The Economics of Soccer:How Economics Can Affect Our Everyday Lives and How to Empower Your Kids with Economic Knowledge

By Crystal Yan

To my family, friends, and teachers who have empowered me with knowledge, advice, and laughter.

Thank you.

1. IntroductionEconomics is part of everything we do.

More than anything, it dictates choices we make everyday: should we buy this peanut butter or that peanut butter (is the opportunity cost of $0.76 more worth the fact that it is organic?), should we take out a loan to buy that new car now that interest rates are up (perhaps due to the Fed’s monetary policy?), and of course, should we watch TV or get work done (is the opportunity cost of regretting it later on worth the 22 minutes of sadly attempted comedic drivel amidst seemingly never-ending, rarely clever ads?).

Start off an internet search engine with “Americans don’t” and it auto-completes it for you as “Americans don’t know…” And sure enough, most Americans are pretty clueless when it comes to economics. As my own economics teacher says, most economics teachers across America teach how to balance a checkbook (NOT economics) instead of Laffert curves, the Law of Diminishing Marginal Utility, and Say’s Law.

And so, Economics for All began as an economics class project and evolved into a call to action: an initiative to make learning about scarcity and buying “stuff” (As our economics teacher says, money doesn’t make us rich. Stuff does) fun and interactive in every Web 2.0 way possible for K-12 youth.

This short e-book contains a very easy, fun, and interactive activity and lesson plan for K-12 educators and non-profit organizations that work with youth to implement.

This activity is inspired by the Oxfam America World Trade Organization Soccer Game. Though inspired by that activity, this one has been modified quite a bit so it focuses more on

general macroeconomics principles and less on the agencies that oversee free trade. I take no credit for the original concept of this soccer game activity, and this e-book is meant to serve as a noncommercial resource to modify an activity I found inspiring to teach macroeconomic principles.

Read this and take action. In less than an hour, your kids will get some fresh air and exercise, learn some sportsmanship, and of course, several macroeconomics principles some adults aren’t even familiar with.

If you like what you see, I encourage you to visit our blog at econforall.tumblr.com or follow our tweets at twitter.com/econforall to read and learn macroeconomic principles in 140 characters or less.

Enjoy!

Crystal YanFounder, Economics for All

2. Game OnBelow is an interactive activity and lesson plan to implement. Handouts and resources for this activity are in chapter 3, “The Economics of Soccer”. Make sure to read through this chapter and the next to fully understand the lesson before you implement the activity.

This activity works best with groups of 20-30 students. Although Economics for All is a program for K-12 youth, this activity may work best with middle and high school age students as the first stage of the lesson requires a certain level of maturity in terms of sportsmanship.

Agenda:

1 min: Divide students into teams.5 min: Play game.1 min: Intermission 1. Enact new rules.5 min: Play game.1 min: Intermission 2. Enact new rules.5 min: Play game.1 min: Intermission 3. Enact new rules.5 min: Play game.1 min: Intermission 4. Enact new rules.5 min: Play game.20 min: Debrief. Lead discussion and implement lesson handouts in chapter 3.Time: About 50 min.

Resources/Supplies Needed:One soccer ballSoccer fieldFour orange traffic conesEconomics of Soccer handout (see chapter 3)

1. Set up the soccer field with two orange cones on each side for goals. Do not use regular soccer goals for this activity.2. Divide the student into two teams. Even/odd numbers of student ID numbers or alphabetically by last names A-M and N-Z work well to initially divide the students, then adjust teams so there are equal numbers of players on both sides.3. Start the two teams off in a casual game of soccer. Make sure each team chooses one student to play the position of goalie. Choose one team as Team A and one as Team B. 4. Tell teams that each side will have the opportunity to call “foul” on the other side three times. When refereeing, choose to “take the side” of Team A every time Team B brings up a dispute. There is a reason for this (see chapter 3). When students protest, shrug your shoulders and don’t explain just yet.5. Intermission 1. After five minutes, take one minute to move the cones for the goal for Team A closer together (so it’s harder for Team B to kick the ball in) and move the cones for Team B farther apart (so it’s easier for Team A to kick the

ball in). There is a reason for this (see chapter 3), and all instructions for future intermissions. Tell Team A that now two successful goals are equal to one point for the next five minutes, but don’t tell Team B.6. Allow the students to return back to their game of soccer.7. Intermission 2. After five minutes, take one minute to tell Team B they are not allowed to have a goalie. The goalie will now be out of the game. Also, Team A is only allowed to have up to 5 points scored against them. Any more goals than that doesn’t count. Also, tell Team A that now one goal is one point and tell both teams (Team A already knew) that for the last five minutes, two goals was only equal to one point.8. Allow the students to return back to their game of soccer.9. Intermission 3. After five minutes, take one minute to tell Team A they can kick one player out from Team B (they will likely pick one of Team B’s strongest players) if they agree to give Team B one free shot at an open, unmanned goal. Team B will not have this option. If Team A takes the deal, this player will now be out of the game. Also, now an additional point can be scored if one team gets control the ball in the first kickoff.10. Allow the students to return back to their game of soccer.11. Intermission 4. After five minutes, take one minute to tell Team A that they can take another player from Team B, this time to join their team (they will likely pick one of Team B’s strongest players). This player will now be on Team A. Also, all points scored against Team A at this point are now void.12. Allow the students to return back to their game of soccer.13. After five minutes, end the game. Hopefully, if this is done right with all the new rules, Team A will have won and Team B will be angry and feel cheated. This is expected.14. Sit them down in a circle and mediate arguments. Have students calm down and quiet down and pass out slips of paper (see handout in chapter 3).

