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The Economics of Income

**OVERVIEW: **
Our recent financial crisis should remind us that economic literacy is an essential skill for everyone. Every child needs to understand what money is, how to make it, how to preserve it, when to borrow it, and how to avoid scams

Yet, sadly, in our current zeal to teach readin’, writin’, and ‘rithmetic—at least as they apply to standardized tests--, even the most fundamental concepts of economic education have been pushed aside for more skill and drill.

These lessons, designed for third graders and seventh graders, are intended to help address this gap through inquiry and simulation. Specifically, they are intended to help students understand the relationship between income and education.

The lesson for third graders is intended to be an introduction to the concept that people need to work to earn money, and that without money, purchasing power is limited. For seventh graders, the lesson is more complex to reflect the connection to capital and natural resources, but still with an emphasis on the idea that most people earn their income by selling their labor. Each lesson begins with a webquest inquiry on day one, while the second day provides an opportunity for a hands-on simulation that allows direct application of new knowledge.

**STANDARDS ****: **
Indiana Social Studies 3.4.8 : llustrate how people compare benefits and costs when making choices and decisions as consumers and producers. (Correlation to ILS 1, 2, 3)  Indiana Social Studies Standard 7.4.7 :  Describe ways that people can increase individual human capital. Example: Acquiring knowledge and skills through education or training. (Correlation to ILS 1, 2, 3)  National Council of Economics Standard 13: Income for most people is determined by the market value of the productive resources they sell. What workers earn depends, primarily, on the market value of what they produce and how productive they are. Both lessons will be focused on using information accurately and creatively, the third information literacy standard, to understand the economics of income.
 * INQUIRY SKILLS: **

In the __Blue Book of Information Age__ Inquiry, Callison reminds us that self-posed and mentor-posed questioning is the key to the inquiry process (171), and that information inquiry is a natural partner of social science and humanities to enhance and enrich the learning experience, taking students beyond facts, dates, and events (177). These are key ideas behind the design of these companion lessons.

(All materials are also available in Word format by email request)
 * TEACHING MATERIALS: **

**Third Grade materials:**
Third Grade Teacher Instructions Third Grade Objective Assessment Third Grade Reflections Journal

**Seventh Grade materials:**
Seventh Grade Teacher Instructions Seventh Grade Powerpoint Seventh Grade Day 1 Activities Economic Survivor Game Instructions (Day 2 Economic Survivor Student Instructions ** Seventh Grade Reflections Journal

LESSON COMPARISONS ** :

Novice information scientists require more controlled and guided inquiries. As early concrete thinkers as described by Piaget, third graders usually have little insight into how money is earned. They are just beginning to reason and process information; hands-on experiences help them see relationships more clearly so that they can begin the development of the ability to reason abstractly. At this level, the instructor must take a more direct role by modeling thinking processes, especially through leading questions. Callison reminds us that while questions can be limited to factual recall, they can also be used to demonstrate process and inspire creativity. Skilled questioning is a type of scaffolding of the sort that can lead to critical and independent thinking and use of information; if students eventually develop “ownership”, questioning can lead to students moving from novice toward expert as they explore the subject more deeply (Callison, 171). To incorporate this, the third grade lesson has more directed questions to help guide students toward this goal.

By contrast, seventh graders are beginning to understand the complex interactions of economics and are working through their apprenticeships on the way to becoming experts; their inquiry should be guided instead of controlled. As adolescents, they are at the cusp of Piaget’s last stage of cognitive development, with the ability to reason deductively and evaluate from a range of perspectives. Because they are older, they have a broader set of core knowledge and experiences on which to draw. Mayer and Wittrock remind us that the ability to transfer knowledge to new situations is key to successful problem solving. To reflect these factors, the scaffolding of the seventh grade lesson changes the focus for the teacher from direct instructor to facilitator and model, roles Preddy tells us more appropriate for middle school students: guide and coach (226).

Both lessons include an active simulation game, designed to motivate and inspire enthusiastic application of knowledge. Large muscle movement is effective for all students, but especially for adolescent boys. Each lesson concludes with a journal activity designed to encourage reflection and self-assessment. Most importantly, they share a constructivist sensibility; they focus on developing understanding and knowledge of the world through varied experiences (Callison and Lamb).