Saving the Environment with Economic Ideas

Lesson 6:
Green Is the New Gold

Author
Andrea Caceres-Santamaria, Federal Reserve Bank of St. Louis

Standards and Benchmarks (see page 6.18)

Lesson Description
In this lesson, students work in groups to solve an issue that businesses face: Resources used
in the production process are scarce, and it can be expensive to throw away a lot of waste,
especially since many industries depend on the same resources. There are two rounds in which
students will assess the production process for toy wooden shapes. In the first round, students
are presented with an inefficient use of resources and the production costs, revenue, and profit
associated with it. In the second round, students brainstorm the most creative and efficient
way to use a resource while increasing production, reducing waste, and increasing profits;
students actively participate and calculate how they can do all three. The lesson closes with a
case study on land tipping fees and questions for discussion.

Grade Level
High school

Concepts
Capital
Factors of production
Fixed costs
Innovate
Labor
Land
Opportunity cost
Profit
Revenue
Scarcity
Total cost
Variable costs

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6.1
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Objectives
Students will be able to
• define capital, factors of production, fixed costs, innovation, labor, land, opportunity
cost, profit, revenue, scarcity, total costs, and variable costs;
• explain why the factors of production are necessary for the production of goods and
services; and
• analyze how businesses can increase and improve their production process while
capturing waste, or reducing it significantly, and increasing profitability.

Compelling Question
How can companies reduce waste, and increase profit, while the costs of production rise?

Time Required
60-75 minutes

Materials
• PowerPoint Slides 6.1-6.14
• Handout 6-1, one copy for each group of two to four students, and two extra copies
for the teacher, all printed on cardstock
• Handout 6-2, one copy for each group of students, printed on cardstock
• Handout 6-2 Sample Answers, one copy for the teacher
• Handout 6-3, one copy for each group of students
• Handout 6-3 Sample Answers, one copy for the teacher
• Handout 6-4, one copy for each student
• Handout 6-5, one copy, cut apart, and one uncut copy for the teacher
• Two pairs of scissors for each group of students (or students can use their own scissors
to make cutting faster)
• One calculator for each group of students
• Clear resealable sandwich bags, one for each group of students
• Small scale that weighs in grams (can be borrowed from a science teacher)

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6.2
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Introduction
“Reduce, reuse, recycle” are now the three Rs of business. Being innovative and taking the
“green” approach to doing business have increased in priority for businesses today. With
waste-limiting laws, public image concerns, and scarcer resources, businesses are innovating
and finding very profitable ways to produce more and waste less. Businesses are becoming
aware that what they are wasting has value. By capturing the waste, they save on both money
and materials. Today’s leaders in green initiatives are also making big profits because of their
efforts in being less wasteful and more mindful.

Procedure
1. Tell the students they will be participating in a production simulation. Before beginning the
simulation, ask the students to think about some of the items they have with them and what
materials were needed to produce those goods. Instruct the students to pick an item and
describe the resources. Record their responses on the board. (Answers will vary. Example
responses may include a T-shirt made of cotton; a pen consisting of plastic, ink, a small spring,
and a metal tip; paper made from trees; or bottled water consisting of plastic and filtered
water.)

2. Display Slides 6.2-6.5. Explain to the students that every type of industry depends on three
essential resources to produce their good or service. These resources are land, labor, and
physical capital. They are known as the factors of production. As you review each slide, be
sure to emphasize the examples given for each type of resource as follows:
• Land: Things that occur naturally in and on the earth that are used to produce goods
and services. Examples include oceans, air, mineral deposits, virgin forests, and actual
fields of land. Land resources are also called natural resources. When investments are
made to improve fields of land or other natural resources, those resources become, in
part, capital resources.
• Labor: The quantity and quality of human effort available to produce goods and services.
• Capital: Resources and goods made and used to produce other goods and services.
Examples include buildings, machinery, tools, and equipment.

3. Display Slide 6.6. Explain that the factors of production come at a cost to producers. The
payment for each of the resources is listed on the slide.

4. Display Slide 6.7. Explain that producers have fixed costs and variable costs. Review the
information on the slide.

5. Display Slide 6.8. Discuss the definition of scarcity and how it applies to the factors of produc-
tion. It is because of scarcity of these resources that an economy cannot produce an endless

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6.3
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

amount of goods and services. Society’s wants for goods and services are unlimited, but we
face scarcity; that is, the resources needed to produce all the goods and services we want are
limited.

