Standards for The Price of Gasoline: What’s Behind It?

Standard: 8

Name: Labor and Income

Income for most people is determined by the market value of their labor and other productive resources they sell. A worker’s wage depends on their productivity and the price of the product they produce. Many factors affect the distribution of income in an economy, including differences in educational levels, experience, and career choices, as well as discrimination and government policies.

• K-5: In elementary school, students learn that people work to earn income.
• 6-8: In middle school, students learn that income from labor depends on worker productivity and the price of the goods the worker produces. They are also introduced to ways in which other resources can generate income.
• 9-12: In high school, students explore income distribution and factors that cause differences in income levels among households.Benchmark Students will know that: Students will use this knowledge to: 8.E.1 Labor is a human resource that is used to produce goods and services.Identify different types of labor (human resources) and the goods and services they produce in their community. 8.E.2 Income is the payment people earn for work they do. People spend, save, or pay taxes with their income.Explain how people earn income and why they don’t spend all their income on buying goods and services. 8.E.3 People can earn income by exchanging their labor (physical or mental work) for wages or salaries.Interview adults about why they work and explain the reasons people have for working. Explain the difference between a wage and a salary.E: ELEMENTARY STUDENTS

Standard: 4

Name: Markets

The interaction between buyers and sellers determines the market price and allocates scarce goods and services. Buyers and sellers make decisions based, in part, on market prices.

• K-5: Elementary school students learn that markets determine the prices of goods and how people change their behavior when prices change.
• 6-8: In middle school, students are formally introduced to the concepts of supply and demand and what is meant by an equilibrium price. They are presented with a situation where the market price is not in equilibrium and learn how equilibrium is restored. Finally, they discover that a change in the price of one good can impact the market for another good.
• 9-12: In high school, students learn about shortages and surpluses, and how supply and demand changes impact the market price. Finally, the concept of the price elasticity of demand is introduced.Benchmark Students will know that: Students will use this knowledge to: 4.E.1 A market exists whenever buyers and sellers exchange goods or services.Identify items they purchased in online marketplaces and at a local market (e.g., grocery store or school fair) and describe the differences between digital and physical markets. 4.E.2 A price is what people pay when they buy a good or service, and what they receive when they sell a good or service.Identify one of their favorite items purchased with their own money and what price they paid, or what they charged when working for others (e.g., chores around the house, yard work for a neighbor). 4.E.3 Higher prices for a good or service provide incentives for buyers to purchase less of that good or service, and for producers to make or sell more of it. Lower prices for a good or service provide incentives for buyers to purchase more of that good or service, and for producers to make or sell less of it.Provide an example of a good that they did not purchase (or their parents or caregivers would not purchase for them) because it was too expensive and predict how low the price would have to drop before they would be able to buy it. Decide if they would take out the garbage, babysit a sibling, or do some other chore for $1 and, if not, decide at what price they would be willing to do the chore.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 20 Standard 4: Markets

Name: Earning Income

Standard: 1

• Students will understand that: Most people earn wage and salary income in return for working, and they can also earn income from interest, dividends, rents, entrepreneurship, business profits, or increases in the value of investments. Employee compensation may also include access to employee benefits such as retirement plans and health insurance. Employers generally pay higher wages and salaries to more educated, skilled, and productive workers. The decision to invest in additional education or training can be made by weighing the benefit of increased income-earning and career potential against the opportunity costs in the form of time, effort, and money. Spendable income is lower than gross income due to taxes assessed on income by federal, state, and local governments.

Name: Investing

Standard: 4

• Students will understand that: People can choose to invest some of their money in financial assets to achieve long-term financial goals, such as buying a house, funding future education, or securing retirement income. Investors receive a return on their investment in the form of income and/or growth in value of their investment over time. People can more easily achieve their financial goals by investing steadily over many years, reinvesting dividends, and capital gains to compound their returns. Investors have many choices of investments that differ in expected rates of return and risk. Riskier investments tend to earn higher long-run rates of return than lower-risk investments. Investors select investments that are consistent with their risk tolerance, and they diversify across a number of different investment choices to reduce investment risk.

Name: Spending

Standard: 2

• Students will understand that: A budget is a plan for allocating a person’s spendable income to necessary and desired goods and services. When there is sufficient money in their budget, people may decide to give money to others, save, or invest to achieve future goals. People can often improve their financial wellbeing by making well-informed spending decisions, which includes critical evaluation of price, quality, product information, and method of payment. Individual spending decisions may be influenced by financial constraints, personal preferences, unique needs, peers, and advertising.