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Economics: Scarcity, Markets, and Decisions

Grade 12 · Christian · NGSS/CCSS-aligned

This is a one-semester economics course for a senior. It builds one way of thinking"everything has a real cost, and that cost is what you gave up, not what you paid", and applies it three times, at three different zoom levels: personal decisions, markets, and then whole countries and the global economy. By the end your child should be able to read a news story about jobs, prices, or trade and tell you which parts are facts you could check and which parts are opinions dressed up as facts. That last skill, separating "what's true" from "what's fair", is the thing this course cares about most, more than any formula.

What your child will learn

The whole year, in plain English. Tap any unit to see every skill inside, nothing is hidden.

Scarcity, Choice, and Opportunity Costpeek inside ▸

This is where your child learns the core habit of the whole course: the real cost of anything is the best thing you gave up to get it, not the money you handed over. They'll also build a graph called the production possibilities curve, which is just a picture of 'if I make more of this, I have to make less of that,' and they'll meet a genuine human bias, the sunk cost fallacy, where people keep throwing good time or money after bad because they can't let go of what they already spent.

  1. The distinction between scarcity and shortage

    Given a scenario describing a resource shortage, state whether the situation is an example of scarcity (a permanent condition) or a shortage (a temporary market condition at a given price), and justify the distinction using the definition of each.

  2. Opportunity cost as the single best forgone alternative

    Calculate the opportunity cost of a stated decision by identifying the single best forgone alternative from a list of options, distinguishing it from the sum of all alternatives given up.

  3. Opportunity cost versus monetary/accounting cost

    Explain why opportunity cost, not monetary price, is the economically correct measure of cost for a decision, using an example involving a 'free' or already-paid-for good.

  4. The production possibilities curve as a graphical model of trade-offs under scarcity

    Given a two-good production dataset, construct a production possibilities curve, correctly plotting points and connecting them to show the trade-off frontier.

  5. Interpretation of PPC position, shifts, and curvature as indicators of efficiency, growth, and increasing opportunity cost

    Interpret a novel, previously unseen PPC graph (including one showing a shift and one showing a point inside/outside the curve) to determine whether an economy is operating efficiently, growing, or facing increasing opportunity costs, and justify the interpretation using features of the curve.

  6. The sunk cost fallacy as a departure from rational marginal decision-making

    Compare a rational-choice prediction about a sunk cost to the sunk cost fallacy as it actually shows up in a described human decision, identifying which piece of information the decision-maker incorrectly treated as relevant.

  7. Marginal analysis (MB = MC decision rule)

    Apply marginal-benefit/marginal-cost reasoning to determine the optimal quantity of an activity in a scenario providing a table of marginal values, identifying the point where marginal benefit equals marginal cost.

  8. Opportunity-cost analysis applied to a self-selected, unmodeled decision

    Generate an original, previously unmodeled real-world or civic decision (not one demonstrated in class) and produce a written opportunity-cost analysis of it that correctly identifies the best forgone alternative and explains why it, rather than another option, is the true cost.

  9. Absolute advantage versus comparative advantage (conceptual, non-numeric-trade-gains version)

    Using a simple two-producer, two-good scenario with given output data, distinguish absolute advantage from comparative advantage by identifying which producer has the lower opportunity cost for each good.

Markets: Supply, Demand, and the Price Systempeek inside ▸

This is the biggest unit and the one the rest of the course leans on hardest. Your child builds the supply-and-demand model from scratch, learns to tell 'the whole curve moved' apart from 'we just moved along the curve because price changed,' calculates how sensitive buyers are to price changes (elasticity), compares competitive markets to monopolies, and finishes with price controls and market failure, the two ways markets can go wrong that the basic model doesn't fix by itself.

  1. The determinants of supply and demand and their effect on curve position

    Given a change in a market condition (e.g., input cost, consumer income, related-good price), state whether the demand curve or the supply curve shifts, and in which direction.

  2. The distinction between shifts and movements along a curve

    Distinguish a shift of an entire supply or demand curve from a movement along a fixed curve, given a scenario describing either a change in price or a change in a non-price determinant.