6. Display Slide 6.9. Explain that because of scarcity—wants exceeding the supply of resources—
producers must make choices about how to maximize their resources in the production
process. Every choice results in a cost, something that is given up. In economics, the highest-­
valued or most-important option that is given up when a choice is made is referred to as
opportunity cost. Discuss the following:
• Give some examples of resources that are increasingly scarce. (Answers may include oil,
fresh water, land, metals, or trees.)
• What happens as these resources become scarcer? (Producers can’t produce as many
goods and services.)
• What happens if producers don’t produce goods and services efficiently with these
resources? (Fewer goods and services are produced and resources are wasted.)
• What will happen to the price of these resources? (The price of the resources will increase.)
• What will happen to the price of goods and why? (The price of goods will increase
because as producers pay more for their resources, they mostly cover the increased
production costs by increasing the price of their goods.)

7. Explain that when the price producers pay for resources increases, producers earn less profit
unless they raise the price for which they sell their goods and services. Display Slide 6.10.
Explain the definitions and calculations for revenue and profit. Tell students that they must
know how to do these calculations for the simulation.

8. Arrange the class into groups of two to four students, depending on class size and amount
of materials available. Explain that they are all producers of wooden toys. The toys they are
producing today are educational toys—shapes for kids. Each group represents a separate
company that produces the same type of toys. Because they all make wooden toys, every
producer depends on the same resource—wood.

9. Distribute a copy of Handout 6-1: Round 1—Shapes, a copy of Handout 6-3: Calculations
Worksheet, a clear resealable sandwich bag, and a calculator to each group. Distribute two
pairs of scissors to each group or ask the students to use their own scissors. Explain that the
box on Handout 6-1 represents a sheet of plywood and the number of toy pieces (30) currently
being produced from one sheet of plywood this size.

10. Refer to Handout 6-3 and review the costs of production for Round 1 with the students.
Explain that given the current supply of wood, each producer will pay $2.50/sheet, and each

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

group will work with only one sheet for each round. The variable cost for this round will be
the waste disposal fee. Calculations will be completed after students complete Step 12 below.

11. Explain that the wooden shapes are sold in sets of three—a triangle, a square, and a circle.
For Round 1, each group will work together to cut out each shape and group each set
together. As they cut, students should place all the excess paper in the resealable sandwich
bag. This represents the waste that results from their production. Allow time for the students
to cut out the shapes.

12. Ask the students how many sets they were able to produce from the one sheet. (Students
should answer 10 sets.) Have the scale ready and tell the students to choose one person from
each group to come up with the bag of waste and calculations worksheet. Weigh each group’s
bag of waste and remind them to record the weight and calculate the total cost of waste
on Handout 6-3, Line C.

13. Using their calculators (if needed), students should complete Handout 6-3 for Round 1.
Handout 6-3: Calculations Worksheet—Sample Answers provides an example of what the
costs would calculate to if the waste disposal weighed 6 grams. Discuss the following:
• Look at your bags with the wasted resources. Did disposing the waste cost anything?
(Yes, we paid $0.50/gram for disposing the unused portions of wood/paper.)
• How many grams of waste did you have and what was your cost? (Answers will vary
but could range from 6-8 grams and cost between $3 and $4.)
• How could you save some of these costs? (By having less waste)

14. Ask the students if any group would like to produce more shapes. Hold up the two extra
copies of Handout 6-1 and announce that there is an increased demand for wooden shapes.
Discuss the following:
• What will happen to the price of a sheet of plywood as a result of increased demand?
(The price will rise.)
• What effect will this have on their costs of production? (Their costs will rise.)
• What will happen to their profit if they continue to sell shapes at the same price? (It will
decrease their profit.)

15. Distribute one copy of Handout 6-2: Round 2—Blank to each group. The blank box represents
a sheet of plywood used in the production of wooden shapes. The wood that is used to pro-
duce the plywood sheets has become scarcer. As a result, the price of plywood has increased
to $3 per sheet, and the waste disposal fee has increased to $0.55. Each set of shapes is still
selling for $4.

