1. Integrating the Social Studies Across Colorado History The Economic Perspective October 4, 2014 Marc Johnson Education Program Director Colorado Council for Economic Education mjohnson@ccee.netmjohnson@ccee.net303-752-2323

2. Personal Financial Literacy: Economics Content Area: Social Studies (4 standards) –History, Geography, Economics, Civics –For each grade level, P-8: –One GLE in Economics –One GLE in Personal Financial Literacy (PFL)

3. Standard 3: Economics Grade Level Expectation – Grade 4 - Economics 1. People respond to positive and negative incentives –Selected Evidence Outcomes Define positive & negative economic incentives Give examples of the kinds of goods and services produced in Colorado’s different historical periods and their connection to economic incentives Explain how the productive resources – natural, human and capital – of CO have influenced the types of goods produced and services provided

4. Standard 3: Economics Grade Level Expectation Grade 4 PFL 2. The relationship between choice and opportunity cost –Selected Evidence Outcomes & 21 st Century Skills: Define choice and opportunity cost Analyze different choices and their opportunity costs Give examples of the opportunity costs for individual decisions What different ways does an individual have to get information when making a decision?

5. Concepts (technical vocabulary) –The economic trilogy scarcity, choice & cost –Incentives positive negative –Goods & services –Productive resources natural, human, capital, entrepreneurship Presentation Objectives

6. Concepts are universal Across space… …to the world, Mexico, Colorado, Denver or your classroom! Across time… …to the present, past or future!

7. Let’s Get Started!

8. When I ask ANY group what economics is all about they invariably say… MONEY

9. When I ask ANY group what economics is all about they invariably say… OR, they mention financial headlines: The DOW was up 150 points today on news that the US had attacked ISIS targets in Syria. The official pre-order opening date for the new Apple iPhone 6 is October 10.

10. No economist likes those answers… And the CO Academic Standards avoid those perceptions too! Economics is NOT about money or financial headlines.

11. A Gift from CCEE Who would like this ultimate economics & PFL resource? Wants: ______ Available: 1 THE economic problem? Scarcity

12. Wants > Availability –or, Unlimited wants > Limited resources

13. Scarcity  Choice Economics is: – the study of choice

14. Scarcity necessitates choice –people must choose The Economic Way of Thinking: Key Concept

15. Scarcity  Choice  Trade-offs

16. A World of Choice Grand Slam? Marry the little red- haired girl?

17. Daily, Small Choices Should I go to the library today? Should I go hiking today? Maybe go shopping at the mall?

18. Big, Strategic Decisions Should I go to college? Should I work instead of college?

19. We All Confront Choice A school teacher? A business person?

20. Develop a Decision-Making Framework for Students Help make decisions – by learning a process for more careful choice

21. Decision-Making Model Define the Problem –outcome to be achieved List the Alternatives –ways to achieve the outcome State the Criteria –standards to judge alternatives Evaluate the Alternatives –apply criteria to each alternative Make a Decision –select best alternative

22. Decision-Making Model Define the Problem List the Alternatives State the Criteria Evaluate the Alternatives Make a Decision PACED

23. PACED Example My wife and I decide on restaurant for dinner …

24. Where to Go for Dinner? How about Venice restaurant? How about Shanahan’s restaurant?

25. Problem: What Restaurant for Dinner? Shah Ajuaa’s Venice Food quality Menu choice Drive Time QuietCost + 0 --+ +- + 0 + +-+ 00 +2 0 +1 0 = average+ = above average- = below average Criteria Alternatives What factors are important to you in making this decision? Used to rank one alterative as “better” than another. Shanahans

26. Problem: Choose a Car to Purchase Alternatives Criteria Greatest value is not in the specific answer, but in the process of identifying important factors. What factors are important to you in making this decision? Used to rank one alterative as “better” than another.

27. Candy Bar Activity One Volunteer, please? Opportunity lost  opportunity cost –Value of the best foregone alternative –“Choosing is refusing” –choose A, refuse B – »cost of A is value of B

28. The Dismal Science! There’s no such thing as a free lunch! TNSTAAFL

29. Choice involves cost » opportunity cost The Economic Way of Thinking: Key Concept

30. Sample question from Grade 4 Social Studies Practice Test Type your response in the box. Read the paragraph. What should the student do? Explain what her opportunity cost will be and why. A student is trying to decide whether to go roller skating, practice soccer, or read a book today. She has time to do only one activity. She went roller skating yesterday, she has an important soccer game tomorrow, and the book is a new one by her favorite author.

