VCEE Scope & Sequence Unit 1 : simplebooklet.com

UNIT 1 - ABOUT DECISIONS (10 Days)All teaching resources in this document are free for teachers. Here is how to you access them:1. Many are hyperlinked in the document, so you can get started right away. 2. Lessons that do not have a hyperlink can be found on the lesson plan resource calledVirtual Economics 4.5 or 5.0 (VE). All teachers can and should get this resource for freeby participating in a VCEE training session. Visit www.vcee.org for more information.3. Lessons from Financial Fitness for Life are on VE. They also have educationaltechnology tools that can be found here:https://www.econedlink.org/resources/collection/fffl-9-12/Students face many choices every day. Is playing video games the best use of their time? Isworking at a fast-food restaurant better than the best alternative job or some other use of theirtime? Identifying and systematically comparing alternatives enables people to make moreinformed decisions and to recognize often overlooked relevant consequences of choices they orothers make. Some students believe that they can have all the goods and services they want fromtheir family or from the government because goods provided by family or by governments arefree. But this view is mistaken. Resources have alternative uses, even if parents or governmentsown them. For example, if a city uses land to build a football stadium, the best alternative use ofthat land must be given up. If additional funds are budgeted for police patrols, less money isavailable to hire more teachers. Explicitly comparing the value of alternative opportunities thatare sacrificed in any choice enables citizens and their political representatives to weigh thealternatives in order to make better economic decisions. This analysis also makes people awareof the consequences of their actions for themselves and others, and could lead to a heightenedsense of responsibility and accountability.2EPF.1 The student will demonstrate knowledge of basic economic concepts and structuresbya) describing how consumers, businesses and government face scarcity of resources, maketrade-offs and incur opportunity costsDay 1 What is scarcity and why does it exist?Day 2 What’s the trade-off? What’s my opportunity cost?Day 3 Decision makingEPF.1 The student will demonstrate knowledge of basic economic concepts and structuresbyc) describing how effective decision-making requires comparing the additional costs (marginalcosts) and additional benefits (marginal benefits)Day 1 What’s in it for me? What is this going to cost me?Day 2 Applying marginal thinking in the real worldEPF.1 The student will demonstrate knowledge of basic economic concepts and structuresbyb) explaining that choices often have long-term unintended consequences1Virginia Council on Economic Education

Page 3

Page 4

Day 1 - What is scarcity and why does it exist?Content KnowledgeEPF.1 The student will demonstrate knowledge of basic economic concepts andstructures bya) describing how consumers, businesses and government face scarcity of resources, maketrade-offs and incur opportunity costsScarcity is the central economic problem—unlimited wants vs limited resources. The goods andservices we want exceed our ability to produce them. Everyone faces scarcity. Because ofscarcity, consumers, businesses, and government decision-makers are forced to make choices.VocabularyChoice – The condition that arises from unlimited wants and limited resources;Decision – A conclusion reached after considering alternatives and their results.Resources – Things that we have that are in limited supply and which may include personalresources (financial, skill, time) or productive resources (capital resources, human resources,natural resources and entrepreneurship).Scarcity - The condition of not being able to have all the goods and services one wants. It existsbecause human wants for goods and services exceed the quantity of goods and services that canbe produced from all available resources.Wants – Desires that can be satisfied by consuming or using a good or service. Economists donot differentiate between wants and needs.Virginia Board of Education FrameworkScarcity is the condition of not being able to have all the goods and services one wants. It existsbecause human wants for goods and services exceed the quantity of goods and services that canbe produced from all available resources.The opportunity cost of a choice is the value of the best alternative given up.Consumers face scarcity and must make choices and incur opportunity costs. For example, aconsumer with two hours of free time cannot go ice skating for two hours and see a movie.Whatever choice is made, the alternative given up is the opportunity cost.Businesses face scarcity and must make choices and incur opportunity costs. Suppose a groceryis deciding whether to add a café or a pharmacy. It only has space for one. It makes a choice; theone not selected is the opportunity cost.3Virginia Council on Economic Education

