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LESSON: TOPS & BOTTOMS
Lesson Summary
This
humorous story illustrates the importance of hard work and shrewd business
practices. Hare's family was hungry, with no land to raise a crop.
Bear was lazy with plenty of farmable land. Hare proposes a deal to
Bear: Hare will farm the land for half the crop - tops or bottoms.
Bear is in for quite a surprise!
Concept: Opportunity Cost
Definition: When you make a decision,
the most valuable alternative you give up is your opportunity cost.
Comprehension Questions
What
goods are produced in the story?
Vegetables
When
Hare proposes that Bear become a business partner, he offers to
"split the profit" with Bear. What is profit?
Profit is the
money you have left after all costs of business are paid.
What is
opportunity cost?
Opportunity cost is the most valuable alternative
you give up when you make a decision.
Although Bear did not know his
opportunity cost when making his business decision, what was his
opportunity cost when he chose to let Hare keep the "bottoms" - carrots,
radishes, and beets?
Bear chose tops, and therefore his
opportunity cost was the bottoms of the plants.
The
next time, when Bear chose the "bottoms", what was his
opportunity cost?
He gave up the tops - lettuce, broccoli,
and celery.
Each time Hare made a business deal with Bear, he
took a risk. What do we call someone who takes a risk to start a
business and produce a product?
Entrepreneur
Was
Hare absolutely sure he would earn a profit?
No. He had to
make a shrewd business deal and work hard to produce the vegetables. He
did not know for sure if he could sell his vegetables at a good price.
Entrepreneurs can never be totally sure they will make a
profit.
Other
Concepts: Profit,
Goods and Services,
Entrepreneur,
Producers
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