Standards for China – Where will they fit in the world economy?

Standard: 5

Name: Business Decisions and Market Structure

Businesses typically make decisions to maximize profit. Competition among sellers usually lowers costs and prices for buyers. A lack of competition in some types of markets can lead to higher prices and less-favorable outcomes for buyers.

• K-5: In elementary school, students learn that businesses use resources to produce goods and services, and that buyers and sellers interact in the market. Entrepreneurship is also introduced.
• 6-8: In middle school, students learn about the idea of profit and how businesses and consumers interact. Students learn more about how businesses are legally organized and their goals. Students learn how the behavior of buyers and sellers affects market outcomes. Students then explore the costs and benefits of being an entrepreneur.
• 9-12: High school students, while they do not learn about specific market structures, investigate why competition may vary across different markets. They also learn how businesses decide how much to produce and why competition prevents businesses from influencing the market price. Students learn why some markets have less competition, with concepts such as network effects being introduced.Benchmark Students will know that: Students will use this knowledge to: 5.E.1 Producers use natural resources, human resources, and capital resources to make to make goods and services.Identify a good they can make and sell (e.g., friendship bracelets) and determine what resources they need to produce 20 units, including how many hours of labor. 5.E.2 Competition exists when there are multiple buyers and sellers of similar products.Explain whether the opening of a second vendor selling the same product at a farmers market is good for buyers, sellers, or both.

Standard: 2

Name: Decision Making

People usually respond predictably to positive and negative incentives. Effective decision-making requires comparing the additional costs of alternatives with the additional benefits.

• K-5: In elementary school, students learn about the benefits and costs of making choices. They learn how positive and negative incentives influence their choices and behaviors, and how different people can make different choices given the same circumstances.
• 6-8: In middle school, the presentation of decision-making is refined by adding the ideas of marginal cost and marginal benefit. Students learn that decisions are made by comparing the marginal cost and the marginal benefit of doing something. Finally, they learn that monetary and non- monetary incentives exist and that decisions may have long- term consequences.
• 9-12: In high school, the scope of decision-making is expanded to include the various roles that individuals play in the economy as well as other decision-makers such as firms and governments. Caveats to decision-making such as unintended consequences, the costs and benefits of an allocation system, and sunk costs are covered. Finally, basic behavioral economics findings are introduced to illustrate examples where individuals may not make the best decisions.Benchmark Students will know that: Students will use this knowledge to: 2.E.1 Because of scarcity, something is given up whenever a choice is made.From a list of three toys, rank order their preferences, state their first choice, and identify the second toy as what is given up. 2.E.2 A cost is what you give up when you decide to do something. A benefit is the gain a person receives when they decide to do something.List the costs (what you give up) and benefits (what you gain) of buying a pet. 2.E.3 The opportunity cost of an activity is the value of the best alternative that would have been chosen instead. It includes what would have been done with the money spent, the time, and other resources used in undertaking the activity.Describe a situation that requires a choice among several alternatives. Decide which they would choose and then identify the opportunity cost of that decision. 2.E.4 The evaluation of choices and opportunity costs is subjective; such evaluations vary depending on individual preferences, cultural backgrounds, and societal norms.Compare solutions to a common problem, such as where to go on a class trip, and explain why solutions and opportunity costs differ among students. 2.E.5 Many choices involve doing a little more or a little less of something; few choices are “all-or-nothing” decisions.Decide how the school should spend $4,800 to buy new playground equipment. Their class voted and would like to buy four swing sets ($1,200 each), three slides ($1,200 each), and three jungle gyms ($600 each). Explain what they must give up to get more of some and less of other equipment.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 12 Standard 2: Decision-Making

Standard: 16

Name: Growth and Fluctuations

Investment in factories, machinery, and technology, and in the health, education, and training of people can encourage economic growth and increase the standard of living in a country. Economic fluctuations, such as recessions, result in a temporary worsening of economic conditions as people have a harder time finding jobs and companies cut back or shut down production.

