Lesson 2

Earning What I Want

 

Lesson Overview:

Lesson 2 covers: 1) specialization; 2) supply and demand; and 3) entrepreneurship.

 

Learning Objectives:

The students will:

  • Define the vocabulary words specialization, supply, demand and entrepreneur.
  • Explain that specialization makes it easier to trade with others. Geographical areas and individuals produce more of what they're best suited to produce.
  • Tell that specialization can reduce the amount of competition that sellers face.
  • Identify qualities and actions that can lead to success as an entrepreneur.
  • Relate supply and demand to the prices of goods and services.

 

Content Standards Addressed:

Common Core State Standards

National Standards

 

Vocabulary

  • Demand - the degree to which consumers want and are willing to pay for a good or service.
  • Entrepreneur - one responsible for creating, organizing and managing a business.
  • Specialization - a good or service that a producer is particularly suited to provide because of location, climate, resources, workers, etc.
  • Supply - the availability of a good or service. 

 

Review:

To reinforce Lesson 1, review these points:

  • Money provides us opportunities and can help us achieve life goals.
  • What we value influences our decision making, including decisions we make with money.
  • The principle of scarcity says we can't have everything we want. We must make choices.
  • The most-valued thing we give up when we make a choice is called the opportunity cost or trade-off.

 

Part 1: Specialization and the Entrepreneur

 

Materials Needed:

One hundred years ago, children younger than those in your group often worked full-time at dangerous jobs for very little pay. Since the enactment of the Fair Labor Standards Act of 1938, however, children under the age of 14 usually cannot be employed. And no person under age 18 can work a job that's considered hazardous.

Due to child labor laws, traditional jobs are not an option for children of this age group. Becoming an entrepreneur - someone who creates and manages his or her own business - is a logical alternative.

What are job possibilities for upper-elementary children? Are they limited to selling lemonade and mowing lawns? How do they decide which job is right for them? Understanding a little about the economic principles of specialization (covered in this section) and supply and demand (covered in Part 2) may help answer some of these questions.​

 

Begin​ the lesson by discussing why visitors might consider your community special. Challenge the students to come up with unique answers. They might mention:

  • A special day or festival.
  • A man-made landmark or natural wonder.
  • A historical site.
  • The birthplace of a famous person.
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Activity: State Specializations

Give each student or small group a real state quarter to look at. Invite them to research the design's meaning and then share with the larger group.

  • What are the state's specializations? (For example, the Wisconsin quarter features a cow and a wheel of cheese.)
  • How does this specialization help the state? (Wisconsin is often ranked first in cheese production. The dairy industry has a positive impact on the state's economy.)

States and countries specialize in certain goods or services due to their climates, natural resources or other reasons. Other states and countries might find it more expensive, difficult or even impossible to produce the same goods or services.

Through specialization, states and countries:

  • Produce more than can be used by their residents.
  • Become more efficient in producing a good or service, which can lower its cost.
  • Provide other areas with goods and services that wouldn't ordinarily be available.

Like geographical areas, individuals have specializations: talents and gifts, even very unique abilities. Individuals once provided what they needed for themselves, but when they started living in communities, specialization of labor began. Some people farmed, some crafted shoes and some baked bread. Last names can point to these ancestral occupations:

  • Baxter = a baker.
  • Cooper = a barrel maker.
  • Fuller = a preparer of woolen cloth.
  • Porter = a gatekeeper or doorkeeper.
  • Wright = a skilled craftsman.

Craft workers are still found today, but more often specialization of labor (or division of labor) refers to the various tasks involved in producing a good or service. For example, in an automotive plant, individuals or teams perform jobs like installing engines, attaching doors and spray painting auto bodies. Specialization of labor results in higher levels of production and lower costs.

