Opportunity Cost with Pickleball

Here is a common opportunity cost scenario: a student has the chance to join a serious competitive pickleball league, which would give her enjoyment, athletic development, friendship, and possibly recognition.

However, the league requires a major time commitment on the same evenings when she could be taking a college course needed for graduation or working paid hours as an administrative assistant at a skin care clinic. In economics, the cost of her choice is not just the league fee, equipment, or transportation. The real opportunity cost is the value of the next best alternative she gives up.

https://youtu.be/ADrAoH0dXM0?si=i-5G3tAi0HpKcM0M

If she chooses the pickleball league, she may lose progress toward graduation and reduce her work income. If she chooses the college course, she gives up the chance to compete more seriously in a sport she loves. If she works the clinic shifts, she earns money and gains job experience, but sacrifices both athletic opportunity and academic progress.

The decision requires her to compare benefits that are not all measured in dollars: time, future goals, income, health, enjoyment, friendships, and career preparation. This is why opportunity cost is central to economic decision-making: every choice uses limited resources, especially time.

Home School Moms and the Labor Force Participation Rate Conundrum

Let's take a look at a mother working at home while also homeschooling her two young children. One child is drawing polka-dotted cats, while the toddler holds a plush kitty, and the mother is surrounded by signs of both education and entrepreneurship: books, school materials, a laptop, branding notes, and web pages for a bookstore, coffee shop, and cattery.

Economically, the scene raises an important question: is she in the labor force? If she is earning income through a home-based web business, helping manage online retail, or developing web presence for small businesses, then she is participating in paid labor. At the same time, she is also doing unpaid work as a caregiver, teacher, household manager, and curriculum organizer.

https://youtu.be/gz5qHGL8XMQ

The graphic also reminds us that official labor statistics do not always capture the full value of women’s work, especially when that work takes place in the home. Homeschooling, childcare, emotional labor, scheduling, tutoring, and business development may all happen in the same room, sometimes at the same time, but only some of that activity may appear as measurable income.

The key takeaway is that women’s economic contributions can be difficult to measure when paid and unpaid labor overlap. In today’s web-based economy, however, flexibility, creativity, responsiveness, and digital skills allow many women to carve out a niche for themselves, combining caregiving responsibilities with entrepreneurial work that supports families, local businesses, and new forms of economic participation.

Supply and Demand Shifts during a Zombie Apocalypse in a Beach Resort Town

Let's explore a macroeconomics scenario set during a zombie apocalypse in a beach resort town. The setting is a once-busy vacation destination, with beaches, miniature golf courses, pizza places, boardwalk attractions, and gelato shops now overrun by chaos.

The zombies are shuffling toward places where they can reliably find crowds of people — and therefore, in the logic of the scenario, “fresh brains to munch on.” This creates a vivid way to think about how consumer behavior changes during a crisis. Instead of focusing on leisure and tourism, people suddenly become much more interested in safety, escape, and survival. The imagery of panicked tourists, overwhelmed businesses, and zombies converging on popular attractions helps illustrate how an external shock can completely transform normal patterns of economic activity.

https://youtu.be/nNhjrWDVYJs 

The slide also shows how demand shifts during an emergency. In ordinary times, a beach town might see strong demand for pizza, mini golf, boardwalk treats, and other recreational services. But when zombies appear, demand surges for barriers, fencing, helmets, security services, and even experimental deterrents — such as blasting Bach and Mozart if people believe the music annoys zombies. 

This is a playful example of demand shifting to the right for goods and services associated with protection and survival. The slide uses the idea of “anti-zombie” strategies to make a serious economic point: when fear and risk rise, consumers reallocate spending toward whatever they think will help keep them safe. Even if some solutions are unconventional or unproven, people may still rush to buy them if they believe there is a chance they will work. 