• 6-8: At the middle school level, students learn the importance of labor productivity in stimulating economic growth. Students learn what can improve labor productivity.
• 9-12: At the high school level, students learn about policies and institutions that could improve economic growth. They also learn about short-run fluctuations in the economy such as recessions and expansions.Benchmark Students will know that: Students will use this knowledge to: 16.M.1 Economic growth is a sustained increase in the quantity of the goods and services produced in a country.Research the real GDP of various countries and draw conclusions about the differences in economic growth between those countries. 16.M.2 Labor productivity is output per worker.Calculate the class’s average labor productivity after completing an activity (i.e., paper airplane production, solving calculations, jumping jacks, etc.). 16.M.3 One way an economy can grow over time is by increasing the number of workers. Another important way for an economy to grow over time is by increasing the output per worker.Perform a simple task such as making paper airplanes and then determine if more students engaged in the task will increase the production of the good or the workers’ productivity. 16.M.4 Workers can improve their labor productivity by using physical capital such as tools and machinery.Provide examples where using tools (an excavator to dig a hole, AI to write a summary of information) can increase the productivity of a worker. 16.M.5 Workers can improve their productivity when they learn new ideas or use better tools that help them perform more efficiently.Estimate the time required to complete tasks (solving a Rubik’s Cube, making an origami animal, or assembling a piece of furniture) with and without instructions. Analyze the differences and draw conclusions on how learning new methods and using tools can enhance workers’ productivity.M: MIDDLE SCHOOL STUDENTS National Content Standards in K–12 Economics | 56 Standard 16: Growth and Fluctuations

Standard: 9

Name: International Trade

International trade can increase the total amount of goods and services available, but these gains are not distributed equally between or within countries. Governments use trade policies such as tariffs or subsidies to change trade flows with different countries.

• K-5: Elementary school students learn what trade, exports, and imports are and how they connect countries.
• 6-8: Middle school students learn about gains from trade and how these gains might not be equally distributed. They also learn reasons why countries might decide to restrict trade.
• 9-12: High school students are formally introduced to the idea of comparative advantage and reasons countries may have a comparative advantage. The debate on globalization and regionalization is discussed. Finally, students are introduced to exchange rates and learn how a change in exchange rates affects prices of traded goods.Benchmark Students will know that: Students will use this knowledge to: 9.E.1 International trade is people and businesses in different countries buying and selling goods and services from each other, offering more choices and improving the quality of life of their people. By specializing in making certain products, countries can trade for other things they need, making everyone better off.Give real-world examples of international trade, such as Mexico selling avocados and mangoes to the United States and in return the United States selling machinery and technology to Mexico. 9.E.2 Trade makes countries more interdependent because countries rely on each other for certain goods and services.Explain how trade leads to interdependence between countries and why it is important for countries to trade with each other. 9.E.3 Exports are domestic goods and services that are sold to buyers in other countries. Imports are foreign goods and services that are purchased from sellers in other countries.Give examples of major products that are produced in the United States and exported to other countries, and identify these countries. Examine labels of products that are consumed or used daily at school or at home and compile a list of imported products and the countries from which they are imported.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 36 Standard 9: International Trade

Standard: 4

Name: Markets

The interaction between buyers and sellers determines the market price and allocates scarce goods and services. Buyers and sellers make decisions based, in part, on market prices.

• K-5: Elementary school students learn that markets determine the prices of goods and how people change their behavior when prices change.
• 6-8: In middle school, students are formally introduced to the concepts of supply and demand and what is meant by an equilibrium price. They are presented with a situation where the market price is not in equilibrium and learn how equilibrium is restored. Finally, they discover that a change in the price of one good can impact the market for another good.
• 9-12: In high school, students learn about shortages and surpluses, and how supply and demand changes impact the market price. Finally, the concept of the price elasticity of demand is introduced.Benchmark Students will know that: Students will use this knowledge to: 4.E.1 A market exists whenever buyers and sellers exchange goods or services.Identify items they purchased in online marketplaces and at a local market (e.g., grocery store or school fair) and describe the differences between digital and physical markets. 4.E.2 A price is what people pay when they buy a good or service, and what they receive when they sell a good or service.Identify one of their favorite items purchased with their own money and what price they paid, or what they charged when working for others (e.g., chores around the house, yard work for a neighbor). 4.E.3 Higher prices for a good or service provide incentives for buyers to purchase less of that good or service, and for producers to make or sell more of it. Lower prices for a good or service provide incentives for buyers to purchase more of that good or service, and for producers to make or sell less of it.Provide an example of a good that they did not purchase (or their parents or caregivers would not purchase for them) because it was too expensive and predict how low the price would have to drop before they would be able to buy it. Decide if they would take out the garbage, babysit a sibling, or do some other chore for $1 and, if not, decide at what price they would be willing to do the chore.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 20 Standard 4: Markets

Standard: 1

Name: Scarcity and Allocation

Productive resources are limited. Therefore, people must choose which goods and services they want and which to forego, and they must also select a method for how to allocate these goods and services.

