You can meet your economic wants by trading for goods and services. But remember, you probably have many things you want. So, you have to make choices about which goods and services you will trade for and which you will give up.
You make a choice to buy a good or service. Then someone has to sell you the product. But first, someone had to make the product. Making the product meant using a worker's time and skill. Maybe the worker needed a machine. The person might have worked in a building. Of course, the building sat on some land. Let's say that a seller believes that buyers like you want to buy the seller's product. Then the seller will hire the workers, buy the machines, build the building, and buy the land. But what if buyers do not want to buy the product? Then the seller can use the workers, machines, building, and land to make different things.
So, buyers are not the only ones who must make choices. Sellers make choices, too.
A simple example of a choice is having to pick between two things. Making a choice means that you pick one of the things. When you pick one thing, you give up the other thing. Let's say that your school lunch comes with either an apple or an orange. You can only have one piece of fruit. If you pick the orange, you give up the chance to pick the apple. You had the opportunity to pick the apple, but you did not make that choice.
Every good or service has a worth to the person who buys it. Getting that worth is the reason that you want to buy something. But here is the surprise! The thing that you do not pick also has a worth. At lunch, you picked the orange because of its worth. But the apple that you did not pick also has a worth. The opportunity cost of a choice is the worth of the thing given up. Both buyers and sellers think about opportunity cost when they make choices.
Buyers are people whose wants are satisfied by using goods and services. Buyers are also called consumers. Buyers compare the worth of each choice. To choose between an apple and an orange, you think about the worth of each. The worth for the orange is greater than the worth for the apple. What would you do? You would pick the orange. Its worth is more than its opportunity cost.
Sellers are people who make goods and provide services. Sellers are also called producers. Sellers compare the worth of each choice. The choices of buyers matter. Buyers really want oranges, but a store sells apples. Then the store loses the opportunity to sell oranges. The opportunity cost to keep selling apples goes up. Stores will start putting out fewer apples. All around the world, more workers and land will be used for oranges and less for apples.
____________________________________
Teacher's Notes
Teach
This lesson's goal is to get students to understand the implications of making consumption choices. Consumption affects production and the use of resources such as workers, machines, buildings, and land.
Emphasize the definitions of opportunity cost, consumers, and producers. Ask the students for examples to get a sense of student understanding of opportunity cost.
____________________________________
Be the first to comment on this blog. Just below the post there is a small link that says "0 comments." Click it to send me a comment. I would love to hear from elementary school teachers.
____________________________________
COPYRIGHT © 2008 by Robert D. Sandman
ALL RIGHTS RESERVED. Teachers and their students may use these elementary economics lesson plans as follows: Robert D. Sandman hereby grants you a nontransferable license to use the content in connection with your classes. The content is for your personal, noncommercial use only and may not be reproduced, or distributed, except that portions of the content may be provided to your students in connection with your instruction. You must include this notice on all copies that you provide to students. You may not sell, license, auction, or otherwise redistribute the content in any form. Your use of the content indicates your acceptance of these conditions. Thank you.
Tuesday, December 9, 2008
Saturday, October 18, 2008
Lesson 2:When You Decide What to Buy, Things Happen
Part 1: Focus
Maria Lopez chose the clock radio at the school fair. She did not choose the stuffed monkey. Paul Brown chose the cheeseburger. He did not choose the hot dog. Each person had good reasons for the choice that she or he made. The things that the friends chose—clock radio and cheeseburger—had values. But the things that Maria and Paul did not choose—stuffed monkey and hot dog—also had values.
Compare the values of the things chosen to the values of the things not chosen. What do you think?
Maria's parents also had a choice to make. They owned an empty lot of land and wanted to do something with it. One choice was to build a house on the land. Another choice was to build a store. The county might be interested in building a community swimming pool. Or a farmer might want to plant soybeans on the land.
The land can be used for only one of the ideas at a time. Maria's parents need to decide what to do with their empty lot. What would you tell them to think about?
________________________________________
Teacher's Notes
This is the second of four lessons covering National Council of Economic Education Voluntary Standard 1 for Teaching Economics. Standard 1 is as follows:
Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others.
At the completion of this lesson, students will know the following benchmarks:
1. People's choices about what goods and services to buy and consume determine how resources will be used.
2. Whenever a choice is made, something is given up.
3. The opportunity cost of a choice is the value of the best alternative given up.
4. People whose wants are satisfied by using goods and services are called consumers.
Focus
Use the story about Maria Lopez and Paul Brown to encourage student interest in the lesson. The basic economic behavior is making choices. In its simplest form, a choice is a decision between two options. A student facing such a choice will pick one option and sacrifice the other. Get students thinking about why they would pick one option over another. What are the relative values?
____________________________________
Be the first to comment on this blog. Just below the post there is a small link that says "0 comments." Click it to send me a comment. I would love to hear from elementary school teachers.
____________________________________
COPYRIGHT © 2008 by Robert D. Sandman
ALL RIGHTS RESERVED. Teachers and their students may use these elementary economics lesson plans as follows: Robert D. Sandman hereby grants you a nontransferable license to use the content in connection with your classes. The content is for your personal, noncommercial use only and may not be reproduced, or distributed, except that portions of the content may be provided to your students in connection with your instruction. You must include this notice on all copies that you provide to students. You may not sell, license, auction, or otherwise redistribute the content in any form. Your use of the content indicates your acceptance of these conditions. Thank you.
Maria Lopez chose the clock radio at the school fair. She did not choose the stuffed monkey. Paul Brown chose the cheeseburger. He did not choose the hot dog. Each person had good reasons for the choice that she or he made. The things that the friends chose—clock radio and cheeseburger—had values. But the things that Maria and Paul did not choose—stuffed monkey and hot dog—also had values.
Compare the values of the things chosen to the values of the things not chosen. What do you think?
Maria's parents also had a choice to make. They owned an empty lot of land and wanted to do something with it. One choice was to build a house on the land. Another choice was to build a store. The county might be interested in building a community swimming pool. Or a farmer might want to plant soybeans on the land.
The land can be used for only one of the ideas at a time. Maria's parents need to decide what to do with their empty lot. What would you tell them to think about?
________________________________________
Teacher's Notes
This is the second of four lessons covering National Council of Economic Education Voluntary Standard 1 for Teaching Economics. Standard 1 is as follows:
Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others.
At the completion of this lesson, students will know the following benchmarks:
1. People's choices about what goods and services to buy and consume determine how resources will be used.
2. Whenever a choice is made, something is given up.
3. The opportunity cost of a choice is the value of the best alternative given up.
4. People whose wants are satisfied by using goods and services are called consumers.
Focus
Use the story about Maria Lopez and Paul Brown to encourage student interest in the lesson. The basic economic behavior is making choices. In its simplest form, a choice is a decision between two options. A student facing such a choice will pick one option and sacrifice the other. Get students thinking about why they would pick one option over another. What are the relative values?
____________________________________
Be the first to comment on this blog. Just below the post there is a small link that says "0 comments." Click it to send me a comment. I would love to hear from elementary school teachers.
____________________________________
COPYRIGHT © 2008 by Robert D. Sandman
ALL RIGHTS RESERVED. Teachers and their students may use these elementary economics lesson plans as follows: Robert D. Sandman hereby grants you a nontransferable license to use the content in connection with your classes. The content is for your personal, noncommercial use only and may not be reproduced, or distributed, except that portions of the content may be provided to your students in connection with your instruction. You must include this notice on all copies that you provide to students. You may not sell, license, auction, or otherwise redistribute the content in any form. Your use of the content indicates your acceptance of these conditions. Thank you.
Subscribe to:
Posts (Atom)