  3. Market equilibrium and the mechanism (surplus/shortage pressure) that drives price toward it

    Given supply and demand schedules or curves for an unfamiliar good, determine the equilibrium price and quantity and explain why a price above or below equilibrium is unsustainable.

  4. The price elasticity of demand formula and elasticity classification

    Calculate price elasticity of demand from percentage-change data and classify a good as elastic, inelastic, or unit elastic based on the resulting coefficient.

  5. The determinants of elasticity (availability of substitutes, necessity vs. luxury, budget share, time horizon)

    Predict, for a good with unfamiliar demand characteristics (novel product, no taught example), whether it is more likely elastic or inelastic based on the presence of substitutes, necessity status, and share of budget, and justify the classification.

  6. The perfect competition and monopoly market structure models

    Compare perfect competition and monopoly on the dimensions of number of firms, barriers to entry, price-setting power, and long-run economic profit.

  7. Market structure classification applied to an unfamiliar industry

    Classify a real-world industry example (not used in instruction) as closer to perfect competition or monopoly and justify the classification using at least two structural criteria.

  8. Negative externalities and the private-cost/social-cost gap

    Explain why a market with a negative externality (e.g., pollution) produces more than the socially optimal quantity, using the distinction between private cost and social cost.

  9. The distinction between an equilibrium shift and a market failure

    Given an unfamiliar scenario combining a market shock and a possible externality or public-good element, determine whether the situation is best explained by an ordinary equilibrium shift or by a market failure, and identify what evidence in the scenario supports that call.

  10. Price ceilings and price floors and their effect on market clearing

    Predict the effect of a price ceiling set below equilibrium or a price floor set above equilibrium on quantity supplied, quantity demanded, and the resulting shortage or surplus, using a labeled supply-and-demand diagram.

  11. The general conditions under which price controls bind and distort a market

    Generalize, from contrasting cases of a successful price control and a failed one, a rule for predicting when a price control will create a persistent shortage or surplus versus when it will have little effect.

The Macroeconomy: Growth, Unemployment, Inflation, and Policypeek inside ▸

Here the course zooms out from single markets to the whole economy: GDP, unemployment, inflation, and the two sets of tools, fiscal policy (Congress and the President taxing and spending) and monetary policy (the Federal Reserve managing money and interest rates), used to steer it. The hard idea underneath the whole unit: every big-picture number (GDP, the unemployment rate) is an average that hides real variation, and the tools that fight unemployment often make inflation worse, and vice versa.

  1. The real GDP calculation using a price deflator

    Given a table of nominal GDP and a price index for two years, calculate real GDP for each year using the deflator formula.

  2. The three types of unemployment (frictional, structural, cyclical)

    Classify a described worker's job loss as frictional, structural, or cyclical unemployment based on the cause stated in the scenario.

  3. Boundary cases between structural and cyclical unemployment

    Compare a new, previously unseen unemployment vignette (with an ambiguous cause combining automation and a recession-driven layoff) to the three taught categories and justify which type dominates or whether it is mixed.

  4. The relationship between an aggregate measure (GDP) and its underlying distribution

    Explain why a rising national GDP figure can coexist with a specific region's unemployment rate remaining unchanged, using the concept of aggregation.

  5. Reconciling conflicting aggregate economic indicators with a distributional/equity question

    Given a completely novel country-year dataset (GDP growth, disaggregated unemployment by demographic group, and CPI) never used in instruction, determine whether the economy has 'recovered' and identify which population the aggregate numbers likely hide.

  6. The distinction between fiscal policy authority and monetary policy authority

    Distinguish which entity (Congress/President vs. the Federal Reserve) controls a described policy action and which broad tool category (fiscal or monetary) it represents.

  7. The direction (expansionary/contractionary) and category of an unfamiliar policy action

    Given a new (unpracticed) government action description, infer whether it represents expansionary or contractionary policy and which category (fiscal/monetary) it belongs to.

  8. The unemployment-inflation policy trade-off under a condition instruction did not directly model

    Given a scenario describing simultaneously high unemployment and high inflation (stagflation-like conditions never presented in instruction), explain why standard fiscal and monetary tools conflict and propose which priority the student would choose, labeling that choice as a value judgment rather than an empirical claim.

