We often tell our students that prices are important because they send messages. They don’t just send messages to consumers about what to buy and how to prioritize their wants. They also send messages to producers. They provide answers for the basic economic questions "What to produce?", "How to produce?", and "For whom to produce?"
The message can become clearer in articles like this one from The Houston Chronicle (HT to Izzit - you can find a lesson plan to accompany the article at the site under April 21, 2010).
The article talks about high technology designed to find deep oil. The cost of this technology and the recovery of the oil are only economically feasible because of higher prices. And the prices are a product, not only of the higher costs of recovery, but of the increasing demand. (Remember price is a scissors.)
Take a look at the article. I'd be interested in your thoughts.