 At the same time, the slide demonstrates supply problems and labor shortages. As much of the labor force flees the zombies, local businesses can no longer operate normally. Restaurants, resorts, mini golf businesses, shops, and boardwalk vendors may cut hours, reduce services, or close altogether. 

This is shown through the “supply shifts left” idea: fewer available workers means fewer goods and services can be provided. The result is a reduced supply of local services and rising prices for whatever remains available. This is why the slide includes “Help Wanted” signs — in a crisis, some employers may become desperate to hire anyone willing to stay, which can drive wages upward. In macroeconomic terms, the labor supply falls, and businesses must compete harder for scarce workers. 

 Overall, the slide is a creative illustration of supply and demand interacting under extreme conditions. Demand rises for protection-related goods, supply falls for normal local services, and labor shortages create additional disruptions across the economy. Prices increase in some areas, output falls in others, and the entire local market becomes unstable. 

The zombie-apocalypse theme makes the lesson memorable, but the underlying economics is very real: when a major shock changes people’s priorities and limits the ability of businesses to operate, both supply and demand can shift dramatically. The slide uses humor — from brain-hungry zombies to Bach-and-Mozart deterrents and emergency help-wanted signs — to show that macroeconomics helps explain how communities respond when normal life is suddenly turned upside down.

Free Video-Based Mini-Course: Monetary Pivot Points, the Dollar, and Oil Prices with William DeMis

Is the U.S. headed for another major monetary shift that could send oil prices soaring? In this powerful and popular presentation, originally delivered to a standing-room-only crowd at IMAGE, William DeMis of Rochelle Court LLC explains the critical link between U.S. monetary policy, the value of the dollar, and the price of oil.

Discover the concept of "monetary pivot points"—critical macroeconomic events where the U.S. dollar's value changes profoundly, triggering major reactions in the oil market.

Video for the Course
https://youtu.be/2zJtTanmC_Q?si=8M73vaWy1w3bre7w

Course Summary

 This course examines the critical relationship between U.S. monetary policy, the value of the dollar, and global oil prices. Drawing on historical analysis, we will explore significant "monetary pivot points" that have profoundly altered the value of the U.S. dollar and, consequently, the price of oil, which is priced and traded globally in U.S. dollars. Key historical events covered include the end of the Bretton Woods Accord in 1971 and the Plaza Accord of 1985. The course will analyze how these events led to major shifts in the dollar's value and triggered corresponding reactions from OPEC to maintain the purchasing power of oil.

We will also investigate the current economic landscape, characterized by unsustainable national debt, significant federal deficits, and the Federal Reserve and Treasury being "boxed into a corner". The course will discuss contemporary signals of a new monetary pivot, such as central banks divesting from U.S. Treasuries in favor of gold, and explore potential future scenarios involving inflation, dollar devaluation, and the rise of stablecoins. By the end of the course, you will understand the historical precedents and current macroeconomic forces that are expected to shape the future of oil prices.

Learning Objectives

Lower-Level Objectives (Remembering & Understanding)

1. Define key monetary terms and events, including monetary pivot points, the Bretton Woods Accord, the Plaza Accord, and the petrodollar agreement.

2. Describe the historical relationship between the price of gold and the price of oil, specifically the "gold-oil ratio".

3. Identify the primary causes for the collapse of the Bretton Woods Accord in 1971.

4. Explain the current fiscal challenges facing the U.S., including the national debt, deficits, and the problem of refinancing maturing debt.

Higher-Level Objectives (Analyzing & Evaluating)

5. Analyze how a significant change in the value of the U.S. dollar impacts oil prices differently depending on whether the global oil supply is tight or loose.

6. Evaluate the argument that the U.S. is currently in a "big pivot" by synthesizing evidence related to national debt, central bank behavior, and historical parallels.

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Assessment Questions

Multiple Choice Questions (for Lower-Level Objectives 1-4)

Objective 1: Define key monetary terms and events.

