Economic Stadards: A Guide for Curriculum Planners

Bonnie Meszaros

As adults, today's students will make economic decisions that affect themselves, their families, and even their country. For many, the economic issues involved in the decisions will seem complex and confusing. An understanding of economics can help students make sense of their world. It will help prepare them for their adult roles as consumers, workers, problem solvers, voters, parents, and global participants as they enter the 21st century. If students lack economic knowledge and the ability to apply economic reasoning to economic problems, they will find it difficult to make sense of the forces that affect them and to fulfill the roles they are expected to assume as adults.
Despite this need for students to possess economic knowledge and an ability to reason economically, many schools omit economics from their curriculum or include it at a cursory level. Others relegate it to inclusion in a course at the secondary level which is currently taken by only about half of all high school students.1 Often the teaching of economics has focused on insignificant content approached with incorrect assumptions.

To aid school districts, curriculum developers, and, ultimately, teachers determine what economics should be taught and when it should be taught, the National Council on Economic Education convened a coalition of organizations interested in developing economics standards.2 In August 1995 the coalition established a writing committee of economists, economic educators, and teachers who were charged with the task of producing a set of world-class standards in economics. These standards were released in January 1997 at the meetings of the American Economic Association.3

The standards document, Voluntary National Content Standards in Economics, includes a rationale and 20 broad economic content standards.4 The overall rationale states that students should possess several kinds of economic knowledge. This includes an understanding of basic economic concepts and an ability to reason logically about key economic issues, knowledge of some pertinent facts about the U.S. economy such as the size and current rates of unemployment, inflation and interest, and an understanding that differing views exist on some economic issues.

The document also stresses the importance of learning how to reason about economic issues. Such reasoning requires economic knowledge and skills. Specifically, these skills reflect an ability to:

(a) identify economic problems, alternatives, benefits, and costs;
(b) analyze the incentives at work in an economic situation;
(c) examine the consequences of changes in economic conditions and public policies;
(d) collect and organize economic evidence; and
(e) compare benefits and costs (Standards, p. xi).

Standards and Benchmarks
Each of the 20 content standards is an essential principle of economics that economically literate students should know and a statement of what students should be able to do with this knowledge upon leaving high school. The standards are not based on facts about the economy, which are subject to constant change, but on the most enduring ideas, concepts, and issues of the discipline. For example, Content Standard 2 focuses on marginal analysis and reads:
Students will understand that:

Effective 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 some things; few choices are all-or-nothing decisions.
Students will able to use this knowledge to:

Make effective decisions as consumers, producers, savers, investors, and citizens (p. 3).
Each of the 20 standards has a rationale that explains to teachers, parents, members of the business community, and the general public why it is essential for students to possess this knowledge and how possession of this knowledge will improve their lives and that of others. Each standard also includes benchmarks that spell out what students should know at the end of grades 4, 8, and 12, and examples of what they should be able to do with this knowledge. For Content Standard 3, Benchmark 1, students are expected to know at the end of grade 4 that:

No method of distributing goods and services can satisfy all wants.
At the completion of Grade 4, students will use this knowledge to:

Generate different methods for allocating student time on classroom computers, tell who gains and who loses with each distribution method, and conclude that no distribution method satisfies all wants (p. 6).
The benchmarks develop the economic reasoning behind the standards so that the standards and benchmarks add up to more than a list of things to know. To look at an isolated benchmark without examining its relationship to others would result in a failure to see how the benchmarks serve as building blocks and how, when woven together, they guide students toward attainment of the overall standard.

Individual benchmarks may seem insignificant since they break down each standard into small pieces of knowledge. These pieces are then presented in sequential order and with increasing levels of complexity, building upon the knowledge that students gained at each of the previous grade levels. For example in Standard 1, at the completion of grade 4, students will know that:

Whenever a choice is made, something is given up (Benchmark 6), and
The opportunity cost of a choice is the value of the best alternative given up (Benchmark 7).
They will use this knowledge to:

Choose a toy from a list of four toys and state what was given up (Benchmark 6), and
Describe a situation that requires a choice, make a decision, and identify the opportunity cost (Benchmark 7, pp. 1-2).
At grade 8 the benchmarks take students beyond the notion that choices involve all-or-nothing decisions and introduce the idea that trade-offs can be made-giving up some of one thing to get more of something else-and that choices have future consequences. By grade 8 students are expected to know that:

Choices involve trading off the expected value of one opportunity against the expected value of its next best alternative (Benchmark 3), and
The choices people make have both present and future consequences (Benchmark 4).

