The Game of Life
Kentucky Academic standards
Financial Literacy
F.P.1 - Recognize that people need to work to meet basic needs.
F.P.3 - Identify the difference between wants (e.g., skateboard, video games) and needs (e.g., food, clothing, and shelter) and the relationship to consumer decisions.
F.P.4 - Identify why people make financial choices.
F.P.5 - Explain how planning helps people make choices about how to use their money.
F.P.6 - Describe how financial decisions impact the achievement of short and long-term goals.
F.P.8 - Identify things people buy (e.g., goods, services (i.e., tasks performed by others), leisure activities, etc.).
F.I.5 - Identify factors and experiences, such as role models and peer pressure, which affect spending patterns.
Social Studies
2.E.MA.2 - Explain the role of prices in an economic market.
3.E.IC.1 - Explain how people use incentives and opportunity costs to inform economic decisions.
Purpose
Students will:
Understand that basic economic concepts are important for consumer decision-making.
Learn consumer decisions are influenced by economic and social factors.
Learn values have a role in making consumer decisions.
Material Suggestions
Consumer magazines with ads
Procedures
Ask students to begin to consider the “goods” that they would like to have or “want.” Let them begin to consider items and start to build a “laundry list” of those things. Also, ask the children to make sure they include the items that they “need.” Distribute a variety of old magazines and allow students to dream. Ask them to cut out pictures of both what they “need” and what they “want.”
Share with the children that they will learn about the true value of agriculture, money, and living in America.
Ask the students to define agriculture. Farming is the production of plants and animals for food, fiber, and fuel. Question: Do we “need“ Agriculture?
Ask the students to define “Needs” vs. “Wants.”
A “need” is something that is required to sustain life. What are examples of needs? Ask them to list the major “needs” for life:
Oxygen – Farmers and Foresters (Tree Farmers) grow plants and trees, which convert carbon dioxide into life-giving oxygen.
Water- Farmland and forests offer great areas for recharging groundwater, lakes, and streams.
Shelter – Tree Farmers produce wood for use in home and building construction.
Clothing – Farmers produce cotton, wool, and other fiber from sheep and plants, which are used for clothing.
Food – Primary function of the farmer.
Describe how these needs are met through agriculture.
A “want” is something that a person desires but is not required to sustain life. Ask them to list examples of “wants.”
Cars
Toys
Video Games
Bicycles
Movies
Vacations
Air-Condition
Hot Water
Modern Appliances & Furniture
Elaborate Finishings (Homes, Clothing and etc..)
TVs and Electronics
Ask the students to categorize each item they cut out of the magazines as a “need” or a “want”—based on the above information—on the Needs vs. Wants Activity Sheet.
Then ask students how we purchase or meet our needs and wants here in the United States. Show a dollar bill. Ask which category, needs, or wants, we should meet first if we have limited money (capital resources). When it comes to buying these items, however, most consumers are willing to pay more for the things they want than the things they need. The Law of Scarcity: People must choose between different items because the resources necessary to fulfill their wants are limited. These decisions are made by giving up (trading off) one want to satisfy another.
Another term to introduce is opportunity cost, the value of the next best option that was not chosen. When people pay for food, very little of our food dollar pays for the production of the food (farm share). In fact, it is just under 16 cents of every dollar. As a visual, you could show students 15 cents and 85 cents, and ask them which is the farmer’s share, and which is the marketer’s (labor, energy, packaging, transportation, retail space, advertising, etc.) share. The answer may surprise them. Processing and packaging food in a more ready-to-eat form saves consumers time. Time is also valuable, so they are willing to pay more for an item so they can spend their time doing something else.
To help students understand how processing and packaging affect the cost of foods (and they may be able to help mom and dad make more economical food choices if they offer to help in the kitchen), give students the More or Less Activity Sheet or use the More of Less Slides. Students are asked to choose which products of the same amounts will be lower in cost based on the amount of processing or service provided, how it is packaged (bulk or single serve), or how it is preserved. Here are a few notes to help your students:
When a product undergoes more processing (cutting, mixing, packaging, cooking), it will typically cost more than the unprocessed product because a business had to provide the labor and energy. Their costs to provide the service must be met.
Buying larger amounts of a product with less packaging will cost less per serving. If you buy more than you can use, however, money may be wasted on buying in bulk.
One scenario in which a processed food may cost less than a fresh food is when it is frozen and bagged. A retail store purchases an amount of fresh food they believe their customers will buy, but much of that food will be thrown away because of spoilage (there is a short period of time meat, dairy, and produce can be eaten). The customer will pay for a portion of the food loss (what is thrown away). When a food is frozen, it reduces food waste because it is preserved. The cost of keeping a food frozen is less than what is lost in throwing the food away.
You may also bring in examples from the grocery store and have Grade 5+ students calculate prices per unit to determine which is the better deal.
To tie this exercise to hunger, discuss with students how we can help people with fewer resources get more for their food dollar or receive assistance. There are several articles at http://www.kyfoodandfarm.info about how organizations in Kentucky are helping solve hunger here at home. Type “hunger” in the search bar to review the articles.
Additional Activity for 5th Grade
According to the United States Department of Agriculture, the average American only spends about 6.4 percent of their income on food. That means we spend less than 7 cents out of every dollar on food. That is much less than many other countries. (See this article from the World Economic Forum: https://www.weforum.org/agenda/2016/12/this-map-shows-how-much-each-country-spends-on-food/). That does not mean we pay less for food necessarily. It means we have more income to spend on other things. Unfortunately, the poorest Americans will direct more of their money toward food, between 20 and 40% of their incomes.
Using these Countries Food Info Cards, have students place themselves in order of least percentage of income spent on food to the highest percentage of income spent on food. Use your knowledge of world economics to explain that in countries with higher populations that are poor, there will be a higher percentage of average income spent on food.
Then have students reorder themselves by the average dollar amount spent on food. This will show which countries place a higher value on food.