1. What is a "monetary pivot point" as described in the presentation? a. A time when the stock market reaches an all-time high. b. A key macroeconomic event where the value of the U.S. dollar changes profoundly. c. An agreement by OPEC to cut oil production. d. A moment when the U.S. national debt exceeds GDP.

2. Under the Bretton Woods Accord, what was the U.S. dollar fixed to? a. The British Pound. b. A basket of foreign currencies. c. Oil. d. Gold.

3. What was the purpose of the 1973 petrodollar agreement? a. To fix the price of oil to the price of gold. b. To require OPEC countries to price their oil in U.S. dollars, creating demand for the currency. c. To create a new currency specifically for oil trading. d. To allow European nations to pay for oil with their own currencies.

4. The Plaza Accord of 1985 was an agreement to: a. Increase the value of the U.S. dollar to fight inflation. b. Return to a gold standard for international currencies. c. Devalue the U.S. dollar to help U.S. exports. d. Establish a new global reserve currency.

5. The phrase "America's exorbitant privilege," as used by France, referred to the ability of the U.S. to: a. Control global oil supplies. b. Pay for international goods simply by printing money, while other countries had to produce value. c. Veto any decision made by the United Nations. d. Maintain the largest military in the world.

Objective 2: Describe the historical relationship between the price of gold and the price of oil.

6. According to the presentation, on average during the OPEC era, one ounce of gold could buy approximately how many barrels of oil? a. 5 barrels. b. 12 barrels. c. 25 barrels. d. 50 barrels.

7. When the price of gold rises significantly relative to oil on the specialized chart shown, what event does this historically signal? a. An impending oil price collapse. b. A period of economic recession. c. An oil boom. d. A strengthening of the U.S. dollar.

8. In the early 1970s, what was the primary motivation for OPEC to raise oil prices four-fold? a. To retaliate against the U.S. for its foreign policy. b. To maintain the purchasing power of oil in the face of a devalued dollar and rising gold prices. c. To fund industrial development projects. d. To reduce global oil consumption for environmental reasons.

9. The presenter states that gold is the "metal with a memory" because it: a. Is difficult to mine and has a long history. b. Is used in computer memory chips. c. Records the cumulative effects of inflation over time. d. Remembers its previous highest price.

10. In the early 1970s, the price of oil was observed to be _______ the price of gold. a. Leading. b. Following. c. Uncorrelated with. d. Inversely related to.

Objective 3: Identify the primary causes for the collapse of the Bretton Woods Accord.

11. According to the presentation, what two major government spending initiatives contributed to the end of the Bretton Woods Accord? a. The Marshall Plan and the Korean War. b. The Vietnam War and Johnson's Great Society. c. The Space Race and the Interstate Highway System. d. The New Deal and World War II.

12. What critical problem with the funding of these 1960s initiatives was highlighted? a. The programs were too unpopular to secure funding. b. The government did not raise taxes to pay for them, and instead just printed money. c. Most of the money was lost to corruption. d. The spending was blocked by the Supreme Court.

13. What was the consequence of President Johnson removing the gold cover requirement for the U.S. dollar? a. It allowed the Federal Reserve to lower interest rates to zero. b. It strengthened the dollar's value internationally. c. It became a true fiat currency, removing the regulatory limit on money printing. d. It caused the stock market to crash.

14. Why did European central banks begin redeeming their U.S. dollars for gold at the "gold window"? a. They needed gold to fund their own social programs. b. They lost faith in the stability of their own currencies. c. They could get gold for $35/ounce from the U.S. and sell it for a higher price on the open market in Europe. d. The U.S. was forcing them to trade in their dollars.

15. What was President Nixon's final action that officially ended the Bretton Woods system in 1971? a. He declared the dollar would no longer be the world's reserve currency. b. He raised taxes significantly to pay off the national debt. c. He closed the gold window to stop foreign central banks from redeeming dollars for U.S. gold. d. He negotiated the petrodollar agreement with OPEC.

