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Curriculum Framework

IX. Learning Standards and Examples,

Strand Three: Economics

Learning Standard 11: Fundamental Economic Concepts.

Students will understand fundamental economic concepts, including choice, ownership, exchange, cooperation, competition, purposive effort, entrepreneurship, incentive, and money.

Learning Standard Components
(Core Knowledge and Skills)
Students understand how natural limits require people to choose among conflicting goals.
All of these should be taught through stories (e.g., fairy tales, historical events) and without specialized vocabulary.

PreK-2: Students learn and explain traditional stories and popular sayings ("You can't have your cake and eat it too"; "A stitch in time saves nine") that embody economic reasoning.
They understand differences between work and play. Students discuss when characters in stories are working or playing.
They understand how natural limits favor people working together. Students study tasks that are impossible to accomplish individually, such as moving a heavy stone to build a pyramid, and discuss proverbs such as "Many hands make light work."
They understand that some tasks are better accomplished by individuals working alone. Students discuss proverbs such as "Too many cooks spoil the broth," and are assigned for a group task something that is best done individually.
They understand that some work is accomplished only when an individual takes initiative. Students discuss stories about situations that seem unresolvable until an individual takes initiative.
Students understand that there is often more than one way to accomplish a goal, and that people can compare the ways and choose the one that provides the greatest benefit. Students compare the advantages and disadvantages of different methods of allocating various goods and services, such as cookies, or student time on playground equipment at recess.
They understand that people can work together in different ways to accomplish different goals. Student identify producers of five different types of goods and five different types of services in their community.
They understand how both parties to a transaction may benefit. Students describe a trade they have made, as in collecting cards or stickers or stamps or coins, and explain why they agreed to trade.
They understand differences between possessing things and owning them. Students explain that books borrowed from the library still are owned by the library.
They understand gradations and variations in ownership. Students explain how two people can own one thing.
They understand the concept of incentives. Students discuss the costs and benefits of reading a book, the rewards and punishments for returning library books when they are due or late, and the incentives to submit homework assignments on time.
They understand the idea of money. Grade 4: Students explain saving money and earning interest and borrowing money and paying interest.
They understand that money makes trading and saving easier. Students list five goods and services they want, and describe ways of obtaining these goods and services, without using money. Then explain why using money makes it easier to get the same five items. Students demonstrate their under-standing of money as a "store of value" in responding to the following: A tomato farmer wants to save money for his five-year old daughter's college education. Why is he better off selling his tomatoes for money and saving the money than he would be if he saved tomatoes to exchange for his daughter's tuition when she reached age 18?
Grades 5-8
Students name, define, and use correctly the common terms of economic life.
Students show practical use of terms such as goods and services; natural human, and capital resources; scar-city, production, distribution, con-sumption; consumer, buyer, producer; product, seller, labor, wage, salary, competition, money, wealth, capital, income, profit, loss, supply, and demand.
Students understand basic ideas of financial record keeping. Students keep track of their expenses in a one-month period, compare it to their income, and project a monthly budget in which their expenses will not exceed their income.
They understand how financial record-keeping is applied by business. They analyze simple profit and loss statements to see that profits are earned when total revenues exceed total costs.
Students understand that individuals or organizations working separately-- in competition with one another-- lower costs and prices, encouraging producers to produce more of what consumers are willing and able to buy. Students explain how the opening of a second pizza shop in a small community or neighborhood affects prices, service, and quality.
They understand differences between individual and institutional aims of economic activity; they understand differences between private and government interests in economic activity. Students explain why government prohibits some behavior which would be profitable to individuals.
Grades 9-10
Students name, define, and use correctly the common terms used to discuss a national economy, relating them to historical and contemporary events.
Students show practical use of terms such as Gross Domestic Product, Consumer Price Index, national income accounting, inflation, deflation, depression, recession, interest rates, exchange rates, balance of payments, fiscal and monetary policy, and balanced budget.
Students describe differences among national economies. Students gather data on Gross Domestic Product for the U.S., Japan, Brazil, and South Korea and identify relationships between GDP and standards of living.
Students describe factors affecting the behavior of a market. Students track changes in the value of three different foreign currencies over six months and attempt to find explanations for changes.
Students understand that interaction between buyers and sellers can affect market prices and allocation of scarce goods and services. Students identify examples of products for which the price fell because sellers were unable to sell all they had produced; identify examples of other products for which the price rose because consumers wanted to buy more than producers were producing.
Grades 11-12
Name, define, and use correctly the common terms used to discuss contemporary economics.
Students show practical use of terms such as Federal Reserve Bank, central banks, microeconomics and macroeconomics, foreign trade, money supply, trade restrictions, cost-benefit analysis, economic development, developing nations.
Students compare ways to save money. Students examine differences between accumulating, saving, and investing money; and compare investments in tools, education, and financial instruments.
Students compare ways to invest money. In September each student invests a hypothetical $500 and makes a chart of weekly earnings or losses. At the end of the year, each student reports on the profits or losses. Students collaborate on a report comparing the performance of the stocks and mutual funds they have followed.

