Economics Unit

Money How do you think money is made? Where do you think it is made? Let’s watch to answer these questions! The Birth of a Coin video

Income The money people earn when they work. How many of you earn an income at home? How do you earn it? What do you do with the money you earn? Do you have a saving account for the money? We are going to read about a boy who receives money, but just can’t seem to make wise choices about saving it.

Goods Items that people make or use to satisfy needs and wants Ex. toys, food, a computer, shoes What goods can you name in the classroom?

Services Activities that satisfy people’s needs and wants Ex. Haircuts, doctor exams, opening a savings account Hairdressers, doctors, and bankers provide these services for us. Who provides services for you in our school? Teachers help us learn, cafeteria workers serve us lunch, custodians clean our school, librarians provide books

Understand Goods and Services? We are going to put you to the test! Goods or Services? Goods and Services Activity

Specialized Jobs Last week, we talked about goods and services. Some workers make the goods for people to buy while other workers provide a service. People that provide services and are trained to do a certain kind of job have a specialized job. A few examples would be lawyers, doctors, and firefighters. Who has a specialized job in our school? Principals, teachers, secretaries, school nurse

Workers in Our Community Think about workers in our community. Are they making goods or providing services? Let’s make a chart! How do service jobs and jobs where people sell things help our community?

Consumers or Producers Consumers are people who buy goods and services to satisfy their wants. Producers are people who make goods or provide services. Label each business on your chart either a consumer or producer. Did you know that some of them are both?

Mystery Worker Riddles Stitches and itches, Slips and falls, Colds and flu, I fix them all. Who am I? _____ A doctor I’m there for you Both night and day So you are safe At school and play. A policeman Fire! Fire! 9-1-1 I fight the blaze until it’s done. Who am I? _____ A firefighter I get up early Just to bake Your cookies, rolls And bread and cake. A baker

Productive Resources These are the things needed to produce (make) goods. There are three main productive resources: capital, natural, and human.

Capital Resources Goods made by people and used to make other goods or to provide services. Examples: any kind of machines such as a computer, blender, hammer What capital resources do we have in our school? pencils, scissors, table, chair

Natural Resources Gifts of nature that are untouched by human hands They can be used to produce goods we want.   Items made with the help of a machine is not a natural resource. Examples are: sunlight, trees, land, coal, oil, water, oranges, flowers What natural resources do we have at our school?

Human Resources People who work to make a product or provide a service. Examples: doctors, truck drivers, and farmers. What human resources do we have at our school? Teachers, principals, custodians, secretaries

Let’s Review! Can you find the capital, human, and natural resources on a construction site? Construction Site Activity Do you understand the three types of resources? Let’s watch the production (making) of Crayola crayons. Looks for natural, capital, and human resources in the video. Crayon production video

Price The amount people (consumers) pay when they buy a good or service. The amount people (producers) receive when they sell a good or service.

Profit The difference between the amount of money they made and spent. Example: You buy a shirt for $6 and sell it to your friend for $10. Your profit would be $4.

Lemonade Stand Productive Resources Pretend you are going to start your own lemonade business. What human resources will you need? You! What capital resources will you need? pitcher, spoons, table, sign What natural resources will you need? lemons, sugar, water, ice

You’re in Business! How well do you think you would do running your own lemonade business? You will get to set your own prices and see if you can make a profit (money). Let’s do the first day together. Lemonade Stand

Did you earn a profit?

Consumer or Producer? Who was the consumer of your lemonade stand? Remember consumers are people who buy goods and services to satisfy their wants. Who was the producer of your lemonade stand? Remember producers are people who make goods or provide services.

Bartering Bartering is trading without using money. Before money was invented, people would barter to get the things they needed that they couldn’t get for themselves. Look at the men bartering in the picture. They are exchanging or swaping without using money. One man needs a pair of boots and the other one needs food. Each one is happy with the trade and thinks they got an item better than the one they had before.

Want to try bartering? Write an item that you have at home that you might like to barter. You will not really be giving this item away. This is just pretend. It can be an item of high value (iPod, bed, camera) or lower value (sunglasses, bookbag, blanket). Listen to the items your classmates are bartering. Decide which item you would like the most. Now you will have a chance to start bartering with your classmates. Always think about whether the exchange would give an item that is better than you started with. You must participate in 4 exchanges, but you don’t have to accept all of them. Let’s see if you end up with the item you wanted. Good luck!

Is bartering or trading easier? How many of you ended up with the item that you wanted? Did you think it was easy to barter? Did anyone have someone that didn’t want to exchange items with you? Imagine having to use bartering all of the time. If you wanted to bake a cake and didn’t have flour, you would have to find someone that was willing to barter with you. Sometimes people would not want to exchange, so you couldn’t get the flour. Now if we need flour, we go to the store and buy it. This is trading because we are using money. It is faster and easier to use money to get the goods and services we need.

With bartering, we talked about not always having all the things we want because of scarcity (not enough of something). When this happens, we have to make choices. When we choose, whatever we give up is the opportunity cost. What are the girl’s two choices? Why can’t she have both? What is the opportunity cost if she chooses the skateboard? The ticket What is the opportunity cost if she chooses the ticket? The skateboard Skateboard or ticket Scarcity of money

Oh Give Me a Choice (Tune: Home on the Range) Oh give me a choice, Oh, a difficult choice, And I’ll think about what I could use. I’ll have to decide, With my eyes open wide, What I’ll give up and what I will choose. Opportunity cost! It’s the thing you give up when you choose. It’s the price that is paid When a choice must be made. It’s the thing that I surely will lose.