Playful Economics Production and Scarcity

Production and
Opportunity Cost
Texas Council on Economic
Laura Ewing
Kindergarten Social Studies
Economics Strand TEKS
(6) Economics. The student understands that basic human
needs and wants are met in many ways. The student is
expected to:
(A) identify basic human needs of food, clothing, and
(B) explain the difference between needs and wants;
First Grade Social Studies
Economics Strand TEKS
(9) Economics. The student understands the condition
of not being able to have all the goods and services
one wants. The student is expected to:
 (A) identify examples of people wanting more
than they can have;
 (B) explain why wanting more than they can have
requires that people make choices; and
 (C) identify examples of choices families make
when buying goods and services.
Second Grade Social Studies
Economics Strand TEKS
 (9)
Economics. The student understands the
value of work. The student is expected to:
 (B) explain the choices people in the U.S.
free enterprise system can make about
earning, spending, and saving money and
where to live and work.
Third Grade Social Studies
Economics Strand TEKS
 (7)
Economics. The student understands
the concept of the free enterprise system.
The student is expected to:
 (A) define and identify examples of
 (B) explain the impact of scarcity on the
production, distribution, and consumption
of goods and services; and
Wish Lists
 What
are your favorite things to buy?
What types of things do you like to buy?
 Why
do you want these things?
 Why
do you need these things?
 Do
others like these same things?
If there is only one toy available and three
people want it, what happens?
If you owned a store and three people
wanted the same toy, what would you do
with the price of the product and why?
When more people want a product than
there are products, that is called scarcity.
When you want several things but can only
afford to buy one of them, that is scarcity.
 What
are some things that are not
 In
other words, what can you always
Goods & Services
What is the difference?
Which of the items on the list are goods and which are
Rank order: which do you think most important to least
What Are The
Factors of
•1. Land
•2. Labor
•3. Capital
•4. Entrepreneurship
Can you make some scarce
 Think
of some things that are scarce and
make them out of modeling clay.
 Produce
a scarcity story by making an
example of something people want and
then make clay people—all to show
Draw a scarcity situation in the space below. Below your drawing,
explain why it is a scarcity situation.
2. Circle the items below that economists would say are not scarce.
Shirt Garbage
Automobile T.V. Repair Sand in the desert
Book Gold
Air in the mountains
A nurse’s services
Bananas Shoes Pencil Air in Space Saltwater at the seashore
3. Draw, label, and color a picture of a good that is very scarce
and a good that is not very scarce.
4. In economics, what “clue” tells you if an item is more scarce than
another item?
Give an example.
Opportunity Cost
 What
are your two most favorite foods?
 What
does each item cost?
 What
if you only have $ ____ to spend,
what would you buy?
 What
is the value of what you gave up?
Opportunity Cost
 What
was the value of what you gave
 The
value of what you gave up is known
as the opportunity cost.
 Why
do we have to make choices? Why
can’t we buy everything we want?
Opportunity Cost is NOT
 The
sum value of all things given up
 The good that the students will produce
 And,
one other note: introduction of
money will come later. The concept will
be taught that one earns money for
purchases/consumption from production
of goods and services.
Classroom Store
 Would
you like to have a classroom store?
 What
kinds of things would you like to buy
at the store?
 How
will we get the things to buy at the
You Are The Producer?
 What
does the word “producer” mean?
 What
does the word “produce” mean?
 What
would you like to produce at the
How will you produce your
good? What are the factors
of production?
 Natural
 Human
 Capital
 Entrepreneurship
Get Your
Capital And
Produce A
Now, You Are The
 What
does it mean to be a consumer???
 What
do consumers do???
 How
are you able to consume???
Consumers Trade
 Everyone
places their products in the
store which is the table in front of the
 Who
will trade first?
 Choose one product for which to trade.
Consumers Have Opportunity
 Who
will volunteer to trade next?
 Choose
three products in which you are
 Which
 What
will you choose?
is your opportunity cost?
Additional Teaching Resources
1. Show and discuss the video, “Opportunity
Cost,” from the Econ and Me video series.
2. Use the concept of opportunity cost as
much as possible in your classroom. E.g. “If
we go to the zoo on our field trip, we can’t
go to the Children’s Museum. The visit to
the Museum would be our opportunity cost.”
3. Do Lesson 6, Opportunity Cost, in the
Herschel’s World of Economics DVD.
 What
 If
types of products do you like to
you could produce a good or service,
what would it be? Why?
What are productive
 Natural
or land—resources used in
producing goods and services
 Human
capital/labor—human skills
gained through education and training
 Capital—tools
to produce goods and
What Are The
Resources of
Factors of •1.
•1. Natural/Land
•2. Human capital/Labor
•3. Capital
•4. Entrepreneurship
You produce a product
 What
will you produce?
 What is the natural part of your product?
 Who is your human capital? What skills
does this person have?
 What tools will you use?
 Who is your entrepreneur?
 Natural
 _____________ _____________ _____________
 _____________ _____________ _____________

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