With the uncertain global economy NewsHour Economics correspondent Paul
Solman reports on unemployment in the town of Elkhart, Indiana offering
an opportunity to look at the real world effects of recession and
changes to the American manufacturing landscape.
Activity A: Assessing Unemployment
Ask students to list luxury goods from their own lives and communities
gathering a list of "prior knowledge" items on the board. Distribute Student
allow students time to fill out the luxury goods section. Lead students
in a discussion about the relationship between unemployment and luxury
goods. Do luxury good sales slump with unemployment? Why?
Solman's Making Sen$e video on the town of Elkhart, Indiana.
After watching the video ask students to add to the list on the
board of luxury goods. As a class draft a definition of a luxury goods
and explain why an RV is considered a luxury good
Ask students to define infrastructure and list some examples on the
board. Split the students up into partners or small groups and have
them write an answer to why a community would invest in its
In the small groups go to Bureau of Labor and find the unemployment
rate for the local community, for the entire country and fill it out on Handout A.
Staying in the small groups direct students to theBeautiful Bulgaria project
and New York's effort
boost economy through infrastructure. Allow at least 15 minutes for
students to read and investigate what they do not understand within the
projects. Ask them to make changes to their answer for why a community
would invest in its infrastructure.
Activity B: Reversing Unemployment
Divide the class into small groups of 3 students and distribute
a copy of Student Handout B
to each group.
Ask each group to a pick one luxury item from the list the class made earlier to be produced in their town.
Assign each group member one of the following
roles: Mayor, CEO, laid-off worker and as a class discuss the top priority of each role.
For the mayor, this would be reversing unemployment in town. For the CEO, this
would be saving or rerouting the company he/she directs. For the worker, this
would be finding a job and being able to provide for his/her family.
In their groups ask students to act their role and advocate for their group while filling out the Student Handout B
will conclude the class period in "town meetings," discussing the next
step their town needs to take to reverse unemployment in town.
final class period, students will vote on the next step they will take as a town.
Then each "town" will present the information on their handouts and
the next step they voted to take to boost their economy.
To extend the lesson, lead a vote among CEOs only, mayors only,
and workers only to compare the different ways townspeople might vote based on
For Economic Education Standards
Standard 2 : Marginal Cost/Benefit
decision making requires comparing the additional costs of alternatives with the
additional benefits. Most choices involve doing a little more or a little less
of something: few choices are "all or nothing" decisions.
concepts: Decision Making, Profit Motive, Benefit, Costs, Marginal Analysis, Profit,
Profit Maximization, Cost/Benefit Analysis
Standard 6 : Specialization
When individuals, regions, and nations specialize in what they
can produce at the lowest cost and then trade with others, both production and
Related concepts: Division of Labor, Production, Productive
Resources, Specialization, Factor Endowments, Gains from Trade, Relative Price,
Transaction Costs, Factors of Production, Full Employment
: Markets - Price and Quantity Determination
Markets exist when buyers
and sellers interact. This interaction determines market prices and thereby allocates
scarce goods and services.
Related concepts: Market Structure, Markets, Price
Floor, Price Stability, Quantity Demanded, Quantity Supplied, Relative Price,
Standard 14 : Profit and the Entrepreneur
are people who take the risks of organizing productive resources to make goods
and services. Profit is an important incentive that leads entrepreneurs to accept
the risks of business failure.
Related concepts: Taxation, Costs, Costs of
Production, Entrepreneur, Risk, Taxes, Cost/Benefit Analysis, Innovation, Entrepreneurship,
Standard 15 : Growth
Investment in factories, machinery,
new technology, and in the health, education, and training of people can raise
future standards of living.
Related concepts: Incentive, Interest Rate, Opportunity
Cost, Production, Technological Changes, Trade-off, Trade-offs among goals, Human
Capital, Intensive Growth, Investment, Physical Capital, Productivity, Risk, Standard
of Living, Economic Efficiency, Economic Equity, Economic Freedom, Economic Growth,
Economic Security, Investing, Business, Businesses and Households, Factors of
Production, Health and Nutrition, Savers, Savings, Stock Market
16 : Role of Government
There is an economic role for government in a market
economy whenever the benefits of a government policy outweigh its costs. Governments
often provide for national defense, address environmental concerns, define and
protect property rights, and attempt to make markets more competitive. Most government
policies also redistribute income.
Related concepts: Externalities, Income,
Natural Monopoly, Redistribution of Income, Role of Government, Taxation, Transfer
Payments, Bonds, Distribution of Income, Income Tax, Maintaining Competition,
Monopolies, Negative Externality, Non-clearing Markets, Positive Externality,
Property Rights, Public Goods, Maintaining Regulation, Taxes, Regulation, Government
Expenditures, Government Revenues
Standard 19 : Unemployment and Inflation
imposes costs on individuals and nations. Unexpected inflation imposes costs on
many people and benefits some others because it arbitrarily redistributes purchasing
power. Inflation can reduce the rate of growth of national living standards because
individuals and organizations use resources to protect themselves against the
uncertainty of future prices.
Related concepts: Types of Unemployment, Causes
of inflation, Consumer Price Index (CPI), Deflation, Labor Force, Unemployment,
Unemployment Rate, Inflation