Table of Contents
- Front Material
This document contains the table of contents, introduction and other related material.
- Unit 1: Lesson 1 - Economic Reasoning: Why Are We A Nation of Couch Potatoes?
Students examine visuals to identify an economic mystery regarding exercise and diet. They use the Guide to Economic Reasoning to analyze the costs and benefits of decisions about diet and exercise. They discover that human behavior is influenced by choices, costs, incentives, rules, voluntary exchange, and future consequences, even in decisions about diet and exercise.
- Unit 1: Lesson 2 - Scarcity and Abundance
The lesson provides students with two definitions of the term scarcity. They apply these definitions to several examples of human behavior. In the second part of the lesson they use the definitions to explain why people may treat scarce resources as if they were not scarce.
- Unit 1: Lesson 3 - Economic Magic: Creating Something from Nothing
Students participate in a small-group survival activity designed to illustrate the basic economic decisions people in every economy must address. They must decide which resources are scarce and they must answer three basic questions: What to produce? How to produce it? For whom will it be produced?
- Unit 1: Lesson 4 - To Choose or Not to Choose? That Is Not the Question
Students make a decision after identifying the alternatives and their anticipated costs and benefits.
- Unit 1: Lesson 5 - Rules Influence Economic Behavior
The lesson begins with a demonstration of how rules and incentives influence students' behavior in the classroom. Then students apply the same analysis to behavior in the larger economy. (WARNING: Given the unusual grading procedure specified in Procedure 5, this lesson may be hazardous to teacher's health.)
- Unit 2: Lesson 6 - Why Did Communism Collapse?
Students examine and discuss visuals to solve an economic mystery regarding the command system of the Soviet Union.
- Unit 2: Lesson 7 - A Silver Market
Students participate in a simulation activity that shows how a competitive market works. Although most markets for goods and services are not as competitive as the silver commodity market, the example helps students gain an understanding of how prices are set in any market.
- Unit 2: Lesson 8 - A Picture Is Worth a Thousand Words: Demand
This lesson asks students to analyze the relationship between changing prices and changes in consumer behavior, to create and understand the demand schedule graph, and to identify how various determinants of demand change the relative location of the demand schedule.
- Unit 2: Lesson 9 - A Picture Is Worth a Thousand Words: Supply
Students analyze the relationship between changing prices and changes in producer behavior. They create a supply schedule graph to represent this relationship. They observe changes in determinants of supply and note the effect of those changes on the supply schedule and the corresponding price-quality relationship.
- Unit 2: Lesson 10 - Equilibrium Prices and Equilibrium Quantities
In examining a visual about the market for yo-yos, students think through the process of mutual accommodation among buyers and sellers that results in an equilibrium price. Students then complete an activity plotting supply and demand curves in the market for Frisbees, identifying the equilibrium price and quantity under different conditions.
- Unit 2: Lesson 11 - Do Prices Matter to Consumers?
This lesson demonstrates how people use prices when they weight expected costs and expected benefits in making economic decisions. It helps students see how choosing a second-best good or service can in some cases improve their overall well-being.
- Unit 2: Lesson 12 - How Do Prices Influence My Behavior? Price Elasticity
Students review consumer and producer behavior in light of changing prices. They predict consumers' and producers' responses to changes in prices, product characteristics, costs of production, time and technology factors.
- Unit 2: Lesson 13 - How Markets Allocate Resources
Students read I, Pencil, by Leonard Read, to gain an understanding of Adam Smith's concept of the invisible hand of the marketplace. Students see that a system of market prices brings about cooperation without coercion. Then students use supply and demand analysis to explain how a change in one market tends to affect related markets.
- Unit 2: Lesson 14 - Secondary Effects: Price Ceilings and Floors
Students investigate the consequences of price controls in markets for silver, rock concerts, automobiles, razor clams, and school textbooks. (It would be best to use this lesson after students have participated in the silver market game [Unit 2, Lesson 7]
- Unit 3: Lesson 15 - Why Do Some People Earn More Than Others?
Students examine and discuss visuals to identify an economic mystery regarding differences in income. They use the Guide to Economic Reasoning to analyze the problem and reach a tentative solution.
- Unit 3: Lesson 16 - Making Choices About Saving and Investing
This lesson introduces the distinction between savings and the investment. It demonstrates how the price of money --the interest rate--is critical to making the right savings and investment choices. It explains when, under various conditions, it is or is not in people's best interest to save.