Objective 4: Explain the current fiscal challenges facing the U.S.

16. What is the major problem with the U.S. national debt that did not exist in the 1960s? a. The debt is mostly owned by foreign nations. b. The debt has exploded and is considered unsustainable. c. There is no political will to address it. d. The interest rate on the debt is fixed and cannot be changed.

17. The interest payments on the national debt now exceed the spending on which of these major federal budget items? a. Education. b. The military or Medicare (taken individually). c. Social Security. d. The military and Medicare combined.

18. What does it mean that the national debt is "always refinanced and rolled over"? a. The government pays off the debt in full every year with tax revenue. b. The debt is forgiven by international lenders every 10 years. c. When old bonds mature, the government issues new bonds to pay for them. d. The debt is converted into corporate stocks.

19. According to the presenter, what happens if the interest rate on all U.S. debt resets to 4.5%? a. The stock market will double in value. b. The U.S. will default on its debt immediately. c. The interest payments alone will consume all federal tax revenue. d. Foreign countries will rush to buy more U.S. bonds.

20. A recent trend among foreign central banks that signals a current monetary pivot is: a. Buying massive amounts of U.S. stocks. b. Selling their own currencies to buy more U.S. dollars. c. Dumping U.S. treasuries and swapping dollars for gold. d. Lobbying the U.S. government to raise interest rates.

Short Essay Questions or Discussion Items 

(or Higher-Level Objectives 4 - 6)

1. Analysis: The Bretton Woods Accord and the Plaza Accord are presented as two key "monetary pivot points" that profoundly changed the value of the U.S. dollar. Compare and contrast the reasons for the dollar's devaluation in each of these pivots and explain the differing impacts these devaluations had on the price of oil.

2. Evaluation: The speaker argues that the current U.S. national debt is unsustainable and that the Federal Reserve and Treasury are "boxed into a corner," limiting their ability to fight inflation or attract bond investors. Based on the evidence presented in the sources, critique this argument. Do you find the speaker's reasoning about the constraints on monetary and fiscal policy to be convincing? Justify your answer.

3. Analysis: Central banks are reportedly buying gold at a rate not seen since the 1960s, a trend the speaker links to the pivot away from the U.S. dollar. Analyze the relationship between the real yield on U.S. Treasury bonds and the price of gold, and explain why the current decoupling of this relationship is significant for the U.S. dollar's status as a reserve currency.

4. Evaluation: The speaker concludes that despite the current fiscal challenges and a period of "tumult," the U.S. will ultimately get through this pivot due to its history of innovation and entrepreneurship. Evaluate the strength of this optimistic conclusion by weighing it against the severity of the problems outlined, such as the national debt consuming all federal revenue.

5. Analysis: The presentation posits that after the end of Bretton Woods, OPEC raised oil prices primarily to maintain its purchasing power against a devalued dollar, rather than for geopolitical reasons. Analyze how the concept of the "real global price of oil" supports this monetary-based explanation for the oil price shocks of the 1970s

Interview with Darlene Beaubien, Energy Economist: Micro-Learning Module

Many people wonder why the price of oil fluctuates so dramatically, and what factors affect both supply and demand for petroleum. Welcome to an interview Darlene Beaubien, an economist who has specialized in energy economics. In addition to the written interview, Darlene was featured on LifeEdge.

1.  What is your name and your connection to economics and the oil industry?
My name is Darlene Beaubien.  I have worked as a corporate planner and economist for  major oil and gas companies for more than 20 years.  Also, I’m former president of the Houston Chapter of the International Association for Energy Economics.
Following are some short and simple explanations of common issues in the current environment.

2.  Why does the oil industry seem to have boom and bust cycles?
Boom and bust cycles are caused by imbalances between worldwide oil supply and demand.  
During periods of high oil prices producers make investments in the oil and gas industry that create jobs, increase the number of operating oil rigs and encourage investments in new technologies.  These oil investments lead to discoveries that produce oil for several decades. 

