Big Idea/Theme: Economic Concepts
Understandings: Producers and Consumers
Standards / Essential Questions / Additional Resources
2.E.1 Understand basic economic concepts.
2.E.1.1
Give examples of ways in which businesses in the community meet the needs and wants of consumers.
2.E.1.2
Explain the roles and impact producers and consumers have on the economy.
2.E.1.3
Summarize the concept of supply and demand.
2.E.1.4
Explain why people and countries around the world trade for goods and services.
2.E.1.5
Explain how money is used for saving, spending, borrowing and giving.
2.E.1.6
Summarize the role of financial institutions relative to savings. / Introduce the overview of second grade economics. (power point) Discuss what they class already knows about economics, including: producers, consumers, goods and services, wants and needs.
Have each child make a box chart including the four vocabulary words for the week. (see below and resources documents)
1) A good is something you buy and consume. Goods are things that you can keep, eat, or use.
2) A service is something that someone does for you. When you buy a service, you hire people to perform work. You are not buying something you can touch or hold.
3) Producers are people who make goods or provide services.
4) Consumers are people who use goods and services.
* Discuss the ways each student is a consumer. / Week 1 – Vocabulary
Economics Powerpoint
Econedlink.org - Lessons
bit.ly/OcP63J
bit.ly/Njg8cx
What is a producer?
What is a consumer? / Review the vocabulary chart from yesterday. Remind the students how they are consumers. Re-introduce the word producers.
What do they think that means? Do they know any producers?
Are they, or could they be a producer? Are there any producers in the community? Make a list of all the producers in the community.
- Have each student choose (or you assign) a producer from the list. Have them write a creative writing piece involving the producer. Bonus – include themselves in the story as the consumer. (See Sample)
* They may illustrate to accompany the story.
* Share a few if there’s time. / Producer Story Example document
What is a good?
What are services? / Today, we will focus on goods and services. Explain to the class that the understanding of goods and services is an important concept in economics. Goods and services include everything purchased and sold.
Goods includes things that are used or consumed, for example clothing and food.
Services are work done for others, such as a teacher or a fire fighter. The difference between goods and services is that goods are something that you can touch.
Sometimes people provide services that result in a good being created. For example, a chef at a restaurant provides the service of cooking a meal that you may eat.
Have the class break into small groups and create two lists; a list of people who provide goods and a list of people who provide services. Each group should choose a representative to read one of their lists and have the class guess if they provide goods or services. / Goods and Services document
Goods and Services Notebook
How can we earn money? / Earning Money - Ask the students the different ways that they earn money (doing chores, allowance, gifts, etc).
One way to earn money is by doing chores. The amount you earn is the pay you get for each chore times the number of times you do the chore.
Calculate pay per chore times number of times chore is completed.
* How much can you earn?
* Earning and Spending SMART board activity / Earning and Spending Notebook
How much money can you earn? Document
Why do people save, spend, borrow, or give money? What is the purpose of a bank? / * Do you have to use a bank to save your money?
Have the students come up with other places they can save their money. Make a list and include the pros and cons to each idea. / Savings and Benefits Notebook
What should we spend our money on? / Wants and Needs - A fundamental concept in budgeting and economics is needs and wants.
Needs are something you must have for survival. For example, food and water. Without food, you would not be able to live.Wants are something that you would like to have, but it is not necessary, and you could do without it. An example would be entertainment, toys, CDs, etc.
Sometimes needs and wants overlap. For example, cake is a food, but it is not a need, but a want. In general, you need a basic diet to survive, but that diet does not need to include cake. / Wants and Needs
Wants and Needs Lesson
* Break the class into small groups. Each group will need a large piece of construction paper folded in half. Label one side with the word “wants” and the other side with the word “needs”. They will also get a few magazines.
Have them search through the magazines and cut out pictures of wants and needs and glue them on the appropriate sides. When they’re finished they can explain to the class a few of their choices and reasons why they felt it was a want or need.
* Read The Ox Cart Man and compare the students lives with the lives of the characters in the book by making the flip book.
OR
Read Any or all of The Pigeon books by Mo Williams. Discuss the wants and needs of pigeon. Have each child fill in the pigeon paper. / Ox Cart Flip book
The Ox-Cart Man
Pigeon Wants
* Review wants and needs, and discuss how this affects them at home. After you read The Berentstain Bears Get the Gimmies, Alexander Who Used to Be Rich Last Sunday, or A Chair for My Mother, Students then write the things they want on the outside of the house. Then they will draw the things they need along with their family on the inside. / How to fold a paper house:
How do our community economic resources change?
How do local businesses meet the wants and needs of consumers?
Why do we trade with other counties for goods and services? / Over the next two days Students will explain how the economy meets human needs through the interaction of producers and consumers.
After reviewing the vocabulary have the students describe how producers and consumers work together in the making and using of goods and services. - Recognize that people supply goods and services based on what people want.
