The Six Principles of Economics

People choose.

Resources are always limited, and people always want more than they can get.

🏃 Have students sort pictures (e.g., food, toys, clothes, video games) into two categories, needs vs. wants.

People's choices involve costs.

Give up opportunity cost (e.g. time, fun, etc.)

🏃 Have class create a graphic organizer that helps students organize their ideas of how one can manufacture, transport, and market their goods.

People respond to incentives in predictable ways.

Incentives are actions, awards, or rewards that infleunce the choices people make. Positive or negative.

🏃 Have students separate into groups and focus on advertising techniques, and what makes customers influenced into buying the product. (i.e. slogan, repetition, bandwagon, promotion, testimonial by celebrity, etc.)

People create economic systems that influence individual choice and incentives.

An economic system is the way a nation manages the production and distribution of goods and services. (What will we produce with our resources? How will we produce these goods? For whom will we produce these goods?)

🏃 The distribution of the toys and treats problem. Have students come up to boxes to get toys and treats. By the time it is the last group's turn, all of the toys and treats are gone, and the idea of scarcity is brought about to the students. Students are then asked about fair distribution, etc.

People gain when they trade voluntarily.

People specialize in producing goods and services because they expect to gain from their specialization.

🏃 Paper Bag Activity: Each student receives a sealed bag with one item. First Round, the student opens the bag and rates their satisfaction with the item in their paper bag. Second round, the student can trade objects within their table group. Third round, the student can trade objects with anyone in the classroom.

People's choices have consequences that lie in the future.

The costs and benefits of economic decisions we make may lead to unintended consequences.

🏃 Create a poster that displays the effects of economic decisions on our environment (could use the annihilation of trees as an example, for products, for space for factories, for resources, etc.)