Economics4th Grade

1

Wants vs. Needs

Economic Wants: Desire that can be satisfied by consuming a good or service

Goods & Services

Goods: Something that people want that they can touch or hold

Food, clothes, books, toys

Services: An action that someone does for you

Haircuts, mail delivery

Producers & Consumers

Advertising

http://www.cozi.com/images/partners_advertisers_sampleofavertisers.jpg

Natural Resources

Natural resources are things that we get from nature.

Air, water, soil, plants, minerals and wild animals are examples of natural resources

Natural resources are used to produce goods and services

All production can be traced back to natural resources (Examples: Sun, water, land for growing cotton to make your shirt, oil for plastic buttons)

Name the Natural Resources in the Picture

Air

Soil

Sun

Rocks

Plants

Water

Natural Resources are Scarce!

Natural resources considered scarce because to freely available to people in unlimited quantities.

They have a price!

http://ed.ted.com/featured/Vs2D6GfT

Overfishing video

Who owns natural resources?

People own many natural resources (land, forests, lacked)

Some are owned by governments

Some are owned by no one (example: the sun, oceans, air)

What are some examples of natural resources used to make goods?

Goods are things that things that people produce that you can touch and feel.

Examples of goods are things like baseballs, candy, shoes, toys, jeans, cars

Renewable or Non-Renewable?

A tree is a renewable resource

Diamonds and fossil fuels are non-renewable resources

What are some ways to be a good steward of natural resources?

Proper care of water and forest resources, recycling and reusing things

Why is pollution and overuse of natural resources a problem (especially when they are not privately owned)?

People act in their own self interest, tend to take care of what they own and overuse and abuse what they do not

Human Resources

Human resources are the people who work to produce goods and services

People need education and training to learn the skills to do their work well

Examples: baker, teacher, artist, dentist, mail carrier, veterinarian, seamstress, builder

What skills do human resources need?

Where do people acquire the skills (capital resources) they need for work?

When do kids become human resources?

Human resources at your school?

Capital Resources

Capital resources are the tools, machines, equipment, and buildings that help you produce goods or services

Man-made items used to produce a good or service

They make production much easier

What capital resources are used in your classroom and school?

Pencils, scissors, nails, tools, machines, equipment

Productive Resources

Productive resources are the natural, human, and capital resources that are used to produce goods and services.

Every country has productive resources.

People use productive resources (natural, human, capital) to produce goods and services

What are the natural, human, and capital resources used to make Hershey’s Chocolate kisses?

The Life of a Water Bottle

Good: Water Bottle

Productive resources used to produce the good

How is a water bottle created?

Life cycle of a water bottle

Products Used to Produce Other Products

Apples are often final products that consumers buy

Apples can also be a productive resource used to make other products

Products that are used as productive resources to produce other products are called intermediate goods

Examples: Sugar used to make donuts, cookies, bread, cereal

Applesauce, Apple Juice, Apple Pie, Candy Apples

Scarcity

Not being able to have everything you want

Scarcity forces people to make choices because there aren't’t enough goods and services to satisfy unlimited wants

Goods and Services that are more scarce usually cost more

Time and Space can be scarce

Space: not enough space in your car for your luggage and other items

Time: not enough time to go to the football game and also do your homework

All purchased items/goods are considered “scarce” because they are made with scare productive resources and have a price. They are not freely available.

It is scarce if it has a price. If there are not enough for people to have all that they want at a price of zero

The price tells how scarce an item/product is compared to other items.

Things that are not considered scarce: items freely available like sand at the beach or sunshine

Scarcity Problems and Situations

Why is land so expensive in New York City? It is extremely scares - lots of people want the land and it is very limited

Business that provide scarce services

Electricity

Visit to the Doctor

Things that are not scarce

Air you are breathing

Sand at the beach

Sunshine

Scarcity and PriceSome things are “more scarce” than others

Goods and services that are more scarce have a higher price.

Estimate the price of each good….

Bottle of water

Pair of shoes

Computer

Tank of Gas

Why do these prices differ?

