Experiments

A. Business Start-up

Objective: The students will be able to apply the laws of price determination in the small business that they will start up. They will also be able to establish the connection of the demand and supply curves into everyday life.

• Organize the students into different groups; preferably having around 6-7 members per each group.
• Each group will have to come up with a product or service that they have to sell to the public. (In this case, the public would pertain to the rest of the school community).
• Each member in the group should be given specific tasks in the entire business operation. Departments such as management, marketing, auditing, and production should be at least established. It is up to the students to divide the given responsibilities among themselves.

2. Management oversees the entire business operation and handles most of the decisions and allocation of profits and capital.
4. Marketing serves as the sales force of the business. It’s their job to sell and advertise the product and/or service to the community and bring in profits for the business.
6. Auditing handles the record-keeping chores of the business. They keep track of the current capital, expenditures and profits.
8. Production takes care of the actual product or service to be sold to the public.

• It is important to consider that the market should be only the school community in order to isolate certain demands and needs.
• The students must be made aware of those demands and needs. It’s totally up to them on what kind of business they should put up. (Of course the business should be within the parameters of basic decency).
• Have the auditing department keep a journal of situations and decisions made by the management asides from the records. This will used to tie up the fundamentals of price determination with their experience in the activity.
• The entire activity can last between 3 weeks to 1 month depending on the discretion of the teacher.
• Have the students prepare a summary/report of their earnings and loss and have them to present it to the rest of the class for analysis.

Guide Questions:

• Did your business succeed? What were the reasons that resulted the success or failure of the business? How did the laws of price determination influence the outcome?
• How did you base your pricing?
• Was your business actually needed by the community?
• What were the changes in the original figures compared to the final figures?

B. Counting Wishlists

Objective: The students will be able to identify differences between each human need and create the connection between the basic concepts of economics being applied in their daily life.

• Have the students list down material things they want in their lives. The costs can range from practical to exorbitant – it’s up to them list down whatever they want. (E.g. Ferrari, a new bike, new shoes or all the riches in the world)
• Then ask them to segregate each want according to priority.
• Ask, "Do you really need all of the things you listed? Why?" Then have them write down the unnecessary things in another list. If possible, have them to support it with reasons why such item/s were removed.
• Have their lists compared with each other, and get different opinions on probable reasons for the differences. This can be a jumping platform in explaining that created needs and luxurious needs is a case-to-case basis. One luxurious item for one maybe an essential need for another. It can be further extended to the thought that not all created/luxurious needs are essential needs. It’s man’s unlimited desires that produce created and luxurious needs.
• Have their wants brought into reality. Follow up with another question, "Could you really afford all the things you listed?" Accordingly, have their lists cut down to the things that they can afford.
• It can be now pointed out to the concept of Scarcity. Man has unlimited wants compared to a world with limited resources. One can’t afford all things in the world, which leads to choices – choosing the things essential for a normal and decent life. Limited resources means limited choices. (E.g. the students are only given set allowances, so their choices of purchase is limited to the amount of money they have).

Guide Questions:

• What are the reasons why you wanted all of the things you listed? Are they really important in your life?
• If you were given the task to allocate this year’s national budget, what are the top 5 sectors that you’re going to give the highest funding and why?

Further Reading

• Economics lesson plans were based and adopted from Fr. Roberto Yap's economics notes found in the Tulong Dunong Sourcebook and Michael P. Todaro: Economics for a Developing World