Page 5

Governments face scarcity and must make choices and incur opportunity costs. For example,money spent on roads cannot be spent on education—or whatever would be the next bestalternative.A tradeoff is not an all-or-nothing decision. For example, government could choose to trade offsome money for roads to spend more on education.1Teaching Tips1) Before class, set up a scarcity situation---e.g. remove a few chairs so there are not enough forall. Ask students to define the problem. (Not enough chairs.) Explain it is a situation ofscarcity—not enough of something for everyone who wants one. How did they allocate thescarce resource? (First-come-ﬁrst-served.) What are some other possibilities? (Fight over chairs,take turns, share, pay to use the chairs, lottery, girls sit, boys sit.)2) Introduce the idea of time being scarce. Discuss many options for time after school. (Work,sports, theater, musical instrument practice, homework, hangout, read, video games.) Can you doall of the things in one afternoon? (No, you have to choose.) Put students in groups. Tell them tomake two columns on a sheet of paper. In column one, write a situation where they had to makea choice. In column two, write what was scarce. (Keep these sheets for the next class period.)3) What about businesses? Have students list businesses and decide what scarcity they face. Forexample, what is scarce for a grocery? (Floor space, shelf space, number of employees workingat one time.) What choices do they have to make? (How much space to give organic food,magazines, soft drinks, produce; whether to have employees on cash registers or carrying outgroceries; which cereals to carry—there are too many for a grocery to carry all). If the studentswork, perhaps they can give examples of other choices businesses make. (Keep these sheets forthe next class period.)4) What about government? Have students list choices the local, state or federal governmentmust make and what is scarce. For example: FEMA may have several disasters occurring at thesame time. What might be scarce? (Workers, supplies, equipment.) What about schools? Whatmight be scarce? (Keep these sheets for the next class period.)5) Discuss. Do even wealthy people experience scarcity? (Yes. They can’t do everything theywant. They must make choices.) Everyone faces scarcity everyday. Economics is about usingyour scarce resources to get or do the things that are most important to you.Lessons and ResourcesChoices & Changes: In Life, School, and Work - Grades 9-10 Lesson 1: Making ChoicesFinancial Fitness for Life: 9-12 Lesson 2: The Economic Way of Thinking4Virginia Council on Economic Education

Page 6

Capstone Lesson 2: Scarcity and AbundanceEconomics In Action Lesson 2: Economic Decision MakingVideoScarcity and Choice (4:35)http://www.youtube.com/watch?v=yoVc_S_gd_0What is economics about? (1:32)https://www.youtube.com/watch?v=nWPrMmv1TisIntro to Economics: Crash Course (12:09)https://www.youtube.com/watch?v=3ez10ADR_gM&t=5sRobert Frost reading poem “The Less Travelled” (1:04)http://www.youtube.com/watch?v=ie2Mspukx14MusicI Want It All by Queen (unlimited wants)In the End by Linkin Park (scarcity)You Can’t Always Get What You Want by The Rolling Stones (scarcity)Day 2 - What's the trade-off? What's my opportunity cost?Content KnowledgeTo evaluate the opportunity cost associated with making a choice, identify what would have beengained if the best alternative use of the resources, including time, had been undertaken. When astudent chooses to attend a theatrical event, the student not only gives up the use of the moneyspent to purchase the admission ticket but the student also gives up the time spent at the play. Ifthat time would have been spent babysitting, the opportunity cost is the price of the ticket and themoney not earned in babysitting. The alternative use for resources also depends on the context inwhich the choice is being made. For example, a choice to attend school may have an opportunitycost of the wages that would be earned if a student entered the workforce instead. But, in aperiod of high unemployment (when students may have little else to do), the choice to attendschool may have an opportunity cost of spending time with friends.2VocabularyOpportunity cost – The second-best alternative (or the value of that alternative) that must begiven up when making a choice.Trade-oﬀs – The giving up of one benefit or advantage in order to gain another regarded as morefavorable.Virginia Board of Education Framework5Virginia Council on Economic Education

Page 7

All choices have opportunity costs. Choices involve trading off the expected value of oneopportunity against the expected value of its best alternative.The opportunity cost of a choice is the value of the best alternative given up.Consumers face scarcity and must make choices and incur opportunity costs. For example, aconsumer with two hours of free time cannot go ice skating for two hours and see a movie.Whatever choice is made, the alternative given up is the opportunity cost.Businesses face scarcity and must make choices and incur opportunity costs. Suppose a groceryis deciding whether to add a café or a pharmacy. It only has space for one. It makes a choice; theone not selected is the opportunity cost.Governments face scarcity and must make choices and incur opportunity costs. For example,money spent on roads cannot be spent on education—or whatever would be the next bestalternative.A tradeoff is not an all-or-nothing decision. For example, government could choose to trade offsome money for roads to spend more on education.Teaching Tips1) Explain that all choices have costs. When you choose something, the real cost is what youhave to give up to get it. That is called the opportunity cost.Example: Suppose someone has two hours available. Let’s say he is choosing betweenparticipating in a two hour bike race, going to a movie or spending the two hours studying for anexam. If he picks the movie, and studying is his second choice, studying is the opportunity cost.Studying is the “real” cost because it’s what he gave up to go to the movies. (Students often thinktheir opportunity cost is all of the choices they might have had. In this scenario, in the two hourperiod it wasn’t a choice between going to the movie OR participating in a two hour bike raceAND studying for two hours. His opportunity cost was the option he would have chosen—hisnext best choice—if he hadn’t chosen to go to the movie.)2) Tell students to look at the list of choices they made in the last class period. In each case theydecided what was scarce. Now, tell students to look at each choice and determine the opportunitycost. What was given up in each case?3) Remind students that businesses experience opportunity costs as well. Suppose BurgerWhoopee can only afford to add one more restaurant in a community. If they build it in onelocation, the opportunity cost is their second choice location. If they can only afford to hire onemore worker, their opportunity cost is the next best applicant.4) Governments experience opportunity costs. $1 million spent on tanks cannot be spent onmedical research. $1 million allocated to cancer research cannot also be spent on Alzheimer’s6Virginia Council on Economic Education

