Integrating the Social Studies Across Colorado History
The Economic Perspective
October 4, 2014
Marc JohnsonEducation Program Director
Colorado Council for Economic [email protected] 303-752-2323
Personal Financial Literacy: Economics
• Content Area: Social Studies (4 standards) – History, Geography, Economics, Civics– For each grade level, P-8:
– One GLE in Economics– One GLE in Personal Financial Literacy
(PFL)
Standard 3: EconomicsGrade Level Expectation – Grade 4 - Economics
1. People respond to positive and negative incentives– Selected Evidence Outcomes
• Define positive & negative economic incentives• Give examples of the kinds of goods and services
produced in Colorado’s different historical periods and their connection to economic incentives
• Explain how the productive resources – natural, human and capital – of CO have influenced the types of goods produced and services provided
Standard 3: EconomicsGrade Level Expectation Grade 4 PFL
2. The relationship between choice and opportunity cost
– Selected Evidence Outcomes & 21st Century Skills:
• Define choice and opportunity cost• Analyze different choices and their opportunity costs• Give examples of the opportunity costs for individual
decisions
What different ways does an individual have to get information when making a decision?
• Concepts (technical vocabulary) – The economic trilogy
• scarcity, choice & cost
– Incentives• positive• negative
– Goods & services– Productive resources
• natural, human, capital, entrepreneurship
Presentation Objectives
Concepts are universal
Across space…
…to the world, Mexico, Colorado,
Denver or your classroom!
Across time…
…to the present, past or future!
When I ask ANY group what economics is all about they invariably say…
OR, they mention financial headlines:
The DOW was up 150 points today on news that the US had attacked ISIS targets in Syria.
The official pre-order opening date for the new Apple iPhone 6 is October 10.
No economist likes those answers…
And the CO Academic Standards avoid those perceptions too!
Economics is NOT about money or financial headlines.
A Gift from CCEE
• Who would like this
ultimate economics &
PFL resource?
• Wants: ______
• Available: 1
THE economic problem?
Scarcity
Daily, Small Choices
Should I go to the
library today?
Should I go hiking
today?
Maybe go shopping
at the mall?
Develop a Decision-Making Framework
for Students
• Help make decisions
– by learning a process for
more careful choice
Decision-Making Model• Define the Problem
– outcome to be achieved
• List the Alternatives– ways to achieve the outcome
• State the Criteria– standards to judge alternatives
• Evaluate the Alternatives– apply criteria to each alternative
• Make a Decision– select best alternative
Decision-Making Model
• Define the Problem
• List the Alternatives
• State the Criteria
• Evaluate the Alternatives
• Make a Decision
PACED
Problem: What Restaurant for Dinner?
Shah
Ajuaa’s
Venice
Food quality
Menu choice
Drive Time Quiet Cost
+0 - - +
+ - + 0+
+ -+ 00
+2
0
+1
0 = average+ = above average - = below average
CriteriaAlternatives
Shanahans
Problem: Choose a Car to Purchase
Alternatives
Criteria
Greatest value is not in the specific answer, but in the process of identifying
important factors.
• What factors are important to you in making this decision? Used to rank one alterative
as “better” than another.
Candy Bar Activity
• One Volunteer, please?
• Opportunity lost opportunity cost
– Value of the best foregone alternative
– “Choosing is refusing”
–choose A, refuse B –
»cost of A is value of B
Sample question from Grade 4 Social Studies Practice Test
Type your response in the box.Read the paragraph. What should the student do? Explain what her opportunity cost will be and why.
A student is trying to decide whether to go roller skating, practice soccer, or read a book today. She has time to do only one activity. She went roller skating yesterday, she has an important soccer game tomorrow, and the book is a new one by her favorite author.
Opportunity Cost Examples• Cost of coming to this workshop today?
– Value of next best foregone alternative• joy spending day with family or friends
• Cost of using frequent flyer miles to fly to Las Vegas?– Value of using frequent flyer miles to fly to Miami
• A student’s cost of going to a movie with friends?– $8.00 movie ticket price – $2.00 transport (gas, etc.)– $20.00 babysitting earnings given up
Explicit
Implicit
Since Scarcity Requires Choice• … and since choice involves cost
Why choose it?
