Poudre Valley School District Professional Development Elementary Economics (and a little PFL) June...

Poudre Valley School District Professional DevelopmentElementary Economics

(and a little PFL)

June 10, 2015

Marc JohnsonEducation Program Director

Colorado Council for Economic [email protected] 303-752-2323

mailto:[email protected]

Not one more thing!

Not only are you supposed to teach PFL & Economics…

It can be enjoyable and rewarding!

As best I can, I’ll use the KISS approach…

Economics

• Content Area: Social Studies (4 standards) – History, Geography, Economics, Civics– For each grade level, P-8:

– One GLE in Economics– One GLE in Personal Financial Literacy

(PFL)

Economics & PFL integrate well

• Concepts (technical vocabulary) – Wants / Needs– The economic trilogy

• scarcity, choice & cost

– Incentives• positive• negative

– Goods & services– Productive resources

• natural, human, capital, entrepreneurship

Presentation Objectives for Economics

Concepts are universal

Across space…

…to the world, Mexico, Colorado,

Denver or your classroom!

Across time…

…to the present, past or future!

Let’s Get Started!

When I ask ANY group what economics is all about they invariably say…

MONEY

When I ask ANY group what economics is all about they invariably say…

OR, they cite economic statistics:

CO is the 2nd largest aerospace employer in the US, behind CA.

Median per capita income in CO in 2013 was $58,823 (US figure: $52,250).

Colorado’s unemployment rate in December, 2014 was 4%.

No economist likes those answers…

Let’s start with some fundamental assumptions of the academic discipline of economics…

Economics is NOT about money or data.

Wants & NeedsCO Academic Standards make this distinction:

“Identify the difference between personal wants and needs.”

“Give examples of the difference between something you want versus something you need.”

An economist’s reactionAnd here’s why…

What do you need to survive – the minimum?

We’re talking mere existence and basic survival.

In the context of life in the 21st century in an affluent society – what do you need to survive?

The distinctions between needs and wants become blurred.

So, economists simply use one category –

Wants – and make distinctions about how much we want something…

and posit that our wants are unlimited.

So, what’s the problem?

A Gift from CCEE

• Who would like this

ultimate economics &

PFL resource?

• Wants: ______

• Available: 1

THE economic problem?

Scarcity

Scarcity

• Wants > Availability

– or,

• Unlimited wants > Limited resources

Scarcity Choice

Economics is:

– the study of choice

• Scarcity necessitates choice–people must choose

The Economic Way of Thinking:Key Concept

Scarcity Choice Trade-offs

A World of Choice

Grand Slam?

Marry the little red-

haired girl?

Daily, Small Choices

Should I go to the

library today?

Should I go hiking

today?

Maybe go shopping

at the mall?

Big, Strategic Decisions

Should I go to

college?

Should I work

instead of college?

We All Confront Choice

A school teacher?

A business person?

Develop a Decision-Making Framework

for Students

• Help make decisions

– by learning a process for

more careful choice

Decision-Making Model• Define the Problem

– outcome to be achieved

• List the Alternatives– ways to achieve the outcome

• State the Criteria– standards to judge alternatives

• Evaluate the Alternatives– apply criteria to each alternative

• Make a Decision– select best alternative

Decision-Making Model

• Define the Problem

• List the Alternatives

• State the Criteria

• Evaluate the Alternatives

• Make a Decision

PACED

PACED Example

• My wife and I decide on restaurant for dinner …

Where to Go for Dinner?

How about Venice

restaurant?

How about Shanahan’s restaurant?

Problem: What Restaurant for Dinner?

Shah

Ajuaa’s

Venice

Food quality

Menu choice

Drive Time Quiet Cost

+0 - - +

+ - + 0+

+ -+ 00

+2

0

+1

0 = average+ = above average - = below average

CriteriaAlternatives

Shanahans

Problem: Choose a Car to Purchase

Alternatives

Criteria

Greatest value is not in the specific answer, but in the process of identifying

important factors.

• What factors are important to you in making this decision? Used to rank one alterative

as “better” than another.

Candy Bar Activity

• One Volunteer, please?

• Opportunity lost opportunity cost

– Value of the best foregone alternative

– “Choosing is refusing”

–choose A, refuse B –

»cost of A is value of B

The Dismal Science!

There’s no such thing as a free lunch!