  9. Definitions of fiscal policy and monetary policy and one tool for each

    Recall the definition and one real-world tool for each of fiscal policy and monetary policy.

  10. The distinction between empirical claims and value trade-offs in economic argument

    In a written policy-argument essay, label each claim made as either an empirical claim (testable against data) or a value trade-off (a matter of priorities), and justify each label.

Trade, Globalization, and Developmentpeek inside ▸

The course closes by turning Unit 1's opportunity cost into real numbers, this is the theory of comparative advantage, and then asks the harder question: even when trade grows the total pie, who inside a country actually gets more, and who gets less? Tariffs, quotas, and exchange rates come next as the tools that change trade's outcome, and the unit ends with global problems like climate change that no single government can be forced to fix.

  1. Opportunity cost as the basis for comparative advantage in a two-country, two-good numeric model

    Given a numeric table of resource costs for two countries producing two goods, calculate each country's opportunity cost for each good and identify which country holds the comparative advantage in each good.

  2. The distinction between absolute advantage and comparative advantage as the basis for mutually beneficial trade

    Explain why a country can gain from trade even when it has an absolute disadvantage in producing every good, using the distinction between absolute and comparative advantage.

  3. Terms of trade as bounded by each country's domestic opportunity costs

    Given an unfamiliar two-country, two-good numeric scenario with unseen numbers, determine which country should specialize in which good and predict the range within which mutually beneficial terms of trade must fall.

  4. The tariff wedge on a domestic supply-and-demand diagram and its distribution across consumers, producers, and government

    Using a supply-and-demand diagram, identify the effect of a tariff on domestic price, quantity, consumer outcomes, producer outcomes, and government revenue.

  5. Tariffs, quotas, and trade agreements as distinct trade-policy tools

    Compare the mechanisms and typical uses of tariffs, quotas, and trade agreements as tools that alter the outcome of otherwise free trade.

  6. The domestic distribution of gains and losses from a real trade or development event

    Given a real trade or development policy dataset (GDP growth, sector employment, regional unemployment) covering a case not discussed in class, identify at least one specific group that benefited and one that was harmed, citing the data.

  7. The distinction between empirical claims and values trade-offs in trade and development policy argument

    Sort a set of contested statements about trade or development policy into 'empirical claim' (resolvable by evidence) and 'values trade-off' (not resolvable by evidence alone), and justify each sorting decision.

  8. Global public goods and cross-border externalities as market failure at the international scale

    Explain why global public goods such as climate stability or pandemic control are underprovided by uncoordinated national markets, using the public-good and externality concepts from Unit 2.

  9. A structured argumentative position on a contested trade/development policy question, evidenced and separated by claim type

    Construct an argumentative essay on a contested trade or development policy question that explicitly separates empirical claims from value judgments and supports claims with cited evidence.

  10. Comparative advantage and macro-aggregate reasoning applied jointly to unseen data

    Given a novel comparative-advantage numeric problem and an unfamiliar country's trade/GDP/unemployment dataset on the cumulative final, apply opportunity-cost reasoning and macro-aggregate interpretation without any unit-labeled cue as to which method applies.

From the parent guide

This is a one-semester economics course for a senior. It builds one way of thinking"everything has a real cost, and that cost is what you gave up, not what you paid", and applies it three times, at three different zoom levels: personal decisions, markets, and then whole countries and the global economy. By the end your child should be able to read a news story about jobs, prices, or trade and tell you which parts are facts you could check and which parts are opinions dressed up as facts. That last skill, separating "what's true" from "what's fair", is the thing this course cares about most, more than any formula.

Unit 1 · what to expect

This is where your child learns the core habit of the whole course: the real cost of anything is the best thing you gave up to get it, not the money you handed over. They'll also build a graph called the production possibilities curve, which is just a picture of 'if I make more of this, I have to make less of that,' and they'll meet a genuine human bias, the sunk cost fallacy, where people keep throwing good time or money after bad because they can't let go of what they already spent.

The full guide covers all 4 units: where kids get stuck, what to say, and how to tell it's working. Included with the course.

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Economics: Scarcity, Markets, and Decisions, Grade 12 Homeschool Curriculum