From Middle School Economics, Unit I, Lesson 2
© National Council on Economic Education, New York, NY
INTRODUCTION
Often decisions result in trading off some of one thing to get some of another.
This lesson introduces the idea of trade-offs and provides practice in analyzing
options before making decisions.
ECONOMIC CONCEPTS
Choice Opportunity cost Alternatives Trade-offs
RELATED CONTENT AREAS
- Mathematics
- Charts and graphs
- Use of calculators
OBJECTIVES
- Define opportunity cost.
- Identify alternatives.
- Explain that a trade-off involves giving up some of one thing to get some of another.
- Analyze trade-offs.
LESSON DESCRIPTION
After reading about a problem, students identify alternative solutions, trade-offs made in choosing each alternative, and the opportunity cost of selecting each option. Students describe trade-offs and create a graphic to rep-resent alternatives and trade-offs.
TIME REQUIRED
- Two class periods
NATIONAL STANDARDS
National Standard Number: 1Productive resources are limited. Therefore, people can not have all the goods and services they want; as a result, they must choose some things and give up others.
National Standard Number: 2
Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Most choices involve doing a little more or a little less of something: few choices are "all or nothing" decisions.
National Standard Number: 4
People respond predictably to positive and negative incentives.
MATERIALS
- Visual 1, Basketball Dilemma, and Visual 2, Basketball Options
- Activity 1
- Calculator for every 23 students Overhead pens
- Markers for each group
- Newspaper ads for food and other items
PROCEDURE
1.Explain that sometimes decisions result in giving up some of one thing to get some of another thing. This is called a trade-off.
2. Display transparency of Visual 1 and ask students to identify the problem in this situation. (The main gym is available only for 8 hours but the students will play 20 basketball games.) Explain there are two obvious choices. The students could use all 8 hours for girls' games or all 8 hours for boys' games.
3. Ask students to identify other options. List these on the board.
(4 hours for girls, 4 hours for boys; 6 hours for girls; 2 hours for boys,
6 hours for boys, 2 hours for girls; 3 hours for boys, 5 hours for girls;
3 hours for girls, 5 hours for boys; and so on.) Select a student and discuss:
- If you were making this decision, what option would you choose? (Answers will vary but use one student's answer as an example.)
- What would your second choice be? What do we call this second choice? (opportunity cost)
- Does choosing this option result in any trade-offs? (Yes, you give up being able to play some boys' (girls') games in order to play some girls' (boys') games.)
5. Divide the class into groups of 23 students. Distribute calculators and markers to each group. Ask students to illustrate as many options as they can and determine the percent of time in the large gym allotted to each group. They may use squares, circles, or rectangles
6. Distribute a copy of Activity 1 to each student. Assign each group one of the situations on the sheet. Instruct the group to determine a list of possible options, and assign time or money values.
7. Ask students to use the back side of Activity 1 to draw pie charts or graphs representing each option they have described. Instruct them to identify the choice they would make, their opportunity cost, and the trade-offs resulting from their decision.