In this lesson, students analyze the price of consumer credit; identify the factors that affect the total price for a car including the interest rate, the length of a contract and the size of a down payment. They learn to evaluate the costs and benefits of car purchase options, and analyze a car contract. This content from Econ Lowdown also features alignment to national Financial Literacy and/or Economics standards.

In this lesson, students analyze the price of consumer credit; identify the factors that affect the total price for a car including the interest rate, the length of a contract and the size of a down payment. They learn to evaluate the costs and benefits of car purchase options, and analyze a car contract. This content from Econ Lowdown also features alignment to national Financial Literacy and/or Economics standards.

In this module, you will meet Jack Of All Trades, a most awesome superhero. In all tasks, Jack can do everything better and faster (he has absolute advantage), but does that mean he must do everything while the rest of the people stand around helplessly? Find out if justice is served when a formerly idle citizen, Andy, wades through the depths of opportunity cost and the benefits of comparative advantage. This content from Econ Lowdown also features alignment to national Financial Literacy and/or Economics standards.

This lesson encourages students to define opportunity cost, determine the the opportunity cost and trade-offs for certain decisions, and select criteria important for decision making.

This video teaches the concept of Scarcity and includes a quiz. The total resources of society, including natural resources, human resources, capital goods and entrepreneurship, are limited, causing scarcity to exist. [1:13]

This energy classroom game focuses on energy sources. Students learn that energy, the environment, and economics are closely tied. During the course of the game students discover the concepts of scarcity, opportunity cost, net energy profit, law of diminishing returns, and that availability does not mean usefulness.

In this lesson, students learn about human capital. “Human capital” refers to the knowledge and skills that people obtain through education, experience, and training. People invest in their human capital through education, on-the-job training, and practice. Throughout their school careers, students make investments in their human capital. Introducing this concept to younger students can help them understand why school is valuable and will allow them to build on their initial understanding of human capital in later years. This content from Econ Lowdown also features alignment to national Financial Literacy and/or Economics standards.

In this module, students use their knowledge of the production possibilities curve to determine how specialization in production can yield greater global consumption.

Specifically, Andy and Jack grow potatoes and strawberries on their islands, Los Andeles and Jackramento. When trying to find the mix of potato and strawberry production that will satisfy the islanders’ wants, they happen upon a solution that provides greater strawberry and potato consumption – specialization and trade.

In this module, students are introduced to absolute advantage, the ability to produce more of a good or service than another producer using the same amount of resources as that producer.

The superhero Jack of All Trades recognizes that although he has the absolute advantage in many tasks, it doesn’t mean he should do all tasks, as Jack explains to mortal, Andy.

From this basic concept, students can move toward an understanding of the benefits of trade and comparative advantage.

In this module, students learn that economies can experience greater consumption through specialization and trade. However, the price must be right for trade to occur. So, students also ascertain the terms of trade, a condition where trade can only benefit both parties when the price of the good is higher than the exporter’s opportunity cost and lower than the importer’s opportunity cost.

Specifically, Jack and Andy work out the terms of trading potatoes and strawberries between their islands by comparing their opportunity costs of producing those goods.

In this module, students learn that even when absolute advantage exists, two parties can still benefit from trading, if they do so according to their comparative advantage. Miss Information tries to persuade Andy that his new car repair and snow removal business is doomed to failure because Jack has the absolute advantage in both tasks. However, Jack dispels Miss Information’s misinformation by suggesting they work together and exploit their comparative advantage.
Miss Information tries to persuade Andy that his new car repair and snow removal business is doomed to failure because Jack has the absolute advantage in both tasks. However, Jack dispels Miss Information’s misinformation by suggesting they work together and exploit their comparative advantage.

Miss Information tries to persuade Andy that his new car repair and snow removal business is doomed to failure because Jack has the absolute advantage in both tasks. However, Jack dispels Miss Information’s misinformation by suggesting they work together and exploit their comparative advantage.

In this module, students learn about the production possibilities curve, a graphic representation of output combinations that can be produced given an economy’s available resources and technology. With their new-found wealth, Andy and Jack have acquired islands, Los Andeles and Jackramento, giving Jack the perfect opportunity to teach Jack about production possibilities, opportunity cost, and the efficiencies of trade according to comparative advantage.

This is a group activity lesson that provides students with the opportunity to incorporate decision making, scarcity, and choice in planning a prom.

Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters. Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition. The first edition of Principles of Macroeconomics by OpenStax is available in web view here.

By the end of this section, you will be able to:

Analyze arguments against economic approaches to decision-making
Interpret a tradeoff diagram
Contrast normative statements and positive statements

By the end of this section, you will be able to:

Discuss the importance of studying economics
Explain the relationship between production and division of labor
Evaluate the significance of scarcity