Page 8

research, or research on diabetes. Land used for a public baseball park cannot also be used for alibrary or school5) Optional end of class activity:Prepare a variety of items such as pencils and/or pieces of candy—enough for each student tohave one. Have one volunteer choose two things she would like to have. Tell her that she canonly have one. Have her choose. Tell her to tell you which is her choice and which is heropportunity cost. She will keep her choice—the cost will be the thing she gave up.Then have all students make the same choice.Lessons and ResourcesFocus High School Economics Lesson 1: Choice, Opportunity Costs, and DecisionsOnlinePaul Solman on Opportunity Cost and costs and benefits (4:49)https://vimeo.com/199326365Reading: Getting the Most Out of Life: The Concept of Opportunity Costhttp://www.econlib.org/library/Columns/y2007/Robertsopportunitycost.htmlVideoSaving Private Ryan – DVD – Chapter 9Captain Miller discusses the cost of saving Ryan in terms of lives lost.Cartoonshttp://www.gocomics.com/bc/2010/12/08 (trade-offs)http://www.gocomics.com/frankandernest/2010/12/08 (opportunity cost, trade-offs)http://www.gocomics.com/calvinandhobbes/2010/09/06/ (opportunity cost)MusicDid You Ever Have to Make Up Your Mind? by the Lovin’ Spoonful (opportunity cost,trade-offs)The Road Not Taken by Bruce Hornsby and the Range (opportunity cost, trade-offs)Big Yellow Taxi by Counting Crows, et al. (trade-offs)PoemThe Road not Taken by Robert Frosthttp://www.youtube.com/watch?v=ie2Mspukx147Virginia Council on Economic Education

Page 9

Day 3 - Decision makingContent KnowledgePeople make decisions many times daily. Both individuals and groups make decisions.Sometimes the outcomes are good—and sometimes not so good. There are tools that can helpclarify choices and alternatives and improve decision making. The PACED decision model is atool that can be used in a variety of situations. While it doesn’t guarantee a good outcome, it doesa good job of clarifying one's alternatives and criteria.VocabularyPACED decision-making process – A decision-making process designed to help people solveproblems in a rational, systematic way. It includes the following steps: State the Problem, ListAlternatives, Identify Criteria, Evaluate Alternatives, and Make a Decision.Virginia Board of Education FrameworkScarcity is the condition of not being able to have all the goods and services one wants. It existsbecause human wants for goods and services exceed the quantity of goods and services that canbe produced from all available resources.The opportunity cost of a choice is the value of the best alternative given up.Consumers face scarcity and must make choices and incur opportunity costs. For example, aconsumer with two hours of free time cannot go ice skating for two hours and see a movie.Whatever choice is made, the alternative given up is the opportunity cost.Businesses face scarcity and must make choices and incur opportunity costs. Suppose a groceryis deciding whether to add a café or a pharmacy. It only has space for one. It makes a choice; theone not selected is the opportunity cost.Governments face scarcity and must make choices and incur opportunity costs. For example,money spent on roads cannot be spent on education—or whatever would be the next bestalternative.A tradeoff is not an all-or-nothing decision. For example, government could choose to trade offsome money for roads to spend more on education.Teaching Tips1) Explain that there are tools to help make decisions. Demonstrate using the PACED model onsomething of interest to them, perhaps buying a used car. A PACED decision grid is attached atthe end of this unit.Step 18Virginia Council on Economic Education

Page 10

Problem: The first step is to state the problem. What car should I buy?Step 2Alternatives: List some likely alternatives.Step 3Criteria: The next step is to establish criteria—what is most important to you. (These criterianeed to be stated in positive terms, i.e., stated as what you want.) For example: costs less than$4,000; gets at least 25 mpg; seats at least 4; has AC; no more than 6 years old; reliable—basedon Consumer Reports; looks good; good sound system.Step 4Evaluate: Assess each alternative by comparing it to each criterion. If an alternative meets acriterion, put a + in that box—if not put in a -. At the end look to see which alternative meetsyour most important criteria. (Some criteria will be more important than others. Those may begiven greater weight. And,, if an alternative costs more than $4000, it probably won’t matter ifthere is a + in all of the other boxes.Step 5Decide: Based on the insights gained, make a choice. Be sure to explain that it won’t always bethe one with the most “+’s”—since some criteria count more than others.Looking at the results, have the class vote on the best choice. The one with the most votes willbe the official “choice.” The runner up will be the opportunity cost (the one they gave up whenchoosing the first).2) This tool can be used for many decisions. Its strength lies in the ability of each student todetermine their own criteria for evaluation, as well as the easy recognition of a “second” choiceor opportunity cost. Have students work in groups to solve a problem using the PACED grid.For example:Someone is giving our class $500 to donate to a charity. Use the PACED model to decide whichcharity to give it to.3) Possible homework: assign students a problem to work on using the PACED model.Examples of “problems” might be: “Which car to buy?” “Which college to attend?” “Whatcareer path to pursue?” "Which cell phone to buy?"Lessons and ResourcesPersonal Decision Making: Focus on Economics Lesson 2: Applying a Decision Making ModelFinancial Fitness for Life 9-12 Lesson 3: Decision MakingCapstone Lesson 2: Economic Decision Making9Virginia Council on Economic Education

