In this elementary economics lesson, students will categorize and prioritize their wants to learn about scarcity and choice. Scarcity is really about knowing that often life is ‘This OR That’ not ‘This AND That’. To be asked to make a choice between ‘this toy OR that toy’ is difficult for students who want every toy. The lesson helps students to consider their wants, determine their opportunities, and try to make the best choices by weighing the benefits and costs. Students read make choices, read a story, and complete a drop and drag activity. The story references “Christmas” but can be adapted for any gift-giving holiday or birthday.
Learning Objectives
Students will be able to:
- Prioritize their wants.
- Describe why scarcity is characterized by “this OR that” and not “this AND that”.
- Identify the opportunity costs associated with each choice.
Materials/Resource List
- Drawing paper and crayons/markers for each student.
- Health Wants vs. Fun Wants: This interactive activity teaches students about the difference between wants and needs.
Health Wants vs. Fun Wants - Toys for Me: A poem written by the author of this lesson, C.D. Crain.
Interactive Version
Print Version
- Extension Activity Resources
- https://www.stlouisfed.org/education/-/media/project/frbstl/stlouisfed/education/curriculum/pdf/kiddynomics-lesson-1-betty-bunny-wants-everything.pdf
- “O Scarcity” and “Oh Give Me A Choice” songs from The Econ Song Book: https://www.jmu.edu/cob/centers/center-for-economic-education/_files/econ-songbook.pdf
- Once Upon A Decision – scroll down the page to access the “Once Upon a Decision Online Module” resource https://www.stlouisfed.org/education/ellas-adventures-online-courses
Introduction and Warm-Up Activity
- Ask students if they ever have to choose between two things that they want… but can only have one.
- As an example, the teacher may hold up a playground ball and a soccer ball, and say that one time she had to choose between which sport to play at recess. Another option would be to hold up a piece of candy, or some stickers and ask individual students which they would choose.
- Give students a piece of paper and some crayons. Tell them that we all would like to have many things. Tell students to draw two pictures on their piece of paper of things they would like to have. After they are done drawing their two pictures, they should put them in order of which is more important to them: they should put a “1” by the one that is most important, and a “2” by the one that is 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?”
- Explain to the students: 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—-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. Think of it like this: “choosing is refusing!” Whenever you choose one thing, you refuse something else.
Process
Part One:
Follow along with the story (a poem) using this interactive version or print a copy of the poem for students to read on their own.
In the 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.
Review the definitions of scarcity and opportunity cost.
Scarcity: Resources are limited so people cannot have all the goods and services they want.
Opportunity Cost: The next best alternative that must be given up when a choice is made. Not all alternatives, just the next best choice.
Discussion questions:
- Scarcity does not understand the difference between “this AND that” and “this OR that”. What is the difference?
[Discuss with the students the meaning of the words “AND” and “OR”. Discuss why Scarcity cannot have everything in life that she wants. For example, Scarcity cannot have every toy that she wants, every piece of candy that she wants or every pet that she wants, and so on.] - Why does Scarcity want every toy on the magic tree?
[Because she does not understand scarcity; that she cannot have it all. Discuss with the students why we cannot have everything thing we want because of limitations, such as time and money.] - There are 10 gifts on the tree. Select two gifts. Mother then says it’s OK to get one of the two gifts, but not both. You must choose between two gifts. What is the opportunity cost of this choice?
[The answer varies. The toy the student does not choose is their opportunity cost. Opportunity cost is your second choice, it is NOT all the other gifts on the tree.]
Conclusion
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
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.]
Extension Activity/Lesson
Sing a song!
Try “O Scarcity,” sung to the tune of “O Christmas Tree,” or “Oh Give Me A Choice” sung to the tune of “Home on the Range.” The lyrics to these songs and others can be found at the James Madison University Center For Economic Education website https://www.jmu.edu/cob/centers/center-for-economic-education/_files/econ-songbook.pdf
View this video of 5th grade students singing “O Scarcity” https://www.econedlink.org/resources/oh-scarcity-sing-a-long-lesson-demo/
Children’s Literature Extension for PreK – 1
Students listen to the story Betty Bunny Wants Everything and identify all the wants that Betty Bunny has at the toy store. Students learn that because of scarcity, they must make choices. They practice making choices by selecting a treat they want, a toy for one of the book characters, and finally a school item. They sing a song about choices and scarcity. Lesson Plan for Betty Bunny Wants Everything
Interactive Story for Grades 2-4
How do you make tough decisions? Read and listen to this story about Ella, who has decisions to make, and learn about the decision-making tool that helps Ella solve her problems. Once Upon A Decision – scroll down the page to access the resource https://www.stlouisfed.org/education/ellas-adventures-online-courses