Chart, histogram

Economics Lesson Plan for Students : Opportunity Cost (Grades 2-8)

Goals: To gain a basic understand of how opportunity costs apply to everyday life.

Objectives:
1. Understand costs of goods and services comparatively.
2. Learn basic principles of money management.
3. Understand the basics of trade.

What you’ll need

Students will need to be provided with cut-outs of 5 items each. Each set of 5 can be represented by goods or activities that they can either spend time on or purchase with money. Each student should have a set of either 5 goods or 5 activities. These items should include goods like food, clothing, etc. Cut-outs representing activities should include things like shopping, playing video games, doing homework, and going on vacation. Each student will need another copy of their 5 items to use for later activities. Blank three-column tables for students to compile their results on and paste or glue will be needed. Pen or pencil for recording information and marking cut-outs will also be needed.

Activity #1 – Preparation

Before handing out the cut-outs pick five numbers to set for each good and write them on the back of the cut-out. Mark one of each of those numbers onto the back of the activities’ cut-out so that for each good there is a correlating activity. Explain to the students what each cut-out represents. For example, a cut-out showing people playing soccer meant time spent doing outdoor activities. Students will begin this activity by writing the number on the back of each of their five cut-outs, in the first column of their table. They will then paste a copy of their cut-outs in the second column of their table. Students are now ready to start the next activity.

Activity #2 – Trading

Students will now begin this activity by trading each of their items with their classmates. Students can choose whatever they would like to trade, as long as the numbers on the back of the cut-outs match each other. Students can only trade, for example, an item marked “4” with another item marked “4”.

Activity #3 – Completing my Chart

Once all students have traded each of their cut-outs with one another, they can paste their new items into the third column of their table.

Assessment

Finish this lesson by explaining to the students how the principle of opportunity cost was demonstrated in the activities. Explain that each cut-out represented an opportunity that was forgone in order to take advantage of another opportunity of equal value, represented by the number on the back of the cut-outs. When a student trades a cut-out of a shirt with a cut-out of people playing soccer, they are forgoing the opportunity to have the shirt in order to spend time on outdoor activities. This example can be seen when people choose to sell a good, like a shirt, in order to spend the money doing activities that they enjoy or on other goods. Their chart represents how they gave up one opportunity for another one. The students’ understand of these concepts can be evaluated by asking the following questions:
1. What is opportunity cost?
2. Can I get something that has a higher opportunity cost than what I give up?
3. What are three things that I can gain by giving up candy?

About Jeffery Swanson