Page 11

Page 12

DAY 1 - “What’s in it for me? What is this going to cost me?”Content KnowledgeEPF.1 The student will demonstrate knowledge of basic economic concepts andstructures byc) describing how effective decision-making requires comparing the additional costs(marginal costs) and additional benefits (marginal benefits)Day 1 What’s in it for me? What is this going to cost me?Day 2 Applying marginal thinking in the real worldTo make decisions that provide the greatest possible return (output or return on investment) fromthe resources available, people and organizations must weigh the benefits and costs of using theirresources to do more of some things, and less of others. For example, to use their timeeffectively, students must weigh the additional benefits and costs of spending another hourstudying economics rather than listening to music or talking with friends. School officials mustdecide whether to use some of their funds to buy more books for the library, more helmets for thefootball team, or more equipment for teachers to use in their classrooms. Company managers anddirectors must choose which products to make and whether to increase or decrease the amountthey produce. The President, Congress, and other government officials must decide which publicspending programs to increase, and which to decrease. Focusing on changes in benefits andcomparing them to changes in costs is a way of thinking that distinguishes economics from mostsocial sciences. In applying this approach, students should realize that it is impossible to alterhow resources were used in the past. Instead, past decisions only establish the starting points forcurrent decisions about whether to increase, decrease, or leave unchanged resource levelsdevoted to different activities.VocabularyBeneﬁts – Monetary or non-monetary gain received because of an action taken or a decisionmadeCosts – What must be given up to obtain something. The effort, loss or sacrifice necessary toachieve or obtain something.Cost-beneﬁt analysis – A process of examining the benefits (positive results) and costs (what isgiven up – lost benefits) of each available alternative in arriving at a decision.11Virginia Council on Economic Education

Page 13

Diminishing marginal utility – A widely observed relationship in which the additionalsatisfaction (marginal utility) associated with consuming additional units of the same product ina given amount of time eventually declines.Marginal analysis – A decision-making tool for comparing the additional or marginal benefitsof a course of action to the additional or marginal costs.Marginal beneﬁt – The additional gain from consuming or producing one more unit of a goodor service; can be measured in dollars or satisfaction. The benefit gained by consuming one moreof something.Marginal cost – The increase in a producer's total cost when it increases its output by one unit.The cost incurred by consuming one more of something.Virginia Board of Education FrameworkMarginal benefits are the additional benefits of consuming one more of something. Marginalcosts are the additional costs (i.e., what one must give up) of getting one more. For example, themarginal benefit of buying one more pair of jeans might be the time saved by having to washjeans less frequently. The marginal cost of one more pair of jeans might be giving up buying anew shirt or pair of shoes.Teaching Tips1) When people decide how to use their personal or productive resources, they want to get themost satisfaction (benefits) possible. One way to do this is to ask the question “What are thecosts and benefits of this choice?” For example: It’s midnight. You’ve been studying for 4 hours.Should you study one more hour or go to sleep? Make two columns on the board, one titledBenefits and the other titled Costs. If you choose to study, what are the benefits? Write thatunder benefits. Under costs, write down what you gave up, the benefits of an extra hour of sleep.Have students work in groups. Each group should draw a line down the center of a page. Writebenefits at the top of one column and costs at the top of the other, remembering to include bothmonetary costs and opportunity costs. Title it at the top, "Deciding whether to go to college."Under benefits, write the benefits of going to college. Under costs, write the costs of going tocollege—what is given up (the things you might have bought with the money you spent ontuition, books, dormitory etc. and lost income from working at a job or, if not working, lost timehanging out.) Discuss. Turn the page over and title it, "Deciding whether to go directly to workafter high school," and do the costs and benefits of taking a job instead of going to college.2) Have students think about other current and historical examples of weighing costs andbenefits. Possible examples: At the time of the revolution, colonists weighed the costs andbenefits of becoming patriots or loyalists. More recently, in Libya, citizens weighed the costs andbenefits of being loyal to Khadafi or being loyal to the freedom fighters. In consumer choices,one might weigh the costs and benefits of buying a new car vs. a used car.3) Sometimes the choice is about whether you want more of something. Students should then beasked if more is always better? Newspaper boxes allow a person to put in money, open the door12Virginia Council on Economic Education

