Consumer

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Consumers Dilemma 2.0
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• Part A Setting the Scene
• Roll the pair of dice, multiply the total by
  10,000, and write that
• number on the first line of your Response Sheet.
• This will represent your annual household income,
  and you can then
• divide by 12 to calculate your monthly household
  income. It is your
• choice as to whether or not you would like to
  share this amount with
• others.
• If you have rolled less
• than a combined total of 4, then roll again.

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2) What is the size of your family (those living
in the same household)? Write that number on
line 2 on your Response Sheet.
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3) What type of car do you have, what is its gas
mileage, and what is the current price for a
gallon of gasoline? Record this on line 3 of
your Response Sheet.
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4) Now that your annual salary has been
determined its time to get settled into a home.
Here you have five choices listed below. Once
you have made you selection, write it down on
line 3.A of your Response Sheet and indicate
on line 3.B the reason for your selection.
Remember, you cannot obtain a dwelling that is
greater in annual cost than is your annual
income.
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• Sizable (5 acres) rural, wooded lot with large,
  new house
• (5 bdr, 2 baths, 2 car garage)
• Daily work commute 75 miles
• Combined utilities 500
• Annual mortgage 30,000 with monthly payments
  of 2,500
• II) Small lot in an established semi-suburb with
  a cozy house (3 bdr, 1 bath)
• Daily work commute 75 miles
• Combined monthly utilities 275
• Annual mortgage 10,800 with monthly payments
  of 900
• III) Sizable urban lot with new, large house (5
  bedrooms, 2 baths, 2 car garage)
• Daily work commute 10 miles
• Combined monthly utilities 500
• Annual mortgage 45,000 with monthly payments
  of 3,750
• IV) Small urban lot in an established
  neighborhood in a cozy house (3 bdrms, 1 bath)
• Daily work commute 10 miles
• Combined monthly utilities 275

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• 5) Calculating your monthly expenses.
• Multiply your daily commute miles by 20, divide
  by the mpg of your
• vehicle, and multiply by the current cost per
  gallon of gasoline (line 3).
• Record that number on line 5.A.
• (Monthly commuter miles / mpg) x /gallon of gas
  
• Work Related Transportation Cost
• B) For each additional person (other than you) in
  your household, add
• an additional 15 to the total monthly utility
  cost, and write that amount
• on line 5.B
• (Base Monthly Utility Cost x 0.15) x of
  additional persons)
• Base Monthly Utility Cost Total Monthly Utility
  Expenditures

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C) Multiply the number of people in your
household by 200 and record on line 5.C. This
will represent your average household food
expenditure. D) Now add all these numbers
(A-C) and write your Monthly Household
Expenditures on line 5.D
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Part B Life Goes On September Food purchases
Everyone must be fed, so let us now consider the
general preferences of those in your household
and look at the following categories of eating
habits
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• 0-20 composed of fresh vegetables
• - 0 increase in monthly food bill
• II) 21-50 composed of fresh vegetables
• - 8 increase in monthly food bill
• III) 51-80 composed of fresh vegetables
• - 12 increase in monthly food bill
• IV) 20-50 of items consumed are locally
  purchased
• - 16 increase in monthly food bill
• 6) Which of the generalized preference categories
  listed above best
• reflects those of your household?
• A) Write your response on line 6.A on your
  Response Sheet.