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6.5
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

16. For this Round 2, group members will work together to innovate a new pattern for position-
ing the shapes to maximize their resources and produce more sets that consist of a square, a
triangle, and a circle. Students will use one of the sets already produced to trace their patterns
on Handout 6-2 so that they are the same size as those produced in Round 1.

17. Explain that their goals are to maximize their scarce resource of plywood, decrease their waste
­disposal fee by wasting less, and increase their profit even though the cost of the plywood
sheets has increased. Students should be sure to produce full sets of shapes as they innovate
so that they do not have shapes left over. Have students empty the waste from their bags
and put aside their shapes from the first round, except for one set to be used for tracing in
Round 2. Students will place the new waste in the emptied plastic bags. Allow time for the
students to innovate, trace, and cut out their new sets. Refer to Handout 6-2: Round 2—
Sample Answers for a possible layout of the shapes. NOTE: It is strongly encouraged that the
teacher walk around the room to check each group’s progress.

18. Have the scale ready and tell the students to choose one person from their group to come
up with the bag of waste and calculations worksheet. Weigh each group’s bag of waste and
remind students to record the weight and calculate the total cost of waste on Handout 6-3,
Line C for Round 2.

19. Review Handout 6-3, Round 2 with the students, allowing time for the groups to work on
their calculations. Walk around the room to make sure students are completing the calcula-
tions correctly. Handout 6-3 Sample Answers has a sample response using 21 sets of the
shapes from Handout 6-1. Discuss the following:
• Were you able to increase your profit in Round 2? (Students should report a higher profit
if they were able to produce more sets.)
• Share with the class your innovative strategies for maximizing the amount of sets you
produced. (Answers will vary.)
• Are there alternative uses for the waste in the bags? (The pieces could be recycled.)

20. Explain that unstained, engineered woods like plywood can be sent to recycling plants where
they are shredded into compost or mulches. Recycling is a very effective way for businesses
to decrease their waste and costs because recycling plants usually collect the material at little
to no cost.

21. Explain that some companies capture their waste. Capturing waste means taking the waste
produced in one part of the production process and using it in another part of the production
process. It is a form of recycling. Some students may have some knowledge or ideas about
how the waste from the activity could be captured. Discuss the following:

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

• Considering the definition of capturing waste, what are some ways the extra wood pieces
in your bags could be captured for energy? (Answers will vary. Students may suggest the
wood pieces could be burned and used as a form of energy for the business, keeping in
mind that the wood does not contain contaminants that are harmful when burned.)
• If wood chips are not needed, how can other manufacturers use the wood pieces?
(Answers will vary. One way is to sell the leftover pieces to a manufacturer of particle
board, which is engineered wood from different scraps of various types of wood.)

22. Explain that, just as the students did in the activity, many businesses consider their production
processes so that they make the most of their resources while increasing productivity and
profits. Businesses today need to add environmental thinking to their production strategies.

23. Distribute a copy of Handout 6-4: Case Study to each student. Tell them they will be reading
a case study that explains what land tipping fees are and gives examples of how some com-
panies have made reducing waste a top priority, which has proved to be efficient, effective,
and—most of all—profit increasing. Allow time for the students to read the case study and
answer the comprehension questions, and then review the answers as follows:
• What are land tipping fees? (Land tipping fees are charges to businesses by waste man-
agement companies for the pick-up, removal, sorting, and other operations associated
with the waste management process.)
• Explain how Apple Inc. increased recycling in its production process. (When building its
new campus, Apple Inc. implemented an effective recycling program that saves the
company $1 million per year. In the manufacturing process of all iPhones and Apple
watches, recyclable materials are sorted within the production line itself. The company is
putting forth many efforts and innovations to have zero waste from the development,
production, and selling stages in its production process.)
• What are some reasons businesses are increasingly more aware of their waste disposal?
(Businesses look for ways to reduce their production costs, and by decreasing the
amount of waste they produce, they can cut what could be a significant cost. Capturing
waste has proved to be a more profitable venture than wasting.)
• Calculate how much a company would have to pay in land tipping fees if a small manu-
facturer of wooden puzzles has 200 tons of waste and the land tipping fee is $85 per ton.
($17,000)
• If the wooden puzzle manufacturer hires you as a consultant to study and provide solu-
tions for greener production methods that could decrease its waste and land tipping
fees, what solutions might you suggest? (Answers will vary. Suggestions could include
getting together with other producers that use the same resource and coming up with
more efficient ways to use the resource. The business could also recycle the excess wood
by using it in another product or find ways to maximize every piece of material so that
very little, if any at all, is wasted.)