- Unit 3: Lesson 17 - Creating and Using a Budget
This lesson focuses on using budgeting to maximize consumer satisfaction. It describes a flexible view of budgets, linking them to markets and market information, and demonstrates how and why budgets should be reviewed and modified often.
- Unit 3: Lesson 18 - Credit Management
This lesson is designed to help students make good consumer-credit decisions. Although using credit is beneficial at times, it often carries higher costs than many people realize. This lesson discusses the costs of credit in a manner that helps students calculate those costs and integrate them in short- and long-term decisions.
- Unit 3: Lesson 19 - Earning an Income
Students examine the concept of income. They identify factors that generate in come, including entrepreneurial traits and changing conditions in labor markets. In learning how income is generated, students plan and make choices to enhance their own income-generating capacity.
- Unit 4: Lesson 20 - Why Helping Yourself Helps Others
Students examine and discuss visuals to identify an economic mystery regarding greed and self-interest. They use economic reasoning to analyze the mystery and reach a tentative explanation.
- Unit 4: Lesson 21 - Productivity, Diminishing Marginal Returns, and the Demand for Labor
Students produce greeting cards with a fixed number of scissors and markers, and a variable number of workers. They discuss factors affecting workers productivity and the law of diminishing marginal returns. With a partner, they use marginal analysis to solve a problem about how many workers a firm should hire.
- Unit 4: Lesson 22 - How Competitive Is the Industry?
Using a local example, students discuss the benefits of competition. In small groups they read descriptions of the markets for cucumbers, haircuts, cereal, and diamonds (prior to 2000). They use this information to fill in a chart that summarizes characteristics of competition, monopolistic competition, oligopoly and monopoly.
- Unit 4: Lesson 23 - Make a Profit: Do the Math
Working as consultant teams, students use basic math to compute fixed costs, total costs, marginal costs, total revenues, marginal revenues, and profits (or losses) for a business. They determine the profit-maximizing quantity of output for the business, and analyze their results in terms of marginal revenues and marginal costs.
- Unit 5: Lesson 24 - Government and the Environment
Students examine and discuss visuals to identify an economic mystery regarding the failure of the Endangered Species Act. They are introduced to the concepts of market failure and government failure. Using the Guide to Economic Reasoning, they focus on positive and negative externalities in analyzing the Endangered Species Act as an example of government failure.
- Unit 5: Lesson 25 - The Economics of the U.S. Constitution
Students discuss why the American economy grew in the period following the American Revolution. After reading an essay by Douglass North and examining the U.S. Constitution, they identify the economic features of the Constitution.
- Unit 5: Lesson 26 - Public versus Private Goods
Students discuss the role of government in the economy. They complete an activity in which they classify goods and services as public or private.
- Unit 5: Lesson 27 - The Economics of Special Interest Groups
Students learn about the diverse nature of special interest groups and read examples that show how incentives influence the actions of elected officials.
- Unit 5: Lesson 28 - The Economics of Voting
Students examine a visual to identify patterns of voter turnout in U.S. presidential elections. They analyze the costs and benefits of voting and discuss how people's voting behavior is influenced by incentives.
- Unit 5: Lesson 29 - Can Taxes Be Incentives?
Students examine different types of taxes and criteria for determining a fair tax. Students work in pairs to predict how changes in taxes will change people's behavior.
- Unit 5: Lesson 30 - Poverty and Income Inequality
Students take part in an activity that simulates the unequal distribution of income in the United States, based on U.S. Census data. They discuss how equal distribution of income would affect incentives to work hard, especially for high-income earners. They discuss measures of poverty, who is most likely to be poor in the United States, and causes of income inequality and poverty.
- Unit 6: Lesson 31 - Measuring Unemployment: A Labor Market Mystery
Students examine an economic mystery regarding employment and unemployment statistics. They learn how the Bureau of Labor Statistics measures employment and unemployment. They use the Guide to Economic Reasoning and some arithmetic to solve the mystery of how employment and unemployment can increase at the same time.
- Unit 6: Lesson 32 - The Effects of Inflation
Students examine recent inflation rates in the United States and discuss the interpretation of inflation rates. They read about the inflation-related experiences of teachers in the former Soviet Union and Eastern Europe and use these experiences as a basis for identifying the effects of high rates of inflation.