TNSTAAFL

• Choice involves cost» opportunity cost


Sample question from Grade 4 Social Studies Practice Test

Type your response in the box.Read the paragraph. What should the student do? Explain what her opportunity cost will be and why.

A student is trying to decide whether to go roller skating, practice soccer, or read a book today. She has time to do only one activity. She went roller skating yesterday, she has an important soccer game tomorrow, and the book is a new one by her favorite author.

Opportunity Cost Examples• Cost of coming to this workshop today?

– Value of next best foregone alternative• joy spending day with family or friends

• Cost of using frequent flyer miles to fly to Las Vegas?– Value of using frequent flyer miles to fly to Miami

• A student’s cost of going to a movie with friends?– $8.00 movie ticket price – $2.00 transport (gas, etc.)– $20.00 babysitting earnings given up

Explicit

Implicit

Since Scarcity Requires Choice• … and since choice involves cost

Why choose it?

• Assume that: – People choose X if:

• B(X) > C(X); – otherwise, not

where :

B(X) ≡ benefit of choice X

C(X) ≡ cost of choice X

B(X) C(X)

Play It Again, Sam

• Raise the cost

– if C(X) > B(X), • choose another bar

People respond to incentives


Are You Willing… • … to be a police person?

– For:• $20,000 per year?• $40,000 per year?• $60,000 per year?• $80,000 per year?• $160,000 per year?• $320,000 per year?

Practice – Identify Incentives

1. Why do some students want good grades?

2. What makes you want to be a good teacher?3. What makes a company want to build a ski

resort?

4. What made Colorado Territory want to become a state?

Intended Consequences

• If people respond to incentives . . .

– then behavior can be altered in desired or intended ways

– For example …

The Camel Race Two Bedouins met in the desert, and fell into an

argument over their camels, each claiming that his was the slowest, “stubbornest,” most useless camel in all of Arabia.

The argument ended in a bet. They agreed to race to the oasis, two miles away, whichever camel arrived last would be proved slowest, and his owner would win ten dirham from the other.

Camel Race

continued

. . . They got on their camels, and set off slowly toward the oasis. More slowly, still more slowly. After a while, it became clear that since each Bedouin was trying to win the bet, they were never going to make it to the oasis.

. . . After a while, a wise sheik rode up on a donkey and asked them why they and their camels were standing still, in the middle of the desert, on a hot day, with the oasis less than two miles away.

The Camel Racecontinued

They got off their camels, and all three sat down in the shade of a rock while the two Bedouins explained about their bet.

The wise sheik whispered two words to them. The Bedouins immediately jumped on the camels and rode off as fast as they could towards the oasis. What were the 2 words?

________ _________

Switch camels!

The Treasury, Petra, Jordan

Consequences

People respond to incentives causing

intended consequences, and

unintended consequenceswhich can offset the intended benefits

The Tax Man Cometh

• April 15, 1987 . . . – IRS rule change:

• Instead of merely listing each dependent child, tax filers required to provide Social Security number.

Result?

7 million children disappeared

Key Concept, Once Again

People respond to incentives …and the rest is commentary

Armchair Economist • Stephen Landsberg

Freakonomics & Super Freakonomics • Steven Levitt

Productive Resources

Focus: Grades 3-5 Economics

Lesson 1

Rolling for Resources

Goods and Services

Goods

Things that can satisfy people’s wants.

A car

A house

A dish of ice cream

An i-pod

Other goods…

Goods and Services

Services

Activities that can satisfy people’s wants.

Dentistry (a dentist checking your teeth)

Selling you a car (car sales person)

Babysitting (babysitter)

Playing professional football (professional athlete)

Other services…

Where do goods and services come from?

Think of a good…like a house. What do you need to produce or build a house?

Lumber

Nails

Saws

Carpenters

Roofers

Economists call all of these “resources”.

There are three kinds of resources.

Human Resources

Human resources are people who work to produce a good or service.

Examples:

Truck driver

Plumber

Teacher

Nurse

Can you name others?

Natural Resources

Natural resources are things that occur naturally in the world and can be used to produce a good or service.

Examples:

granite

natural gas

deer

water

gold

Can you think of others?

Capital Resources

Capital resources are goods produced and used to make other goods and services.

Examples:

an office building

a copy machine

pots & pans

a tractor

a projector in school

Can you name any more?

