Economics Is Everywhere 1

Course Name:  Economics, Social Studies

Unit Title:          Getting Started with Economics: Economics Is Everywhere!

Lesson Title:    Lesson 1: PEOPLE CHOOSE

Grade Levels:    4-8

Duration:            50 minute sessions for each lesson

Standards:         All three lessons incorporate Voluntary National Content Standards in Economics (listed at the end of all three lessons) and Michigan Content Standards and Benchmarks for Economics (listed after each lesson). 

Social Studies, Economics Key Words and Concepts:  barter, benefits, capital resources, choice, consumer, corporation, cost, distribution, economics, economic wants, entrepreneur, exports, goods, human resources, imports, incentives, individual ownership, interdependence, interest, investing, market economy, market, money, natural resources, opportunity cost, partnership, price, productive resources, productivity, producer, profit, savings, scarcity, services, specialization, supply and demand, surplus, taxes, trade, trade-off.

Purpose: 

These introductory economics lessons will introduce students to the “economic way of thinking” by examining the first three of the Six Core Economic Principles, otherwise known as The Handy Dandy Guide, or HDG, in three sessions of approximately 50 minutes each. 

One Economic Principle and a round of EconAround Bingo will be featured in each session.  The Core Economic Principles will be directly related to 40 essential economic vocabulary words and concepts.   The learner will be introduced to the principles with examples from everyday life and learn how to use the appropriate economic vocabulary to explain these economic principles at work in their world.

Objectives: 

The learner will:

• Define and explain the Six Core Economic Principles
• Analyze everyday life and current events to explain how economic principles can be applied
• Define basic economic vocabulary terms and concepts and apply them correctly in explaining economic principles

Materials:

• Overhead transparency of the Six Core Economic Principles
• Overhead transparency of EconAround  Bingo Vocabulary List
• Teacher copy only of EconAround Bingo Game Sequence sheet
• EconAround Bingo Game Sheet, one copy for each student.  Student should write name on game sheet.
• EconAround Bingo Vocabulary List, one for each student. Also make one overhead transparency. Student should write their name on their paper copy..
• The Six Core Economic Principles mini-poster, one for each student. Make one overhead transparency.  Student should write name on mini-poster.
• EconAround Bingo game cards (40, unless you have modified the deck to smaller number)
• Tokens for Bingo (plastic chips, beans, play money,etc) 

Teacher Prep:  Divide tokens so each student has 10

• Highlighters, one per student or share
• Pencil
• 5 “desirable items”, such as candy bar, granola bar, juice, pocket calculator, marker or highlighter, colorful pencils, pens, folder, stickers, etc.)

Day One:  Principle 1, People Choose and Round 1 of EconAround Bingo

Note to teacher:  EconAround Bingo can be played without the Bingo portion as a basic “zip around” the room Economics vocabulary word game.  Similarly, the Bingo portion can stand alone as a game to reinforce Economics vocabulary.  This lesson assumes that both portions will be played simultaneously.

Instructional Procedures:

Anticipatory Set:

• Show the overhead transparency of The Six Core Economic Principles to the class.  Highlight or write the word principle on the overhead or on the board.  (It may be appropriate to distinguish principle with principal at this point if any students are confused.)  Explain to the class that a principle describes something that seems to work a certain way with great accuracy.  A principle helps explain why something works the way it does.  A principle, if it is well founded, can help explain the economic behavior of individuals and groups of people.  Some economists think there are more than six principles of  Economics, but tell students we are going to learn about six very important principles that many economists agree on and try to see if they help to explain the world around us with any greater clarity. 

• Using the overhead transparency of the Six Core Economic Principles, read aloud the titles of all six principles, and point out and explain the graphics accompanying each principle on the left side of the transparency.  A lot of discussion or detail about the principles is not necessary at this point.

• Ask the students, if at first glance, any of these economic principles sound like they might have some truth to them.  Ask volunteers to respond how or why a particular principle makes sense to them or doesn’t.  Tell the class that you will be looking more closely at each of the principles in the coming days to see if they “hold water”.  Tell students that while they will be learning about “the economic way of thinking” in more detail, they will be playing each day an interactive game called EconAround Bingo and that there will be prizes awarded for successful Bingo players.

• Introduce Principle 1:  People Choose   Using the overhead transparency of  The Six Core Economic Principles, read aloud the title and subtext of Principle 1, People Choose.  Ask students to tell you what the “Door 1, Door 2, Door 3” graphic means to them.  (Students may speak of having to pick a door, not being able to pick all three doors, the difficulty of choosing etc.)  Distribute a copy of The Six Core Economic Principles mini poster and a copy of the EconAround Bingo Vocabulary List to each student.

• Before you explain Principle 1, inform students that you will be calling attention to some important economics vocabulary words and concepts in the following discussion.  Ask students to write the number “1” (representing Principle 1) immediately to the left of these words on their EconAround Bingo Vocabulary Lists.  

