Strand 5: Economics, The Social Studies Standard as of May 22, 2006
State of Arizona, Standards and Assessment Division
Concept 1: Foundations of Economics
The foundations of economics are the application of basic economic concepts and decision-making skills. This includes scarcity and the different methods of allocation of goods and services.
Concept 1 Performance Objectives for High School
- PO 1. Analyze the implications of scarcity:
- a. limited resources and unlimited human wants influence choice at individual, national, and international levels
- b. factors of production (e.g., natural, human, and capital resources, entrepreneurship, technology)
- c. marginal analysis by producers, consumers, savers, and investors
- PO 2. Analyze production possibilities curves to describe opportunity costs and trade-offs.
- PO 3. Describe the characteristics of the mixed-market economy of the United States:
- a. property rights
- b. profit motive
- c. consumer sovereignty
- d. competition
- e. role of the government
- f. rational self-interest
- g. invisible hand
- PO 4. Evaluate the economic implications of current events from a variety of sources (e.g., magazine articles, newspaper articles, radio, television reports, editorials, Internet sites).
- PO 5. Interpret economic information using charts, tables, graphs, equations, and diagrams.
Concept 2: Microeconomics
Microeconomics examines the costs and benefits of economic choices relating to individuals, markets and industries, and governmental policies.
Concept 2 Performance Objectives for High School
- PO 1. Describe how the interdependence of both households and firms is affected by trade, exchange, money, and banking:
- a. why voluntary exchange occurs only when all participating parties expect to gain from the exchange
- b. role and interdependence of households, firms, and government in the circular flow model of economic activity
- c. role of entrepreneurs in a market economy and how profit is an incentive that leads entrepreneurs to accept risks of business failure
- d. financial institutions and securities markets
- e. importance of rule of law in a market economy for enforcement of contracts
- PO 2. Describe how markets function:
- a. laws of supply and demand
- b. how a market price is determined
- c. graphs that demonstrate changes in supply and demand
- d. how price ceilings and floors cause shortages or surpluses
- e. comparison of monopolistic and competitive behaviors
- f. theory of production and the role of cost
- PO 3. Describe how government policies influence the economy:
- a. need to compare costs and benefits of government policies before taking action
- b. use of federal, state, and local government spending to provide national defense; address environmental concerns; define and enforce
property, consumer and worker rights; regulate markets; and provide goods and services
- c. effects of progressive, proportional, and regressive taxes on different income groups
- d. role of self-interest in decisions of voters, elected officials, and public employees
Concept 3: Macroeconomics
Macroeconomics examines the costs and benefits of economic choices made at a societal level and how those choices affect overall economic well being.
Concept 3 Performance Objectives for High School
- PO 1. Determine how inflation, unemployment, and gross domestic product statistics are used in policy decisions.
- PO 2. Explain the effects of inflation and deflation on different groups (e.g., borrowers v. lenders, fixed income/cost of living adjustments).
- PO 3. Describe the economic and non-economic consequences of unemployment.
- PO 4. Analyze fiscal policy and its effects on inflation, unemployment, and economic growth.
- PO 5. Describe the functions of the Federal Reserve System (e.g., banking regulation and supervision, financial services, monetary policy) and their influences on the economy.
- PO 6. Explain the effects of monetary policy on unemployment, inflation, and economic growth.
- PO 7. Determine how investment in factories, machinery, new technology, and the health, education, and training of people can raise future standards of living.
Concept 4: Global Economics
Patterns of global interaction and economic development vary due to different economic systems and institutions that exist throughout the world.
Concept 4 Performance Objectives for High School
- PO 1. Analyze the similarities and differences among economic systems:
- a. characteristics of market, command, and mixed economic systems, including roles of production, distribution, and consumption of goods and services
- b. benefits and costs of market and command economies
- c. characteristics of the mixed-market economy of the United States, including such concepts as private ownership, profit motive, consumer sovereignty, competition, and government regulation
- d. role of private property in conserving scarce resources and providing incentives in a market economy
- PO 2. Describe the effects of international trade on the United States and other nations:
- a. how people and nations gain through trade
- b. how the law of comparative advantage leads to specialization and trade
- c. effects of protectionism, including tariffs and quotas on international trade and on a nationís standard of living
- d. how exchange rates work and how they affect international trade
- e. how the concepts of balance of trade and balance of payments are used to measure international trade
- f. factors that influence the major world patterns of economic activity including the differing costs of production between developed and
- g. economic connections among different regions, including changing alignments in world trade partners
- h. identify the effects of trade agreements(e.g., North American Free Trade Agreement)
Concept 5: Personal Finance
Decision making skills foster a personís individual standard of living. Using information wisely leads to better informed decisions as consumers, workers, investors and effective participants in society.
Concept 5 Performance Objectives for High School
- PO 1. Explain how education, career choices, and family obligations affect future income.
- PO 2. Analyze how advertising influences consumer choices.
- PO 3. Determine short- and long-term financial goals and plans, including income, spending, saving, and investing.
- PO 4. Compare the advantages and disadvantages of using various forms of credit and the determinants of credit history.
- PO 5. Explain the risk, return, and liquidity of short- and long-term saving and investment vehicles.
- PO 6. Identify investment options, (e.g., stocks, bonds, mutual funds) available to individuals and households.
Kids' Money > Teachers > 10th Grade