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6.B) Now calculate what your households food
expenses will be and record that on line
6.B. C) Monthly Accounting Calculate your
months household finances.
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October You belong to a community-owned electric
company, and one of the coal-fired generation
plants is nearing the end of its life cycle and
will need to be replaced. All members are asked
to vote on whether they would like to have the
old generator refurbished or to have an array of
wind-powered generators to make up for the lost
capacity.
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Your choice A Refurbishment of the coal-fired
generator will result in a small increase of 3
in your electricity costs, which will result in
an increase of 1 in utility costs. B
Replacement of the old generator with an array of
wind generators is more expensive and will
create an increase of 6 in electricity costs,
which will result in a increase of 3 in utility
costs.
7) Making a decision A) Which do you chose?
Circle your selection on line 7.A of your
Response Sheet. B) Explain why you made the
choice you did.
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7.C) Now it is time to take a survey of the group
to see what course of action has been selected.
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7.D) Calculate the increase in your household
utility costs in accordance with the choice made
by the group. E) Monthly Accounting
Calculate your months household finances.
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November The Collective Costs Now it is time to
take stock of the effects of the group members
decisions. First, let us consider the food
preferences and determine the number within each
category. Write the figures for each on your
Response Sheet for 8.A to 8.D and do the
calculations following each category. Total the
second column and record on line 8.E.
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What do these numbers mean? They reflect the net
externalities associated with each of the
respective diet types. A diet like category I
not only has a higher food-chain entropy effect
(decrease in useful calories with a move up the
food chain), but it also requires greater
processing, packaging, and transportation costs.
Some of the effects of this include an increase
in the cost of energy as demand grows at a rate
at which supply cannot keep up and an increase
in health care costs and insurance as poor diets
lead to poor health. Eating locally raised,
healthy foods is the best way to counter these
affects.
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Despite your personal dietary choice, those of
your neighbors do have an affect on the total
energy demand and the collective cost of
healthcare. So, that number on line 8.E of
your response sheet must be calculated into your
budget. The fist way will be the effect to your
transportation bill. Take 25 of that number
from 8.E (E x 0.25) and write that on line
8.F as additional cents per gallon to include
in your transportation cost. Use your
calculation figures from 5.A but reflect the
increased price of fuel. Record your new monthly
transportation cost on the appropriate spot on
8.J.
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Now we will consider the healthcare cost of
everyones dietary choices. Take that same
number from line 8.E and multiply by 1.25 and
then write that number on line 8.G. Now, take
that number and subtract it from your monthly
salary and record that on line 8.H.
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Everyone knows that your are what your eat, so
those with a healthier diet will likely have
fewer visits to the doctor and not be required to
pay out for insurance deductibles. So, using
the list scale below, readjust your monthly
salary to reflect your dietary choice and place
your again re-adjusted monthly income on the
appropriate spot on 8.J. I) No
increase II) Add 100 III) Add 200 IV) Add
250 Calculate your months household finances
for 8.J.
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December Roll the Die One person in the group
will need to roll one die, the result of which
is likely to impact all in the group.
Calculate your monthly finances according to the
scenario dictated by the roll of the die. Record
this on line 9 of your Response Sheet.
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I Nothing changes. The world has equilibrium and
stability II The redirection of corn toward
biofuels causes a scarcity in this grain (thus
increasing its economic value) and a loss of land
for food production (again increasing scarcity
and prices), the effect of which is a 10
increase in everyones food expenses.
III Rather than simply being an oil exporting
nation, Saudi Arabia decides to use more of its
dwindling supplies for its own industries and
living comfort and cuts its sales in half. This
affects the price of everything. Everyones
expenses increase in the following
way Transportation 35 Utilities
25 Food 30
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IV The Ogallala Aquifer, which supplies nearly
all the irrigation water to the United States
Bread Basket, becomes over-depleted and too
saline and the wheat crop fails. Simultaneously,
a disease destroys the rice crops of Southeast
Asia. The price of both of these staple foods
skyrocket, and everyones food bill increases
15. V Alaskas decides to take ownership
of its natural gas and to manage its
distribution throughout the state. All utility
bills in Alaska decrease by 15. VI Climate
change has increasingly acidified the oceans to
the point where salmon runs dramatically
decrease, thus heavily damaging the commercial
fishing industry in Alaska, which damages the
overall economy of the state. This is reflected
in a 10 decrease in everyones monthly salary.
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Part C Your Suggestions on Improving this
Exercise January Community Meeting? February
Scenario? March Collective Costs? April Scenar
io? May Roll the Die? June Scenario? July Sce
nario? August Collective Costs?
What are your thoughts on the usefulness of this
exercise? What are its good points and bad
points? Create an additional scenario such as
was done for September and October. Be sure to
also list the Collective Costs, as was played
out in November. Create two Roll of the Die
scenarios.