Human, Natural & Capital Resources

Practice...

What productive resources are necessary to produce a haircut?

Comb, brush, razor, clippers, electricity, scissors

Hair stylist, receptionist

Water

A Game: Rolling for ResourcesRULES

Each group displays all its resource cards face-up.

Make certain the cards are scattered slightly so that each resource card is visible.

To “win” the individual game, a student must be the first to collect a human resource card, a natural resource card and a capital resource card. To win the group game, all members of the group must have all cards; first group to finish wins.


The resource cards have dots on the back that match the dots for each type of resource on the die (human resources – one dot; natural resources – two dots; capital resources – three dots).

Students will take turns rolling the die. Begin with the youngest student in the group. After that, play will move to the left.


If the die lands on “natural resources,” the student should find a natural resource card from the resource cards.

If the die lands on “human resource,” the student should find a human resource card from the resource cards.

If the die lands on “capital resource,” the student should find a capital resource card from the resource cards.


If a student selects the correct resource card, the number on the back of the card will match the number of dots for the type of resource on the die.

If a student selects a correct resource card from all the resource cards, he or she may keep the card and his or her turn is over.


If the card selected isn’t a correct example of the resource displayed on the die, the student must put the card back in the pile and wait for his or her next turn.

If a student rolls the die and it lands on a resource for which he or she already has a card, he or she may roll a second time. If the die again lands on a type of resource for which he or she already has a card, he or she must wait until his or her next turn.


The game is played until each student in the group has correctly selected cards for each type of resource.

When groups have finished…

Each group member gets a copy of Activity 1.3.

Identify the resource cards you selected during the game by writing the resource name in the correct space in Activity 1.3.

In the box next to each type of resource on Activity 1.3, write a sentence containing the name of this good or service and draw a picture of the good or service.

Display completed 1.3 around the room.

Discussion

• Why do people use productive resources?• Name one of the three kinds of productive

resources.• What are natural resources?• Give some examples of natural resources.• What are human resources?• Give some examples of human resources.

Discussion

• What are capital resources?• Give some examples of capital resources.• What are some human resources needed to

build a house?• What are some capital resources needed to

build a house?• What are some natural resources needed to

build a house?

Assessment

Activity 1.4

Did we achieve our objectives?• Concepts (technical vocabulary)•

– The economic trilogy• scarcity, choice & cost

– Incentives• positive• negative

– Goods & services– Productive resources

• natural, human, capital, entrepreneurship

For Whom? Rationing Device

• Lottery• First come• Market/Price• Command/Planner• Force• Share• Need

Market Economy or Command Economy?

Two Primary Mechanisms Observed in World?

Let’s vote on the one we want to use for the souvenir.

What’s PFL really about?

• Earning Income• Buying Goods & Services• Saving• Using Credit• Financial Investing• Protecting and Insuring

The Big Three(in elementary)

“risk” an add-on in 4th grade

Let’s take one at a time…

Earning Income

For most of us – income is wages for our labor

Other sources of income–

interest

dividends

rent

capital gains

profit

What’s best for elementary kids to explore?K-2? 3-5?

Earning Income continued

Young folks get their income from…

allowance

family or neighborhood jobs

gifts

other?

Earning Income continuedWhat students should know and be able to do…

1. People earn an income when they are hired by an employer to do a job.

1. Explain why employers are willing to pay people to do their work.

2. People have many different types of jobs from which to choose. Different jobs require people to have different skills.

2. Make a list of different types of jobs and describe the different skills associated with each job.


3. Workers are paid for their labor in different ways, such as wages, salaries or commissions.

3. Explain how a waitress, a teacher and a realtor are paid.

4. Income from working is taxed. The revenue from these taxes is used to pay for government-provided goods and services

4. Describe examples of government-provided goods and services that are paid for with taxes.


MAYBE upper elementary…get into other sources of income…interest, dividends, rent, capital gains and profit, as appropriate for your students and their grade level.

Follow-up questions:

What type of work do you want to do when you grow up?

How do you get prepared for your desired career or job?

How can you increase your work income and job opportunities?

Buying Goods and Services

We can’t buy or make all the goods and services we want.

Not enough time, not enough skill, not enough money.

So, we have to CHOOSE to buy some goods and services and not others.

We have to THINK about spending – by setting goals,gathering information,planning and budgeting.

