Chapter 7 Student Activities

Reciprocity in Your Dorm Activity

We often think that economic activity is about money changing hands. But in fact, Americans have many transactions that don’t involve cash but resemble gift giving. Consider the kinds of gift giving your roommate or a friend on campus engages in. Are these transactions really gifts? Will the recipient later repay, such as when you treat me today and I treat you later? How extensive are these reciprocal transactions?

A Thought Activity: Setting Prices

Consider three different objects in your book bag or dorm room. At some point in time you bought these items (or perhaps a parent bought one for you). Who actually sets the prices of the things we buy? Consider who has actually determined the price you had to pay. Since prices are often arbitrary, they are usually set by the wholesale price determined by the manufacturer. What kinds of factors would influence the price? Many manufacturers expect to sell their products for $10.95 or $19.95? Why set these odd price points rather than $11.00 or $20.00?