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

24. Display Slide 6.11. Discuss some highlights about land tipping fees.

25. Display Slides 6.12-6.14. Referring to Slide 6.12, ask the students if they know what the
companies listed produce. (Tesla: all-electric, zero-emissions cars; Chipotle: burritos and fast,
casual dining; Toyota: automobiles; GE’s Ecomagination: GE makes industrials such as aircraft
engines, power generators, medical imaging machines, and oil and gas production equipment.
Ecomagination is the name of their strategic plan to reduce their impact on Earth; Patagonia:
outdoor clothing) Point out that more and more companies are learning that using resources
wisely and reducing waste has proved to be very profitable.

Closure
26. Have the students participate in a review activity called “I Have a Question, I Have an Answer.”
Divide the class—evenly, if possible—and distribute cards from Handout 6-5: Closure Activity
so that one-half of the class gets an “I Have a Question!” card and the other half gets an
“I Have an Answer!” card. NOTE: If not all questions and answers are used, be sure that each
question handed out has a corresponding answer.

27. Explain that the students who have the question cards will each read their question aloud.
The students who have the answers need to listen carefully so that they can both determine
if theirs is the one that answers the question and then read the answer aloud. An extra uncut
copy of Handout 6-5 can be used as a key for the teacher.

28. Continue the activity until all questions have been asked and answered. For extra review, you
can reverse the roles for the students and switch some of the used questions and answers
with any unused ones.

Assessment
29. Have students research and write a few paragraphs about the waste management efforts of
a company of their choice. Their research should specifically highlight what the company
produces, how it produces it, and what its savings are from innovating more-efficient forms
of production.

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-1: Round 1—Shapes

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-2: Round 2—Blank

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-2: Round 2—Sample Answers

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-3: Calculations Worksheet

Round 1
Wood sheet = $2.50
Labor per set (circle, triangle, square) = $1
Waste disposal fee per gram = $0.50
Other resources (capital, land) = $1
Each set sells for $4
A. Total sets produced per sheet........................................................................ _____________
B. Total sets produced x Cost of labor per set.................................................. $_____________
C. Waste disposal (Grams x Cost) Grams = _________..................................... $_____________
D. Cost of wood sheet and other resources..................................................... $_____________
E. Total cost (B + C + D).................................................................................. $_____________
F. Total sets x Sale price = Revenue................................................................ $_____________
G. Revenue (F) – Total cost (E) = Profit............................................................ $_____________
____________________________________________________________________________________
Round 2
Wood sheet = $3
Labor per set (circle, triangle, square) = $1
Waste disposal fee per gram = $0.55
Other resources (capital, land) = $1
Each set sells for $4
A. Total sets produced per sheet........................................................................ _____________
B. Total sets produced x Cost of labor per set.................................................. $_____________
C. Waste disposal (Grams x Cost) Grams = _________..................................... $_____________
D. Cost of wood sheet and other resources..................................................... $_____________
E. Total cost (B + C + D).................................................................................. $_____________
F. Total sets x Sale price = Revenue................................................................ $_____________
G. Revenue (F) – Total cost (E) = Profit............................................................ $_____________
____________________________________________________________________________________
Total Profit Round 1:....... $_____________
Total Profit Round 2:....... $_____________
Total Difference:.............. $_____________

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-3: Calculations Worksheet—Sample Answers

