ECONOMICS COMMON CORE UNIT I /II

Korpics 2013

Valley Central School District

Common Core Unit Plan
Economics Unit I

Title of Unit: Introduction to Economics:

Scarcity, Wants/Needs/Opportunity Costs,
Production, Land, Labor Capital, Types of
Economic Systems, Labor, Costs and Revenues
Curricular Areas Included: Economics Lessons
1 7.

Grade Level: 12

Time Frame: 3 Weeks Approximate Depending on

Shortened Period Schedule/Snow Days/ Days

Overview: Section 1: Scarcity and the Factors of Production

Although people's wants and needs are unlimited, the resources to satisfy these wants and needs are
limited
Section 2: Opportunity Cost
All human decisions involve trade-offs. The next best alternative to any choice is called an opportunity
cost.
Section 3: Costs and Revenues
Production possibilities curves help economists analze an economy's use of its resources.
Section 4: Types of Economies & Economists
Traditional, Mixed, Command, Free Market, Capitalism, Keynes, Marx, Adam Smith, Milton Friedman
Section 5: Labor
The role of labor issues, unions and collective bargaining.
Do Now:
Which car to buy? How many hours to study?
Which movie to see? How do you make your
everyday choices?

Focus Standards:
NYS Social Studies for Economics, the Enterprise
System and Finance.
http://www.p12.nysed.gov/ciai/socst/pub/economics.
pdf
Common Core Standards:

If you're like most people, you constantly face

decisions because you don't have enough time
and money to do everything. At its most basic
level, economics is the study of how people
make choices when they face a limited supply
of resources

12.RH.2
Determine the central ideas or information of a
primary or secondary source; provide an accurate
summary that makes clear the relationships among

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the key details and ideas.
Essential Questions:
1. Economics is the social science that
studies how people use scarce
resources to satisfy unlimited needs
and wants. You'll notice it's a social
science because it's about how people
interact and why they behave in certain
ways. In some respects, it's a lot like
psychology because we talk about and
make decisions based on our
understanding of why people do what
they do.
2. Although people's wants and needs are
unlimited, the resources to satisfy these
wants and needs are limited Should
people be categorized into stratification
based on morality based solely on age?
3. Although people's wants and needs are
unlimited, the resources to satisfy these
wants and needs are limited
4. Scarcity, in general terms, means that
the demand for something is much
greater than the supply, or there is not
enough money to buy it. So how do
people get what they need?
5. The exact definition in economics is that
there are insufficient resources to
satisfy everyone's needs and wants,
there isn't enough for everyone to get
what they want at a zero price. You
know something is scarce if you try to
offer it for free, and you don't have
enough of it for everyone who stands in
line to get it.
6. So, how does a society decide who gets
what? Do the legal standpoints conflict
or coincide?
7. Producers charge a price for it. That
way, whoever values it the most will pay

12.RST.4
"Determine the meaning of symbols, key terms, and
other domain-specific words and phrases as they
are used in a specific scientific or technical context
relevant to grades 1112 texts and topics."

SUMMARY:
Lesson #1 is Scarcity
The study of economics begins with the concept of
scarcity. Scarcity describes the condition in which
our wants are greater than the resources available
to satisfy those wants. We face the problem of
scarcity every day whether we think about it or not. It
might be nice to dream about a world without
scarcity, but the sad reality is that the things we want
are scarce because the resources that are needed
to produce them are scarce. If you want a new
skateboard, it takes wood, tools, and labor (all of
which are resources) to produce that skateboard.
The people who own the wood, the tools, and the
labor want something in return for their use because
they have other ways they could be used. If the
wood were not used for skateboards, it might be
used to build windows or baseball bats. Economist
Thomas Sowell says it this way: The first lesson of
economics is scarcity: There is never enough of
anything to satisfy all those who want it.