• Explain Principle 1, People Choose, by telling  students that we always want more than we can get, our economic wants are unlimited.  (Pause to give time for them to write a number 1 next to economic wants on their lists)  People never seem to be satisfied, we always seem to want more.  We would like to have what is behind all three doors, but life is not usually like this.  The productive resources we use to produce goods and services are limited, however.  (Pause again to mark a “1” next to these three words on their Vocabulary Lists)

• Explain that there are only so many productive resources, (human resources, capital resources,  natural resources) available to produce the unlimited number of goods and services we all want.  Therefore these productive resources are limited or finite in number and there are three basic kinds: human resources (knowledge, skills, and work attitudes),  capital resources (tools, factories, buildings, equipment, computers,etc) and natural resources (air, water, land, oil, minerals).  Ask students what kind of a resource is a pencil?  (capital, like a tool),  paper clip?  (capital), soil? (natural) , themselves? (human) Ask students what productive resources were used to make the pencil?  (human, natural and capital resources).  Repeat as needed with other goods such a a book, chair, concrete block, floor tile, etc.

•  Introduce the concept of scarcity.  Explain to students that scarcity occurs when the unlimited economic wants of people meet up with the fact that there are only so many productive resources available to people (they are limited).  We just can’t have everything we want, so therefore we are forced to make choices.  A simple rule will tell you if scarcity is present:  To be scarce, something must be limited and desirable. More than one person must want it. Scarce goods have prices. Some goods and services are more scarce than others and people are willing to pay a higher price for them.  So, goods and services differ in their relative degree of scarcity as well. Scarcity is a relative, not an absolute concept.  Almost everything is scarce.  If you pay a positive price for a good or a service, it is scarce.

Teaching example for relative scarcity of a good: Hold up a pencil for the students to consider. Ask how many people want the pencil.  Explain that if more than one person wants it, it is scarce.  Hold up a more popular item, like a candy bar, and see if more people want it.  If so, the candy bar is more scarce relative to the pencil and hence could command a higher price if there was a market and people could bid on the price.  

• Prices are a reflection of just how scarce one good or service is compared to another, so a higher price means more people want it and will assign a higher exchange value to it. This is the law of supply and demand, Now tell students that the candy bar is made with broccoli and spinach and chocolate.  Poll how many students now want it.  If very few now want the candy bar, it is now less scarce than the pencil and the pencil could command a higher relative price.

• Benefits and costs: Refer to Principle #1 on the overhead transparency to explain that making any choice in life, such as the choice of Door 1, Door 2, or Door 3 involves both costs and benefits for the individual. If you choose Door 1, your cost is not being able to choose your second favorite door. Your perceived benefit is to get whatever is behind Door 1, but we know in life sometimes you don’t always get what you want.  Your cost was not being able to pick Door 2 or Door 3. 

• Teaching example of costs and benefits:  Give an example such as deciding to come to school today to show how everyone in the room personally made a choice today that had benefits and costs.   Identify those possible benefits (paycheck, personal satisfaction, learning, socializing, not getting behind, etc.) and costs. (some other specific thing you would have done with your time, such as sleeping in, going shopping, a recreational activity, a trip, fixing your bike, etc)

• Ask students for examples where they have had to make a choice lately.  Ask them why they had to choose?  Ask them what benefits and costs they saw in the choice.  Ask them to identify the next best alternative they gave up.  ( If students tell you they don’t make any choices, their parents make them do certain things, etc. remind them that they still have a choice whether to go along with someone else’s choice for them) 

• Using the overhead transparency of the Vocabulary List, review with the class the words  related to  People Choose.  Students should have a “1” next to economic wants, choice, productive resources, human resources, natural resources, capital resources, scarcity, price, benefits, and cost.)

• Let’s Play EconAround Bingo!  Next instruct the class that you are ready to play a word game called EconAround Bingo that will teach them a basic economics vocabulary that they can connect to the Six Core Economic Principles and help them for a lifetime. Tell students they will have the opportunity to win prizes. Show them the prizes.

• Give each student a copy of the EconAround Bingo sheet. Distribute 10 Bingo tokens to each student.  Inform students that  EconAround Bingo involves all 40 of the vocabulary words on their list and that they will need to be good listeners while they listen for word definitions spoken by other students in class that match with the vocabulary word on their card or cards.  Tell them not to worry because you will soon practice so they know what to do.
• Now ask students to create their own “lucky” EconAround Bingo sheet by choosing 24 different words from the Vocabulary List to write into the 24 open boxes on the blank EconAround Bingo sheet.  Remind students that each word chosen may only be used once on the sheet.  Tell students they will be able to trade Bingo sheets after the first round of Bingo if they wish.  Give them a few minutes to complete their “lucky” Bingo sheets.
• For the first time through the game, remove the card from the game deck which says at the top “I have incentives” and keep this card  to start the game in a few moments.  Shuffle the remaining EconAround Bingo game cards very thoroughly and pass out all of the multi-colored game cards, giving some students more than one if necessary.  Give more than one card to any student who suggests that they can keep track of two or more cards. (Note: If you have already modified the game deck of 40 cards to a smaller number of cards using the blank card(s) included, just be sure that you have passed out all the cards. You should also modify the Vocabulary List to match the cards you are using. See General Suggestions sheet enclosed with game under the bullet “Customize EconAround Bingo for more information. It will not matter which card starts the game because the game will end with that card as well.) 

