Students will be able to:
- Describe scarcity
- Prioritize their wants
- Identify the opportunity costs associated with making a choice
In this economics lesson, students will categorize and prioritize their wants to explain scarcity.
Give each student a sheet of paper with some crayons. Tell them to draw two pictures of things they would like to have. After they are finshed, have them put a “1” by the picture of the item most important to them, and a “2” by the one not as important. Ask students the following questions: “What were the two things you drew?” “Was it difficult to choose one over the other?” “Why did you choose one as more important than the other?”
Ask students if they can think of a time where they had to choose between two things they really wanted, but could only have one. Allow time for them to share examples of choices they had to make. Hold up two items such as a softball and a soccer ball; explain that they would have to choose which game to play at recess because it would be impossible to play both games at the same time. (Option: hold up candy and gum, explaining the could not chew both at the same time.) Explain that life is all about making choices because we cannot have everything we want. Tell them we make choices because we have unlimited wants and limited resources — and that creates a situation called scarcity. Scarcity means we always want more than we can have. Every person — child and adult, rich and poor, U.S. citizen and non U.S. citizen — has to deal with scarcity every minute of the day, because no one can have everything they want. Remind them that means they cannot have all the time they want, all the toys they want, or all the anything they want. And when they choose to have on thing, they are giving up the opportunity to have something else — just like if they chose to play softball at recess, they gave up the opportunity to play soccer. Why? Because all choices have costs. What they give up when they choose is called their opportunity cost. Explain that making good choices is very important and sometimes hard to do because they are always giving up something else. Tell them that “choosing is refusing” because they are choosing one thing and refusing something else. Summarize this part of the lesson by reminding them that choices have benefits (getting what they want) and choices have costs (giving up the opportunity to have something else).
Tell students you will be reading a “scarcity” poem to them called Toys for Me Slides (Note: you may choose to have students read individual slides.) Explain that the poem will help illustrate the difference between “this AND that” and “this OR that”. Provide a brief overview of the poem to help students listen for the key concepts: In the poem, a little girl named Scarcity does not understand that the world is “this OR that,” not “this AND that”. And, when her Mother says she is limited to one toy, Scarcity does not believe it is fair, or right, to have to choose. She wants every toy that she can see. After reading the poem, ask the following discussion questions: Why does Scarcity believe she wants every toy? [Because she does not understand we cannot have everything we want.] Why does Scarcity want every toy on the magic tree? [Because she does not understand that she has to make a choice; no one can have everything they want.] What did Scarcity give up (her opportunity cost) by choosing to spend the night picking toys off of the magic tree? [Possible answers include: she did not eat dinner, she did not get to sleep, she did not get to play with a friend or a pet.] What is the difference between “this OR that” and “this AND that”? [“or” means one or the other; you have to make a choice; “and” means both; you do not have to make a choice because you can have both.] In the poem, Scarcity had two choices: the kite and the bike. Because she got the bike, what was her opportunity cost? [The kite] Do you think that was a good choice? Why or why not? [Most students would agree it was a good choice because a bike will last longer than a kite and can be used for more things.] Why do you think we cannot have everything we want? [Limited time, limited money, etc.] Suppose Scarcity could have all the candy and junk food that she wanted. Would that be a good decision? [No because she could have health issues] What would be the benefit of eating foods other than just candy? [She would probably be healthier.] Suppose Scarcity could have every pet she wanted. Would that be a good decision? [No because it would be hard to take good care of them and find a place for them in the house or yard.] What would be the benefit of limiting the number of pets? [She would have more time for the ones she had and could take better care of them.] Debrief the activity by reminding students that making choices has benefits and costs. While it is sometimes hard or seems unfair to have to choose, no one can ever have everything they want. The goal is to make the best choice with the best benefit and the least opportunity cost.
Explain that some choices are really difficult to make, especially when they affect our health and safety. Those “health wants” might be considered needs while toys and other things would be “fun” wants. Have students complete the Health Wants vs. Fun Wants drag-and-drop activity. (Note: you may want to do this as an individual activity or as a class-activity). After completing the activity, have students explain their answers. Remind students that making choices is not always as easy as picking health wants over fun wants. Also remind them that adults — even teachers and their parents — have to make choices…and sometimes those choices are not fun for them to make either.
Have students identify three choices they made today before coming to school, and list the opportunity cost of each choice. Remind them that the an opportunity cost is their second choice or the next best thing they would have chosen to do. [Possible answers: to wear the red or blue sweater, to eat cereal or toast, to ride in the car or walk, to take lunch money or a lunch to school, to brush their teeth or not.]
Explain that everyone must make decision, including consumers (buyers) and producers (sellers). Introduce the lesson What Should Our Business Produce which helps students understand how to think like a producer. Have students make a list of six items that they want, and then share those wants with their classmates. Students can then use those lists as “market research” to decide what kind of product they would like to make for a classroom business. Remind students that resources for producing goods and services are also limited, and producers will allocate those resources to make the products that most consumers want to buy.
Provide students with a list of ten items (or show them ten different items). Have them draw pictures of two items from the list that they would like to have. Have them circle their first choice and put an X by their second choice. Remind them their second choice is their opportunity cost. You may also want to have them write a sentence explaining the reason for selecting their first choice item.
Engage students in singing fun songs about scarcity and choice. “O Scarcity” is sung to the tune of “O Christmas Tree” and “Oh Give Me A Choice” is sung to the “Home on the Range.” Debrief the activity by asking students to explain the concepts of scarcity, choices, costs and benefits.