However, consumers respond to high oil prices by reducing their demand for oil products such as gasoline, heating oil and jet fuel. The result is lower consumption and the potential for an oil surplus. Periods of significant surplus and shortage of oil result in dramatic changes in prices and create boom and bust cycles in the oil industry.

It should be noted that movements in supply and demand are influenced by factors including international economic performance, government actions, technology, and geopolitical factors.

 Link to a conversation on oil price fluctuations and global economics with Darlene Beaubien on LifeEdge.

3.  What causes companies and countries to produce too much, even though they know that by producing too much, they'll cause the price to collapse?

Oil companies and countries may produce during periods of surplus for various reasons including:
•    The dependence of some countries on oil exports to fund their governments.
•    The decision of some energy oil countries  to maintain their share of the worldwide market or even to suppress prices to the point that higher cost producers can’t maintain operations
•    Contract commitments for services, rigs and products that prevent producers from making immediate reductions in production operations 
•    The need to continue producing in order to meet cash requirements or to maintain leases. 
•    Time lags between reduction in rigs and production due to the physical characteristics of the producing properties

 4.  How has political uncertainty and war affected the price of oil in the past?
Geopolitical events and war are a major risk factor in oil and gas markets.  Supply disruptions in major producing countries can cause dramatic price increases.  On the other hand, the restoration of production by a previously war torn countries increase supply and could suppress prices.  Following are a couple of examples.

•    The Iraq war and ongoing violent during the past decade, caused dramatic supply disruptions due the destruction of physical assets (ie. Fields, pipelines) and threats to personnel.
•    The restoration of production in Libya in 2015 added to world production and exacerbated the already existing supply surplus.
Changes in political regimes are another geopolitical factor in oil markets.  New regimes may attempt to change the terms of existing profit sharing agreements or even nationalize oil producing assets contracted to foreign oil companies.

5.  What is the "ideal" price of oil that's high enough to allow producers to cover costs and have a profit, but is low enough for the transportation industry other consumers to not suffer?
The price of oil is set on the global market based on worldwide supply and demand.  The ideal price is difficult to determine because exploration and production costs vary widely by location, production source (ie onshore vs onshore), technology, regulations and other factors.

6.  What do you think will be the final outcome of this down cycle?  Winners? Losers?
In general, the winners in today’s down cycle are the major consumers of oil and gas.  Winners include major oil and gas consuming industries including chemical, refining, transportation and electric generation.

Winning countries are net oil importers including Japan, India and non producing European countries.

Losers are those entities that are major producers of oil and gas.  Analysts estimate that 70 small U.S. producers went bankrupt in 2015.  Many more are likely to go bankrupt these years.  Losing countries include those for whom oil and gas make up large a share of government revenues such as Nigeria, Venezuela and Russia. 

Interview with Jody Hoff, Federal Reserve Bank: Innovators in E-Learning Series

With all the recent efforts by the U.S. federal government to respond to the ongoing economic challenges, the demand for understanding the role of the Federal Reserve Bank has grown dramatically. In response, the Federal Reserve Bank of San Francisco (FRBSB) has developed an informative and innovative way to help learners of all levels gain an understanding of the banking crisis of 2008, in addition to ongoing current challenges.

The materials that the FRBSF has developed are appropriate for online and hybrid courses, and would fit in well in portfolios developed for many different subjects, ranging from economics to marketing.

Welcome to an interview with Jody Hoff, Senior Manager at the Federal Reserve Bank of San Francisco.

1. What is your name, your organization, and your relation to elearning?

a. Jody Hoff, Senior Manager

b. Federal Reserve Bank of San Francisco

c. I direct our education efforts for the 12th District which includes nine western states. An important component of our educational strategy leverages elearning approaches to reach our key audiences, including students and educators.

