Social Studies Curriculum

Economics Framework

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Business Economics Course

Course Description

Business Economics is a one-semester course in which students relate economic concepts and business principles to real-life situations.  The class operates a student company and may take part in computer-based simulations in which students operate companies in a high-tech industry and apply economic policies to decision making for the company’s benefit.

Course Goals

Through this course students will:

1. Demonstrate an understanding of the fundamental economic concepts upon which the free market system is based through the creation and operation of a real business.
2. Apply concepts of profit, business organization, business finance, productivity, market structure, and related topics successfully to their respective businesses.
3. Demonstrate an understanding of the relationship of their individual business to the larger economy and the roles of government, financial institutions, and the monetary and fiscal policies used to moderate the economy’s fluctuations.
4. Demonstrate an understanding of the costs and benefits of international trade, describe the structure and values of other economic systems, and address economic growth and development in industrialized and developing nations.
5. In businesses created as international joint venture companies, students will apply this knowledge to the operation of their business.
   

Course Standards and Objectives

In Business Economics, students will:

Standard 1: Scarcity and Choice

1. Describe how scarcity forces people to make choices when allocating resources.
2. Explain how scarcity impacts business decision making.

Standard 2: Opportunity Cost and Trade-offs

1. Identify examples of tradeoffs.
2. Explain how opportunity costs impact individual and business decision making.
3. Interpret a production possibilities curve.
   

Standard 3: Economic Systems

1. Compare how traditional, command, and market economies allocate resources.
2. Identify the resources necessary to produce and distribute goods and services.
3. Explain why private property, prices determined by supply and demand, market competition, and entrepreneurship are necessary to the operation of the free enterprise system.
4. Apply his/her knowledge of the free enterprise system to the creation and operation of a student-run business.
   

Standard 4: Economic Incentives

1. Describe the responsibilities, risks, and rewards of entrepreneurship.
2. Apply the factors (responsibilities, risks, and rewards) in creating the student-run business.
   

Standard 5: Economic Institutions

1. Describe legal and economic institutions that operate in the market.
2. Differentiate among different types of business financing.
3. Analyze and decide how to finance the student-run business.
4. Compare and contrast the characteristics of sole proprietorship, partnership and corporate ownerships.
5. Operate a business based upon the corporate model.
   

Standard 6: Exchange, Money, and Interdependence

1. Understand that people engage in voluntary exchange of goods and services because they expect to be better off afterwards.
2. Explain how money facilitates exchange and list the three basic functions it performs.
   

Standard 7: Markets and Prices

1. Explain how prices ration goods and services.
2. Construct and administer a market survey to determine demand for potential products to be sold by the student run business.
   

Standard 8: Supply and Demand

1. Illustrate how changes in supply and demand effect market price.
2. Describe the interaction of supply and demand to create a market clearing price.
3. Explain the difference between price effect and a change in demand or supply.
4. Create and interpret supply and demand graphs.
   

Standard 9: Competition and Market Structure

1. Describe the role of competition and marketing in a market system.
2. Identify different market structures and how businesses compete in each.
   

Standard 10: Income Distribution

Describe how voluntary exchange between households and businesses create a circular flow of money, products, and resources.

Standard 11: Market Failures

1. Define externality and identify examples of both harmful and beneficial externalities as they apply to their business and community.

Standard 12: Role of Government

1. Describe the role of government including enforcement of private property rights, dealing with externalities, ensuring market competition, providing public goods and services, redistribution of income, promoting economic security and stabilizing the economy.
2. Incorporate into his/her business plan the government’s role as related to product and distribution.
3. Explain how federal, state and local governments raise and spend money.
   

Standard 13: Gross Domestic Product

1. Define gross domestic product (GDP) and explain what it measures and understand its limitations.
2. Explain how the profits from the student run business will affect the GDP.
   

Standard 14: Aggregate Supply and Aggregate Demand

Define aggregate supply and aggregate demand.

Standard 15: Unemployment

1. Identify and differentiate among the various types of unemployment within Alaska and describe it as an indicator of economic health.
2. Create projections on the sales of potential products based on local unemployment rates.

Standard 16: Inflation and Deflation

1. Define the role of inflation and deflation as it affects the economy as a whole and the student run business specifically.
2. Explain the role of government in controlling inflation and deflation and how it might effect the student run business.
   

Standard 17: Savings and Investment

1. List common services provided by banks and other financial institutions.
2. Explain how inflation impacts the student run business as well as consumers.
   

Standard 18: Monetary Policy

1. Explain the monetary policy tools government leaders are able to use to influence the economy.
2. Define the principle roles and responsibilities of the Federal Reserve System.

Standard 19: Fiscal Policy

1. Analyze fiscal policy options of the government.
2. Evaluate the effectiveness of different economic policies on the stability of the American economy.

Standard 20: Productivity

1. Describe the factors that effect productivity in American business and apply them to the student run business.
2. Explain how productivity is related to standard of living.

Standard 21: Economic Growth

Use economic indicators to identify the economy’s position in the business cycle.

Standard 22: Absolute and Comparative Advantage and Barriers to Trade

Explain why nations trade goods and services using the concepts of comparative and absolute advantage.

Standard 23: Exchange Rates and the Balance of Power

1. Describe barriers to international trade and what the effects will be on a national and global markets.
2. Calculate the price of a product in foreign currencies.

Standard 24: International Aspects of Economic Development

1. Evaluate problems facing less-developed countries.
2. Analyze current economic problems facing industrialized nations.

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