Grades 3-5, 6-8
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Students encounter the concept of scarcity in their daily tasks but have little comprehension as to its meaning or how to deal with the concept of scarcity. Scarcity is really about knowing that often life is ‘This OR That’ not ‘This AND That’. This lesson plan for students in grades K-2 and 3-5 introduces the concept of scarcity by illustrating how time is finite and how life involves a series of choices. Specifically, this lesson teaches students about scarcity and choice: Scarcity means we all have to make choices and all choices involve "costs." Not only do you have to make a choice every minute of the day because of scarcity, but, when making a choice, you have to give up something. This cost is called oppportunity cost. Opportunity cost is defined as the value of the next best thing you would have chosen. It is not the value of all things you could have chosen. Choice gives us ‘benefits’ and choice gives us ‘costs’. Not only do you have to make a choice every minute of the day, because of scarcity, but also, when making a choice, you have to give up something of value (opportunity cost). To be asked to make a choice between ‘this toy OR that toy’ is difficult for students who want every toy. A goal in life for each of us is to look at our wants, determine our opportunities, and try and make the best choices by weighing the benefits and costs.
To know what Economics is about, you have to understand scarcity. Scarcity means that you always want more than you 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. You cannot have all the time you want. You cannot have every toy you want. You cannot have more of anything you want without having less of something else you want. All choices have costs. Not only do you have to make a choice because of scarcity, but the cost of making that choice means you give up the chance to get something else. This is called opportunity cost.
Therefore, the choice you make is very important. Not only do you have to make a choice, because of scarcity, but also, when you making a choice, you have to give up something.
Follow along with the story poem print a copy of the poem.
In the story poem, Scarcity does not understand that the world is “this OR that,” not “this AND that”. In other words, when you make a choice, you have to give up something else, which is the cost of the choice. Scarcity is limited to one toy as a gift from Mother for her birthday. Then, Scarcity is limited to one toy as a gift from Mother for Christmas. But Scarcity does not believe it is fair, or right, to have to choose. She does not want to pay the cost of having to give something up when she makes a choice. She wants every toy that she can see.
Because of scarcity, we all have to make choices. No one, not even you, can have everything they want. Every time you make a choice, you have to give up something.
Assessment Activity 1:
Identify five choices you made today preparing for school. For each choice list the opportunity cost. (Remember, opportunity cost is the next best thing you would choose 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 your teeth or not.]
Assessment Activity 2:
Discuss opportunities that Scarcity gave up (costs) by choosing to spend the night picking toys off of the magic tree.
[She did not eat dinner, she did not get to sleep, she did not get to play with a friend or a pet.]
Grades 3-5, 6-8