 

Reproducible: Specialization and You

Make copies of the reproducible. You may wish to read and discuss the worksheet as a whole-group activity or assign it as independent work. The answers may be found here

 

Part 2: Supply and Demand, And the Entrepreneur

 

Materials Needed:

Understanding specialization can help someone decide what kind of good or service to sell. Knowing about supply and demand helps to decide:

  • What goods or services to offer.
  • How much to charge.
  • What to do if the good or service is very popular, or doesn't sell.

Supply how available a good or service is.

The supply of a good or service depends on things like:

  • The cost of making the good or providing the service.
  • The number of other producers that sell the same good/service.

Demand is the need for a good or service (and people's willingness to pay for it).

The demand for a good or service depends on things like:
  • What consumers (customers) like and dislike.
  • How many want the good or service.
  • How much consumers have to spend on the good or service.
  • If there's a similar good or service available.
Supply and demand affects the prices that are charged for goods and services:

  • If the demand for a good or service is much higher than the supply, the price of the good or service will rise.
  • If the demand for the good or service is much lower than the supply, the price will fall. 

Discuss these questions related to supply and demand:

  • Each Christmas season's hottest toy is often sold out in stores. Why can sellers charge higher than normal prices in classified ads and on online auction sites? (The supply is low and the demand for the toy is high, so some parents will pay more to make sure one is under the Christmas tree.)
  • Why are clearance rack or closeout prices so low? (Clearance racks display goods that haven't been sold at regular or sale prices. Closeouts are discontinued items. Since the supply of these items is much higher than the demand, the prices are low.)

Reproducible: Supply and Demand 

For more examples of supply and demand, make copies of the reproducible. This worksheet might be best used in a whole-group discussion. The answers are found here.

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Part 3: Being an Entrepreneur

 

Reproducible: Could You Be An Entrepreneur?

Make copies of the two-sided reproducible. Discuss the worksheet together after the students complete it independently. 

 

Reproducible: Learn From Successful Young Entrepreneurs

The reproducible profiles some young business owners. Read and discuss their biographies using the questions below:

Discussion questions - Granola Guru:

  • How did this entrepreneur show he doesn't give up easily? (He created his own granola when the bed and breakfast wouldn't share its recipe, and he didn't let rejection discourage him.) 
  • Have you run into any unique products while traveling? What could you introduce to your own community?

Discussion questions - Computer Consultant:

  • Lesson 1 discussed what people value. Which did this young man value more, making money or learning? (Learning.) How do you know? (He didn't charge much for his goods and services and turned down a high-paying job offer.)
  • Do you like to tinker with unwanted or outdated items? Is there a market for your talent? 

Discussion questions - Construction Cleaner:

  • How did this young woman promote her business? (She mailed information to builders, her potential customers. She offered her first cleanings free of charge. If she did a good job, these customers might recommend her to others.)
  • What marketable skills have you learned by doing chores around the house?

Discussion questions - Insect Identifier: 

  • Is it wise to conduct business over the Internet? Why? Why not? (Shopping on the Internet is often more convenient, but there are real dangers related to privacy, cyber stalking and more. Adults should be cautious online, and children should always let parents know what they're up to, online and elsewhere.)
  • Which of your hobbies could be turned into a business? 

Discussion questions - Basketball Brothers:

  • How did the boys' previous jobs help with their basketball camp? (They must have been good babysitters, because parents trusted them and were willing to send their kids to camp. Remind the group that doing one's best is very important.)
  • How did these brothers promote the camp to their community? (They gave away a free camp registration. They also gave each camper a free T-shirt. When people saw the shirts around town, they would be reminded of the camp.)
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Activities: Entrepreneurship

1. Invite an entrepreneur (better yet, a young entrepreneur) to speak with the group about his or her business:

  • How did your business get started?
  • What have you learned?
  • Would you do anything differently next time around?

2. Divide into small groups. Ask each group to research a fad like Beanie Babies, the Pet Rock, Cabbage Patch Kids, the Rubik's Cube, etc.

  • How did this product originate?
  • How did sales promotions increase the product's popularity?
  • What lessons can entrepreneurs learn from this fad?