• K-5: Elementary students are introduced to wants and how goods and services satisfy those wants. The four types of resources are defined, with entrepreneurship included as a resource. Students are introduced to the concept of scarcity. They learn that due to scarcity, they cannot have everything they want and therefore, decisions need to be made in some manner.
• 6-8: Middle school students delve more deeply into the concept of scarcity and the implication of scarcity in terms of the types of choices that scarcity forces society to make. The different types of economic systems societies might use are presented.
• 9-12: High school students are given criteria by which to judge economic systems and policies and are introduced to how scarcity of resources leads to a trade-off between the goods a country produces.Benchmark Students will know that: Students will use this knowledge to: 1.E.1 Economic wants are desires that can be satisfied by consuming a good (an object) or a service (an action).Match a list of wants with the correct example of a good or service that satisfies each want. 1.E.2 Goods are things that people use to satisfy their wants. People can touch, see, consume, or play with goods. Services are things that people do for other people.Identify examples of goods used in the classroom; identify the service provided by a teacher, hair stylist, mechanic, or other producers in the community. 1.E.3 Producers are people who make or grow goods and provide services. Consumers are people who buy or use goods and services.Identify people who are consumers and give examples of goods or services they use or buy. Identify people who are producers and give examples of goods and services they make or grow. Give examples of when they have been consumers and producers. 1.E.4 Productive resources are the capital resources, natural resources, and human resources available to make goods and services. Entrepreneurs combine resources to create new businesses and, therefore, are considered a separate productive resource.Identify the resources required to begin a business the student would like to own, making sure to include each category of resources. 1.E.5 Capital resources are goods that are produced and used to make other goods and services. They can be used over and over again in the production process. They are also called capital goods or physical capital.Draw a picture representing a capital resource used at school. Identify examples of capital resources used to produce a good or service in their community.E: ELEMENTARY STUDENTSThe Standards and Benchmarks Notes: The standard is found at the top of each section. The standard is followed by a narrative on how the standard is designed, in other words, the guiding ideas behind the benchmarks for each level. Benchmarks are provided for three levels: elementary, middle, and high school. The benchmarks do not provide a specific grade level; that determination should be done by local teachers, schools, and districts. The final determination of grade level will vary depending on the students as well as the overall design of the school or district plans. National Content Standards in K–12 Economics | 8 Standard 1: Scarcity and Allocation

Standard: 3

Name: Specialization and Exchange

Specialization and the division of labor allow people to benefit from voluntary exchange. Voluntary exchange occurs only when all participating parties expect to gain.

• K-5: Elementary students learn about the benefits of specialization and the division of labor. They understand that exchange becomes necessary when people have specialized in a skill. Barter is identified as an inefficient way to trade and how money makes trading easier is discussed in Standard 13.
• 6-8: By middle school, students are expected to understand that both buyers and sellers anticipate benefiting from exchange.
• 9-12: The high school student learns how transaction costs may limit trade. The role of markets is outlined in Standard 4.Benchmark Students will know that: Students will use this knowledge to: 3.E.1 Most people produce and consume goods and services.Give an example of a good a farmer or florist produces and a good or service they consume. 3.E.2 Economic specialization occurs when people concentrate their production on fewer varieties of goods and services than they consume.Name several adults in the school or community who specialize in the production of a good or service (plumber, law enforcement officer, teacher, hair stylist, etc.) and identify other goods and services that these individuals consume but do not produce for themselves. 3.E.3 Division of labor occurs when the production of a good or service is broken down into numerous separate tasks, with different workers performing each task.Participate in a simulated assembly line and identify the separate operations and the different tasks involved. Identify examples of goods produced in the U.S. using division of labor. 3.E.4 Specialization and division of labor usually increase the productivity of workers.Work individually as a craftsperson to produce a product alone and then work as a member of a small group to produce the same product. Explain why more products usually are produced when each member of the group performs a particular task in making the good. 3.E.5 People specialize in producing what they do best and then exchange their income for goods and services they do not produce.Describe how a specialist’s life such as a long-haul truck driver, accountant, lawyer, or childcare worker would change if they were unable to exchange their income to buy goods or pay for services needed.E: ELEMENTARY STUDENTS National Content Standards in K–12 Economics | 17 Standard 3: Specialization and Exchange