Download Economics Curriculum

Economics
Proposed Curriculum
A. Fundamental Concepts
1. Guiding Concepts
a. understand the concept of scarcity and how it necessitates allocative
decisions
b. recognize that trade-offs are part of every decision
c. define opportunity costs
d. utilize marginal analysis for decision making
e. recognize importance of incentives in decision making
f. understand that specialization leads to interdependence
g. understand concept of voluntary exchange
h. recognize benefit of markets as means of allocating resources
i. analyze relationships between inflation, unemployment, and output
2. Scarcity / Opportunity Cost
a. explain the nature of scarcity and demonstrate its relationship to
economics
b. describe the factors of production
c. identify the major components of the circular flow diagram
d. analyze the flow of products, resources and money using a circular
flow model
e. analyze the costs and benefits of organizing a business as a sole
proprietorship, partnership, or corporation
f. examine the three basic questions every economy must answer
g. recognize that limited resources necessitate trade-offs and that trade
-offs involve opportunity cost
h. evaluate opportunity cost under various circumstances
i. construct a production possibilities frontier to demonstrate opportunity
cost
j. manipulate production possibility frontier to demonstrate alternative
societal choices
k. evaluate how changes in education, incentives, technology, and capital
investment alter productivity and demonstrate using a production
possibilities frontier
3. Economic Goals and Systems
a. summarize the basic economic goals
b. evaluate economic performance utilizing economic goals
c. examine trade-offs among economic goals
d. evaluate the strengths and weaknesses of traditional, command, and
market economies
e. analyze the impact of traditional, command, and market economies on
the United States economy
4. Absolute and Comparative Advantage
a. understand how everyone can benefit from voluntary trade
b. learn the meaning of absolute and comparative advantage
c. recognize how comparative advantage forms the basis upon which
specialization and exchange benefit trading partners (i.e. increased
standard of living)
d. be able to apply the theory of comparative advantage to real-world
situations
e. analyze the relationship between trade, competition, and productivity
B. Microeconomics
1. Markets
a. define and determine the equilibrium price and equilibrium quantity
when given the demand for and the supply of a good or service
b. explain the factors that change demand for a good or service
c. explain the factors that change supply for a good or service
d. predict the how changes in supply and/or demand will impact
equilibrium price and equilibrium quantity in both the product and
factor markets
e. analyze how buyers and sellers respond to incentives provided by
changing market conditions
f. illustrate and calculate surpluses and shortages utilizing supply and
demand data
g. explain how markets allocate resources in an efficient manner
2. Elasticity
a. define price elasticity of demand and price elasticity of supply
b. distinguish among elastic, inelastic, and unit elastic demand
c. identify the determinants of demand elasticity
d. calculate elasticity of demand utilizing total revenue test and the
elasticity of demand coefficient
e. apply price elasticity of demand to economic problems
f. analyze momentary, short-run, and long-run elasticity of supply
3. Supply, Demand, and Government Policies
a. explain the consequences of government policies that impose a ceiling
(maximum) price on a market
b. explain the consequences of government policies that impose a floor
(minimum) price on a market
c. understand how a tax on a good affects equilibrium price and quantity
d. recognize the equivalence of taxes imposed on buyers and sellers and
explain how the burden of a tax is divided between buyers and sellers
e. analyze how prices act as incentives that influence human behavior
4. Externalities
a. define and give example of third party costs or negative externalities
b. define and give examples of third party benefits or positive externalities
c. analyze ways positive and negative externalities can cause
overproduction or underproduction of goods and/or services
d. analyze the effectiveness of government policies designed to remedy
problems caused by positive or negative externalities
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5. Public Goods and Common Resources
a. explain the concept of public goods and common resources
b. describe why private markets sometimes fail to supply public goods
c. identify examples of public goods in U.S. economy
d. analyze the nature and limitations of cost benefit analysis in terms of