- Unit 6: Lesson 33 - Gross Domestic Product (GDP) and How to Measure It
Students examine GDP. They distinguish between nominal and real GDP. They study how GDP is comprised of household spending on consumption goods and services (C), business investment spending (I), government spending on goods and services (G), and net exports (X-M). They participate in a simulation in which they classify economic events into the categories C, I, G, or (X-M), and predict whether the event will lead to an increase or decrease in GDP.
- Unit 6: Lesson 34 - Money and Monetary Policy
The concept of money creation by banks is often not intuitive for students, but it is important to their understanding of the role of the Federal Reserve. In this lesson, students first discuss money, its functions, and why the money supply is important in the economy. The they take part in a short activity to learn how banks create money and affect the money supply. They then apply the concepts from the activity to an analysis of monetary policy.
- Unit 6: Lesson 35 - Fiscal Policy: A Two-Act Play
Groups of students are given outlines for one of two acts in a play describing either expansionary or contractionary fiscal policy. After choosing parts and preparing lines for their roles, two groups are chosen to perform the play. Events in the play are discussed by reference to concepts of fiscal policy. More advanced classes may then discuss current debates about the effectiveness of fiscal policy.
- Unit 6: Lesson 36 - Should We Worry About the National Debt?
Students discuss the size of the current national debt and what this means. A class discussion covers the causes of the debt, how it is financed, definitions of a budget deficit and budget surplus, and the difference between a budget deficit and a trade deficit. Students then participate in an activity presenting different perspectives on whether the national debt is a problem of major concern.
- Unit 6: Lesson 37 - Can Government Manage the National Economy?
Although economists agree much more often than they disagree, the opinions of prominent economists on economic policy often conflict. This lesson seeks to clarify why economists disagree. Understanding the reasons for disagreement among experts may help students to make their own judgments about economic policies. The lesson concludes by having students compare and contrast the major macroeconomic theories, which are Keynesian and New Classical. New Classical economics includes the Monetarist and Rational Expectations theories.
- Unit 6: Lesson 38 - Aggregate Demand and Aggregate Supply
Students build their understanding of aggregate demand and aggregate supply. They use their new skills to analyze the effects of events and government monetary and fiscal policies on inflation, unemployment, and economic growth. In the first two Activities, students identify different components of AD and AS and the factors that shift AD and AS. In the last two Activities, students use AD and AS analysis to predict the effect of events and government monetary and fiscal policies on inflation, unemployment, and economic growth.
- Unit 7: Lesson 39 - Why Go Global?
Students examine an economic mystery regarding the importance of U.S. participation in the global economy. They participate in a demonstration regarding imported clothing. They use the Guide to Economic Reasoning to explain that, while exports and imports may be a relatively small part of the U.S. economy, international trade benefits the United States and its trade partners.
- Unit 7: Lesson 40 - Why Do People Trade Across National Borders?
This lesson involves students in a trading simulation that grows in complexity. Students use this experience to investigate the consequences of voluntary trade among individuals in increasingly larger groups.
- Unit 7: Lesson 41 - Why People Trade: Comparative Advantage
The students decide why people buy foreign goods, and they practice measuring the comparative advantage of different producers.
- Unit 7: Lesson 42 - Foreign Currencies and Foreign Exchange
Students participate in a simulated foreign exchange market. The exercise provides an opportunity for students to use supply and demand analysis to explain how flexible exchange rates are established in currency markets.
- Unit 7: Lesson 43 - Why Are Some Nations Wealthy?
Students work in groups to examine data from several nations regarding size, natural resources, and population. Using these data, they try to identify the nations and predict whether each nation is rich or poor. Students rank the nations from richest to poorest. After the mystery nations are revealed, students discuss economists' findings about the factors that contribute most to long-term economic growth.
- Unit 7: Lesson 44 - World Environmental Issues: Is the Market at Fault?
Students study for short case studies. They identify similarities and differences across these five case studies. After noting this information, they assess several environmental policy solutions. They must decide which policies set up incentives that encourage good stewardship of the resources.
- Unit 7: Lesson 45 - International Trade: How Do We Measure Trades Across Political Borders?
Many popular misconceptions evolve from reading balance of payments reports. Newspaper stories warn us of the perils of a deficit in the U.S. trade balance and a surplus in the Chinese trade balance of payments reports and help them draw accurate conclusions about the economy from these reports.
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