Page 14

and take a newspaper from the stack. Why don’t people take two or three newspapers? (Answer:The marginal utility (additional benefit) of an extra newspaper is pretty low.)4) Ask for a student who likes bubble gum. Bring that student to the front, ask him/her to chew apiece of gum and give a number on a scale of 1 – 5, measuring the satisfaction. Write thatnumber on the board. Then give the student another piece to chew and give a rating. Repeat untilthe number begins falling. This is called diminishing marginal utility (benefit). As we consumemore and more of something, such as newspapers or chewing gum, the amount ofexcitement/benefit we get with each additional unit goes down.Why does this matter? Assume you are buying a slice of pizza in a food court. The first slice islikely to produce satisfaction. As you eat more and more pizza, each slice is likely to producelower and lower extra satisfaction (marginal utility). Again, this is called diminishing marginalutility. The marginal cost of each slice is it’s price. The real cost is whatever else one might bedoing with that money. At some point the extra satisfaction (marginal utility) of one more slicewill fall to the point that you would rather do something else with your money…maybe buy acookie.5) Imagine you are buying a concert ticket. Tickets up front are $75 while those halfway backare $50. What is the marginal cost of having a front row seat? $25. You are giving up thebenefits of whatever else you could do with the extra $25. What is the marginal benefit? Beingable to see better, etc. For some, it would be worth the marginal cost, but not for others.Lessons and ResourcesCapstone Lesson 4: To Choose or Not to Choose – That is Not the QuestionEconomics In Action Lesson 6: The Economic Way of Thinking - Three Activities toDemonstrate Marginal AnalysisOnlinePaul Solman on marginal thinking: How long should I pick berries? (6:37)https://www.youtube.com/watch?v=y8gt_1beAmwVideoThe Chicken Roaster (benefits, costs, cost-benefit analysis) (8:16)http://www.yadayadayadaecon.com/clip/84/Nobody Can Eat 50 Eggs from Cool Hand Luke (diminishing utility, marginal analysis) (1:30)https://www.youtube.com/watch?v=Ct3CcR3c4oMA Civil Action (DVD) – (0:30 to 1:20 and 7:10 to 11:25 cost-benefit analysis)Music13Virginia Council on Economic Education

Page 15

Stuﬀ by Diamond Rio (cost-benefit analysis, diminishing marginal utility)Day 2 - Applying marginal thinking in the real worldContent KnowledgeFew choices are all-or-nothing decisions. Most choices involve doing a little more or less ofsomething.How can marginal benefit and marginal cost be used to improve decision-making?1VocabularyCost - what you give up when you decide to do something.Beneﬁt - what satisfies your wants.Marginal beneﬁt - the change in total benefit resulting from an action.Marginal cost - the change in total cost resulting from an action.Virginia Board of Education FrameworkMarginal benefits are the additional benefits of consuming one more of something. Marginalcosts are the additional costs (i.e., what one must give up) of getting one more. For example, themarginal benefit of buying one more pair of jeans might be the time saved by having to washjeans less frequently. The marginal cost of one more pair of jeans might be giving up buying anew shirt or pair of shoes.As long as the marginal benefit of an activity exceeds the marginal cost, people are better offdoing more of it; when the marginal cost exceeds the marginal benefit, they are better off doingless of it. For example, what is the marginal benefit of one more hour of exercise? Suppose themarginal cost is one more hour of study?Teaching Tips1) Explain that individuals, businesses and governments make choices about whether to choosemore of something they are already buying or whether the benefits would be higher if theystarted spending on something else. Thinking along those lines, have students solve thefollowing problem: Your grandmother gives you $50 for your birthday and you are trying todecide how to spend it. You are considering buying t-shirts ($15 each), going to the movies ($10per ticket), or taking some friends out for pizza ($7.50 per person). You do not have to spend allyour money on one thing. You can use some money for one thing, and some for another. Howwould you spend your money to get the greatest satisfaction? After student decisions are made,explain that the satisfaction of buying one more is called the marginal benefit (or marginalutility). What one gives up to get the additional unit is the marginal cost. As one consumes moreand more of something the marginal benefit tends to fall with each additional unit. For example,14Virginia Council on Economic Education

Page 16

as one consumes more and more pizza, each additional slice provides less satisfaction than theone before.2) Apply the concepts of marginal benefit and marginal cost to reducing pollution. An activity inlesson 6 of Economics in Action can help demonstrate this.3) Decide how many workers to hire for a profit maximizing car wash by comparing the cost ofhiring each additional worker to the additional revenues derived from hiring each additionalworker.Lessons and ResourcesEconomics in Action: 14 Greatest Hits for Teaching High School Economics Lesson 6: TheEconomic Way of Thinking: Three activities to demonstrate marginal analysisFocus: High School Economics Lesson 15: Until the Last Unit Equals15Virginia Council on Economic Education

