Goods and Services: Some are Private, Some are Not
This lesson printed from:
Posted January 3, 2012
Grades: 3-5, 6-8
Author: Council for Economic Education Technology Staff
Posted: January 3, 2012
The role of government is to provide for the common defense, define and protect property rights, and enforce contractual arrangements. Throughout the 20th and early 21st century, government has increased its role in economic life. The role of government has expanded to address so-called market failures and externalities by expanding their regulatory reach to address environmental concerns, monopolistic competition and provide public goods. Governments have also introduced various social programs to provide a social safety net for low-income individuals and senior citizens.
- Distinguish between goods and services provided by private businesses and those provided by government.
- Explain why governments provide certain goods and services.
- Explain that taxes collected by governments are used to pay for goods and services provided by governments.
Students will construct a community map bulletin board using construction paper cutouts of businesses and structures. Students ill explore the goods and services available in their community and determine that some are privately produced and governments provides others. Students learn that taxes, fees, and loans pay for government goods and services.
Display Visual 1 and ask students where they would call to report a broken swing set in the park. [Parks Department] Write the answer on the bottom of Visual 1.
Randomly distribute one card from either Activity 1 or Activity 2 to each student. Keep the card that identifies the parks department for use in step 12.
Tell students to read the cards and write the answer to the question on the back of their cards.
Direct students’ attention to the blank bulletin board. Tell them that the bulletin board is a picture of their community. Ask what is missing. [Possible answers might include houses, buildings, stores, and businesses.]
Tell students to look at the answers they wrote on the back of their cards. Ask them to share their answers. [movie theater, video store, sporting goods store, hair salon, restaurant, dry cleaner, car dealership, pet store, rental office, bank, bowling alley, dentist, clothing store, grocery store, stationery store, gas station, news stand, post office, highway department, library, school, sanitation department, zoo, recycling center, police station, parks department, bridge, traffic light, street signs]
Tell students that all their answers are examples of buildings and structures that are missing from their community. Explain that they will make construction-paper cutouts of structures that they have written on the back of their cards.
Display Visual 1 with the answer, “parks department,” written on it. Show students the construction paper parks department as a model.
Give a piece of construction paper, scissors, and crayons to each student. Ask them to make their construction-paper structures. When they are finished, have them share their structures.
Explain that some buildings and structures represent businesses. Businesses produce and sell goods and services to people. Some buildings and structures represent goods and services provided by the government to their citizens.
Display the parks department cutout. Tape the appropriate card from Activity 2 on the construction paper cutout.
Distribute tape. Ask students to tape the cards from Activity 1 or Activity 2 on their construction paper structures so that the name of each structure is visible.
Attach each structure to the bulletin board and label it “Our Community.” Draw roads and a river on the bulletin board. Discuss the following.
- What do the two different color labels on the buildings and structures in our community have in common? [One color represents privately owned businesses and one color represents things provided by the government.]
- Who provides our community with the greater number of goods and services we want? [private businesses]
- What goods and services are provided by the privately owned businesses? [movies, videos, sporting equipment, haircuts, food, clean clothes, cars, pets, apartments, banking services, entertainment, dental care, coats, groceries, school supplies, gasoline, newspaper] Point out that businesses sell these goods and services to consumers.
What goods and services does government provide? [mail, postage stamps, road repairs, books, trash pickup, zoo, recycling collection, police protection, recreation, bridge, traffic light, street signs] Point out that the government collects taxes from people and businesses in the community to be able to pay for these goods and services.
Reinforce the concept of government goods and services using the example of cleaning the classroom. Point out the mess in the classroom from the activity. Discuss the following.
- Is it fair for one person to clean up the room while the rest of us go out to play? [No.] Why not? [The mess was made by many students.]
- Who should clean up the mess? [Students might suggest those who made the mess or taking turns.]
- What might happen if we ask everyone to clean up the room voluntarily? [Some would and some wouldn’t. Those who do not volunteer would benefit because other students would clean the room.] Is this fair? [No, some students benefit and don’t do any work.]
- What happens when people make a mess in our parks? [City workers clean it up.]
- Who pays for the goods and services bought from private businesses such as a fast food restaurant, movie theater, or grocery store? [Consumers, such as the students and their parents]
Who pays for the goods and services provided by the government? (If students do not know, tell them that people and businesses pay taxes which are used to provide these services.)
Explain that taxes are monies paid by people to the government. Government uses these monies to pay for goods and services it provides.
Tell students that sometimes fees such as bridge and highway tolls and entrance fees to public parks also pay for these goods and services.
Explain that government can borrow money to pay for some goods and services that require a great deal of money to produce, such as national defense, health insurance for the elderly, and education, if they do not collect enough taxes. When the government borrows money, it must pay it back with interest.
Discuss the following.
- What are some types of taxes? [sales, property, income]
- Why does government provide certain goods and services? [Consumers want these goods and services and feel they are so important they should be made available to everyone. These include such things as national defense, education, and highways.]
If consumers want these goods and services, why won’t private businesses provide them? [Private businesses will not offer these goods and services because once they are produced, some people will benefit even if they did not pay for the good or service.] Refer back to the example of cleaning up the classroom, pointing out that everyone benefits even if only a few voluntarily clean up the mess. Ask students for examples from their community. [street lights, traffic lights, police protection]
- Display Visual 2. Have students sing, “Some Are Private; Some Are Not.”
The role of government is to provide for the common defense, define and protect property rights, and enforce contractual arrangements. Throughout the 20th and early 21st century, government has increased its role in economic life. In this lesson students have learned about the contrast between public and private goods. Public goods are those provided by the government because of inefficiencies, which persist in the private sector.
Review the main points of the lesson with the following.
What are private goods and services? [Goods and services produced privately and sold to consumers.]
What are some examples of private goods and services? [Some examples of private goods and services are restaurant meals, books, cars, clothes, televisions, games.]
What are some examples of goods and services provided by government? [Some examples of goods and services provided by government are national defense, bridges, police protection, highways.]
How does government pay for these goods and services? [They pay for these goods and services from taxes, fees, and borrowing.]
What are taxes? [Taxes are money collected by government to pay for goods and services it provides.]
Why do private businesses not provide the kinds of goods and services that government provides?[Businesses will have difficulty selling them. Once the good or service is provided, some consumers will be able to use it without paying.]
- Why do citizens think that government should provide certain goods and services? [Citizens think these goods and services are important for every one to have or use.]
Distribute a copy of Activity 3 to each student. Tell them they will be detectives looking for goods and services provided by government and private businesses. Ask students to read newspapers, listen to television and radio news stories, and walk through their community to look for examples. Instruct students to list five examples of private goods and services and five examples of goods and services provided by government. For each good or service listed, they should write where they obtained the information.
Tell students that a fable is a short tale in which animals talk and a lesson is learned. Ask students to write a fable that teaches how goods and services provided by government benefit a community.
- Write new verses for the song, “Some Are Private; Some Are Not.”