Lesson Plan for Economics: Grades K to 5
To apply basic principles of economics to real life.
- Understand basic costs involved with opening a store.
2. Practice making bar graphs.
3. Learn about factors of production.
What you’ll need
Prepare your supplies by printing out a few blank charts for your students, which can be found online or on word processing software that may be available on your computer. Small cut-outs of food related (i.e. fruits, milk, cream) and kitchen equipment, are used for illustrations and charts. You will also need a dictionary or an introductory economics textbook, to define terms after the activities. A few different color pens or pencils, to signify different bars of the graph, can also be used.
Activity #1 – My First Smoothie Shop
In this activity, you will begin by painting a picture of entrepreneurship. The students have just earned enough money to open their first shop, selling fruit smoothies. Begin by giving each student a dollar value of money; a number ranging from $200 to $1,000. You will then take the food and kitchen related cut-outs and ask your students to identify as many items that they would use to make and sell their smoothies, as they can. There should be enough cut-outs for each student to choose at least 5 different items.
Activity #2 – My Shop’s Costs
Once the students have chosen their cut-outs, you can place dollar values on these items, proportional to the dollar amount given to them at the beginning of the lesson. Writing these values on a chalkboard or piece of paper for the students to reference back to, is also helpful.
Activity #3 – Making a Chart
Now it is time to begin making a chart of the students’ costs, in relation to their capital. Start by having the students paste the cut-outs on the horizontal axis of the charts. Ask the students to write values in increments of 50 along the vertical axis until they reach the total amount of capital they have. Fifty will be the lowest value, on the graph and their original capital value will be the highest value, at the top of the graph.
Activity #4 – Graphing the Costs
Students will now graph the cost of each of their items in relation to their capital amount on the graph. An item that costs $50 will be represented by a bar going up to the top of the lowest increment, which is 50.
Students are now ready to evaluate the cost of opening their smoothie shop. Students should be able to answer the following questions:
1. What are my factors of production?
2. What is the largest cost involved in opening my shop?
3. What is the smallest cost involved in opening my shop?
4. How much money do I have left after I buy all of the items for my shop?
Students should be able to understand that the cut-out items that they have chosen, are apart of their factors of production. These items are the resources that they have used to produce their goods, smoothies. Students can compare the cost of each factor of production in relation to the amount of money they were initially given to open up their smoothie store. Although, these are not the actual values of purchasing their factors of products, these representations will give students a basic understanding of how costs compare to capital. Students will also become more familiar with bar graphs and how they can be used in real life.