketplace. A second option is regulation – attempting to control the behavior of buyers and sellers. Rules governing what is available for purchase; the production and distribution process; and advertising; and what is available for purchase are all examples of government regulation. This lesson introduces students to federal regulation and information in one U.S. market - food. Students learn how these government functions help level the playing field for both consumers and businesses.

The FDA does many good things for American consumers and business, but it uses many resources in doing it. Debate whether it goes too far or not far enough.

Resources:

Web Links

• The Long Struggle For The 1906 Law by James Harvey Young (FDA Consumer, July 1981): Discussion about the creation of Foods and Drugs Act.
  (www.safepractice.us/news1.html)
   
• The 'Poison Squad' and the Advent of Food and Drug Regulation by Carol Lewis (FDA Consumer, December 2002): Discussion of toxic substances found in food during the early 19th century and the emergence of Food and Drug regulation.
  www.toxicology.org/gp/21_PoisonSquadFDA.pdf
   
• 1990 - NUTRITION LABELING AND EDUCATION ACT (NLEA): Discussion of the Nutrition and Education Act.
  http://vm.cfsan.fda.gov/~dms/foodlab.html
   
• How to Understand and Use the Nutrition Facts Panel on Food Labels: Explains how to read nutrition labels.
  http://vm.cfsan.fda.gov/~dms/foodlab.html
  
  www.cfsan.fda.gov/~acrobat/foodlab.pdf. - PDF version

Printable Worksheets

• The Struggle for a Federal Pure Food Law
  Students work in teams or groups to answer questions on the worksheet concerning the struggle for passage of the first food safety laws.
• Reading the Label
  Use the package information from two similar food products to answer questions about each food.
• Definitions
  A printable list of definitions for students to reference as they work through this lesson.

Food Labels

• Prior to Activity 2, gather or have students gather labels from various food products. There should be at least two different labels for each foods product. You may want to select some labels that exhibit dramatic differences such as fruit juices versus fruit drinks; white versus whole grain breads, and dairy products with different levels of fat contents. Comparisons between products in other categories may be interesting because they exhibit few differences or none at all. Foods labeled “organic” or “all natural” often fall into this category, as do alternatives promoted as "low-fat," "no sugar," etc.

Process:

Activity 1: Food Safety and Quality

Have students work in teams or groups to answer questions on the "The Struggle for a Federal Pure Food Law" worksheet concerning the struggle for passage of the first food safety laws. If computer access time is limited, you may want to print out copies of these two FDA Consumer articles needed to answer the worksheet questions. Also, to better organize this information, have the students fill out this data retrieval chart involving major advances in food safety and quality.

• The Long Struggle For The 1906 Law by James Harvey Young, July 1981(www.safepractice.us/news1.html)
• The 'Poison Squad' and the Advent of Food and Drug Regulation by Carol Lewis, December 2002 (www.toxicology.org/gp/21_PoisonSquadFDA.pdf)

Following the completion of the activity, go over the worksheet with the students. Answers (see "Answer Key") will vary, so consider having students compare their responses. During this discussion be sure to cover the following topics/questions:

1. What are some examples of adulteration? [Specific examples that have occurred include dilution of juices with sugar water or less expensive juices, adding water to milk, and adding soybean meal to hamburger.] Point out that in cases of misbranding, a food is not adulterated, but the consumer is deceived. For example, in 1993 the FDA seized 2,400 cases of Procter & Gamble’s Citrus Hill orange juice which used “fresh” on the label when the product was, in fact, produced from concentrate.
2. There are many terms in this lesson that have hyperlink connections to definitions and other regulatory details. Ask students why the use of precise language is so important in government regulation. [Definitions are critical in communicating to market participants what is acceptable and unacceptable behavior. Clear language also makes it easier for government agencies to enforce rules in court. Regulations that are detailed and precise make it difficult for a violators to say there was a misunderstanding and that they thought they were operating within the law.]
   
3. In order for regulations to have an impact, a federal agency must be given the authority and tools to enforce them. What legal remedies has the FDA been given to deal with violators? [court injunctions, voluntary recalls, product seizures, and criminal prosecutions.]

[Note to teacher: Food additives which are toxic or found to be allergens are not subject to the Delaney amendment. These are not banned from the market but treated with either warning labels or through allowable threshold levels. For example, in 1986 the FDA adopted a regulation limiting the use of sulfating agents. The regulation specifies that sulfites must be declared on the label if they are present above given levels.]