15. There won’t be enough slips of paper for all students, so have every other student take one and ask those students read what’s on the paper aloud. 16. The slips of paper will define macroeconomic principles. Ask each student what they thought was in the game that corresponded to teach macroeconomic principle. Let students know the correct answer and explain the principles If they have any questions.

3. The Economics of SoccerHandout:

Instructions: Take the following macroeconomic concepts and print them out. Cut them into separate slips of paper and have them ready before the game for debrief. Students will be asked to match something in the soccer game to these principles.

If there’s enough time afterward: If you’re a K-12 educator, lead a discussion relating the activity and the principles to where your class is in your curriculum. If you’re a non-profit, ask students what they thought economics was about and teach them some more economic principles.

1. Government subsidies are a way for government to enable production of a certain good or service to favor certain businesses. When the government subsidizes a good or service, it makes it cheaper for a business to produce that good or service so it makes more profit (or any at all). Can you think of an example of a government subsidy?2. Tariffs are a form of restriction to free trade. A tariff is a tax on imports. When one country places a tariff on imported products from another country, it means that

that country’s products will cost more to consumers than they were before and then consumers will likely choose domestic products over foreign products. Most tariffs are placed to supposedly “protect domestic businesses”. Can you think of a tariff a country has now or has had before?3. Quotas are another form of restriction to free trade. When one country places a quota on imported goods from another country, it means that only a certain number of that good can be imported. This means some customers will have to choose domestic goods. Most quotas are placed to supposedly “protect domestic businesses”. Can you think of a quota a country has now or has had before?4. Embargoes are another form of restriction to free trade. When one country places an embargo on another country, it means that country is not allowed to import from or export to that country. In short, the countries are not allowed to trade with each other at all. Most embargoes are placed for political reasons. Can you think of any embargoes you know of?5. Opportunity cost/trade-off is the cost of giving up one thing for another. For example, the opportunity cost of going to the movies with your friends means less studying for your economics test coming up. The opportunity cost of going on that family vacation is not only the expenses incurred to go on that vacation (for example, the cost of flight tickets are part of those expenses), but also the chance to make $50 that weekend babysitting the neighbor’s kids. Can you think of some examples of opportunity cost in your life?6. Inflation is when the price level increases so the value of each dollar is less. Remember when your grandparents say “Back in my day, soda was only $0.10 a bottle!” they’re talking about inflations. Now, $0.10 will buy less because there was been a lot of inflation since their day. Can you think of another example of inflation?7. The GDP (Gross Domestic Product) Deflator helps clarify misconceptions in thinking that the GDP of a nation is always increasing when most of the time the increase in

GDP is due to inflation. The GDP Deflator calculates the “real” GDP by taking inflation into account.8. Money illusion is when consumers think they have more money/value than they actually do because they forget about inflation. For example, if someone got a 2% raise, he/she would be very happy and think they are richer. However, if inflation was 3%, they actually got less than the year before. But because the nominal salary of this person is still higher, he/she thinks that he/she is richer and that thinking is known as money illusion.9. Bimetallism is when money is measured as a ratio against not one, but two commodities, most commonly gold and silver. Both ratios are accepted.10. The Law of Diminishing Marginal Utility states that the more of a product a consumer consumes, the less benefit per additional unit of that product the consumer receives. For example, if you eat one serving of your favorite homemade dish, you’ll love it. But how would you feel about eating the tenth serving?

Answer Key:Note: The referee is the World Trade Organization and/or government. Teams A and B are nations.

1. Government subsidies: Helping Team A win by letting them take out Team B players is like the government subsidizing for Team A. It favors Team A just like government favors certain businesses when it subsidizes their products.2. Tariffs: Making Team A’s goal smaller is like a tariff. It restricts the points coming in like rich nations restrict imports coming in from developing nations.3. Quota: Announcing Team B is only allowed to score up to 5 points against Team A is like a quota. It limits points coming in like quotas limit imports coming in.4. Embargo: Making all further points scored against Team A void is like an embargo. It prevents any further points from coming in like embargoes prevent any imports from coming in.

