Economics: Principals in Action
Unit Plans
Unit 1: Introduction to Economics
Duration: 2-3 weeks
Textbook: Economics Principals in Action
Chapters: Chapters 1-2
Content Questions
1. What is scarcity?
2. What are the three factors of production?
3. What is en entrepreneur?
4. What is a trade-off and opportunity cost?
5. What does it mean to think at the margin?
6. What is a possibility curve and how does it show efficiency, growth and cost?
7. How does a country’s production depend on its available resources and technology?
8. What are the three key economic questions of what and how to produce and who consumes?
9. What are the characteristics of traditional and market economies?
10. Why do markets exist?
11. What is the self-regulating nature of the marketplace?
12. What are the disadvantages and advantages of a free market?
13. What are the disadvantages and advantages of a centrally planned market?
14. What are mixed economies?
Essential Questions: Be able to explain the following concepts with examples and information from the
unit:
1. How productive resources are limited, therefore people cannot have all the goods and services
they want; as a result, they must choose some things and give up others
2. Effective decision-making requires comparing the additional costs of alternatives with
additional benefits.
3. Most choices involve doing a little more or a little less of something; few choices are all-ornothing decisions
4. Different methods can be used to allocate goods and services. There are advantages and
disadvantages to each one
5. People respond predictably to positive and negative incentives
Vocabulary
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Need
Want
Economics
Goods
Services
Scarcity
Shortage
Land
Labor
Capital
Physical capital
Human capital
Entrepreneur
Guns or butter
Production
16. Possibility
curve
17. Possibility
frontier
18. Efficiency
19. Underutilization
20. Cost
21. Law of
increasing cost
22. Economic
system
23. Factor
payments
24. Patriotism
25. Safety net
26. Standard of
living
27. Market
28. Specialization
29. Household
30. Firm
31. Factor market
32. Profit
33. Product market
34. Self-interest
35. Incentive
36. Competition
37. Invisible hand
38. Consumer
39. Sovereignty
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50.
Socialism
Communism
Authoritarian
Collective
Heavy industry
Laissez faire
Private
property
Free enterprise
Continuum
Transition
Privatize
Standards
Coming…
Activities/Lessons
Lesson 1: Scarcity, factors of production, entrepreneurs
1. Lecture on scarcity vs. shortage, factors of production, entrepreneurs
2. Fanta and her cookies
3. Apply to the profile of their businesses
4. Summary at end of lesson
Lesson 2: Opportunity cost
1. Activity on opportunity cost
a. Groups of three: create five cards with the following on the back: Military aircraft,
bridges, school buildings, water purification plants, hospitals
b. Taking turns, each person chooses 2 of the 3 cards and explains why they chose that one
versus the others (opportunity costs/trade-offs)
2. Discuss personal examples of opportunity costs and trade-offs
3. Discuss what opportunity costs they must/could be making in their businesses
4. Scenario 1: teacher creates a choice for each business according to opportunity costs/tradeoffs
5. Summary at end of lesson
Lesson 3: Production possibility curve and frontier
1. Define production possibility curve and frontier
2. Do book example on board (graphs)
3. Do a second example – not from the book
4. Scenario 2: create a ppc and for one of your businesses
a. Meet with one other group and discuss their choices/advise etc
5. Summary at end of lesson
6. Chapter quiz
Lesson 4: Economic questions, types of economic systems
1. Define: Producer, Product, Market, Consumer
2. Put the three economic questions on the board
a. 1: guns and butter, opportunity costs, complex choices
i. Example: restaurant – choose what should be on menu
b. 2: methods, factors of production
i. Example restaurant – how should it be made (pre-frozen food, fresh etc)
c. 3: Who gets paid what and who gets access to what (economic systems)
i. Example Restaurant – choose to cater to wealthy – create a system that
discourages poor to middle class clients (coat and tie rule, reservations, prices
etc)
3. Must read entire chapter before discussion and be able to answer: WHAT IS AN ECONOMIC
SYSTEM?
4. Questions that the four main economic systems try to answer
a. How to be the most efficient
b. How to provide security and predictability
c. How to create equity
d. How to encourage growth and innovation
e. How to create stability economically and politically
5. Have students in groups or individually go through each question and figure out how each of
the four systems answer the questions above
a. Can be done as a willow tree GO or as bullet points
b. Discuss as class + advantages and disadvantages + bias of many Americans against
anything resembling socialism or communism
6. Case study power point lecture: Soviet Union and China, United States (case study reading pg.
39)
7. Scenario 3: Assuming Microville is in a mixed economy, predict how your business would react
or change if the economy switched to one of the other three.
8. Summary at end of lesson
Lesson 5:
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