Students will be able to:
- Understand the concept of opportunity cost and apply the concept to several scenarios.
- Analyze the conditions under which their opportunity cost might be their first choice.
In this economics lesson, students will use decision-making to learn the costs associated with decisions.
Ask students if they have ever made a decision and then regretted it. For younger students, use language like, have you ever chosen something and then were sorry that you chose what you did? Tell students about a time when you made a choice that you later regretted. Say that making good choices means that we need to think carefully about all our options before we choose. Today, we will learn how to make decisions so that we won’t be sorry afterward.
Ask the students to tell you some of the choices that they made before coming to school. As the students provide examples, make a list of these examples on the board. Then, ask that student what they did not choose to do instead. Tell them to give you their next best choice and write this example next to their “choice”. Explain to the students that the next best thing that they didn’t choose is their “Opportunity Cost. ” Opportunity Cost means the next-best alternative a person gives up in making a choice. For example, if they chose to wear a blue shirt, their opportunity cost may have been a red shirt. Discuss whether or not the choice they made was good or bad and why. Tell students that sometimes choosing is easy and sometimes choosing is difficult. Now, they will learn how to make good choices.
Divide the class into 4 groups. Each group will be a season of the year. Write the name of the four seasons on the board. Give each group cards 1 and 2 from their season. Use Choices for Every Season worksheet for instructions and the printable cards. Tell each season that they are to pretend that they live in whatever season is you have assigned to them. Tell students to choose between cards 1 and 2. You can have the group come to a decision by voting, or you can have each student make their own decision. One student in each group can be the recorder and must use the My Choice worksheet to keep track of individual responses.
After the groups have had time to make their choice, record each season’s choice under the title “Choice” and each option not chosen under “Opportunity Cost”. Ask students if these were easy decisions to make. They should say yes because their choices were between something that “goes” with their season and something that does not. Ask students if their opportunity cost would always be their second choice, no matter what; i.e., is there a time when your second choice would be your first choice? They will probably answer that if they were a different season, their choice would be different. If they do not respond this way, lead them to that recognition. Tell students to trade their “out of season” card with another season’s out of season card.
Summer should now have an ice cream cone and the water park; Winter, hot chocolate and sledding; Fall, corn maze and pumpkin pie; and Spring, biking and chocolate easter bunnies. Again, ask students to choose between these two and record as in the first round. Ask students if this decision was harder than the first decision and why. They should say yes, because both of their options were things they would eat/do in their season. This harder decision should be reflected in a more even vote distribution between choice 1 and 2. Again, ask students what would have made them choose their opportunity cost as their first choice instead of their second choice. Finally, in each season, remove one of the cards. In summer, remove the water park; winter, hot chocolate; fall, pumpkin pie; and spring, chocolate bunnies. Then give each season the third card from the set (summer, lemonade; winter, skating; fall, pumpkin carving; spring, baseball). Now ask students to choose between the two card they have and record as previously. Ask if this was a harder decision than the last one and why. Students might say yes because now they had to choose between either two things to eat/drink or two activities. Point out that sometimes the more alike our options are, the harder it is to make a decision. Ask students to think about when (under what conditions) their opportunity costs would be there first choice. For example, if a “summer” student chose the ice cream cone, he/she might have chosen the lemonade if he/she was very thirsty.
Distribute Choices Matter to each student and have them work individually on making choices, identifying opportunity cost and thinking critically about the conditions under which their second choice would be their first. Invite students to share their choices and their reasons.
Using the Choices, Choices worksheet, have students complete it at home with a parent or guardian’s help.
To reinforce the idea of opportunity cost, make an effort to frame classroom discussions using that term and the concept. For example, anytime the class needs to vote on something, frame the second-place choice as the opportunity cost. Keep track of all the choices and opportunity costs the class has made during the week.
When reading children’s literature, when a character makes a choice, ask students what his/her/its opportunity cost was. Tops and Bottoms by Janet Stevens is a recommended book. As you read this story, use Guided Questions for “Tops and Bottoms” to guide students through a deeper level of reading.