Unit 1 → Subtopic 1.2
Investigating the Real Cost of a Product
Every product that reaches consumers has a hidden cost beyond its retail price. The journey from raw materials to final sale involves labor, transportation, environmental impact, and economic policies that shape pricing decisions. This project challenges students to investigate the true cost of a product, uncovering the economic factors that influence its market price while considering externalities that often go unnoticed.
Students will select a common consumer product, such as a smartphone, a pair of jeans, or a cup of coffee, and trace its production process. They will research how raw materials are sourced, where the product is manufactured, and how supply chain logistics impact the final price. Beyond direct production costs, they should explore hidden economic effects such as labor conditions in factories, environmental consequences of production, and government subsidies or tariffs that alter pricing. For example, a $5 coffee may seem inexpensive to a consumer, but its real cost includes wages for farmers, transportation emissions, and potential price manipulation by large corporations.
The goal of this project is to demonstrate how economic decisions affect pricing and resource allocation while discussing whether market prices reflect the true societal and environmental costs of production. Students will compile their findings into an engaging in-class presentation that explains the economic journey of their chosen product. They should use visuals, supply chain diagrams, or cost breakdowns to help illustrate their research.
During the presentation, students must also discuss potential solutions for making pricing more reflective of real costs, such as sustainable sourcing, fair trade certification, or consumer awareness campaigns. By analyzing these factors, students will deepen their understanding of how market forces, business decisions, and economic policies shape everyday purchases.
Recommended Procedure:
Choose a Product to Investigate – Select a widely used consumer product and research its supply chain, including raw material sourcing, labor, and production.
Analyze Direct and Indirect Costs – Break down the cost structure, considering material costs, wages, transportation, and corporate pricing strategies. Investigate any hidden costs, such as environmental damage or unethical labor practices.
Examine Government and Market Influences – Research whether subsidies, trade policies, or taxation impact the final price of the product. Consider how tariffs or supply chain disruptions influence pricing.
Create a Visual Breakdown – Develop supply chain diagrams, cost comparisons, or infographics that illustrate the real cost of the product. Ensure that the data is clear and supports the analysis.
Present and Discuss Economic Implications – Deliver the presentation in class, explaining the economic complexities behind the product's price. Engage the audience in a discussion about ethical production and potential reforms.
Suggested Sources:
Understanding Supply Chains:
Harvard Business Review: Global Supply Chain Economics – https://hbr.org
Investopedia: How Supply Chains Affect Prices – https://www.investopedia.com
2. Cost Breakdown and Market Influences:
World Economic Forum: The Hidden Costs of Consumer Goods – https://www.weforum.org
The Balance: What Determines the Price of Goods? – https://www.thebalancemoney.com
3. Labor and Environmental Impact:
Fair Trade Certified: Ethical Consumer Choices – https://www.fairtradecertified.org
The Guardian: Investigating Factory Labor Conditions – https://www.theguardian.com
4. Government Policies and Trade Regulations:
World Bank: The Role of Tariffs in Pricing – https://www.worldbank.org
IMF: How Trade Policies Influence Product Costs – https://www.imf.org
Grading Rubric:
Total Points: __ /20