Lesson #2 is Choice
This condition of limited resources to meet unlimited
wants leaves us in a situation in which we must
constantly choose which of our wants we will seek to
satisfy. For example, because time is scarce you
must choose whether you will sleep away the
morning or go to school. You must choose whether
to spend your allowance or save your allowance.
Scarcity prohibits you from saving and spending the
same dollar, you must choose. If you decide to
spend it, you must choose whether you want to buy
a video game or a DVD of your favorite movie. If you
save your allowance, will you save it for a car or for
college? On a broader level, scarcity forces society
to choose how to use resources as well. Will a piece
of land be used as a park or for a housing

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the most for it. This is how scarce
development? Will tax revenue be used for
resources are allocated, or divided up
healthcare or for education?
and distributed, efficiently in our
economy. When you go to the store,
you can't buy everything you want, so
you must make choices to buy one
Lesson #3 is Opportunity Cost
thing instead of another
8. This is called Opportunity Cost
9. An economy is, therefore, a system in
which suppliers produce the goods and
services that consumers demand. It's
where consumers make choices about
what to consume, and producers decide
what to produce, how to produce and
distribute it?
10. Economists study the economy by
using certain mathematical models, and
these models will explain why people
behave the way they do. These are call
production, possibilities and supply and
demand curves.
11. What are incentives? Do you use
these? Are these used on you?

The next logical step is that when making choices

people incur a cost. If you choose to buy a video
game instead of a movie, you incur an opportunity
cost. Economists define an opportunity cost as the
most highly valued opportunity given up when you
make a choice. So the opportunity cost of buying the
video game is that you cannot buy the DVD. The
opportunity cost is the opportunity lost. The
opportunity cost of spending money is the lost
opportunity to save the money. On a social level, the
opportunity cost of using land for parks is land not
available for building houses. The opportunity cost of
tax revenues spent on healthcare is the lost
opportunity to spend the money on education. Keep
in mind that the opportunity cost is the most highly
valued opportunity given up. Think about this: when
your alarm clock went off this morning, you had a
number of options open to you. Assuming you first
chose to get out of bed, you could have chosen to:

Go to school

Watch TV, or

Go to the mall

Now, what is the opportunity cost of going to school?

Is it watching TV and going to the mall? No.
Because of the scarcity problem, you would have
only been able to do one of those options if you
werent at school, so you are only giving up the
opportunity to do one of them, more specifically the
one you were most likely to do. So if you were to
place a value on your choices you would choose the
activity you valued most, which was go to school,
your opportunity cost would be the one on which you
placed the next highest value, watching television.
Nobel Laureate Milton Friedman was fond of saying,
There is no such thing as a free lunch. Imagine that the
friendly neighborhood pizza restaurant set up a table full
of pizza boxes outside your school about lunchtime and
put up a sign that said Pizza and soda $0.00. Why
wouldnt that be a free lunch? It didnt cost you anything
right? Well, it may not have cost you in terms of money,
but any situation which forces you to make a choice

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results in an opportunity cost. Or consider this: you may