Round 1
Wood sheet = $2.50
Labor per set (circle, triangle, square) = $1
Waste disposal fee per gram = $0.50
Other resources (capital, land) = $1
Each set sells for $4
A. Total sets produced per sheet.............................................10
B. Total sets produced x Cost of labor per set.........................10 × $1 = $10 (Labor cost)
C. Waste disposal (Grams x Cost) Grams = 6..........................$0.50 × 6 = $3 (Disposal cost)
D. Cost of wood sheet and other resources............................$2.50 + $1 = $3.50 (Other cost)
E. Total cost (B + C + D).........................................................$16.50
F. Total sets x Sale price = Revenue.......................................10 × $4 = $40
G. Revenue (F) – Total cost (E) = Profit...................................$40 – $16.50 = $23.50
____________________________________________________________________________________
Round 2
Wood sheet = $3
Labor per set (circle, triangle, square) = $1
Waste disposal fee per gram = $0.55
Other resources (capital, land) = $1
Each set sells for $4
A. Total sets produced per sheet.............................................21
B. Total sets produced x Cost of labor per set.........................21 × $1 = $21 (Labor cost)
C. Waste disposal (Grams x Cost) Grams = 4..........................$0.55 × 4 = $2.20 (Disposal cost)
D. Cost of wood sheet and other resources............................$3 + $1 = $4 (Other cost)
E. Total cost (B + C + D).........................................................$27.20
F. Total sets x Sale price = Revenue.......................................21 × $4 = $84
G. Revenue (F) – Total cost (E) = Profit...................................$84 – $27.20 = $56.80
____________________________________________________________________________________
Total Profit Round 1:..................... $23.50
Total Profit Round 2:..................... $56.80
Total Difference:............................ $33.30

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-4: Case Study (page 1 of 2)

Less Wasteful Waste

Landfills are not free plots of land where waste is collected and nothing is done with the waste.
Waste management is a business of its own with operating costs that need to be paid for, just
like any other business. Every company, whether it provides a good or service, has a significant
amount of waste that needs to be processed and disposed of safely to minimize harm to the
environment. Waste management businesses charge other businesses gate or land tipping fees.
These are charges that vary based on the type and amount of waste that is collected, and they are
used to cover the costs of waste collection, transportation, and sorting. It is usually measured in tons
and ranges from $20 to slightly above $100 per ton, depending on where the businesses are located.
Hazardous waste disposal fees can be more than 10 times higher.

These fees are a cost that can be decreased, providing businesses with the motivation to innovate
more-efficient production methods that result in less waste. These companies look for ways to recycle
and reuse their waste in ways that decrease their waste disposal costs, which in turn increases their
profits. Collecting materials that can be recycled costs less, and companies use this as an opportu-
nity to innovate other uses for the recycled material. For example, Apple Inc. implemented an active
recycling program that saves the company $1 million per year. In the manufacturing process of all
iPhones and Apple watches, recyclable materials are sorted within the production line itself. The
company is putting forth many efforts and innovations to have zero waste from the development,
production, and selling stages in its production process.

Capturing waste—redirecting waste to be used in other parts of the production process within a
company’s own manufacturing, or selling it to other manufacturers as a resource—has proved for
many companies a much more profitable venture than wasting. With society’s increasing use of
social media outlets, companies are under a finer lens of the public eye, and this is especially true
of their efforts to be greener. Image is everything for companies looking to thrive in a consumer
world like ours; when consumers feel good about a company’s products, they purchase more. There
have been proven negative effects on companies that are not cautious about their production and
resource management. For example, Conagra Brands Inc., which makes Reddi-Wip® whipped cream,
Hunt’s® ketchup, and Orville Redenbacher’s® popcorn, has been cited as one of the top 10 com-
panies with the worst sustainability record. The company has paid high pollution fines because their
Oregon plant exceeded the limit of nitrate pollution disposal, which can harm freshwater sources.
Their reputation, through news outlets and online sources, was tarnished some years ago as a result.
This in turn can hurt profits. Being green pays, and some companies are not only following govern-
ment regulation, but going beyond and creating their own initiatives for profit, public image, and
non-depletion of the resources needed to produce their goods.

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-4: Case Study (page 2 of 2)

Comprehension Questions

1. What are land tipping fees?

2. Explain how Apple Inc. increased recycling in its production process.

3. What are some reasons businesses are increasingly more aware of their waste disposal?

4. Calculate how much a company would have to pay in land tipping fees if a small manufacturer
of wooden puzzles has 200 tons of waste and the land tipping fee is $85 per ton.

5. If the wooden puzzle manufacturer hires you as a consultant to study and provide solutions
for greener production methods that could decrease its waste and land tipping fees, what
solutions might you suggest?

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6.15
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-5: Closure Activity (page 1 of 2)

I Have A Question! I Have An Answer!

What are the factors of production? Land, labor, and capital

I Have An Answer!
I Have A Question!
Factory, blender, pasteurization
What type of capital is used in the
machine, processing machine,
production of vanilla ice cream?
conveyer belt, carboard, and electricity

I Have A Question! I Have An Answer!