Learning Standard 12: Economic Reasoning.

Students will demonstrate understanding of supply and demand, price labor markets, the cost of capital, factors affecting production, distribution, and consumption, relations among such factors, the nature of goods and services, incentives, financial markets, cost-benefit (including marginal cost-benefit) analysis, fairness, and the value of trade.

Learning Standard Components
(Core Knowledge and Skills)
Students understand that some things can be bought and sold and others cannot.
All these should be taught through stories (e.g., fairy tales, historical events) and without specialized vocabulary.

Students discuss things that can be purchased with money (e.g., food) and things that cannot (e.g., people).
They understand differences between the price of something, its intrinsic worth, and its value to particular people. Students explain the relation of scarcity to price, as when people would be willing to pay more for diamonds than for water, and when they would pay more for water than for diamonds.
They understand that price may be determined by bargaining. Students listen to and discuss stories about people bargaining (e.g., "Jack and the Beanstalk").
They understand difference between the price someone pays to buy a good or service and the cost of making or providing it. Students compare the costs a farmer incurs to raise a crop and the price the crop sells for.
Students learn that demand can affect price. Give each student a small tied baggie of 5 M&M's-- the "money." Present a fixed supply of Rolos to be sold off. Ask how many students are willing to buy a Rolo for a "price" of 1 M&M. Put the answer on a sideways bar graph. Continue raising the "price," and graphing the answers, until a market-clearing "price" is established. Untie the baggies, execute the sales and consume the goods (including the "money").
Grades 5-8
Students explain law of supply and demand.
Students explain how an increase in the supply of wheat can cause a decrease in the price of bread.
Students explain how labor markets work. Students analyze the "help wanted" pages in the newspaper.
Students explain why it costs money to borrow money. Students discuss the various ways a bank might use the money it holds.
Students explain how someone running a business thinks about the cost of money. They explain why the purchase of a car to use for delivering pizzas may be less attractive when interest rates are higher.
Students evaluate the advantages of different kinds of distribution channels. Students discuss advantages and disadvantages for a producer of selling door- to- door, to a retail shop, through the mail, to a distributor, locally, across the country, and overseas.
Grades 9-10
Students identify elements of production, distribution, and consumption.
Students identify these elements in the economy of 16th century Venice.
relations Students explain relations among these elements in the economy of 16th century Venice.
Students trace relations among sectors of an economy. Students explain how transportation systems affect farmers' choices about what crops to plant.
Students describe the scale of production in different societies. Students compare subsistence farming, subsistence farming that produces surplus sold at market, cash crop farming, and industrial farming.
Grades 11-12
Students explain the economic reasoning behind hedging, i.e., protecting one's interests if things do not go as one expects.
Students examine how a farmer guards against fluctuations in the price of crops.
Students understand that changes in supply or demand cause prices to change; in turn, buyers and sellers adjust their purchase and sales decisions. Students identify products that have become more or less expensive compared to other products as a result of changes in supply and demand.

Using line graphs of supply and demand for a particular product, they explain how the price changes affected production and consumption decisions.
Students explain how monopolies work and how they differ from competitive markets. Students compare the history of the telephone industry with the cable television industry.
Students explain various types of taxes, their aims, their costs, and their benefits. Students debate advantages and disadvantages of raising revenue through sales, income, or inheri-tance taxes. They explain how entre-preneurial activity is affected by taxes on income from profits and capital investment.
Students explain reactions to inflation in various sectors of the economy. Students compare the situations of people who have mortgages to people who rent; those who earn most of their income from wages, investments, or fixed pensions.

