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Economic Enigma 1 Step 1: Carefully consider the economic data below. After analyzing the graphs, table, and photograph, identify the economic enigma you think these data lead to. 4 water bottles and faucet filling a 1-gallon jug

Relative Cost What you get for $10

or

Per Capita Gallons Consumed

1 gallon of bottled water (about 4 liters)

Sources of Bottled Water Sold in the United States

x 1,000 1,000 gallons of tap water (about 5.5 years’ worth)

40%

Filtered tap water

60%

Spring water

Bottled Water Consumption, 1990–2005 30 25 20 15 10 5

In 2007, the U.S. recycling rate for plastic water bottles was 14%. 1990

0

1995 Year

2000

2005

FDA Regulations for Bottled Water Versus EPA Regulations for Tap Water Must Report Violations to State/Federal Authorities

Consumer Right to Know About Contamination

no

no

Disinfection Required

Testing for Bacteria

Bottled Water

no

once per week

Big City (100,000 or more people) Tap Water

yes

hundreds yes of times per month

yes

Sources: American Museum of Natural History. Beverage Marketing Corporation of New York. Natural Resources Defense Council. Container Recycling Institute.

Economic Enigma Why do people pay for bottled water when it is so much more expensive than tap water?

Step 2: On your handout, list any principles of the economic way of thinking that help explain this enigma. Step 3: Choose the one principle that you believe best explains this enigma. On your handout, describe why. © Teachers’ Curriculum Institute

Econ Alive! The Power to Choose

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Economic Enigma 3 Step 1: Carefully consider the economic data below. After analyzing the graphs, tables, and photograph, identify the economic enigma you think these data lead to.

Means of Transportation to Work, 2005 Took public transportation

2%, Walked Other

Carpooled 5% 11%

The diamond indicates an HOV (high occupancy vehicle) lane, or carpool lane.

77%

Drove alone

Average Annual Carpool Cost Number of Passengers

5%

Commuting alone: $6,744 Two-person carpool: $3,372

Seattle Traffic During Morning Rush Hour (6 A .M. to 9 A .M.) Northbound I-5 at Corson Avenue Vehicles per Lane per Hour HOV Lane 1,230

Other Lanes 1,633

Average Speed (mph) HOV Lane 43.9

Other Lanes 29.0

Four-person carpool: $1,685 0

1,000 2,000 3,000 4,000 5,000 6,000

Average Yearly Cost (dollars) Assumptions: Daily round-trip commute: 40 miles. Average miles per gallon: 22 mpg. Cost of gasoline: $3.50 per gallon.

Southbound I-5 at Corson Avenue Vehicles per Lane per Hour HOV Lane 549

Other Lanes 1,390

Average Speed (mph) HOV Lane 58.9

Other Lanes 60+

Sources: U.S. Census Bureau. Washington State Department of Transportation.

Economic Enigma Why don’t more people carpool?

Step 2: On your handout, list any principles of the economic way of thinking that help explain this enigma. Step 3: Choose the one principle that you believe best explains this enigma. On your handout, describe why.

© Teachers’ Curriculum Institute

Econ Alive! The Power to Choose

4

Economic Enigmas  

Chapter 1 Economic Enigmas

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