public goods
e. explain why common resources are overused
f. identify examples of common resources in U.S. economy
6. The Design of the Tax System
a. define and differentiate among progressive, proportional, and regressive
taxes
b. recognize that understanding tax incidence is important for evaluating
tax issues
c. analyze trade-offs between equity and efficiency in a tax system
C. Macroeconomics
1. Gross Domestic Product (GDP) / Gross National Product (GNP)
a. explain how GDP/GNP are measured
b. differentiate methods of calculating GDP/GNP
c. understand importance of GDP/GNP
d. describe limitations of GDP/GNP
e. calculate and distinguish nominal and real GDP utilizing implicit GDP
deflator and Consumer Price Index (CPI)
f. use output-expenditure model to classify economic activity into the
appropriate sectors
2. Unemployment
a. describe and differentiate the four types of unemployment
b. analyze causes of unemployment
c. describe and evaluate consequences of unemployment
d. define the concept of full employment
3. Inflation
a. identify causes and effects of inflation
b. construct a price index when given raw data
c. calculate rate of inflation using a price index
d. understand limitations of CPI as a measure of inflation
e. describe and analyze how some groups are hurt while other groups
benefit from unexpected inflation
f. use price index data to calculate relative purchasing power over time
4. Business Cycles and other economic indicators
a. describe the phases of the business cycle
b. determine the impact of the varying phases of the business cycle on
inflation, unemployment, and real GDP
c. understand short run trade-off between unemployment and inflation
d. analyze various economic indicators to accurately determine the phase
of the business cycle
5. Aggregate Demand (AD) / Aggregate Supply (AS)
a. define aggregate demand, aggregate supply, and equilibrium
b. describe the reasons for the horizontal, vertical, and upward sloping
segments of the aggregate supply curve
c. list, explain, and analyze the basic causes of shifts in AD and AS and
the effects of these shifts on real national output and price level
d. distinguish between short-run aggregate supply and long-run aggregate
supply
e. use AD/AS curves to analyze the effects of macroeconomic events on
real national output and the price level
f. analyze macroeconomic policy issues using AD/AS curves
6. Fiscal Policy
a. describe how fiscal policy can be used to stabilize the economy
b. distinguish between automatic and discretionary stabilizers
c. distinguish between expansionary and contractionary fiscal policy
d. evaluate macroeconomic conditions and determine the appropriate
fiscal policy
e. list and explain limitations of fiscal policy
f. illustrate expansionary/contractionary policy using the AD/AS model
7. Monetary Policy
a. define and explain the functions and characteristics of money
b. describe the functions and structure of the Federal Reserve System
c. define and explain the three major tools of monetary policy (reserve
requirement, open market operations, discount rate) and how they are
utilized to control the money supply
d. evaluate macroeconomic conditions and determine the appropriate
monetary policy
e. list and explain the limitations of monetary policy
f. illustrate expansionary and contractionary monetary policy using a
money market graph and AD/AS model
D. International Economics
1. Absolute and Comparative Advantage
a. understand how everyone can benefit from voluntary trade
b. learn the meaning of absolute and comparative advantage
c. recognize how comparative advantage forms the basis upon which
specialization and exchange benefit trading partners (i.e. increased
standard of living)
d. be able to apply the theory of comparative advantage to real-world
situations
e. analyze the relationship between trade, competition, and productivity
2. Free Trade Versus Protectionism
a. describe methods of protectionism
b. analyze and evaluate the case for protectionism
c. analyze and evaluate the case for free trade
d. use supply and demand curves to analyze the effects of tariffs and
quotas
3. Exchange Rates
a. describe how the price of currency is determined
b. use supply and demand curves to analyze how events affect exchange
rates
c. analyze how policies and international events may change exchange
rates
d. understand the effects of currency appreciation and depreciation on
international trade
4. Global perspective
a. compare distribution of wealth across countries
b. identify economic similarities and differences among developed and
developing countries
c. analyze how U.S. consumers and producers participate in global
production and consumption of goods and services