Buying Goods & Services continuedWhat students should know and be able to do…

1. People make choices about what goods and services they buy because they can’t have everything they want. This requires individuals to prioritize their wants.

1. Create a list of goods and services that you want NOW. Assume you have $x.00. With that limited budget, rank what you want from most to least desired and justify their ranking.

Buying Goods & Services continued

What students should know and be able to do…

2. Good decision making requires comparing the costs and benefits of spending alternatives. Costs are things that a decision maker gives up; benefits are things that a decision maker gains.

2. Compare the costs and benefits of buying a bicycle in two settings, rural and urban, and for different people, including a younger child, a teenager and a grandparent

Buying Goods & Services continuedWhat students should know and be able to do…

3. Whenever people buy something, they incur an opportunity cost. Opportunity cost is the next best alternative that is given up when a person makes a choice.

3. Present an example of a buying choice a person made and identify the opportunity cost of that choice.

Buying Goods and Services continued

Follow-up questionsWhat would you choose as a present for a

parent, brother or sister?What would you do with money received as

a birthday gift? What is the opportunity cost of your choice?

Saving

Saving is what is left of your income after taxes are paid and spending is done.

Why might you want to save?

Set it aside for future uses…

A big item (bicycle, phone, clothes)

A vacation

A car, a home

Your education

Your retirement

Saving continued

As with spending, you have to make CHOICES about how to save and how much to save.

It’s a good idea to set goals and match your savings to achieve those goals.

Saving continuedWhat students should know and be able to do…

1. Income is saved, spent on goods & services or used to pay taxes.

1. Explain the differences between saving and spending and give examples of each.

2. When people save money, they give up the opportunity to spend that money to buy things now in order to buy things later.

2. Describe what a person gives up when he or she deposits $20 into a savings account.


3. People can choose to save money in many places – at home, in a piggy bank, at a commercial bank, credit union or savings and loan.

3. Draw a picture identifying the different places where people can save their money.


4. People set savings goals as incentives to save. One savings goal might be to buy goods and services in the future.

4. Read a children’s book and identify a character’s savings goal and whether the character meets the savings goal.

5. A savings plan helps people reach their savings goals.

5. Select a savings goal and identify steps to take in order to reach that savings goal.


6. When people deposit money in into a bank (or other financial institution), the bank may pay them interest. Banks attract savings by paying interest. People also deposit money into banks because banks are safe places to keep their savings.

6. Describe the advantages of saving money in a savings account rather than putting the money into a piggy bank.

Saving continued

Follow-up questionsWhere do you choose to put your savings?How can you save enough money to reach

your savings goals?How much should you save and how much

should you spend?

Protecting and insuring (risk)

Students should be aware of financial risk and learn that individuals can reduce that risk by altering their behavior to reduce the likelihood and size of a loss.

Risk continued…What students should know and be able to do…

1. Risk is the chance of loss or harm.

1. Give examples of the risk associated with activies such as riding a bicycle, using a skateboard or having a pet.

2. Risk from accidents and unexpected events is an unavoidable part of daily life.

Write a newspaper article on an unexpected “bad” event such as a tornado, car accident, or illness, and describe the effect the event would have on individuals and their families.


3. Individuals can either choose to accept risk or take steps to protect themselves by avoiding or reducing risk.

3. Draw a poster depicting an age-appropriate activity (e.g., owning and riding a bicycle) that illustrates how to avoid risk of harm or loss (not riding the bike) or how to reduce the chance of a bad event (riding in a safe manner) and potential harm if the bad even happens (wearing a bike helmet).


4. One method to cope with unexpected losses is to save for emergencies.

4. Give examples of events for which emergency savings could offset financial losses.

Risk continued…

Follow-up questionWhat steps could you take to lower the risk

of injury in a bicycle accident?

Did we achieve our objectives?

Are you familiar and confident with the concepts of:• Earning Income• Buying Goods & Services• Saving• Protecting and Insuring (risk)

So, Economics & PFL

Relevant to kids’ lives

Can be enjoyable to teach and fun to learn

Part of the state standards

Lots of resources available to help you

Master the concepts yourself, seek resources, share methods with your colleagues, then… GO FOR IT!

Poudre Valley School District Professional Development Elementary Economics (and a little PFL) June...

Documents

Transcript of Poudre Valley School District Professional Development Elementary Economics (and a little PFL) June...