Opportunity Cost

Because of scarcity, children and adults can’t have all the things they want

They have to make choices

When we choose between two things, the thing we give up (don’t choose) is our opportunity cost

Decisions, Decisions!Choices may have good and bad points that you should consider when choosing

Your parents tell you that you can get a gaming system for your birthday.

Choices: Xbox, PlayStation, or Wii

Why can’t you purchase both? (Scarcity of money)

What points would you consider when choosing?

What is your opportunity cost?

TradeLet’s make a deal!

People trade with each other to get goods and services they want

When people trade without using money, it’s called a barter

When the trade is voluntary, they both expect to be better off - there is not a winner and a loser

I will cut your hair if you mow my lawn

What must be true before two people will trade/barter?

Each person must want what the other person has and be willing to trade for it

Who benefits from a trade or exchange and why?

Both people benefit. Each gives up something they value less for something they value more.

Why is trade so important?

If people didn’t trade, they would have to produce all the goods and services they wanted - almost impossible!

Why is barter often difficult?

You may not want what other person has, but they want what you have

That’s why we use money - to make trade easier

Trading and bartering on the American frontier

Money was scarce

Traders used items like salt, nails, bullets, and guns to trade with Native Americans for furs (which were in great demand in Europe)

Examples of Trades

Trading in sports

Trading with other countries

Interdependence: When people or nations depend on one another to provide the goods and services they want

Trading baseball cards

Money & CoinsPeople use money to help them trade

Using money is easier than bartering

Money called “currency”

Paper bills and coins are the two types of currency

Paper money has pictures of past presidents and famous Americans on the front of each bill

Paper money currently comes in the following amounts: $1, $2, $5, $10, $20, $50, $100

Where does money come from?

Issued by the U.S. Treasury

Currency made by the Bureau of Engraving and Printing

Coins by the U.S. mint

People can’t make their own money (counterfeit money is against the law)

Money is difficult to counterfeit

http://www.theatlantic.com/video/index/278980/what-is-money/

What is money? (video)

A Day in the Life of a Dollar Bills

• http://www.youtube.com/watch?v=kn32vavZqvg

Who’s on the U.S. Bills?• George Washington

• Abraham Lincoln

• Alexander Hamilton

• Andrew Jackson

• Ulysses Grant

• Benjamin Franklin

• www.moneyfactory.com

How We Get Money

How We Use Money

1. Spend

2. Save

3. Give

Giving• Experience the joy of giving

• Giving vocabulary

– Donation

– Charitable

– Charity

– Volunteer

– Contribute

– Tithe

Sales Tax

• When you purchase goods and services, you usually have to pay a sales tax on the amount your purchase

• If you pay $100 for a bicycle and sales tax rate is 6%, you will pay $6.00 extra in sales tax

• Receipt example

• Don’t always have to pay sales tax on every they buy…

– Depending on state some goods and services are exempt from sales taxes (examples: food items, medicines, certain services, out of state Internet purchases)

• Online sales tax - not one but debate over future

• Minnesota - essentials don’t get taxed

• Tax free shopping days

• Where does the sales tax go?

– Store owner pays it to the state or local government

– Taxes pay for public services

• schools, roads, private businesses that provide these (road building company), parks, bridges, teachers salaries, police protection, fire station, public library

– Sales Tax in Iowa

Keeping Money Safe• Many places to keep your money safe

• Keep it in your pocket, under your mattress, piggy bank, pocket, purse, wallet, at a bank, or have a friend or relative keep it for you (mom or dad)

• Bank is usually very safe place to keep your money

– Safe from thieves, fire, and deposits insured by FDIC

– Where you decide to keep it depends on how you will use the money

• Short term or long term goal?

• Shopping soon to spend it?

• Checking or savings account

• Stock market

• Saving for college

• Saving for a video game

• Shopping withal friend

• Saving for your mom’s birthday present

Banks• Banks offer variety of goods and services to consumers

• open a checking or savings account

• purchase personal checks

• deposit/withdraw money from accounts from teller or ATM machine

• cash checks

• borrow money

• rent safety deposit box

• buy savings bonds

• buy stocks and mutual funds

• Human resource jobs at bank: teller, manager, loan officer, secretary, security guard