Suggested Target Age: Grades 5-8 (This lesson should also be taught as the first lesson in the grade 9-12 sequence as a foundational lesson.)

Topics Covered: decision-making, opportunity costs, planning ahead

Time required: Approximately 20-40 minutes; may be longer depending on the size of the group and whether you choose to do the optional concluding activity.

What Will the Students Learn?

• That because of scarcity, choices must be made. The choice deferred is called an opportunity cost.
• That choice-making is empowering

State Content Standards Key
California: History/Social Science: Principles of Economics 12.1.1-3; Math
Florida: SS.D.1.2, SS.D.1.1,
Indiana: Social Studies (Economics); Math
Virginia: Economics Math

NOTE: This lesson can be done in a classroom, without access to the Internet & computers, or in a computer lab where students will be able to use computers with Internet access.

Materials Needed:

• Index cards or small pieces of paper
  
• Pens or pencils
  
• Chalkboard or whiteboard to write on (or overhead projector or LCD projector to project images on)

Lesson Plan:

1. Gather students in the classroom or computer lab and hand each of them a blank index card or small piece of paper and a pen or pencil to write with.

2. Tell the students to imagine that they are going on a trip and they have to pack things to bring with them. They will be going away for 2 weeks and the weather where they are going will be both hot and cold (hot during the day and cold at night). They should plan to bring their favorite clothes and items with them.

3. Have the students write down the 4 MOST IMPORTANT items they want to be sure to take with them on their trip. These might be a favorite shirt or pair of sneakers, or a favorite game or book they want to be sure to have with them on their trip. Tell them that there is no TV where they are going.

4. Once all the students have written down four items on their card/paper, tell them that they now have to cross off two things from their list. It turns out they will not have enough room in their suitcase and car to bring everything they want. They have to choose which two things from the list of four that they most want to keep with them; the other two have to be crossed off their list. This exercise should produce some difficult choice making by the students.

5. Once everyone has crossed off two things from their list of four, explain that the students have just experienced a common problem in life that we call “opportunity cost.”
• Write the phrase “opportunity cost” on the board, with this definition: An opportunity cost is the term for the value of something given up in order to pursue something else. It is “the next best thing they would have chosen.”

6. Explain that the students also probably experienced the economic concept of “trade offs” in the midst of their choice making. For example, let’s say that they had a favorite piece of sports equipment, like a special baseball glove or football, on their list and they also had a favorite book. When they had to cut items from their list, they may have crossed out the football in order to retain the book. This is a trade-off: by keeping the book, the student will have something to do on the trip if he/she has to stay inside because of bad weather—he/she can read the book. But it also means that he/she will not have the football to play with outside when the weather is nice. Or perhaps the student decided to cross off the book in favor of keeping the football: the trade off is that they may be bored inside the house if the weather is bad and they have nothing to read, but they will have the football with them to play with outside when the weather is nice. Ask a few of the students to tell the class about their choices. Identify where “trade offs” were made.

7. Now write the word ECONOMICS on the chalkboard/whiteboard in large letters, easily visible to the students. Ask the students if they know what the word “economics” is about. (The most likely answer will be “money”). Tell them that although most people think economics is just about money, it is really about making choices. In fact, two of the most important principles of economics are these (write these 2 principles down on the board for all students to see):

• Principle #1 – We ALL Make Choices

• Principle #2 – Choices Have Consequences

Then discuss these principles briefly. For principle #1, ask students to give you some examples of choices they already made today (for example, they may have chosen what to wear, what to eat for breakfast, where to sit in the classroom, whether to walk or bike or ride the bus to your ministry center). One reason we make choices is because of SCARCITY – for example, think back to the opening exercise of the lesson. There wasn’t enough room in the students’ hypothetical suitcases for their trip, so they had to make a choice. They couldn’t bring everything they wanted, because there was not enough room –or there was a “scarcity” of room—so they had to make a choice.

• Write the word “scarcity” on the board and this phrase: “Because of unlimited human wants/needs and limited goods, we all experience the problem of scarcity.”

For principle #2, help them identify the link between choices and consequences. You could do something silly, like deliberately spilling a little water on your shirt or pants. Say: “You see, if I choose to drop this water on my shirt, the result—or consequence—is that I get a wet shirt!” Get them talking briefly about some of the consequences of their choices. Again, you could get them laughing by talking about choosing not to take the dog out for a walk, and that resulting in the dog going to the bathroom on the kitchen floor. Or choosing to go outside on a cloudy day without an umbrella, and ending up getting wet. Help them see that choices have positive and negative consequences. If they study really hard for a test a positive consequence may be that they receive an “A” on it as a result.

Activity/Demonstration: "Cleaning Up the Lake"

At this point, you could conduct the "Cleaning Up the Lake" activity. In this exercise, the city lake is polluted, and your class must decide how undertake the clean-up process - where to get the funds, to what extent the lake should be cleaned, etc. This is a fun, interactive demonstration that incorporates trade-offs, opportunity costs, and the concept of scarcity. To view the PDF, click here.

OPTIONAL CLOSING ACTIVITY FOR GROUPS ALREADY IN THE COMPUTER LAB, WITH INTERNET ACCESS

1. Have the students log into their Economis accounts and select “online shopping.”

2. Point out to them that there are inexpensive and more expensive items in your inventory. In Economis, they get to control how they spend their “credits” [whatever the name of your currency is]. They have the power to choose. But they should think carefully about their choices because of opportunity costs. If they buy a lot of snacks every week, they may never save up enough credits to be able to purchase a field trip or some special, more expensive product in your store.

3. Have the students log out of their accounts (or, depending on when you do this lesson and the amount of credits students will have earned by this time, you might use this time to allow them to do some online shopping.)