EconMovies Episode #1:

Star Wars-Scarcity, Incentives, and Markets

Part 1 - Key Terms- Fill in the blanks with one of the key
terms below:
economics
incentives
involuntary exchange

scarcity
benefits and costs
free market

self-interest
voluntary exchange
the invisible hand

1. Individuals are influenced by incentives

which motivate them and encourage them to do

things.
Voluntary exchange is when buyers and sellers willingly engage in a mutually
beneficial
transaction. 3, Economists assume that everyone acts in their own
self-interest__ by analyzing the benefits

and costs of their decisions. 4. The idea that we all have unlimited wants but
limited resources is called scarcity 5. The concept that unintended social
benefits arise from individuals acting in their own self interest is known as the
invisible hand 6. Buyers and sellers are meeting to exchange goods and services
with no government intervention in a free market
Part 2 - Check Your Understanding- Answer the following:
7. Explain why we are all forced to make choices and explain why
economics has been called the study of choices. People are always forced to
make choices due to the limited resources in different aspects including materials, time, energy,
etc. Economics is the study of choices because people have to always weigh the costs vs the
benefits before committing any action.
WWW

8. Economists assume that everyone acts in their own self-interest, Explain the
difference between self-interest and selfishness. Self-interest is doing actions for your
own benefit that can also have positive benefit, but selfishness is purely focusing on
yourself without going through consequences.
.WASAP.A.SASA!!

9. What are three characteristics of a free market? There is little

government intervention in the market, individuals own the resource
production, individuals answer the 3 economic questions.
WWW.Swediliyow

Do not post online © Copyright Jacob Clifford, ACDC Leadership, 2018

asicnc>YCTERIM

EconMovies Episode #1:

Star Wars- Scarcity, Incentives, and

Markets
w

Part 3- Apply It- Answer the following questions based upon your experience
with negotiating prices.
Assume that Leia wants to buy a speeder bike and is currently negotiating
with an Ewok. Leia wants to spend $500 and the Ewok is hoping to sell his bike
for $900.
10. Identify two specific things that the Ewok could do (or say) to
negotiate a higher price. The Ewok could offer to meet in the middle with
$700, The Ewok could say he’d take $500 up front, then $400 later.

11. Identify two specific things that Leia could do (or say) to negotiate a
lower price. She could meet in the middle with $700, she could lie and say
that theres better options and lower the price to $500.
.................................
....................

12. Assume that Leia gains access to EndorList, an online website that shows
many speeder bikes for sale, Does gaining access to the website benefit
Leia, the Ewok, or both? Why? Both. If the average prices are lower than
$900 Leia could argue that she shouldn’t pay $900; however, if the average
prices are higher or around $900 the Ewok could argue that Leia should
pay his price.
.
A
ww.WIM WHIFILIITWII WIHVIMIX 12.6MMIKIR2X122.

13. Assume that Leia and the Ewok agree on a price of $800, Who benefits from this
voluntary exchange? Explain your answer Both of the two benefit from this
exchange because Leia has to pay less and Ewok gets more money
XHA

Part 5- Make Connections- Complete the following: 14. Think of the

last voluntary exchange that you participated in. Identify the good or
service exchanged and describe how the buyer and seller each acted in their
own self-interest. The last voluntary exchange I participated in was going to
kroger to buy vegetables. I acted in my self-interest because I needed something
to use with my omelette, and I got spinach for $5.
MIMISSASSINAASAS.
.SADE
N IEwwwwwww

15. Think of a scene from a popular movie that shows an involuntary

exchange (where a buyer or seller is forced to participate). Identify the movie
and explain how the scene would be different if it were a voluntary exchange. In
Batman the Dark Knight, the men rob the bank for the money. If it was a
voluntary exchange where the bank tellers were not threatened, they wouldn;t
give up all the money like that.
.WITWIWIHWWIIWHVMWIWILLIAMIX.
CALV
IYI
L ASO
T

Do not post online © Copyright Jacob Clifford, ACDC Leadership, 2018

XE
S
TEX
XXX

Econ Movies Episode

#1:
Star Wars - Scarcity, Incentives, and Markets

Part 4- Stretch Your Thinking: 16. Star Wars movies have generated over 8 billion
dollars in worldwide sales. Use the ideas of self-interest, incentives, and the free market
to explain why it is likely that The Walt Disney Company (the owner of Star Wars) will
continue producing Star War movies. The Disney Company is heavily motivated by the incentives
of massive profit to continue producing Star Wars movies. It is in their self-interest to generate as
much profit as possible by producing these films to put in theaters without heavy government
regulation.

17. Producing a movie like Star Wars requires the collective effort of thousands of people
including writers, artists, designers, camera operators, computer engineers, editors, and
actors. Furthermore, movie sets require resources like lumber, paint, lights, props, and
cameras. Use the idea of the invisible hand to explain how these workers and resources
are organized so effectively without government planning. Because they are motivated by
self-interest, everyone participating in the film's creation tries their hardest. This self-
interest is manifested in two ways: the need to make a livelihood, which motivates people
to work efficiently in order to avoid being fired, and the need for fulfillment, which is
especially prevalent in artistic environments. The director, like the scriptwriters, performers,
and even make-up artists, wants to do his best because he wants to feel personally
accomplished.
Do not post online ©
Copyright Jacob
Clifford, ACDC Leadership, 2018