Brainstorm and discuss some things that have been produced in large, fast quantities, because of the consumers want for that item. (silly bands, hair feathers, zuzu pets, etc.) Why were these items so popular?
Skittles & Candy Bars - Candy is a way to teach supply and demand. Choose several candies for this exercise, such as candy canes, Skittles and M&Ms, and separate them individually. You will want to get somewhere between one and three king-size candy bars.
Present all of the candy to students. Show that you have lots and lots of Skittles and M&Ms and that you have a small number of candy bars. Ask the students which they think is easier to acquire--the little candies or the candy bars. Then, ask the students what they think they would have to do to get the candy bars. Award the students as you choose, perhaps based on academic performance, tasks the students do that day or points the students have been saving up all year. Use this point to illustrate how in the "grown-up world" things that are "bigger" like candy bars cost more than little things and that we have to save up for them.
Fake Money - For this exercise, give each student the same amount of money, and select items that they can buy. Have pencils, erasers, calendars and other academic materials that students need. Limit some items to only one or two that the students must spend all of their points on to acquire. Convey to the students that certain items have a higher price because there are fewer of them while others cost less because there are more. You can also overprice certain items or have things for sale that they would have no interest in such as paper clips. Ask afterward why no one wanted to buy a paper clip. Explain that there was no demand for paper clips or whatever item you use to choose to extrapolate your point. / See templates for bills.
bills
fake-bills-template -1
fake-bills-template -2
Auction - An auction is perhaps the most effective way to demonstrate supply and demand since the students set the prices for the items. Like the example above, give each student a set amount of money. Have certain items be more common such as pencils, and then have less common items such as stickers. Have the students bid on the items. Mark on the board how much each item ended at and then go into a discussion afterward as to why the items went for the prices that they did.
How do local businesses meet the wants and needs of consumers? / The students will now come up with “the next big thing”. They will invent an object that will catch the eye of the consumer. Remind them why the other objects became so popular. What were their characteristics?
They should draw a detailed picture of the item. Write a brief description of what it does or what it is used for. Who is the item geared towards? (Moms, dads, boys, girls, college students, teachers, etc.) Last, they will need to include the price. Remind them that the price should be appropriate for who they are trying to sell it to. For example, if they created something intended for a second grade boy, it probably wouldn’t sell for over $100.
Before they share their inventions, ask the students if it’s possible to be BOTH a producer and consumer? Explain ways in which people can be both consumers and producers of goods and services.
The students (producers) will each have the opportunity to share their product. As consumers, the class will give feedback as to why they would, or would not, buy that item. Remind the class that they we’re all producers, and will all be sharing our products. They need to think about the feedback they would like to receive before they give feedback to someone else. Focus on the positive; color, size, shape, price, idea, etc. /
The Next Big Thing Document
What have you learned? / Over the next week, the students will put all of their economic knowledge to use! They will become the producer and the consumer. They are going to have an economic fair!
Each student will create a product to sell. They will also earn “money” in your classroom. They can earn “money” by making good choices, working hard, trying their best, being a kind friend or a good helper. They can earn “money” for any reason you choose. In addition they will create an example of an advertisement including a slogan and description of their product.
Their product can be made at home or in class. See attached letter to families. Some suggestions or examples are: Macaroni necklaces, Popsicle stick picture frames, bottle cap magnets, bookmarks, beaded bracelets….the opportunities are limited only by their creativity. All items should be homemade and not cost a lot to create. Using recycled items is suggested. / See templates for bills.
bills
fake-bills-template -1
fake-bills-template -2
Enterprise Day Project Document
What have you learned? / Their advertisement should be made in class. Each student will make a poster using a computer, or poster board. They should include;
- Drawings, coloring, paintings, photographs, etc.
- A slogan - make it catchy to grab consumer’s attention.
- A short description of the product telling the consumer its name, materials, price, etc.
- Interviews with parents, family, neighbors, etc.
- A table, chart, or graph showing which ones provide goods and which ones provide services.
What have you learned? / On Friday, the class will be split in half. One group will be the producers and one will be the consumers.
* The producers will set up their items and their poster/sign. They should also have a plate or bowl and place the money that they earn in it. Each student should keep their spending money separate from the money they earned in class.
* The consumers will shop, using the “school bucks” they have earned over the past week.
When the consumers are finished shopping, take a look at what the producers have left. Did anyone sell all of their items? Why? Why do some students have so many items left? What would they have changed about their product?
Switch groups! When the second group is finished shopping, take a look at what the producers have left. Did anyone sell all of their items? Why? Why do some students have so many items left? What would they have changed about their product?
Make a plus/delta chart about Enterprise Day. Have each student place a post it under one of the columns expressing their thoughts about the day. / ** Note: You can also have the Economics Fair, cross grade level!! Students will be able to shop in the other classrooms, as well as their own.