spend several hours this evening tweeting and texting
friends at no additional monetary cost to your phone
plan. You may think of this as free, but there is a cost.
What opportunity did you give up? In his famous quote,
Milton Friedman was reminding us of the lessons we
have learned today: because of scarcity we must choose
and choice means that there is an opportunity cost. So
the reason there is no free lunch is that your choice to
eat pizza out on the sidewalk in front of your school
means that you are giving up the opportunity to dine
elsewhere, such as a local burger stand. Perhaps your
evening spent tweeting and texting at home was an
evening not spent with other friends at a football game.
These three concepts scarcity, choice, and opportunity
cost help form the foundation for economic thinking
and reasoning.
Lesson #4 is Factors of Production
The need for land, labor and capital in production of
goods and services and capital goods. Included is
the issue of specialization and the comparisons of
urban vs. suburban vs. rural micro economies and
specialization plays a role from more to less.
Circular flow and the flow chart from households
(consumers) to and services though the economy. In
the model, producers are termed as "firms"
while consumers are referred to as "households."
Firms supply goods and services
Households consume these goods and
services. Factors of production (land, labor, capital)
are supplied by the household to firms and the firms
convert these into finished products for
household consumption
Lesson #5 is Costs and Revenues
Cost the total amount of money it takes to produce
an item (to pay for ALL Factors of Production).
Revenues the total amount of $ a company or the
government takes in Fixed Costs the amount of
money a business MUST pay each month or year
(like rent and Capital expenses). Variable Costs
the amount of money a business pays that changes
over time (Labor and Raw Materials). Total Costs =
Fixed + Variable Costs. Marginal Costs the
additional Cost of the NEXT UNIT produced. Profit
the difference between Total Costs and Revenues.
This is WHY youre in BUSINESS (Profit
Motive.)Profit=Revenues-Total cost. Profit
Motive=why you are in business---to make
MONEY(principles of Capitalism) Cost Benefit

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Analysis: immediate or short term satisfaction can

lead to missing the long-term benefits.

Lesson #6 is Types of Economic Systems

Economic Questions answered by custom.
Predominately Agricultural. Developing or 3rd
WorldTrade and barter oriented. Low GDP & PCI
(per capita income = avg. inc.) For Example
immediate spending on cheap stuff instead of longterm savings will lead to lower economic prosperity.
Economic questions answered by the government.

Very little economic choice

No private ownership

Communism
Old Soviet Union, old Communist China, Cuba and
North Korea economist. Author of Communist
Manifesto and Das Kapital Government should
control economy and distribute goods and services
to the people. Founder of revolutionary socialism
and communism Market reforms in China in the mid
1970s.Fall of the Berlin Wall in 1989.Collapse of the
Soviet Union 1991.
Free Market Capitalism (w/ some Mixed Economies)
Economic questions answered by producers and
consumers

Limited government involvement

Private property rights

Wide variety of choices and products

U.S., Japan Competition more businesses means

lower prices and higher quality products for
consumers (US!) to buy. Voluntary Exchange
businesses and consumers MUST be free to buy or
sell what and when they want. Private Property
Individuals and businesses MUST be able to get the
benefits of owning their OWN property. Government
doesnt control it. Government involvement and
ownership and control of property, of decision
making, and companies.
Socialism

Government control of business

Social safety net for people

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6
Common in Europe, Latin America, and Africa

Keyensian Economics Government should intervene

in economic emergencies through tax and spending
(Fiscal Policy) and changing the money supply
(Monetary Policy).This is done to smooth out the
business cycle (expansion and recession) and keep
inflation low.
Lesson #7 Labor and Unions
Wages what companies pay employees for their
labor (usually based upon an hourly rate).Blue
Collar
Manufacturing, work with hands. Usually the labor
in production Salary the amount of pay a person
gets over a year (especially for professional
jobs).White CollarOffice jobs. When Production
Decreases: control production Downsizing laying
off employees to save costs. Outsourcing sending
jobs and manufacturing overseas or contracting to
outside companies to save money.Bankruptcy
government allows business to restructure its debt,
but now all profits go to paying off debt rather than to
the owners/investors. Out of Business lose all your
business, money, and profits. The current trend in
the U.S. is that manufacturing jobs are declining.
PROJECT: Follow up: Comparison of Maybrook,
Montgomery Village, and Walden. Lag/Lead
indicators, growth evaluation, efficiency, problems,
factors.teams will redefine these communities and
present their pros/cons, current problems, future
issues, possible solutions and and interview with a
member of town/village council.

