When individuals produce goods or services, they normally trade (exchange) most of them to obtain other more desired goods or services. In doing so, individuals are immediately confronted with the problem of scarcity - as consumers they have many different goods or services to choose from, but limited income (from their own production) available to obtain the goods and services. Scarcity dictates that consumers must choose which goods and services they wish to purchase. When consumers purchase one good or service, they are giving up the chance to purchase another. The best single alternative not chosen is their opportunity cost. Since a consumer choice always involves alternatives, every consumer choice has an opportunity cost.
A classic rhyme, Simple Simon and the Pie-Man, introduces students to the concepts of consumer and producer. Students learn that consumers are the people who buy and use goods and services. Producers make the goods and provide the services. When producers are working, they often use goods and services provided by other producers. These goods and services are called resources. An interactive activity helps students distinguish between consumers and producers. In a second activity, the students match producers with the resources needed to provide goods and services. A suggested follow-up lesson is We are Consumers and Producers which examines how students and their families function as consumers and producers in their homes and communities.
Students will give examples of human resources that are producers, and identify goods and services produced by workers.
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This publication contains 16 stories that complement the K-2 Student Storybook. Specific to grades K-2 are a variety of activities, including making coins out of salt dough or cookie dough; a song that teaches students about opportunity cost and decisions; and a game in which students learn the importance of savings.
16 out of 18 lessons from this publication relate to this EconEdLink lesson.
Designed primarily for elementary and middle school students, each of the 15 lessons in this guide introduces an economics concept through activities with modeling clay.
9 out of 17 lessons from this publication relate to this EconEdLink lesson.
This publication helps students analyze energy and environment issues from an economics perspective.
2 out of 6 lessons from this publication relate to this EconEdLink lesson.