Teaching Economics Through Literature

Social Studies Review, Fall 2003 by Charkins, Jim

One of the easiest and most exciting ways to get the basic messages of economics across is to use children's literature. An additional advantage is that teachers can implement both social studies and language arts standards at the same time. The following lesson exemplifies the use of literature in the early grades. For an explanation of ways that this technique can be expanded, see Donna McCreadie's article in this issue. For a more complete list of children's books see "Resources for Economic Teachers," also in this issue.

In the middle grades, historical fiction offers many opportunities to teach the fundamentals of benefit/ cost analysis, opportunity cost, markets, and human capital. For older students, a newly published book by Michael Watts, The Literary Book of Economics, is a veritable treasure chest of ways to help students understand economics with popular literature. One simple example is the use of Robert Frost's The Road Not Taken to illustrate the concept or opportunity cost but there are many more including an excerpt from Benjamin Franklin's autobiography to illustrate human capital. For a complete citation on the Watts book, see "Resources for Economics Teachers."

What follows is a simple lesson plan that uses the Three Little Pigs to teach some fundamental concepts.

Opportunity Cost and The Three Little Pigs

A Primary Lesson

Objectives:

Upon successful completion of this lesson, students will:

* Recognize the opportunity cost of decisions

* Use the concept of opportunity cost in making decisions

Prior Knowledge:

Scarcity, choice, alternatives, advantages and disadvantages, personal responsibility, resources, human capital

Economic Principle:

Principle 3: Every Choice Involves Cost

California History/Social Science Standards:

1.6 - Students understand basic economic concepts and the role of individual choice in a free-market economy

3.5 Section 3 - Understand that individual economic choices involve trade-offs and the evaluation of benefits and costs

Materials:

* A copy of the Story of the Three Little Pigs (Activity 1-1)

* A piece of paper per child and art supplies to enable the children to draw two pictures

Motivation:

Ask the children if they have heard the story of the three little pigs. If so, ask one of the children to tell the story to the class. If not, give the class a brief explanation of the story. "Three little pigs build houses. The first builds a house of straw and the big bad wolf blows it down. The second pig builds his house of sticks and the big bad wolf blows it down. The third pig builds a house of bricks and the big bad wolf can't blow it down." Explain to them that they are going to hear a slightly different version of the story today. Explain that a version is a different way of telling a story.

Teaching procedure:

1. Write the words "opportunity cost" on the board. Say the words and have the children repeat them. Ask a few children to say the words by themselves. Explain that opportunity cost is what you give up when you make a decision. It is what you would have chosen-the next best alternative.

2. Tell the children that you are going to read them a version of the three little pigs story. Ask the children to identify the choices that each pig makes as you read the story.

3. Read the story, emphasizing the choices that each pig makes.

* Luke chose to use his money and pig capital to build a small house of straw and go to Disneyland. His alternative was to use his money and pig capital to build a strong house and not go to Disneyland. He also chose to use his money and pig capital to go Disneyland instead of going to college.

* Bo - same as Luke, only he went to Magic Mountain instead of Disneyland

* Sadie - same alternatives as Luke and Bo except that her favorite amusement park is Knotts Berry Farm. She chose to use her resources to build a strong house and did not go anywhere. She chose to use her money and resources to go to college instead of an amusement park.

4. Each Pig made two choices: (1) type of house and amusement park and (2) college or amusement park. Use Activity 1-2 to answer the following questions:

* In each case, which alternative did Luke and Bo choose and what was their opportunity cost? In each case, which alternatives did Sadie choose and what was her opportunity cost?

* What were the advantages and disadvantages of the choices made by Luke, Bo, and Sadie?

5. Ask the class which pig or pigs made a good choice and why? Use their responses to lead them to a conclusion that more education (whether college or occupational training) provides human (or pig) capital that is useful on the job.

6. Ask the children to identify some decisions that they have made recently. What resources were involved, and what was the opportunity cost of each choice?

7. Ask the children what they would be doing if they weren't listening to the teacher. (Answers will vary) Explain that that is the opportunity cost of their choosing to listen.

8. Distribute one piece of paper and art supplies to each child. Have each child draw a picture of one of the houses on one side of the paper and an amusement park on the other. Ask the children which side of the paper they would like to display on the wall-the play side or the house side. After they have all chosen and the pictures are on the wall, explain that the side they don't display is the opportunity cost of their decision.