Standards for Green Eggs and …Economics?

Standard: 2

Name: Decision Making

People usually respond predictably to positive and negative incentives. Effective decision-making requires comparing the additional costs of alternatives with the additional benefits.

• K-5: In elementary school, students learn about the benefits and costs of making choices. They learn how positive and negative incentives influence their choices and behaviors, and how different people can make different choices given the same circumstances.
• 6-8: In middle school, the presentation of decision-making is refined by adding the ideas of marginal cost and marginal benefit. Students learn that decisions are made by comparing the marginal cost and the marginal benefit of doing something. Finally, they learn that monetary and non- monetary incentives exist and that decisions may have long- term consequences.
• 9-12: In high school, the scope of decision-making is expanded to include the various roles that individuals play in the economy as well as other decision-makers such as firms and governments. Caveats to decision-making such as unintended consequences, the costs and benefits of an allocation system, and sunk costs are covered. Finally, basic behavioral economics findings are introduced to illustrate examples where individuals may not make the best decisions.Benchmark Students will know that: Students will use this knowledge to: 2.E.1 Because of scarcity, something is given up whenever a choice is made.From a list of three toys, rank order their preferences, state their first choice, and identify the second toy as what is given up. 2.E.2 A cost is what you give up when you decide to do something. A benefit is the gain a person receives when they decide to do something.List the costs (what you give up) and benefits (what you gain) of buying a pet. 2.E.3 The opportunity cost of an activity is the value of the best alternative that would have been chosen instead. It includes what would have been done with the money spent, the time, and other resources used in undertaking the activity.Describe a situation that requires a choice among several alternatives. Decide which they would choose and then identify the opportunity cost of that decision. 2.E.4 The evaluation of choices and opportunity costs is subjective; such evaluations vary depending on individual preferences, cultural backgrounds, and societal norms.Compare solutions to a common problem, such as where to go on a class trip, and explain why solutions and opportunity costs differ among students. 2.E.5 Many choices involve doing a little more or a little less of something; few choices are “all-or-nothing” decisions.Decide how the school should spend $4,800 to buy new playground equipment. Their class voted and would like to buy four swing sets ($1,200 each), three slides ($1,200 each), and three jungle gyms ($600 each). Explain what they must give up to get more of some and less of other equipment.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 12 Standard 2: Decision-Making

Standard: 6

Name: Market Failure

Markets sometimes fail to reflect the full economic costs and benefits of producing goods, leading to the over- or under-production of goods and services. Additionally, a lack of competition can lead markets to under-produce goods and services.

• K-5: Elementary school students are introduced to the concepts of externalities and public goods.
• 6-8: Middle schoolers learn that externalities and public goods cause problems in the private market.
• 9-12: High school students are formally introduced to the idea of efficiency and learn how externalities, public goods, noncompetitive markets, and lack of property rights can lead to inefficient outcomes.Benchmark Students will know that: Students will use this knowledge to: 6.E.1 The production of goods or services by businesses can sometimes affect people who do not work at the business or buy the product the business produces.Explain how a factory that produces house paint and pollutes the environment around the factory affects those who do not work at the factory or buy the house paint. Explain how the pleasant smells from a bakery can affect people who do not purchase the bakery’s goods. 6.E.2 Public goods and services are those that can be enjoyed by everyone at the same time, and once they are provided, people cannot be prevented from using them—even if they have not paid. Private goods are those that benefit the person buying them and people can’t use them unless they pay for them.Categorize a list of goods and services into public goods (such as national defense, flood protection, and clean air) and private goods and services (such as pizza, automobiles, and movie streaming services). Explain why each good or service was placed in the appropriate category.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 26 Standard 6: Market Failure