Standards for Trade, Exchange and Interdependence Video and Quiz

Standard: 3

Name: Specialization and Exchange

Specialization and the division of labor allow people to benefit from voluntary exchange. Voluntary exchange occurs only when all participating parties expect to gain.

• K-5: Elementary students learn about the benefits of specialization and the division of labor. They understand that exchange becomes necessary when people have specialized in a skill. Barter is identified as an inefficient way to trade and how money makes trading easier is discussed in Standard 13.
• 6-8: By middle school, students are expected to understand that both buyers and sellers anticipate benefiting from exchange.
• 9-12: The high school student learns how transaction costs may limit trade. The role of markets is outlined in Standard 4.Benchmark Students will know that: Students will use this knowledge to: 3.E.1 Most people produce and consume goods and services.Give an example of a good a farmer or florist produces and a good or service they consume. 3.E.2 Economic specialization occurs when people concentrate their production on fewer varieties of goods and services than they consume.Name several adults in the school or community who specialize in the production of a good or service (plumber, law enforcement officer, teacher, hair stylist, etc.) and identify other goods and services that these individuals consume but do not produce for themselves. 3.E.3 Division of labor occurs when the production of a good or service is broken down into numerous separate tasks, with different workers performing each task.Participate in a simulated assembly line and identify the separate operations and the different tasks involved. Identify examples of goods produced in the U.S. using division of labor. 3.E.4 Specialization and division of labor usually increase the productivity of workers.Work individually as a craftsperson to produce a product alone and then work as a member of a small group to produce the same product. Explain why more products usually are produced when each member of the group performs a particular task in making the good. 3.E.5 People specialize in producing what they do best and then exchange their income for goods and services they do not produce.Describe how a specialist’s life such as a long-haul truck driver, accountant, lawyer, or childcare worker would change if they were unable to exchange their income to buy goods or pay for services needed.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 17 Standard 3: Specialization and Exchange