• Assume that: – People choose X if:
• B(X) > C(X); – otherwise, not
where :
B(X) ≡ benefit of choice X
C(X) ≡ cost of choice X
B(X) C(X)
Would You Ride a Bull?
– For $5?– for $50?– for $500?– for $5,000?– for $50,000?
• Likely to get more risk takers as the reward rises!
Are You Willing… • … to be a police person?
– For:• $20,000 per year?• $40,000 per year?• $60,000 per year?• $80,000 per year?• $160,000 per year?• $320,000 per year?
Why might someone have wanted to…
• …leave the comforts of St. Louis to homestead in Colorado in 1866?
• Why might some rural counties be willing to secede from the state of Colorado? What would be the costs and benefits of secession?
Practice – Identify Incentives
1. Why do some students want good grades?
2. What makes you want to be a good teacher?3. What makes a company want to build a ski
resort?
4. What made Colorado Territory want to become a state?
Intended Consequences
• If people respond to incentives . . .
– then behavior can be altered in desired or intended ways
– For example …
The Camel Race Two Bedouins met in the desert, and fell into an
argument over their camels, each claiming that his was the slowest, “stubbornest,” most useless camel in all of Arabia.
The argument ended in a bet. They agreed to race to the oasis, two miles away, whichever camel arrived last would be proved slowest, and his owner would win ten dirham from the other.
Camel Race
continued
. . . They got on their camels, and set off slowly toward the oasis. More slowly, still more slowly. After a while, it became clear that since each Bedouin was trying to win the bet, they were never going to make it to the oasis.
. . . After a while, a wise sheik rode up on a donkey and asked them why they and their camels were standing still, in the middle of the desert, on a hot day, with the oasis less than two miles away.
The Camel Racecontinued
They got off their camels, and all three sat down in the shade of a rock while the two Bedouins explained about their bet.
The wise sheik whispered two words to them. The Bedouins immediately jumped on the camels and rode off as fast as they could towards the oasis. What were the 2 words?
________ _________
Switch camels!
The Treasury, Petra, Jordan
Consequences
People respond to incentives causing
intended consequences, and
unintended consequenceswhich can offset the intended benefits
The Tax Man Cometh
• April 15, 1987 . . . – IRS rule change:
• Instead of merely listing each dependent child, tax filers required to provide Social Security number.
Result?
7 million children disappeared
Key Concept, Once Again
People respond to incentives …and the rest is commentary
Armchair Economist • Stephen Landsberg
Freakonomics & Super Freakonomics • Steven Levitt
CO Academic Standards
• Standard 3 – Economics
GLE (2nd grade) – The scarcity of resources affects the choices of individuals and communities
21st Cent. Skills
*Economic thinkers analyze how goods and services are produced…
*Economic thinkers analyze the scarcity of resources…
CO Academic Standards
• Standard 3 – Economics
GLE (4th grade) – People respond to positive and negative incentives
Evidence Outcomes
*Explain how the productive resources – natural, human and capital – of Colorado have influenced the types of goods and services provided
Goods and Services
Goods
Things that can satisfy people’s wants.
A car
A house
A dish of ice cream
An i-pod
Other goods…
Goods and Services
Services
Activities that can satisfy people’s wants.
Dentistry (a dentist checking your teeth)
Selling you a car (car sales person)
Babysitting (babysitter)
Playing professional football (professional athlete)
Other services…
Where do goods and services come from?
Think of a good…like a house. What do you need to produce or build a house?
Lumber
Nails
Saws
Carpenters
Roofers
Economists call all of these “resources”.
There are three kinds of resources.
Human Resources
Human resources are people who work to produce a good or service.
Examples:
Truck driver
Plumber
Teacher
Nurse
Can you name others?
Natural Resources
Natural resources are things that occur naturally in the world and can be used to produce a good or service.
Examples:
granite
natural gas
deer
water
gold
Can you think of others?