2. What is the Federal Reserve Bank San Francisco (FRBSF) doing in the area of elearning?

a. In the Education group, we are in the process of shifting our strategy to provide content to students and teachers in an electronic format. Examples are the Crisis and Response and What is the Fed? web resources. In addition, we are rolling out a new project called DataPost that will provide a weekly chart/visualization of the economy with a brief explanation of the story behind the data, discussion questions for the classroom, and the actual data set so that students can experiment with their own visualization or chart.

3. What is the mission of the FRBSF's educational outreach? Why? What do you hope to see in the future?

a. Our education mission is to provide meaningful learning opportunities about the Federal Reserve, economics, and the economy.

b. As an institution, the Federal Reserve is charged with implementing monetary policy to promote a healthy economy, job growth, and stable prices. We are committed to providing a variety of opportunities for people to learn about the Federal Reserve and its role in the U. S. economy.

c. The explosive growth in access to technology and information is erasing the traditional split between teachers and students. I recently witnessed two teenagers utilize a YouTube video to complete their algebra homework. They were having trouble remembering the classroom lecture from earlier in the day and rather than dig through the textbook, they pulled up a video on the exact topic, watched it for about 90 seconds and then completed the problem. We view our online resources, like the Crisis & Response site, as offering a self- serve, if you will, source of information and analysis. Our strategy is to support learning in a way that gives the user some control about how to process the information. OurWhat is the Fed? resource follows this model with text, conceptual images, discussion questions, and a monetary policy game called The Fed Chairman Game.

4. You've used a combination of video, animated graphics, and an interesting schema-building instructional strategy that allows learners to move to ever increasing levels of detail and depth. Could you describe how that happens in your site, and why you took that approach?

a. The sites are organized around essential questions and bullet point answers. We wanted to provide a way for the reader to get their arms around the big picture before diving into the specifics of the content. We also wanted to provide a variety of tools for the reader to develop their own meaning about the narrative. We used compelling data and graphs to support the bullet point answers and also created a number of conceptual images to help readers understand unfamiliar terms such as ‘macro-prudential supervision’.

b. Our approach was to frame the issues around essential questions that would tell the story of the economy without completely overwhelming the reader. We wanted to experiment with an approach that didn’t just drop you in the deep end of the pool and hope you could swim. Rather, we wanted to provide an entry point to the story that you could follow to increasing levels of complexity.

5. Cause and effect plays a big role in the fundamental narrative and logic structure of your site and the approach you take. It seems extremely effective and appropriate given the economic crisis and the need to untangle the basic "why's" and "how's" of what occurred. Could you discuss how you settled on which major issues to address?

a. Because of the challenge of synthesizing the complexity of the crisis into a concise, essential question format, our most senior economists wrote the narrative. And, we spent a great deal of time thinking through the story of the crisis and how best to contextualize the issues.

6. What are your plans for the future? Do you have any plans to encourage banks to put in links in their online banking portals? If so, how do you see your role in relation to local banks and also users of banking services?

a. That’s an interesting question. A direction we are exploring for the future is the use of short, immersive video “talks” to quickly and directly pull the viewer into a look at the economy from the perspective of a research economist. Our goal is to share new understanding and insight about economic processes. These efforts are focused primarily on educators, students, and the general public.

7. Please discuss an aspect or two of your philosophy of elearning.

a. My philosophy of learning is based on the constructionist perspective that places the learner at the center of the action. We design content with a specific context and provide tools that support the learner’s efforts to understand and create meaning. Taking that perspective to the elearning environment, we’ve incorporated many of the instructional design principles outlined in Richard Mayer’s Cognitive Theory of Multimedia Learning. The Crisis and Response site is really all about trying to reduce the cognitive load for the non-expert members of the public, including teachers and students, who want to understand more about the complexity of the financial crisis. Our What is the Fed? resource and upcoming new DataPost project also incorporate these design principles.