Nine economic principles create the foundation of all programs and lessons developed and taught by the California Council on Economic Education, CCEE. Just mentioning the word economics can sound complex to students, but when broken down into a simple idea, lessons are fun and actionable. CCEE programs and workshops have earned a 97% teacher-approval rating because all lessons are classroom-ready and easy to use. CCEE’s focus is to make economics understandable for teachers and students alike. When we do so:
Every choice we make involves benefit/cost analysis either implicitly or explicitly; it is the primary tool of economic reasoning. In using scarce resources to achieve goals, it is helpful to do so in a systematic manner. Benefit/cost analysis, or decision making, includes five steps:
An economy accomplishes two tasks:
In a market economy, these two tasks are done using the least amount of resources for the greatest amount of good if the four conditions (competition, information, incentives, property rights) are present. Competition involves buyers competing against other buyers for scarce goods and services and sellers competing against other sellers for customers. Profit is the major incentive of a market economy and competition is the major regulator. “Market failures” usually occur when one of the four conditions does not exist. When they do exist, markets are efficient.
Many students assume the government will decide their income. If this is the case, there is little incentive to develop their human capital. It is important that they recognize how labor markets work. Applying the Principle of Exchange, employers will hire workers if the employers expect to gain more than they give. Salaries of some entertainers, executives, and athletes make perfect sense if those paying the salaries expect the individual to bring in more revenue than they are being paid.
Today’s students will enter a highly technological, information-oriented economy. Demand for workers in those areas is high and income is high. There are plenty of jobs in low-skilled sectors, but those jobs pay a low income. Students should recognize that individual wages are determined by the supply of and demand for those workers and reflect the relative scarcity of those workers. Market imperfections exist in labor markets just as they do in product markets.