Student Objectives Specific Student Outcomes:

-Understand that the economy refers to the management of the resources of a country. The basic
economic problem is that needs and wants are unlimited, but resources are scarce. Resources, also
known as factors of production, include land, labor, capital and entrepreneurship. Scarcity means that
resources are limited, and because resources are scarce, people must make choices. Economics is
the social science that studies how people use scarce resources to satisfy unlimited needs and
wants. Finally, economists study incentives, which are rewards that motivate people to behave in
certain ways.
-Explain why every decision involves tradeoffs. Summarize the concept of opportunity cost. Analyze
Milton Friedmans Theres no such thing as a free lunch. Describe how people make decisions by
thinking on the margin. Describe the role of entrepreneurs in a free market economy. Outline and
understand the factors of production and the differences between each and understand what a
production possibilities curve is and how it shows efficiency, growth and cost. a

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-Understand why markets exist. Analyze circular flow models and discuss how each impacts the
other. Describe the self regulating nature of the marketplace. Identify the advantages and
disadvantages of a free market economy.

-Identify the five economic questions each society must answer. Analyze how societal values
determine how a country answers these economic questions. Define the characteristics of a
traditional, command, mixed, and free market economies. Recall the development of communism
from the times of Karl Marx and Adam Smith.
-Discuss the role of labor and the evolution of workers rights, labor unions and collective bargaining
and how this all impacts total costs.
What evidence will show that students understand?
http://www.stlouisfed.org/education_resources/economic-short-takes/opportunity-cost-nationaleconomic-education-video-contest-2009-first-place-winner
Quiz: Lesson 1,2,3,4,5,6,7 Tests: Unit I and Unit II (Chapters 1 and 2 in total)
Local Communities Project: Maybrook, Walden, Village of Montgomery Where does their future
stand economic analysis teams. (see above description)
Activities, Tasks, Projects:
Formal and Informal Assessments:
Interactive Activity: Video Clip: Opportunity Cost Online Quiz
National Economic Education Video Contest, 2009 First Inquiry
Place Winner
Discussion
Discussion: What is the difference between Written answers to handouts
Readings from primary sources and current
needs and wants? How does economics
economic texts
impact your own life? How has economics
Questions from primary source readings.
changed your life in the last few years.
Reading from textbook.
Questions from textbook
Explanation of Class & Expectations
Projects
Do Nows: See Notes and Powerpoint Links
Cumulative questions on Unit Exams
via website
Visual: (Differentiation of Learning)
http://www.vcsd.k12.ny.us//Domain/246
Videos: 30 Days Outsourcing and Minimum Wage
Videos: True Life: My parents are Broke, Im
PROJECT: Comparison of Maybrook,
homeless. Im Starting a Business. Im paying
Montgomery Village, and Walden. Lag/Lead
My Way through College.
indicators, growth evaluation, efficiency,
Videos: World of Jenks Street Queen
problems, factors.teams will redefine these
communities and present their pros/cons,
current problems, future issues, possible
solutions and interview with a member of
town/village council.
Resources: Curriculum Links

Vocabulary

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Prentice Hall Essential Questions Journal: Chapters

1,2.
http://education-portal.com/academy
http://www.p12.nysed.gov/ciai/socst/pub/economics.
pdf
http://www.stlouisfed.org/education_resources
http://teachers.hfcsd.org/webpages/tnassivera

8
Scarcity
Wants/Needs
Opportunity Costs
Production Possibilities Curve
Supply
Demand
Incentive
Capital

No Free Lunch
Goods/Services
Shortage
Factors of Production
Land/labor/capital
Human/physical capital
Margin
Diminishing Marginal Utility
Cost/benefit analysis
Production Possibilities Curve
Efficiency
Profits
Safety net
Innovation
Households
Laissez faire
privatization
Collective bargaining.
Modifications/Accommodations/Differentiation: As per I.E.P.s and 504s

Reading outloud

Blooms Taxonomy in Questioning

Refocusing and explaining as needed

Notes provided if needed online as well as all class readings/notes/handouts for

students who are home tutored, adhd, or have other modifications necessitating
provided notes however this resource is an option for all students and will only result in
more transparency, parental involvement and organizational issues common to
adolescents.