Page 17

EPF.1 The student will demonstrate knowledge of basic economic concepts andstructures byb) explaining that choices often have long-term unintended consequencesDay 1 - “I didn’t mean for that to happen.”Content KnowledgeChoices made by individuals, firms, or government officials often have long run unintendedconsequences that can partially or entirely offset or supplement the initial effects of the decision.2VocabularyUnintended consequences – The unexpected and unplanned results of a decision or action.Virginia Board of Education FrameworkPeople make decisions and governments make policies which sometimes have completelyunexpected results, called unintended consequences. For example, off the coast of Florida, oldtires were used to build reefs to attract fish; unfortunately, over time, the tires began todisintegrate, polluting the water, and the tires had to be removed.Teaching Tips1) Ask students “Do you ever make a bad decision on purpose?” Does anyone buy a stockexpecting the price to go down? Ask students if they ever made a choice that turned out badly?Did they ever make a decision that turned out better than they expected?2) Tell students that consumers, businesses and government make choices that sometimes haveunintended consequences. For example:Energy companies build more wind turbines to increase the production of renewable, greenenergy. After the turbines have been in use for a couple of months, there is a noticeable increasein the number of dead birds found near the structures.Student on spring break in Florida decides to stay until the last minute. Her flight is cancelleddue to bad weather and she misses an exam the following day.3) Give students a scenario and ask them to work in groups trying to determine possibleunintended consequences. Here are two options:A high school senior decides to work 20 hours per week during the school year. How mightworking reduce her lifetime income?16Virginia Council on Economic Education

Page 18

A city is experiencing extreme traffic congestion on an important highway, and decides to addlanes to reduce the congestion. Why might it not reduce congestion?Lessons and ResourcesFocus: International Economics Lesson 9: Ripples - Trade Barriers and UnintendedConsequencesEconomics in Action Lesson 3: Using Economic Reasoning to Solve MysteriesUS History: Focus on Economics Lesson 15: What Can Yesterday’s Choices Tell Us AboutTomorrow?OnlineEconEdLink, Cost/Benefit Analysis: Three Gorges Damhttps://www.econedlink.org/resources/cost-benefit-analysisthree-gorges-dam/VideoGreat Moments in Unintended Consequences (3:04)http://www.youtube.com/watch?v=pSwMEtuL-GQ&feature=results_video&playnext=1&list=PL8C2278851B42541A17Virginia Council on Economic Education

Page 19

EPF.1 The student will demonstrate knowledge of basic economic concepts andstructures byd) identifying the factors of production.Day 1 - Resources for productionContent KnowledgeProductive resources are the natural resources, human resources, capital goods andentrepreneurial skills available to make goods and services. Consumers, businesses and governmentwant to make decisions that provide the greatest possible return (output or return on investment) from theresources they have available. Economics is about using the resources you have to get the most of what youwant.Virginia Board of Education FrameworkThe factors of production are the productive resources used to produce goods and services.They include natural resources, human resources, capital resources, and entrepreneurship. Theseare the four factors of production.Natural resources are “gifts of nature” and exist without human intervention.Human resources refer to the effort of people which is applied to the production of goods andservices.There are two types of capital resources. Physical capital refers to man-made goods, such astools, which are used to produce other goods. Human capital refers to the skills and knowledge aperson has acquired through experience and/or education.Entrepreneurs are individuals who are willing to take risks, to bring the other resources togetherand develop new products, and start new businesses. They recognize opportunities, like workingfor themselves, and accept challenges. Entrepreneurs accept the risks in organizing resources toproduce goods and services because they expect to earn a profit.Teaching Tips1) Ask students to write down the word that comes to mind when someone says “economics.”Display their answers. Then give this definition of economics: “Economics is about how to usewhat you have to get the most of what you want.”Tell students to draw a line down the center of a page. In the left column, write “What you have”in the right column write “What you want.”Tell students to list in the right column things they want: Things they want for themselves, theirfamilies, friends, community, country world, in the present or in the future. They can bematerial/tangible things or intangible (fun, fitness, world peace). Give them about 3 minutes.18Virginia Council on Economic Education