Capital Resources
Capital resources are goods produced and used to make other goods and services.
Examples:
an office building
a copy machine
pots & pans
a tractor
a projector in school
Can you name any more?
Practice...
What productive resources are necessary to produce a haircut?
Comb, brush, razor, clippers, electricity, scissors
Hair stylist, receptionist
Water
A Game: Rolling for ResourcesRULES
Each group displays all its resource cards face-up.
Make certain the cards are scattered slightly so that each resource card is visible.
To “win” the individual game, a student must be the first to collect a human resource card, a natural resource card and a capital resource card. To win the group game, all members of the group must have all cards; first group to finish wins.
A Game: Rolling for ResourcesRULES
The resource cards have dots on the back that match the dots for each type of resource on the die (human resources – one dot; natural resources – two dots; capital resources – three dots).
Students will take turns rolling the die. Begin with the youngest student in the group. After that, play will move to the left.
A Game: Rolling for ResourcesRULES
If the die lands on “natural resources,” the student should find a natural resource card from the resource cards.
If the die lands on “human resource,” the student should find a human resource card from the resource cards.
If the die lands on “capital resource,” the student should find a capital resource card from the resource cards.
A Game: Rolling for ResourcesRULES
If a student selects the correct resource card, the number on the back of the card will match the number of dots for the type of resource on the die.
If a student selects a correct resource card from all the resource cards, he or she may keep the card and his or her turn is over.
A Game: Rolling for ResourcesRULES
If the card selected isn’t a correct example of the resource displayed on the die, the student must put the card back in the pile and wait for his or her next turn.
If a student rolls the die and it lands on a resource for which he or she already has a card, he or she may roll a second time. If the die again lands on a type of resource for which he or she already has a card, he or she must wait until his or her next turn.
A Game: Rolling for ResourcesRULES
The game is played until each student in the group has correctly selected cards for each type of resource.
When groups have finished…
Each group member gets a copy of Activity 1.3.
Identify the resource cards you selected during the game by writing the resource name in the correct space in Activity 1.3.
In the box next to each type of resource on Activity 1.3, write a sentence containing the name of this good or service and draw a picture of the good or service.
Display completed 1.3 around the room.
Discussion
• Why do people use productive resources?• Name one of the three kinds of productive
resources.• What are natural resources?• Give some examples of natural resources.• What are human resources?• Give some examples of human resources.
Discussion
• What are capital resources?• Give some examples of capital resources.• What are some human resources needed to
build a house?• What are some capital resources needed to
build a house?• What are some natural resources needed to
build a house?
Questions using economic thinking
What might inspire a student to complete homework? (identify incentives!)
Why has there been so little teaching of economics in elementary school until recently? Why is it changing?
Identify some different reasons white settlers from the east moved to Colorado? What affected their decision-making?
Questions using economic thinking
What productive resources did the Ancestral Pueblans use to create Mesa Verde?
Cloud City p. 131 of The Colorado Story
Using your understanding of economic benefits, cost & incentives, speculate on why residents of Leadville would so destroy their environment? Why would they restore it later?
Questions using economic thinking
• Light rail – save energy; environmentally friendly – how might you decide whether or not to build more?
• What incentives, both positive and negative, might the early fur traders have considered before moving to CO?What are some of the positive and negative incentives for moving to CO today?
Questions using economic thinking
• It’s sometimes said that the only people who really made money during the gold and silver rush were the general supply store and bar owners? Why?
• What do you think are the greatest natural resources CO has today? What were the most valuable natural resources of the past? Why has that changed?
Questions using economic thinking
How has the nature of human capital of the late 19th century changed by the 21st century?
Explain why capital goods used in Colorado in the 19th, 20th and 21st centuries changed so dramatically.
Economists describe barbed wire as a capital resource. Why?
For Whom? Rationing Device
• Lottery• First come• Market/Price• Command/Planner• Force• Share• Need
Market Economy or Command Economy?
Two Primary Mechanisms Observed in World?
Let’s vote on the one we want to use for the souvenir.