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List of Benchmarks for Economics

Standard 4.Understands basic features of market structures and exchanges
  Level Pre-K (Grade Pre-K)
   1. Understands basic concepts of buying, selling, and trading
  Level I (Grade K-2)
   1. Understands that in an exchange people trade goods and services for other goods and services or for money
   2. Knows that money is a good that can be used to buy all other goods and services
   3. Understands that when two people trade because they want to, they expect to be better off after the exchange
   4. Knows that barter is trading goods and services for other goods and services without using money
  Level II (Grade 3-5)
   1. Knows that competitive markets are those with many buyers and sellers, where no one person or firm controls prices or the number of products for sale
   2. Understands that money reduces the problems barter faces because money is easy to divide, carry, and store  A 
   3. Knows that banks play a key role in providing currency and other forms of money to consumers, and that banks serve as intermediaries between savers and borrowers
   4. Understands that when people and nations specialize, they become more interdependent (i.e., less self-sufficient and more dependent on exchange)
   5. Understands that money makes it easier to compare the value of different kinds of goods and services and allows people to save purchasing power for a later time because it can easily be traded for goods and services at any time
   6. Understands how active competition among sellers results in lower prices and costs, higher product quality, and better customer service
  Level III (Grade 6-8)
   1. Understands that not all competition is on the basis of price for identical products and that non-price competition includes style and quality differences, advertising, customer services, and credit policies
   2. Understands how competition among buyers of a product results in higher prices for the product
   3. Understands that the United States government uses laws and regulations to maintain competition, but sometimes the government reduces competition unintentionally or in response to special interest groups
   4. Understands that money encourages people to specialize because they can operate more efficiently in an exchange (i.e., sell what they produce to anyone, not just to someone who has something they want)
  Level IV (Grade 9-12)
   1. Knows that the basic money supply is usually measured as the total value of coins, currency, and checking account deposits held by the public  A 
   2. Knows that collusion among buyers or sellers reduces the level of competition in a market and is more difficult in markets with large numbers of buyers and sellers
   3. Understands that in the long run the level of competition in an industry is determined largely by how difficult and expensive it is for new firms to enter the market and by consumers’ information about the availability, price, and quantity of substitute goods and services
   4. Understands that the introduction of new products and production methods by entrepreneurs is an important form of competition and source of technological progress and economic growth
   5. Understands that externalities are unintended positive or negative side effects that result when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in the market exchange (e.g., a negative externality in consumption occurs when cigarette smoking by one individual has harmful or undesirable effects on nonsmokers, a positive externality in production occurs when a neighbor’s home improvements increase the value of nearby properties)
   6. Understands that a natural monopoly exists when it is cheaper for one supplier to produce all of the output in a market than for two or more producers to share the output (e.g., electric companies)
   7. Understands that public service commissions typically regulate natural monopolies because people cannot rely on competition to control price and service levels in these cases
   8. Understands that when transaction costs (e.g., tariffs, costs of gathering or disseminating information on products, transportation costs paid by the consumer) decrease, more specialization and trading will occur  A 

 A  = Assessment items available