Page 20

Then ask them what they use to get the things they want. What can they write in the column of“What you have”? (Answer resources: natural, capital, human, entrepreneurship)2) Define and give examples of natural resources. (Land, trees, rivers, ﬁsh) Do you knowanyone who produces any of the things they want from natural resources they own? Do somepeople grow some of their own food? Do you know anyone who gets income from naturalresources? (Fishermen, farmers) When they sell what they produce, they can buy some of thethings they want. Ask for examples of natural resources. (Sugar, flour, chocolate chips, forexample are NOT natural resources because they do not exist in nature. They are goods whichhave been produced by people.)Define and give examples of capital goods. Explain that when economists use the term capital,they mean man-made things used to produce other things. Examples might be tools, factories.Be sure they understand that a capital good is used over and over in production, and is notincorporated into the products that the capital good is used to produce. Do you know anyone whoinvested in capital goods and earns money? (Guitar for band member. Snowplow for clearingparking lots. Ladder and brushes for a housepainter.) People spend their money investing incapital goods because tools make workers more productive—able to get their work done faster.Capital helps them produce more and earn more money to buy the things they want. Studentsneed to clearly understand that money is neither capital nor a resource in the context ofconsidering productive resources used to make goods and services.Define human resources. Do you know anyone who sells their labor? Do any of you have a job?Most people earn their income by selling their labor. (Later lessons will cover why people earndifferent income for their labor.) When people have a job and earn money, they can use thatmoney to buy things they want.Define entrepreneurship. Note that entrepreneurship has its own category separate from laborbecause of the entrepreneur’s special role. Distinguish between inventors and entrepreneurs.Inventors come up with something new—but may not bring it to market. Entrepreneurs bringnew things to market or bring old things to market in new ways. McDonalds did not inventhamburgers. Ray Kroc brought hamburgers to market in a new way. Do you know of anyentrepreneurs? (founders of Google, founder of Facebook) Do you know anyone local whostarted their own business? When entrepreneurs are successful, they earn a profit. They can usethat money to buy things they want.Conclusion: Economics is about using the resources we have (factors of production) to get themost of what we want. Can we have everything we want? (No.) Why not? (Our resources arelimited.) We have a limited amount of time for labor, a limited amount of natural resources andcapital resources, a limited amount of entrepreneurial skill. Resources are limited and wants areunlimited. That is scarcity.Why do we categorize resources? We put resources in different categories in order to comparecountries/regions and consider the quality and quantity of the resources they have. Do differentcountries have different amounts/kinds of resources? Compare the US and Haiti—natural19Virginia Council on Economic Education

Page 21

resources? Human resources—are they skilled or unskilled? Capital resources—do they have lotsof factories?Do available resources affect what is produced in a country or region? (Oranges or apples inVirginia?)Can products be made different ways—using different resources? Lace can be made by hand incountries where labor is cheap, but is made by machine in countries where labor is expensive.3) In groups have students list examples of each of the types of resources in their region in onecolumn and in the other column how that influences what is produced in that region.(Example—Northern Neck has rivers and access to the Chesapeake Bay. Over the years, manyin the area have derived their income working as watermen. The Winchester area has many applegrowers.)Lessons and ResourcesMiddle School World Geography: Focus on Economics Lesson 1: What Are ProductiveResources?MusicWorkin’ for a Livin’ featuring Huey Lewishttp://www.youtube.com/watch?v=zOVRxizfqxM (labor)Day 2 - What do entrepreneurs do?EPF.2 The student will demonstrate knowledge of the role of producers and consumersin a market economy byc) identifying the role of entrepreneursContent KnowledgeEntrepreneurs create the new businesses in our economy. They take on the challenge of creatingor identifying a product, assessing the market for the product, determining a price for theproduct, creating a strategy for the business, obtaining funding for the new enterprise, hiring andmanaging employees, and assuming the risk associated with the new venture. Entrepreneurs areoften motivated by the potential for financial rewards, as well as an interest in working forthemselves. If they are successful, entrepreneurs receive the profit that remains after they paysalaries for employees, taxes to the government, and all other costs associated with the business.20Virginia Council on Economic Education

Page 22

Starting any new business involves some risk. Entrepreneurs must invest their own time andresources before making products available in the market. The vast majority of entrepreneurscreate new businesses similar to those around them, such as a new grocery store or a new drycleaning business. These businesses may create jobs and often provide important products andservices for their communities. Other entrepreneurs take on an even greater challenge byinnovating or bringing a new invention to the market. In addition to accepting the risks entailedin starting a new business, these innovative entrepreneurs must have the vision, originality, anddaring to seek out opportunities for a new product or service and introduce it to the public.Innovative entrepreneurs are responsible for much of the growth in our economy. Bringing usinnovations such as the radio, airplane, and personal computer, these individuals change the waypeople live their lives, often fostering a more productive and efficient economy. Becauseentrepreneurship plays an important role in economic growth, public policies that affect thereturns to entrepreneurship — from intellectual property rights to taxes to immigrationregulations — often have a significant effect on consumers.2VocabularyEntrepreneurs are people who take calculated risks in order to start new businesses and developinnovative products and processes.Virginia Board of Education FrameworkEntrepreneurs accept the risk of organizing resources to produce goods and services, and theyexpect to earn profits.Entrepreneurs earn profits when buyers purchase the products they sell at prices higher than thecosts of production. Entrepreneurs incur losses when buyers do not purchase the products theysell at prices high enough to cover the costs of production.Profit is an important incentive that leads entrepreneurs to accept the risks of business failure.Independence in decision-making is another incentive important to entrepreneurs.Entrepreneurs increase competition by bringing new goods and services to market or deliveringproducts in innovative ways. They often foster technological progress and economic growth.Teaching Tips1) In groups, have students think of examples of products or services entrepreneurs have broughtus in each category.2) Ask students if they can identify any firms that have gone out of business and discuss how thismight have occurred.3) Identify a local entrepreneur and describe how the entrepreneur’s decisions affect jobopportunities.21Virginia Council on Economic Education

