The Penny Problem

Teacher's Version

This lesson printed from http://www.econedlink.org/lessons/index.php?lesson=257&page=teacher

July 31, 2002

Content Standards: 10 11

Key Economic Concepts:

Description:

Students will research the cost of making the penny an the use of the penny and come up with reasons why the penny should or should not be continued to be made and used.

Lesson Objectives:

Students will:

Introduction:

How many pennies do you have in your pocket or purse or bookbag? How often do you get a penny back in change? Can you buy anything with a penny? For four pennies? What use are pennies in our economy?

According to www.usnews.com (Washington Whispers Daily), Arizona Congressman Jim Kolbe introduced a bill in congress to reduce the importance or use of the penny. He wants to bar purchases that would be made with more than 25 pennies. He would also round up or down to the nickel. In July of 2001, Good Morning America aired an interview, claiming that the penny is not a very economical coin. The claim was made that many people don't use pennies, instead people just save pennies and don't get them back into circulation. The mint has to make so many pennies, because people don't use them after they get them as change. During the interview it was stated that pennies are getting expensive to make. The suggestion was made to do away with the use of the penny altogether and round purchases up when paying.

A group dedicated to keeping the penny, called Americans for Common Cents (found on www.pennies.org [1] ), supplies information that claims that it costs .7 cents for the mint to make a penny. The group claims the U.S. treasury gains profits of $40 million a year from the penny.

Resources:

Process:

Step 1

Divide the class into brainstorming groups (no more than 3 to a group). Tell the class about the Congressman who has introduced a bill to eliminate the penny coin. Have the groups brainstorm ideas about why the penny is useful and why it is not so useful.

Now have each student list the pros and cons of the penny in the appropriate columns.

Click here to download the worksheet.

Step 2

In the same groups, have the students go to the following websites to find facts about the penny suggesting that it is or is not a worthwhile coin to have around.

Now have the students add to their columns. Advise the students that the information on the websites may take some time reading. It may not just list pros and cons. Guide the students to understand that the cost of making the penny may fit into the pro or con category.

Now have the students in their groups discuss and list two ways to get pennies back into circulation . They also should list two ways to buy and sell things without the use of the penny as one of our coins.

Conclusion:

Bring the students together as a whole group and list the pros and cons of continuing to mint the penny on a large chart paper. On another piece of large chart paper make a whole class list of ways to get the penny circulating, and how we should deal with buying and selling without the penny.

Assessment Activity:

Each student is to write a letter to Congressman Jim Kolbe either applauding him or objecting to his plan for getting rid of the penny, or telling him that you want the penny to stay. Remind the students to check for grammar and spelling mistakes before handing in their letter.

Grading System

 
Pros or Cons
Other Requirements
Poor none discussed  
Fair 1 discussed  
Good 2 discussed  
Excellent more than 2 discussed  
Superior more than 2 discussed give ideas for what to do when the penny is discontinued or what could be done to get people to use the penny

Extension Activity:

Further studies could be done with the dollar bill or using a longer lasting coin.

Links Used:

1. ^ ^ ^ "www.pennies.org" - (www.pennies.org)
2. ^ ^ "www.usmint.gov/about_the_mint/annual_report/index.cfm?action=operations_00_ann_rpt" - (www.usmint.gov)
3. ^ ^ "www.forbes.com/2002/07/05/0705penny.html" - (www.forbes.com)
4. ^ "www.govtrack.us/congress/person.xpd?id=400226l" - (www.govtrack.us)