What is the form of payment for labor? Wages

I Have A Question! I Have An Answer!

Why are goods and services scarce? Because resources are scarce

I Have A Question! I Have An Answer!

What is an example of a Natural resources such as air,
resource we get from land? oil, and mineral deposits

I Have A Question! I Have An Answer!

What is the form of payment for land? Rent

I Have An Answer!
I Have A Question!
Selling price of a good or
How is revenue calculated?
service × the number of units sold

I Have An Answer!
I Have A Question!
The surplus remaining after total costs
What is profit?
are deducted from total revenue

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 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Handout 6-5: Closure Activity (page 2 of 2)

I Have A Question! I Have An Answer!

What is an example of a labor resource? The baker at a grocery store

I Have An Answer!
I Have A Question!
Businesses can use their resources more
Businesses can increase their profitability
efficiently by capturing their waste and reusing
by doing what with their waste?
it in other goods in the production process.

I Have A Question! I Have An Answer!

What is the form of payment for land? Rent

I Have An Answer!
I Have A Question! It results in the manufacturer paying
Why is capturing waste more profitable less in land tipping fees, producing
than just throwing it away? less pollution, having a better
social image, and earning more profit.

I Have A Question! I Have An Answer!

What is an example of a Natural resources such as air,
resource we get from land? oil, and mineral deposits

I Have A Question! I Have An Answer!

Can you name some companies that Tesla, Chipotle, Toyota,
are making sustainability profitable? GE’s Ecomagination, and Patagonia

I Have A Question! I Have An Answer!

How have companies that looked Companies that have increased
beyond profit and increased their sustainability efforts have outperformed
sustainability efforts performed since 2011? the competition by 11.7 percent.

I Have An Answer!
I Have A Question!
Costs of those factors of production
What are variable costs?
that vary as production changes

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entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis.

6.17
 Saving the Environment with Economic Ideas | Lesson 6: Green Is the New Gold

Standards and Benchmarks

Voluntary National Content Standards in Economics
Standard 1: Scarcity
Productive resources are limited. Therefore, people cannot have all the goods and services they
want; as a result, they must choose some things and give up others.
• Benchmark: Grade 12
1. Choices made by individuals, firms, or government officials are constrained by the
resources to which they have access.
Standard 4: Incentives
People usually respond predictably to positive and negative incentives.
• Benchmarks: Grade 12
1. Acting as consumers, producers, workers, savers, investors, and citizens, people respond
to incentives in order to allocate their scarce resources in ways that provide them the
most possible net benefit.
2. Decision making in small and large firms, labor unions, educational institutions and
not-for-profit organizations has different goals and faces different rules and constraints.
These goals, rules, and constraints influence the benefits and costs of those who work
with or for those organizations, and therefore their behavior.
Standard 8: Role of Prices
Prices send signals and provide incentives to buyers and sellers. When supply or demand changes,
market prices adjust, affecting incentives.
• Benchmark: Grade 12
2. Supply of a product changes when there are changes in either the prices of the
productive resources used to make the product, technology used to make the product,
the profit opportunities available to producers from selling other products, or the number
of sellers in a market.

Notes
Apple Inc.; www.apple.com/environment/.
Bakeryandsnacks.com. “ConAgra Foods Fined for Wastewater Permit Violation.” BakeryandSnacks, September 21, 2012;
www.bakeryandsnacks.com/Article/2012/09/21/Oregon-fines-ConAgra-for-nitrate-pollution.
Environmental Protection Agency (EPA). “Why Should You Care About Preventing Waste? Small Business Guide.” EPA, November 16,
2017; www.epa.gov/p2/why-should-you-care-about-preventing-waste-small-business-guide.
Esty, Daniel C. and Winston, Andrew S. Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value,
and Build Competitive Advantage. Yale University Press, 2006.
General Electric (GE); www.ge.com/.
Kralstein, Michael. “Does Commercial Recycling Really Save Companies Money?” AAA Polymer;
www.aaapolymer.com/commercial-recycling-save-money/.
Smith, S.E. “9 Awful Companies Everyone Should Boycott Right Now.” The Daily Dot, March 8, 2017;
www.dailydot.com/via/nestle-whole-foods-horrible-companies-boycott/.

©2020, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its
entirety for educational purposes, provided the user credits the Federal Reserve Bank of St. Louis.

6.18