31. Opportunity Cost Examples Cost of coming to this workshop today? –Value of next best foregone alternative joy spending day with family or friends Cost of using frequent flyer miles to fly to Las Vegas? –Value of using frequent flyer miles to fly to Miami A student’s cost of going to a movie with friends? –$8.00 movie ticket price –$2.00 transport (gas, etc.) –$20.00 babysitting earnings given up Explicit Implicit

32. Since Scarcity Requires Choice … and since choice involves cost Why choose it? Assume that: –People choose X if: B(X) > C(X); – otherwise, not where : B(X) ≡ benefit of choice X C(X) ≡ cost of choice X B(X)C(X)

33. Play It Again, Sam Raise the cost –if C(X) > B(X), choose another bar

34. s People respond to incentives The Economic Way of Thinking: Key Concept

35. Would You Ride a Bull? –F or $5? –for $50? –for $500? –for $5,000? –for $50,000? Likely to get more risk takers as the reward rises!

36. Are You Willing… … to be a police person? –For: $20,000 per year? $40,000 per year? $60,000 per year? $80,000 per year? $160,000 per year? $320,000 per year?

37. Why might someone have wanted to… …leave the comforts of St. Louis to homestead in Colorado in 1866? Why might some rural counties be willing to secede from the state of Colorado? What would be the costs and benefits of secession?

38. Practice – Identify Incentives 1.Why do some students want good grades? 2.What makes you want to be a good teacher? 3.What makes a company want to build a ski resort? 4.What made Colorado Territory want to become a state?

39. Intended Consequences If people respond to incentives... – then behavior can be altered in desired or intended ways –For example …

40. The Camel Race s Two Bedouins met in the desert, and fell into an argument over their camels, each claiming that his was the slowest, “stubbornest,” most useless camel in all of Arabia. s The argument ended in a bet. They agreed to race to the oasis, two miles away, whichever camel arrived last would be proved slowest, and his owner would win ten dirham from the other.

41. Camel Race continued s... They got on their camels, and set off slowly toward the oasis. More slowly, still more slowly. After a while, it became clear that since each Bedouin was trying to win the bet, they were never going to make it to the oasis. s... After a while, a wise sheik rode up on a donkey and asked them why they and their camels were standing still, in the middle of the desert, on a hot day, with the oasis less than two miles away.

42. The Camel Race continued s They got off their camels, and all three sat down in the shade of a rock while the two Bedouins explained about their bet. s The wise sheik whispered two words to them. The Bedouins immediately jumped on the camels and rode off as fast as they could towards the oasis.  What were the 2 words? ________ _________ Switch camels! The Treasury, Petra, Jordan

43. Consequences s People respond to incentives causing  intended consequences, and  unintended consequences  which can offset the intended benefits

44. Steven Levitt’s story in… Think Like a Freak His infant daughter & M & Ms Unintended Consequences!

45. The Tax Man Cometh April 15, 1987... –IRS rule change: Instead of merely listing each dependent child, tax filers required to provide Social Security number. Result? 7 million children disappeared

46. Key Concept, Once Again s People respond to incentives  …and the rest is commentary  Armchair Economist Stephen Landsberg  Freakonomics & Super Freakonomics Steven Levitt

47. Productive Resources Focus: Grades 3-5 Economics Lesson 1 Rolling for Resources

48. CO Academic Standards Standard 3 – Economics GLE (2 nd grade) – The scarcity of resources affects the choices of individuals and communities 21 st Cent. Skills *Economic thinkers analyze how goods and services are produced… *Economic thinkers analyze the scarcity of resources…

49. CO Academic Standards Standard 3 – Economics GLE (4th grade) – People respond to positive and negative incentives Evidence Outcomes *Explain how the productive resources – natural, human and capital – of Colorado have influenced the types of goods and services provided

50. Goods and Services Goods Things that can satisfy people’s wants. A car A house A dish of ice cream An i-pod Other goods…

51. Goods and Services Services Activities that can satisfy people’s wants. Dentistry (a dentist checking your teeth) Selling you a car (car sales person) Babysitting (babysitter) Playing professional football (professional athlete) Other services…

52. Where do goods and services come from? Think of a good…like a house. What do you need to produce or build a house? Lumber Nails Saws Carpenters Roofers Economists call all of these “resources”. There are three kinds of resources.