For each of the following cases, students tell who would be harmed by an unexpected 10% inflation rate, who would benefit, and explain why:
  1. Mike's retirement income is $24,000 a year;
  2. Bonnie borrowed $5,000 last year and must pay it back at the end of this year;
  3. John lent the $5,000 to Bonnie last year and will be paid back at the end of this year; and
  4. Bob and Mary bought several houses as an investment 10 years ago, and now they plan to sell them.
Students explain cost-benefit analysis. Students compare the costs of a luxury car to the benefits that it provides to the purchaser.
Students explain marginal cost-benefit analysis, whereby effective decisions are made by comparing the additional costs of alternatives with the additional benefits. Students apply the concepts of marginal benefit and marginal cost to evaluate proposals for a pollution control ordinance aimed at maximizing economic efficiency. They then select the best proposal and explain the evidence for concluding that it is best.
Students understand the basics of running a business. Students collaborate to write a business plan. They decide how many workers to hire for a profit-maximizing car wash by comparing the cost of hiring each additional worker to the additional revenues derived from hiring each additional worker.

Learning Standard 13: American and Massachusetts Economic History.

Students will describe the development of the American economy, including Massachusetts and New England, from colonial times to the present.

Learning Standard Components
(Core Knowledge and Skills)
Students understand technological progress.
Students learn stories that show some things have to develop in sequence, e.g., people must control fire before they can make metal, and must make metal before they can plow effectively.
Students understand population growth. Students read stories that show there were far fewer people in the past and that growth of population allowed for new occupations.
Students understand that pursuit of economic opportunity often required people to make journeys and to establish new homes. Students read biographies of people who left home to find new work.
Grades 5-8
Students describe the stages of economic change in New England from the 1600s to the present.
Students draw timelines of New England industries: fishing and farming in 17th century; textiles and whaling in 18th century; large-scale manufacturing in 19th and early 20th centuries; and recent emphases on technology, education, tourism, and health care.
Students describe effect of changing modes of transportation and communication on the distribution of goods and services. Students trace connections between coastal, road, canal, railroad, and air transport and rise and fall of Massachusetts towns and industries.
Students describe differing views of how government may affect an economy. Students explain conflicts between Jefferson and Hamilton on the relation of government to the economy.
Students analyze the effects of American inventions on the U.S. economy in the 18th and early 19th centuries. Students examine the effect of the cotton gin and interchangeable parts manufacturing on American trade and the development of New England industry.
Grades 9-10
Note: American history is not required, though it may be taught, in 9th and 10th grades. The world history and geography sequence, however, provides some areas of important background to the American economy.
Students explain the development of coinage and currency. Students examine the role of coinage in the Roman Empire.
Students understand how war and political instability affect economic development. Students compare the fall of Rome to the rise of Islam.
Students explain systems of inheritance. Students examine how property was transmitted in feudal society.
Students describe the economics of the slave trade. Students examine the role of European and African states in the slave trade.
Students describe the rise and fall of international trading patterns and markets. Students examine China's overland silk trade, and England's position in 18th and 19th century overseas trade.
Students describe the economics of World War II. Students examine Lend/Lease and the Marshall Plan.
Students describe the rise and fall of particular national economies. Students compare economies in Eastern and Western Europe since 1945.
Grades 11-12
Students describe the rise and fall of particular industries.
Students examine such New England industries as shoe manufacture, whaling, and biotechnology.
Students describe the effects of slavery on the U.S. economy in the 19th century. Students report on segments of the economy in the North and South during the antebellum period and Reconstruction.
Students describe how the state and federal governments encouraged business ex-pansion in the 19th century. Students examine tariffs, banking, land grants, franchising, railroad subsidies, taxation, and labor policies.
Students describe the new industries, manufacturing techniques, and lending practices of the early 20th century. Students examine the rise of the automobile industry, assembly-line manufacturing, and the creation of the Federal Reserve Bank.
Students describe the causes of the Great Depression. Students distinguish between initial causes and factors that prolonged the Depression.
Students describe the rise of government economic and social policies intended to alleviate poverty. Students examine the Works Progress Administration, Social Security, the Great Society, and 1980s deregulatory policies.

Learning Standard 14: Today's Economy.

Students will describe the distinctive aspects of the contemporary economy of the United States and the world.