5. Opportunity cost, Trade-off: The chance for Team A to take Team B’s strongest player at the opportunity cost of giving Team B one free shot illustrates the economic principle of opportunity cost.6. Inflation: When the rules changed so that two kicks meant one point, it was like inflation. Each kick was worth less just like each dollar is worth less when the price level is too high.7. GDP Deflator: When the rules changed back so that one kick meant one point, it was like “deflating” the inflation. It took the inflation into account and “corrected” it. Similarly, the GDP of a nation is often miscalculated as always on the rise due to rising inflation and the GDP Deflator takes the inflation into account and “corrects” it into the real GDP. The action of changing the rules back was like the GDP Deflator.8. Money illusion: Only Team A knew about the brief inflationary period. Team B was under the impression that their goals were worth the same amount. They experienced money illusion, much like some consumers do when they are under the impression that they have more money because they have a greater nominal amount of money even when they have less value because of inflation.9. Bimetallism: When teams are told they can score an additional point for getting control of the ball in the kickoff, this is like bimetallism. Bimetallism is when ratios for gold and silver are both accepted. Similarly, goals and getting control of the ball after kickoff are now both accepted ways to score a point.10. Law of Diminishing Marginal Utility: This was a hard one. This actually was a comparison to two students in the group. If one student was a soccer player, he/she probably scored quite a few times and was probably proud each time, but perhaps less so for each additional goal because he/she is used to doing well in soccer. For another student in the group, he/she may not be an avid soccer player and was probably very proud in scoring even one goal because he/she doesn’t play soccer often and didn’t expect it.

4. More Resources

Here are some websites I would recommend visiting:

Economics for All:1. Economics for All Blog: http://econforall.tumblr.com2. Economics for All Twitter: http://twitter.com/econforall

Universities:3. Yale Economics Open Courses Online:

http://oyc.yale.edu/economics4. UC Berkeley Open Courses Online:

http://webcast.berkeley.edu/courses.php5. MIT Economics Open Courses Online:

http://ocw.mit.edu/OcwWeb/Economics/index.htm6. Princeton Lectures Online:

http://www.princeton.edu/WebMedia/lectures/

Non-profit Organizations and Foundations:7. Network for Teaching Entrepreneurship (NFTE):

http://www.nfte.com/8. Foundation for Economic Education (FEE):

http://fee.org/9. Foundation for Teaching Economics (FTE):

http://www.fte.org/

5. ConclusionI hope you’ve enjoyed reading this as much as I did writing it. As your students have learned by now, economics is a part of our everyday lives. Every time you see a kid peddling ice cold lemonade or cookies at a bake sale, you see economics in action among our youth.

Just a couple months ago, I was talking to my younger sister, then in middle school. At the young age of 13, she had already understood the laws of supply and demand. You see, at her middle school, students get “head of the line” passes for good behavior, and use these passes to go through a

shorter line to buy lunch. My sister, ever the good student, was overwhelmed with too many “head of the line” passes for her own good, and had decided to use her passes to go through a shorter line and buy food for her friends, turn around, and charge them a higher price to net herself a handsome profit. She realized quickly that the demand was growing for not only snacks but snacks as soon as possible, and so took advantage of that demand and charged the higher price accordingly.

Think of the things your students can achieve with a solid education in economics. Think of a world in which “Americans don’t” auto-completes as “Americans don’t experience money illusion”.

Please take advantage of this book and share it with any educators or youth organization leaders you know!

Thanks for reading, and don’t forget to check out our blog at econforall.tumblr.com or follow our tweets at twitter.com/econforall!

6. About the AuthorCrystal Yan (严晨) is @crystalcy on Twitter. She is a trilingual Chinese American student entrepreneur in the San Francisco Bay Area. As a serial social entrepreneur with a focus on youth marketing and online social media strategy, she has collaborated with a socially responsible start-up to start an internship program for high school and college students, worked as a consultant in a consulting firm to help a non-profit expand its donor and

volunteer program in its 50 centers throughout the Bay Area,

recruited high schools to participate in microfinance fundraising program for a nationally recognized microfinance non-profit, interned for a personal branding company, won the national championship scholarship for a debate-like case study competition in Banking and Financial Systems, and worked pro-bono on graphic design projects for the largest student business organization in the world, an international non-profit, an award-winning robotics team, and many more. Crystal also sits on the board of a governing body that oversees 6,000+ student leaders and leads a language honor society chapter that runs a nationally-acclaimed debate program. Crystal aspires to attend a four-year college and contribute to the fields of global business, foreign affairs, corporate philanthropy or international aid.

Read my blog: http://crystaly.wordpress.com/Visit my LinkedIn profile: http://www.linkedin.com/in/crystalyTake a look at my Twitter profile: http://twitter.com/crystalcyView my online portfolio for graphic design and photography: http://crystaly.carbonmade.com/

6. About Economics For AllEconomics for All is an initiative to make learning economics fun and interactive for K-12 youth.

Our pilot programs include a free e-book with interactive lesson plans to implement for K-12 educators and non-profits, as well as a Twitter account summarizing 20 basic macroeconomic principles in 140 characters or less.

Visit our blog at econforall.tumblr.com or follow our tweets at twitter.com/econforall!