Economics Concepts High School Graduates Should Know

The concepts every high school graduate should know are described in A Framework for Teaching the Basic Concepts, EconomicsAmerica edition, National Council on Economic Education, 1993. Related useful volumes are Economics America: Teaching Strategies, and Economics What and When: Scope and Sequence Guidelines. Additional information is available at the Center for Economic Education in each state (go to the directory). To go directly to the list of concepts on this page, click here. The next section describes the study of economics.

Economics is the social science that studies the methods by which individuals and societies organize production activities and allocate scarce resources to meet material wants and needs. Economics is a logical way of thinking about economic matters rather than a set of answers. An important part of economics is the analysis of the interaction of economic policy and economic activity with the objective of selecting policies which will encourage the desired outcome.

The study of Economics helps to prepare students to make rational economic choices both in their own lives and in their participation in policy decisions as citizens of a city, state, nation, and the world. Increasingly, Nebraskans are in fact global citizens who will be required to make tough economic choices in an increasingly complex, changing world. The study of Economics provides students with analytical tools for interpreting economic events and making personal economic choices, even under changed conditions.

The subject matter of economics has been described as follows:

Economics is the study of how the goods and services we want get produced, and how they are distributed among us. This part we call economic analysis. Economics is also the study of how we can make the system of production and distribution work better. This part we call economic policy. Economic analysis is the necessary foundation for sound economic policy.

Another, slightly different, definition of economics, favored by many economists, is this: Economics is the study of how our scarce productive resources are used to satisfy human wants. This definition emphasizes two central points. First, productive resources are scarce, in the sense that we are not able to produce all of everything that everyone wants free; thus, we must "economize" our resources, or use them as efficiently as possible. Second, human wants, if not infinite, go so far beyond the ability of our productive resources to satisfy them all that we face a major problem in "economizing" those productive resources so as to satisfy the largest possible number of our wants. Indeed, most major economic problems arise from this fact of scarcity, and the need to make effective use of our resources to satisfy our wants. If there were plenty of everything for everyone to have without working or paying for it, there would be no economic problem. But, alas, this is not the state of the world, even in the affluent American society, and certainly not in the poorer nations that contain most of the world's people. (G. L. Bach, Economics: An Introduction to Analysis and Policy, 10th ed., p. 3)

Prominent economists and educators worked together to develop a set of fundamental economic concepts that are appropriate for presentation at each of the various levels of precollege education. A description of the level of understanding of these concepts that can be expected of students at various points along the K-12 curriculum, and suggested teaching materials, are available from the National Council on Economic Education as described at the beginning of this document. At the High School level, the concepts listed below are appropriate.


Concepts from a Framework for Teaching the Basic Concepts:

FUNDAMENTAL ECONOMIC CONCEPTS

1. Scarcity
2. Opportunity Cost and Trade-offs
3. Productivity
4. Economic Systems
5. Economic Institutions and Incentives
6. Exchange, Money, and Interdependence

MICROECONOMIC CONCEPTS

7. Markets and Prices
8. Supply and Demand
9. Competition and Market structure
10. Income Distribution
11. Market Failures
12. The Role of Government

MACROECONOMIC CONCEPTS

13. Gross National Product
14. Aggregate Supply
15. Aggregate Demand
16. Unemployment
17. Inflation and Deflation
18. Monetary Policy
19. Fiscal Policy
INTERNATIONAL ECONOMIC CONCEPTS

20. Absolute and Comparative Advantage to Barriers to Trade
21. Exchange and Rates and the Balance of Payments
22. International Aspects of Growth and Stability

MEASUREMENTS CONCEPTS AND METHODS STUDENTS SHOULD KNOW

Tables
Charts and Graphs
Ratios and Percentages
Percentage Changes
Index Numbers
Real vs. Nominal Values
Averages and Distributions Around the Average

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