53. Human Resources Human resources are people who work to produce a good or service. Examples: Truck driver Plumber Teacher Nurse Can you name others?

54. Natural Resources Natural resources are things that occur naturally in the world and can be used to produce a good or service. Examples: granite natural gas deer water gold Can you think of others?

55. Capital Resources Capital resources are goods produced and used to make other goods and services. Examples: an office building a copy machine pots & pans a tractor a projector in school Can you name any more?

56. Human, Natural & Capital Resources

57. Practice... What productive resources are necessary to produce a haircut? Comb, brush, razor, clippers, electricity, scissors Hair stylist, receptionist Water

58. A Game: Rolling for Resources RULES Each group displays all its resource cards face-up. Make certain the cards are scattered slightly so that each resource card is visible. To “win” the individual game, a student must be the first to collect a human resource card, a natural resource card and a capital resource card. To win the group game, all members of the group must have all cards; first group to finish wins.

59. A Game: Rolling for Resources RULES The resource cards have dots on the back that match the dots for each type of resource on the die (human resources – one dot; natural resources – two dots; capital resources – three dots). Students will take turns rolling the die. Begin with the youngest student in the group. After that, play will move to the left.

60. A Game: Rolling for Resources RULES If the die lands on “natural resources,” the student should find a natural resource card from the resource cards. If the die lands on “human resource,” the student should find a human resource card from the resource cards. If the die lands on “capital resource,” the student should find a capital resource card from the resource cards.

61. A Game: Rolling for Resources RULES If a student selects the correct resource card, the number on the back of the card will match the number of dots for the type of resource on the die. If a student selects a correct resource card from all the resource cards, he or she may keep the card and his or her turn is over.

62. A Game: Rolling for Resources RULES If the card selected isn’t a correct example of the resource displayed on the die, the student must put the card back in the pile and wait for his or her next turn. If a student rolls the die and it lands on a resource for which he or she already has a card, he or she may roll a second time. If the die again lands on a type of resource for which he or she already has a card, he or she must wait until his or her next turn.

63. A Game: Rolling for Resources RULES The game is played until each student in the group has correctly selected cards for each type of resource.

64. When groups have finished… Each group member gets a copy of Activity 1.3. Identify the resource cards you selected during the game by writing the resource name in the correct space in Activity 1.3. In the box next to each type of resource on Activity 1.3, write a sentence containing the name of this good or service and draw a picture of the good or service. Display completed 1.3 around the room.

65. Discussion Why do people use productive resources? Name one of the three kinds of productive resources. What are natural resources? Give some examples of natural resources. What are human resources? Give some examples of human resources.

66. Discussion What are capital resources? Give some examples of capital resources. What are some human resources needed to build a house? What are some capital resources needed to build a house? What are some natural resources needed to build a house?

67. Assessment Activity 1.4

68. Questions using economic thinking What might inspire a student to complete homework? (identify incentives!) Why has there been so little teaching of economics in elementary school until recently? Why is it changing? Identify some different reasons white settlers from the east moved to Colorado? What affected their decision-making?

69. Questions using economic thinking What productive resources did the Ancestral Pueblans use to create Mesa Verde? Cloud City p. 131 of The Colorado Story Using your understanding of economic benefits, cost & incentives, speculate on why residents of Leadville would so destroy their environment? Why would they restore it later?

70. Questions using economic thinking Light rail – save energy; environmentally friendly – how might you decide whether or not to build more? What incentives, both positive and negative, might the early fur traders have considered before moving to CO? What are some of the positive and negative incentives for moving to CO today?

71. Questions using economic thinking It’s sometimes said that the only people who really made money during the gold and silver rush were the general supply store and bar owners? Why? What do you think are the greatest natural resources CO has today? What were the most valuable natural resources of the past? Why has that changed?

72. Questions using economic thinking How has the nature of human capital of the late 19 th century changed by the 21 st century? Explain why capital goods used in Colorado in the 19 th, 20 th and 21 st centuries changed so dramatically. Economists describe barbed wire as a capital resource. Why?

73. For Whom? Rationing Device Lottery First come Market/Price Command/Planner Force Share Need Market Economy or Command Economy? Two Primary Mechanisms Observed in World? Let’s vote on the one we want to use for the souvenir.

74. Parting Information In your folder: 1)PPT 2)Economic Concepts 3)Rolling for Resources 4)Stock Market Experience 5)Online PFL class info 6)Mailing list (give to Marc if interested)