Activity 2: Information for Making Choices

If you would like your students to use print copies of the food pyramid, print out this pdf version at www.cfsan.fda.gov/~acrobat/foodlab.pdf. Have students fill in this data retrieval chart to help them organize what they have learned about food labeling acts in the United States. Then, have the students work individually or pairs when comparing two similar food products using package information and the "Reading the Label" worksheet.

When all students have made their choices, ask them to report their decisions to the class and the reasons for their choice. Students will likely be surprised by some of their findings. Products labeled "low-fat","low-sugar", or "low-salt" may reveal trade-offs in terms of another element. For example, low-fat cookies may have more sugar than regular cookies. When comparing organic with non organic foods, students may also discover there is typically little nutritional difference between foods in the two categories.

Conclusion:

From this examination of regulation of the nation's food supply and government's efforts to expand the knowledge available to people choosing making foods, it is possible to see why both buyers and sellers sometimes ask government to intervene in the market economy. The creation and enforcement of rules reduces the chance that consumers will be harmed as a result of a purchase. Full information reduces the miscellaneous of our nation’s economic resources and helps consumers maximize personal satisfaction. Businesses value regulation and information because it instills consumer confidence and promotes fair market competition.

Assessment Activity:

Assessment tools are provided at the end of each activity.

The questions in the Activity 1 Worksheet - The Struggle for a Federal Food Law are structured so that there are 10 responses that can be equally weighted for scoring on any multiple of ten scale (e.g., 10 points, 20 points or 100 percent).

Likewise, the Activity 2 Worksheet provides an evaluation tool. By giving question eight a value of three points, scoring can be based on a 10-point scale. Students may be awarded extra points for quality in their written explanations and oral presentations.

Extension Activity:

1. Knowing there was a possibility of long-term harm, Dr. Wiley’s “Poison Squad” volunteers agreed to not hold the government responsible for any illness or injury that might result. Have students debate whether it would be appropriate for the government to conduct a similar study today. Encourage them to consider alternatives such as animal tests and the use of new technologies.

2. Read The Jungle or do more research on the role Upton Sinclair played in bringing about meat industry reform.

3. The Pure Food and Drugs Act was concerned about drug safety as well as food safety. Create a time line of milestones in the history of drug regulation in the United States. Analyze similarities and differences in the regulation of food and drugs. A link to the Milestones in FDA History can be found at www.fda.gov/opacom/backgrounders/miles.html. It offers a chronology of major U.S. food and drug regulations provided in the extension activities section of the student lesson page.

4. Have students study the The Food Guide Pyramid at www.mypyramid.gov/index.html. The pyramid has been designed by the USDA to help educate the public on healthful diets. It provides an illustration of what and how much people should eat from each of the respective food groups. For an introduction to the Pyramid created just for young persons, students can visit Teens Health: The Food Guide Pyramid from the Nemours Foundation at http://kidshealth.org/teen/food_fitness/nutrition/pyramid.html. Links to these sites are provided in the extension activities section of the student lesson page.

5. Gather news stories or conduct research on current food issues. Identify the individuals and organizations crusading for change and the methods they are using to garner attention.Here are some possible topics:

• Overuse of antibiotics in livestock production
• Genetic engineering of food and agriculture (e.g., BGH which increases milk production in cows, disease resistant plants)
• Marketing junk food to children (e.g., vending machines in school)
• Healthy school lunches
• Taxes to discourage the consumption of junk food
• Nutrition information on chain restaurant menus
• Food-borne Illness (e.g., “mad cow” disease, salmonella, listeria, campylobacter E. coli and other organisms in foods like hot dogs, lunch meats, hamburger patties, apple juice, fresh produce and fruit
• Irradiation of foods
• Deceptive health claims on food
• Food terrorism

Links to sites where students will find a wealth of information on these topics are provided in the extension activities section of the student lesson page.

6 . When businesses, consumers, and other groups organize politically and press for regulations, they tend to focus on how they will benefit from regulation, not on the efficient allocation of resources. Chart the costs and benefits of a proposed public policy concerning food. Identify the special interest groups that will be affected by the policy.

7 . Risk analysts say the greatest threats to food safety - bacteria and viruses - are the hazards over which consumers have the greatest control. Thus, consumers are responsible for food safety, too. Have students develop brochures, web pages, or other informational materials providing advice on the safe storage and handling of food once it is purchased.

8 . Create a dictionary of terms that may be used to describe nutrient content. For a list of terms that may be used and their definitions visit The Food Label Web page posted by the FDA (www.fda.gov/opacom/backgrounders/foodlabel/newlabel.html).

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