What Am I Giving Up?

Keystone Principle #2 – TANSTAAFL (There Ain’t No Such Thing As A Free Lunch)

Voluntary National Content Standards: #1, #3

Connection:

Young and old alike find it easier to anticipate the benefits of potential choices than to anticipate the costs.  Our thoughts focus on all the positive things we expect our choices to bring us. That anticipation can cloud our minds and blind us to the variety of attendant costs we will necessarily incur.  Many teenagers have not yet emerged from the egocentric nature of youth which inclines them to view costs only in terms of themselves – “What will it cost me?”

Teachers can help them broaden their understanding of cost.   Show them how to look beyond the question of monetary cost to include time, energy, and psychic costs as well.  Consider whether an initial cost is just the beginning or whether there are long-term costs (a commitment to take on an after-school job or joining a school athletic team).  Sometimes the opposite is true – the cost may be short-term, but the benefit is long-term (taking the time to help a friend may cement a long-term friendship).  Even when we calculate and shoulder our own cost, we may fail to consider the cost it imposes on other people (driving carefully and being home on time, but not replacing the gas used when borrowing a parent’s car – an unpleasant surprise to the parent heading out to work the next morning).

As students become increasingly sophisticated in their reasoning ability, help them to see that their best decisions are made when they have a genuine understanding of the opportunity they are giving up.  We all live with trade-offs, and it is important to ensure that when we make a choice and forego some particular thing, we have actually chosen something we value more in its stead.

Objectives

I. Understanding

  • All costs should be recognized.
  • You often have many initial alternatives from which you can choose, but in the moment of choice, you choose between only two things.  That next best choice you didn’t pick is called your opportunity cost.
  • Most choices are not choices between desirable and undesirable options.  We usually choose between two similar options or varying degrees of the same thing.
  • Sometimes we confuse Cost and Price. If you ask the average person, “How much did those new shoes cost?” they’ll say, “$100.”  The price of the shoes was $100.  If, however, we are thinking economically, we realize that the $100 represents time or leisure given up in exchange for $100 in income.  The real cost of your shoes might be 15 hours bagging groceries.
  • Economics measures tangible and intangible costs such as time, labor, morality, safety, or forgone leisure.

II. Skills

Students will be able to:

  • define vocabulary
  • identify opportunity costs
  • distinguish between cost and price
  • identify tangible and intangible costs

Activities

I. Concept Vocabulary

  • Cost – An amount that must be paid or spent to buy or obtain something. The effort, loss, or sacrifice necessary to achieve or obtain something.
  • Intangible cost – An intangible thing (something you can’t see or touch) that you give up in order to get something else you want more.
  • Opportunity cost – The second-best alternative (or the value of that alternative) that must be given up when scarce resources are used for one purpose instead of another.
  • Price – The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.
  • Tangible cost – A tangible thing (something you can touch or see) that you give up in order to get something else you want more.
  • Trade-off – The giving up of one benefit or advantage in order to gain another regarded as more favorable.

II. Journals

Initial Prompt: Look back at your list of things that you want to do and have from last month’s journals (Keystone Principle #1).

  • Write down what you would have to give up to do or to have those things.
  • Write about how you feel or what you think about what you would have to give up.

General Assignment:

Choose from the quotations below and write a journal entry of at least half a page

  1. Restate the idea in your own words.
  2. Say whether or not you agree with the statement.
  3. Explain why you agree or disagree.
  4. Discuss how you have seen it expressed in your own life.

III. Quotations:

  1. “I shall be telling this with a sigh, somewhere ages and ages hence: Two roads diverged in a wood and I- I took the one less traveled by, and that has made all the difference.”  Robert Frost
  2. “You can’t have your cake and eat it too.” Anonymous
  3. “One must always be aware, to notice—even though the cost of noticing is to become responsible.” Thylias Moss
  4. “For which of you, intending to build a tower, does not first sit down and estimate the cost, to see whether he has enough to complete it?” Jesus
  5. “Choose a job you love and you will never have to work a day in your life.” Confucius
  6. “Loving can cost a lot but not loving always costs more, and those who fear to love often find that want of love is an emptiness that robs the joy from life.” Merle Shain
  7. “To safeguard one’s health at the cost of too strict a diet is a tiresome illness indeed.” François, Duc De La Rochefoucauld
  8. “I acknowledge that the balance I have achieved between work and family roles comes at a cost, and every day I must weigh whether I live with that cost happily or guiltily, or whether some other lifestyle entails trade-offs I might accept more readily. It is always my choice: to change what I cannot tolerate, or tolerate what I cannot—or will not—change.” Melinda M. Marshall
  9. “We assemble parliaments and councils, to have the benefit of their collected wisdom; but we necessarily have, at the same time, the inconvenience of their collected passions, prejudices, and private interests.” Benjamin Franklin

Lessons

Late to Class: What Does It Cost Me? (from the Powell Center Lessons)

From Virtual Economics v.3:

  • Choices & Changes: In Life, School, and Work – Grades 7-8 – Teacher’s Resource Manual (MS), 1-56183-590-0; Unit 1: Lesson 5 – “Economic Choice and Opportunity Cost” and Unit 2: Lesson 6 – “Choices Have Benefits and Costs”
  • Capstone: Exemplary Lessons for High School Economics (HS), 1-56183-515-3; Unit 1: Lesson 3 – “Economic Magic:  Creating Something from Nothing”
  • Old MacDonald to Uncle Sam: Lesson Plans from Writers around the World (HS), 1-56183-133-6; Lesson 5 – “Scarcity and Choice”
  • Focus: High School Economics, 1-56183-614-1; Lesson 1: “Choice, Opportunity Costs, and Decisions”
  • Economics in Action: 14 Greatest Hits for Teaching High School Economics(MS/HS), 1-56183-086-0; Lesson 2 – “Economic Decision Making”
  • Choices & Changes: In Life, School, and Work – Grades 9-10 – Teacher’s Resource Manual (MS/HS),1-56183-592-7; Unit 1: Lesson 2 – “Choosing Among Alternatives”
  • Personal Decision Making: Focus on Economics (MS/HS), 1-56183-494-7; Lesson 1 – “Decision Making: Scarcity, Opportunity Cost, and You”

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