• Ask students to find and read the definition from the Vocabulary List  for each “I have” word on their card(s).  Tell students to use highlighters to highlight these definitions on their Vocabulary List to help them remember the definition when they hear it later during the game and need to come up with the proper word for the definition.

• Important:  The teacher should have a copy of both the EconAround BingoVocabulary List and the EconAround BingoGame Sequence sheet in hand for reference as the game unfolds.  

• Begin EconAround Bingo by asking the question to the class at the bottom of the “I have incentives” card.  Ask: ”Who has things people like or desire that can be satisfied by consuming a good, service, or leisure activity?”  Someone in the room has the correct “I have economic wants” card for this definition and should say in a loud voice, “I have economic wants!”  If, for some reason, no one speaks up with the correct “I have…”  response here, the teacher can give clues or prompts to try to help elicit the proper response using the definition from the Vocabulary List or other hints from real life. The teacher should repeat the “Who has…?” prompt a second time if there is not a ready response so all can hear it again and think about what they have on their card(s) in front of them.  Liberal praise should be awarded the first responder at this point.  Tell students they will need to be able to do two jobs at the same time:  to be ready with the proper word when they hear the definition and to keep track of their Bingo sheet if they expect to win.  Once you have received the proper response here, instruct all students who have “Economic wants” on their Bingo sheet to cover it with a token.  The game is on! 

• Now ask the same student who responded correctly with “I have…” to read the “Who has…?” portion at the bottom of their same card in a loud voice for all to hear.  Remind students of how important it is to go to the bottom of the same card and not to another one they may have.  (Otherwise, the game will get all confused!)  Wait for the proper responses and coach or give clues as needed until the proper response is given.  Remind students to place Bingo tokens on appropriate Bingo squares with each correct “I have response” throughout the game.

•  Continue playing the game until someone has Bingo!  Give appropriate prizes immediately to the winner(s).  After the first one or two Bingo winners from this Bingo sheet, instruct students to clear their Bingo sheets of tokens and trade Bingo sheets with someone else if they wish, since play will continue with a clean Bingo sheet. Remind students that Economic Principle #5 says that Voluntary Trade Creates Wealth.  Both parties expect to be better off by trading Bingo sheets or else they wouldn’t trade in the first place. Continue play on the clean Bingo sheets.  (This adds more excitement and randomness for winning the Bingo portion of the game!)  It is usually possible to sweep all tokens and start over on Bingo 3-4 times during the course of a round of the EconAround vocabulary game. It is helpful if the teacher gives a real-life example of a word or concept that is troublesome for students in the class anytime there is a teachable moment.

• In this first round, the teacher is holding the last card of the game, “I have incentives”.  You can end the game right here or continue the game until the next Bingo is called, or go even further if you wish.  (Be sure to note the time elapsed to play this first round for later use.)  Liberally praise all students for working together and using good listening skills. Tell students that the next time they play the game, you will be discussing Principle #2, All Choices Involve Costs. Suggest that it will be interesting to see how much time can be shaved off in Round 2 of EconAround Bingo.

• Important: Collect all EconAround Bingo game cards, making sure you have all that were handed out!  Also collect and store EconAround Bingo game sheets, and all Bingo tokens.  Students should also keep (or collect and store) their own  EconAround  Bingo Vocabulary Lists and Six Core Economic Principles mini-poster handouts for the next lesson.  Make sure they have labeled each with their name and that these can be retrieved easily for Lesson 2.

• Debrief this experience with students as you refer to an overhead transparency of The Six Core Economic Principles:  Cover the subtext of Principle #1 but reveal the graphic of the three doors.
• Ask students to generate a list of economics vocabulary words that relate to Principle #1, People Choose. Ask volunteers to explain why or how their word relates. Write brainstormed list on the board and keep going until you get most or all of the above words.  (Answers can include any word already discussed along with reasonable explanation of how it relates. Even new words not already discussed are acceptable if they are connected logically to scarcity in some way. Examples from everyday life should be encouraged)

• Ask students to explain how you would know if one item is more scarce than another and to give an example.  (If more people want one item than the other, it is relatively more scarce than the other.  It has nothing to do with how many actual goods are available, only how many want it)

Assessment:

1. Discuss a choice you have made recently in a paragraph. Discuss your economic wants and identify which productive resources were scarce in this situation. 
2. Discuss the same choice as above, or another choice you have made recently, and identify some benefits and costs involved in your economic decision.
3. Explain  Principle #1, People Choose in your own words. Write a complete paragraph correctly using at least 3 economics vocabulary words that are associated with the principle in your explanation.
4. Draw a sketch, graphic, or cartoon of Principle #1 that captures the idea of People Choose.   Explain why your picture is a scarcity situation.

Michigan Social Studies Content Standards/Benchmarks Addressed in Lesson 1:

 Econ Is Everywhere 2