Learning Standard Components
(Core Knowledge and Skills)
Students understand that some things are made locally, some elsewhere in the U.S., and some abroad.
Students discuss where their favorite fruits, vegetables, clothing, and toys come from.
Students understand obsolescence: things wear out or need to be replenished at different rates. Students discuss what happens when things wear out and how long each item mentioned in a story is likely to last before it has to be replaced.
Students explain why traders and explorers in the past were willing to go great dis-tances and overcome obstacles. Grades 3-4: A student reads a biography of Marco Polo, traces his journey on a map, and creates a display about the goods that he discovered or traded in his travels.
Grades 5-8
Students describe international trade in Massachusetts.
Students describe Massachusetts' trade with foreign countries in the 18th and 19th centuries.
Students describe the role of information in the contemporary economy. Students discuss how the Internet, news-papers, and television affect business decisions.
Students describe how the pace of economic transactions has quickened. Students discuss how many transactions take less time today than in the past.
Students explain differences and similarities between producing for local and for international markets. Students discuss changes a Massachusetts computer manufacturer might make in products to be sold in Vietnam.
Students describe the changing role of labor in the global economy and the rise of service industries. Students discuss the rise and fall of membership in American trade unions in relation to new technology and global markets.
Grades 9-10
Students explain how government policies foster or inhibit various kinds of international trade.
Students discuss how a tariff on olives might have affected Roman olive oil producers and foreign olive growers and compare how a tariff on imported cacao beans affects the production of chocolate candy in the United States and how it affects people in the cacao-growing countries.
Students explain the effects of international trade on domestic employment, income, and price level and understand that economic conditions and policies in one nation affect economic conditions and policies in other nations. Students discuss the textile, shipbuilding, and arms industries in the 18th century. In the context of current events, they ana-lyze the following scenario: the United States allows Taiwan to export shirts to this country without placing a tariff on the imports. The Taiwanese can produce shirts at half the cost of shirts produced by American manufacturers. What groups in the United States and in Taiwan will be helped and what groups will be hurt if the United States continues the present free-trade policy toward Taiwan?
Students explain comparative advantage. Students discuss why the automobile industry declined in France but flourished in Japan in the 20th century. They apply the concepts of opportunity cost and comparative advantage to the following problem: The Netherlands can produce in one day either four drill presses or eight embroidered tablecloths. Using the same amount of resources, Portugal can produce either two drill presses or seven embroidered tablecloths. Which country should specialize in drill presses and import tablecloths, and why? Which country should specialize in tablecloths and import drill presses, and why?
Grades 11-12
Students describe the relationship between trade balance and capital flow.
Students compare the balance of trade between the U.S. and China, and the flow of international capital of each. They examine how a nation pays for its imports, as with exports and borrowing.
Students describe international lending and investment. Students compare the actions of private banks and international agencies such as the World Bank in fostering development in Zimbabwe.

Economics Strand

Learning Standard 15: Theories of Economy.

Students will describe and compare the major theories of economy, and will identify the individuals and historical circumstances in which these theories were developed.

Learning Standard Components
(Core Knowledge and Skills)
Students understand the causes and effects of divisions of labor by sex, class, and skill.
Students listen to and discuss stories that point out that in most historically- known societies, men and women generally were required to pursue different occupations; that many societies are based on groups of people who pursue different occupations; and that differences in skill also lead to different occupations.
Students understand differences between the economic effects of individual choices and government policies. Students contrast situations shaped by in-dividual decisions with those shaped by group decisions.
Grades 5-8
Students distinguish between money and barter economies.
Students read about societies without money and discuss what Americans would have to give up if they had to barter for all their needs.
Students explain the relationships among the elements of the United States economy. Students examine how private property, banking, contracts, labor agreements, federalism, and environmental regulations interact.
Grades 9-10
Students describe how feudalism, mercantilism, communism, capitalism, and free- market economies have operated and how participants in these systems would describe them.
Students read and analyze excerpts from the writings of important defenders and proponents of these systems.
Students describe the criticisms of these systems made by their opponents. Students read and analyze excerpts from the writings of important critics of these systems.
Students analyze historical cases of each system. Students examine feudalism in medieval Europe; mercantilism in the 18th century; Soviet communism; and capitalist and other free- market societies.
Grades 11-12
Students analyze social and political con-sequences of economic systems.
Students compare the economic and po-litical system of the United States with those of other nations, and evaluate these systems in terms of:
  • the degree of governmental control over the economy;
  • entrepreneurship, labor, productivity, health, and standards of living;
  • the extent of individual political freedom.
Students analyze differences among free- market economies. Students compare Canadian and U.S. tax systems; or labor relations in England and Germany.
Students understand how economic systems can combine elements of free markets and government regulation. Students explain the government's mon-etary role in pollution control, vaccina-tions, and medical research. They recommend what the governments role should be in these areas.

Students assess evidence in a particular locale for and against removal of rent controls. Also, they explain who would gain and who would lose as a result of a 10% ceiling on credit card interest rates.

Last Updated: September 1, 1997
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