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Topic: Opportunity costs and trade-offs  

Economics

 Standard 1.  Understands that scarcity of productive resources requires choices that generate opportunity costs
  Level I (Grade K-2)
   Benchmark 3.Knows that a cost is what you give up when you decide to do something, and a benefit is something that satisfies your wants
    Knowledge/skill statements
     1.Knows that a cost is something that you give up when you make a decision
     2.Knows that a benefit is something that satisfies your wants
  Level II (Grade 3-5)
   Benchmark 7.Understands that when productive resources are used to produce one good or service, the opportunity cost (i.e., what is given up) is other goods and services that would have been made with the same resources if the chosen good or service had not been made
    Knowledge/skill statements
     1.Knows that the opportunity cost is something that is given up
     2.Understands that when productive resources are used the opportunity costs are other goods and services
     3.Understands that other goods and services could have been made from productive resources if the chosen good or service had not been made
   Benchmark 8.Understands that choices usually involve trade-offs; people can give up buying or doing a little of one thing in order to buy or do a little of something else
    Knowledge/skill statements
     1.Understands that choices usually involve trade-offs
     2.Knows that a trade-off is when people give up buying or doing a little of something in order to buy or do a little of something else
  Level III (Grade 6-8)
   Benchmark 2.Knows that all decisions involve opportunity costs and that effective economic decision making involves weighing the costs and benefits associated with alternative choices
    Knowledge/skill statements
     1.Knows that all decisions involve opportunity costs
     2.Knows that economic decision-making involves weighing the costs and benefits of alternative choices
   Benchmark 3.Understands that the evaluation of choices and opportunity costs is subjective and differs across individuals and societies
    Knowledge/skill statements
     1.Understands that the evaluation of choices is subjective
     2.Understands that the evaluation of opportunity costs is subjective
     3.Knows that individuals evaluate choices differently
     4.Knows that societies evaluate choices differently
     5.Knows that individuals evaluate opportunity costs differently
     6.Knows that societies evaluate opportunity costs differently
  Level IV (Grade 9-12)
   Benchmark 1.Understands that marginal benefit is the change in total benefit resulting from an action, and marginal cost is the change in total cost resulting from an action
    Knowledge/skill statements
     1.Knows the meaning of marginal benefit
     2.Understands the relationship between marginal benefit and total benefit
     3.Knows the meaning of marginal cost
     4.Understands the relationship between marginal cost and total cost
   Benchmark 2.Understands that optimal levels of output (e.g., production output, output of services provided by a public program) can be determined by comparing the marginal benefits and costs of producing a little more against the marginal benefits and costs of producing a little less
    Knowledge/skill statements
     1.Knows that production output is a type of output that has an optimal level
     2.Knows that output of services provided by a public program is a type of output that has an optimal level
     3.Understands how to determine the optimal level of output
     4.Knows that production output is an optimal level of output
     5.Knows that the output of services provided by a public program is an optimal level of output
   Benchmark 4.Understands that investing in new physical or human capital involves a trade-off of lower current consumption in anticipation of greater future production and consumption
    Knowledge/skill statements
     1.Understands that investing in new physical capital involves trade-offs
     2.Understands that investing in new human capital involves trade-offs
     3.Understands that investing in new physical capital involves a trade-off of lower current consumption in anticipation of greater future production and consumption
     4.Understands that investing in new human capital involves a trade-off of lower current consumption in anticipation of greater future production and consumption
   Benchmark 5.Understands that technological change and investments in capital goods and human capital may increase labor productivity but have significant opportunity costs and economic risks
    Knowledge/skill statements
     1.Understands that technological change may increase labor productivity
     2.Understands that investments in capital goods may increase labor productivity
     3.Understands that investments in human capital may increase labor productivity
     4.Understands that technological change may have significant opportunity costs
     5.Understands that technological change may have significant economic risks
     6.Understands that investments in capital goods may have significant opportunity costs
     7.Understands that investments in capital goods may have significant economic risks
     8.Understands that investments in human capital may have significant opportunity costs
     9.Understands that investments in human capital may have significant economic risks
 Standard 2.  Understands characteristics of different economic systems, economic institutions, and economic incentives
  Level IV (Grade 9-12)
   Benchmark 1.Understands that the effectiveness of allocation methods can be evaluated by comparing costs and benefits
    Knowledge/skill statements
     1.Understands how effectiveness of allocation methods is measured
     2.Understands how costs and benefits are related to the effectiveness of allocation methods
 Standard 6.  Understands the roles government plays in the United States economy
  Level IV (Grade 9-12)
   Benchmark 1.Understands that because citizens, government employees, and elected officials do not always directly bear the costs of their political decisions, sometimes policies have costs that outweigh their benefits for society
    Knowledge/skill statements
     1.Knows that citizens do not always directly bear the costs of their political decisions
     2.Knows that government employees do not always directly bear the costs of their political decisions
     3.Knows that elected officials do not always directly bear the costs of their political decisions
     4.Understands that sometimes policies have costs that outweigh their benefits for society
   Benchmark 5.Understands that governments provide an alternative method to markets for supplying goods and services when it appears that the benefits to society of doing so outweigh the costs to society but that not all individuals will bear the same costs or share the same benefits of these policies
    Knowledge/skill statements
     1.Understands why governments provide alternative methods to markets for supplying goods and services
     2.Understands that not all individuals bear the same costs or share the same benefits of governmental policies
     3.Knows alternative methods for providing goods and services
     4.Knows costs and benefits associated with alternative methods of supplying goods and services
   Benchmark 6.Understands that incentives exist for political leaders to implement policies (e.g., price controls, barriers to trade) that disperse costs widely over large groups of people and benefit relatively small, politically powerful groups of people.
    Knowledge/skill statements
     1.Understands that incentives exist for political leaders to implement certain policies that disperse costs widely over large groups of people
     2.Understands that incentives exist for political leaders to implement policies that benefit relatively small, politically powerful groups of people
     3.Knows that price controls are an example of policies that may disperse costs over a large group of people but benefit only a small group
     4.Knows that trade barriers are an example of policies that may disperse costs over a large group of people but benefit only a small group
   Benchmark 7.Understands that few incentives exist for political leaders to implement policies that entail immediate costs and deferred benefits, even though these types of programs may be more economically effective
    Knowledge/skill statements
     1.Understands that few incentives exist for political leaders to implement policies that entail immediate costs and deferred benefits
     2.Knows that sometimes programs that entail immediate costs and deferred benefits may be more economically effective than programs with immediate benefits and deferred costs
 Standard 10.  Understands basic concepts about international economics
  Level IV (Grade 9-12)
   Benchmark 6.Understands that public policies affecting foreign trade impose costs and benefits on different groups of people (e.g., consumers may pay higher prices, profits in exporting firms may decrease), and that decisions on these policies reflect economic and political interests and forces
    Knowledge/skill statements
     1.Understands that public policies affecting foreign trade impose costs on different groups of people
     2.Understands that public policies affecting foreign trade impose benefits on different groups of people
     3.Knows that consumers paying higher prices is an example of a cost imposed on a group of people by public policies affecting foreign trade
     4.Knows that a loss of profit for export firms is an example of a cost imposed on a group of people by public policies affecting foreign trade
     5.Understands that decisions based on public policies affecting foreign trade reflect economic interests
     6.Understands that decisions based on public policies affecting foreign trade reflect economic forces
     7.Understands that decisions based on public policies affecting foreign trade reflect political interests
     8.Understands that decisions based on public policies affecting foreign trade reflect political forces