Page 23

4) Entrepreneurs are risk-takers—but they try to anticipate and prepare for risks. Assign studentsto read short biographies of entrepreneurs and identify the risks each faced. Examine how theentrepreneur analyzed the risks and the entrepreneur’s incentive(s) for accepting the risk.5) Read short biographies of several entrepreneurs, list the pertinent characteristics of eachentrepreneur, and make a generalization about the non-financial incentives that motivateentrepreneurs and the risks or disincentives entrepreneurs face.Lessons and ResourcesEntrepreneurship in the U.S. Economy: Teacher Resource Manual Lesson 29: The InnovativeProcess: How Entrepreneurs Develop New IdeasFinancial Fitness for Life: 9-12 Lesson 5: Making Your Own JobEntrepreneurship Economics Lesson 2: The Role of the Entrepreneur in the EconomyOnlineEconEdLink: The Entrepreneur in You?https://www.econedlink.org/resources/the-entepreneur-in-you/EconEdLink: Inventors and Entrepreneurs in the Industrial Agehttps://www.econedlink.org/resources/economic-spotter-inventors-and-entrepreneurs-in-the-industrial-age/Comicshttp://www.gocomics.com/bc/2010/04/13 (business combination)Video– DVD – The last 30 minutes. (role of the entrepreneur)New in TownThe Entrepreneur (1:50)https://www.youtube.com/watch?v=q7K9RXqAK6sDay 3 - What’s the diﬀerence between real capital and humancapital?Content KnowledgeHuman resources are the people who do the mental and physical work to produce goods andservices. Capital goods are goods that are produced and used to make other goods and services.Human capital refers to the quality of labor resources, which can be improved throughinvestments in education, training, and health.22Virginia Council on Economic Education

Page 24

There are two types of capital resources. Physical capital refers to man made goods, such astools, which are used to produce other goods. Human capital refers to the skills and knowledge aperson has acquired through experience and/or education. People invest in their human capitalthrough education, training, and experience.1Investment in human capital can improve one’sproductivity and thus increase one’s income. Investment in physical capital (tools etc.) canimprove worker productivity (output per hour) and increase a nation’s growth (output per year)and thus its standard of living.VocabularyHuman resources - the effort of people which is applied to the production of goods andservices.Human capital - the skills and knowledge a person has acquired through experience and/oreducation.Capital (sometimes called real capital or physical capital) - man made goods, such as tools,which are used to produce other goods.Teaching Tips1) Have students look up job listings—in the newspaper, online, or in the Occupational OutlookHandbook. Note the pay and the requirements. Occupational Outlook Handbookhttps://www.bls.gov/ooh/In class, divide the students into groups according to pay. Discuss why some jobs are payingmore than others. Help students understand that jobs requiring more skill tend to pay more, andthat when there are many openings and few people with the skills to do the job, the pay tends tobe higher. Discuss how people get skills. (School—high school, college or technical school—internships, practice, apprenticeship)Use statistics on incomes for various professions to show that those which require more trainingare likely to be paid more. Use statistics to show that people with little education are much morelikely to be unemployed.2) Have students list the human capital they already have. (e.g. reading, writing, math, computerskills, web design, PowerPoint , accounting skills, understanding of how the government works,understanding of how the economy works, speaking a foreign language, cooking, playing amusical instrument, public speaking, communication skills, working with a team, organizationalskills, athletic skills, singing, dancing) Compile a list.Ask students to look at the skills they have and think about what types of jobs they would bequalified to do.3) Ask students to select a couple of skills they would like to have, but don’t have at present.Tell them to make a plan for how they might develop those skills.23Virginia Council on Economic Education

Page 25

4) Have students write a paragraph explaining to a younger sibling the definition of humancapital and how it might affect their future income.5) Have students investigate a profession of interest to them to determine the skills required andthe path to acquiring those skills and the average income in that field.6) Show Steve Jobs Graduation Speech--What kind of human capital did he have? How did heacquire his human skill?7) Show the segment about Byron Pitts. How did he overcome his obstacles to gain the humancapital he needed?Lessons and ResourcesLearning, Earning, and Investing Lesson 3: Invest in YourselfCapstone Lesson 15: Why Do Some People Earn More than Others?Occupational Outlook Handbookhttps://www.bls.gov/ooh/VideosSteve Jobs Graduation Speech at Stanford 2005 (15:04)http://www.youtube.com/watch?v=IeqlN0I_ZB0&feature=related60 Minutes' Byron Pitts talks about overcoming illiteracy (2:34)http://www.youtube.com/watch?v=HMZIOAbZRiEWhat is human capital? (2:51)https://www.youtube.com/watch?v=unQwnHmV7UEEVALUATION DAY24Virginia Council on Economic Education

VCEE Scope & Sequence Unit 1

Page 1

Page 2