|Using resources in one way requires giving up alternative uses
|Relative cost / relative benefit
Download lesson outline and handouts (Microsoft Word)
National Content Standards Addressed:
Standard 1: 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.
Living in a world of scarcity, we are continually faced with choices about how to use our limited resources, and we must recognize that our decisions impose opportunity costs. Choosing among uses of resources necessitates evaluating the costs and benefits of the alternatives. Because people’s values and preferences guide their choices by shaping their perceptions of costs and benefits, and because individual values differ, community-based decisions about resource use may be especially difficult. This role play simulates a common environmental dilemma as community members trying to decide where to locate a new school are faced with the costs – the alternative uses that must be given up – of any particular school location.
The simulation consists of two rounds of decision-making, the second constrained by the introduction of existing environmental law and regulation. Discussion of the laws and regulations clarifies both the costs and/or benefits of alternative sites, and the values of the different stakeholders in the school location issue. The debriefing questions help students to distill from their experience and articulate the implications of the basic economics concepts of scarcity, choice, and cost (content standard 1).
- Scarcity forces choice. All choices impose costs and confer benefits.
- People choose and their choices are always rational. They choose the alternative
- they believe to have the greatest excess of benefits over costs.
- People’s choices reflect their values. People’s values differ.
- Resource management decisions are made by people (not by organizations, governments, or societies) acting as individuals, or as members of groups.
- Changes in rules and laws affect decision-making by changing costs and benefits.
- Comparing decisions made under different sets of rules and laws allows us to identify the costs and benefits of changing the “rules of the game.” It also demonstrates how decision-making is a process of weighing the respective costs and benefits to diverse individuals.
Handouts and overhead transparencies
- “Background” – 1 per group and 1 overhead transparency (p. 5)
- “Charge to the Site Selection Committee” – 1 per group and 1 overhead transparency (p. 6)
- “Land Use Key” – 1 per group and 1 overhead transparency (p. 7)
- Site map – 1 per group and 1 overhead transparency (p. 8)
- School prototype disks – 2 per group, cut from overhead transparencies (p. 9)
- “Description – Current Land Use . . .” – enough for 2 or 3 copies per group (pp.10-11)
- (optional) 1 set of role cards (pp. 12-13)
- (optional) “How Would You Vote? – 1 per student (p. 14)
1 – 1½ class periods
- Display the background scenario on the overhead projector and read through the description with the class.
- Display the site map on the overhead projector, pointing out the various features listed in the map key.
- Display the school prototype on the overhead projector and identify the components.
- Divide the class into small groups of 4-6 students. Distribute copies of the instructions for the school siting committee, the site map, the map key, and 2 plastic school-prototype disks. (Only 1 disk is necessary for the activity, but having a second help more visual students compare alternative sites.)
- Direct groups to appoint a chairman to lead the discussion and a recorder to write down the group’s decision and the values that led them to the decision.
- Start the group discussions by suggesting that students begin by sharing what values and priorities they think should guide the committee’s decision. Allow groups approximately 10 minutes to discuss the problem and make a recommendation.
- Reconvene the large group. Discussion:
- Where did you locate the school? Why did you choose this location?
- What values were most important to you in choosing a location? (Expect a variety of answers. Some may value attracting business so that the town will experience economic growth and higher standards of living. Others may value their children’s education. Some may value environmental quality above all other things.)
- What alternate site(s) did you consider? (Encourage students to identify alternatives. This is not an all-or-nothing exercise, and in choosing a site, they have dismissed all other sites. The concept of opportunity cost requires recognition of the next-best alternative. One way to get students thinking along these lines is to ask, “If we cannot locate the school where you’ve recommended, what would be your next choice?)
- What trade-off did you accept in locating the school where you did instead of in the alternate site? (Encourage students to think in terms of costs and benefits. In recommending one location, they trade-off or give up the benefits of the alternate site.)
- Explain to students that a lawyer on the town council has put together a packet of information about the laws and regulations that apply to the land being considered for the school. Wishing to avoid future problems, the council has asked the site selection committees to reconsider their decisions in light of the regulatory information.
- Ask students to return to their small groups.
- Distribute the handout entitled, “Description of Current Land Use & Legal-Regulatory Framework.”
- Allow groups approximately 10 minutes to reconsider their decisions in light of the new information.
- Reconvene the large group. Discussion:
- Where did you locate the school and is this a change from the first location you recommended?
- Why are you recommending this location? (Why did you change/not change your recommendation?) (Expect a variety of answers. Help students to articulate the ways in which the “rules of the game,” in the form of the land use and regulations, changed the costs and benefits associated with particular sites. Also, anticipate that some students may have re-ordered their values and priorities based on the information they gained from the land use descriptions.)
- What trade-off or opportunity cost did you accept in recommending this location? (Again, focus on changes in the costs and benefits).
- How did the “rules of the game,” explained in the new handout, affect your perception of the costs and benefits of the location you choose? Of alternative locations? (Accept a variety of answers, focusing on how particular regulations or current land use changed perceptions of costs and benefits.)
- How did the “rules of the game” impact the opportunity cost of choosing the site you did choose? Of choosing the alternative site you considered? The opportunity costs didn’t change; the opportunity cost of any site is the foregone benefits of the alternative site. However, students’ awareness of the foregone benefits may have changed their perception of the cost.
- How did the rules of the game constrain your thinking? (Were there other solutions you might have considered had the rules been different?)
- In what way do the rules support the values of your group members? In what ways do the rules undermine or conflict with the values of your group members?
- Who is very pleased with their final choice? Expect few to say that they are very happy. Making a constrained choice means looking for the most satisfying of the options available, but that may feel like looking for the “best of the bad.”
- (Optional) Appoint 1 member from each discussion group to role play the town council. Seat the council members at the front of the room, with access to the overhead. Place the school prototype disks on the locations that have been recommended by the committees. The remaining students will role play community members attending the town forum on the new school.
- ” Choose 7 students to play the scripted roles. Give them the role cards so that they may read over their lines while the other students are setting up the classroom for the council meeting.
- ” Choose a student to play the council secretary (or play the role yourself). The secretary will help the council president conduct the meeting by calling speakers from the list of people who have signed up to address the council.
- Allow approximately 10 – 15 minutes for the council discussion. As a follow-up, ask the council to discuss and report their decision, or assign a brief assessment for homework in which students write paragraphs explaining how they would vote as members of the council and why. Their explanations should include a statement of the values that drove their decisions and of the trade-offs (costs and benefits) they’re willing to accept. (See “How Would You Vote? P. 14)
Foundation for Teaching Economics is proud to announce that Debbie Henney, director of curriculum for the Foundation for Teaching…
Ted Tucker, Executive Director, Foundation for Teaching Economics October 26, 2022 More high schools are offering courses on personal finance…