Students will use this knowledge to:

Determine criteria for selecting a stereo and identify the trade-offs made when selecting one stereo over another (Benchmark 3), and
Analyze the consequences of choosing not to study for a final exam and tell when those consequences occur (Benchmark 4, pp. 2-3).
By grade 12 students are expected to know that choices are made not only by individuals but also by groups and that these choices can have unintended consequences. Standard 1, Grade 12, Benchmark 1 states that students will know:

Choices made by individuals, firms, or government officials often have long-run unintended consequences that can partially or entirely offset the initial effects of their decisions.
Students will use this knowledge to:

Explain how a high school senior's decision to work 20 hours per week during the school year could reduce her lifetime income. Also, explain how an increase in the legal minimum wage aimed at improving the financial condition of some low-income families could reduce the income of some minimum wage earners (p. 3).
Not all standards have benchmarks at all three achievement levels. Some are weighted heavily with benchmarks at the upper grades and others at the lower levels. Four standards have no benchmarks at grade 4 and three have benchmarks for grade 12 only.

The Economics Standards and Curriculum Development
The economic standards reflect the economic principles that economists, economic educators and teachers feel are essential for every student to know upon leaving high school. As with other content standards, they are not intended to serve as a mandate of what should be taught. Rather, the economic content standards serve as a guide for states that are responsible for writing state standards and for local school districts and teachers charged with implementing the standards. It is the latter two groups that will find the economic standards and the standards document, Voluntary National Content Standards in Economics, particularly helpful.
The National Council on Economic Education has a long track record of publishing instructional materials in economics for teachers of students in grades K-12. The benchmarks in the standards document (56 at grade 4, 67 at grade 8, and 88 at grade 12) are correlated with multiple lessons in these instructional materials.5 This is valuable information for curriculum writers and teachers for several reasons.

First, the benchmarks specify what students should know by the time they leave grades 4, 8,and 12. They do not offer guidance for teachers responsible for teaching economics at the other grade levels. However, when the benchmarks are tied to particular lessons, teachers have a clearer idea at what grade levels the benchmarks should be introduced because many instructional packages address a narrower range of grade levels, i.e. K-2, 3-4, 5-6.

For example, Standard 1, Benchmark 1, Grade 4 expects students to know that: "People make choices because they cannot have everything they want." (p. 1). This benchmark is correlated with six lessons from Master Curriculum Guide: Teaching Strategies K-2,6 two from Personal Finance Economics K-2: Pocketwise,7 and 11 other lessons from five other NCEE publications.

Second, in a recent study, Buckles and Watts reviewed the civics, geography, history and social studies standards to determine the amount and accuracy of economics included in each. They concluded that all four sets of standards assume significantly more economic knowledge and ability than the economic standards expect students to achieve by graduation. They also found that frequently economic issues and concepts were described with broad, general terms that did not identify the specific economic knowledge required to understand and discuss them.8 Although the economic standards may not go far enough in offering the specific content teachers and students need to attain all economics objectives in the civics, history, geography and social studies standards, the economic standards document does offer a level of specificity that presently does not exist in the other standards and suggests appropriate lessons for the classroom.

Third, the economic standards alone provide little guidance or examples of how economics can be integrated into geography, history, civics, or social studies.9 However, the standards from these other disciplines do provide numerous opportunities to teach economics at all grade levels in other subject areas. Buckles and Watts contend that the economic standards can only be met by including considerable amounts of economic instruction in these other subjects.10

The National Council on Economic Education has ten publications in grades 6-12 that include lessons on how to teach economics in civics and government, U.S. history, world history, and geography. For example, Civics and Government: Focus on Economics has 16 lessons for teaching economics in a high school civics and government class.11 The four NCEE publications that focus on U.S. history include 73 lessons and a video covering the period of exploration through the 20th century. The economics standards are correlated with each of these lessons. The issue of integrating economics into other social sciences is more involved than the teaching of a few lessons; however, NCEE materials provide a beginning for teachers who face the task of blending economics into their social science curriculum.

The economic content standards are generic principles of economics and not the application of these principles. Therefore, states will adjust them to accommodate state and regional differences and local school districts, and individual schools will tailor them to meet their individual interests and cultural traditions. Voluntary National Content Standards in Economics provides curriculum developers and teachers with guidance for establishing their own standards in economics. For those who have standards in place, the standards document can serve as a guide for reviewing the extent and quality of their economic component.

Voluntary National Content Standards in Economics will help teachers to select important economic content and to provide rich and accurate coverage at the appropriate grade levels. It offers teachers a package that not only articulates the goals of economic instruction but also gives them a source of actual materials they can use in their classroom to teach the economic standards. And, in the end, when implemented, the economic standards will help prepare students for their many adult roles as citizens in a global economy.

1. William Walstad, "Economic Instruction in High Schools," Journal of Economic Literature 30 (December 1995): 2019-2051.
2. The coalition consisted of the National Council on Economic Education and its network of affiliated councils and centers, the National Association of Economic Educators, the Foundation for Teaching Economics, and the American Economic Association's Committee on Economic Education.
3. The writing committee consisted of John Siegfried (Vanderbilt University, chair), Bonnie Meszaros Univeristy of Delaware, project director), James Charkins (California State University-San Bernardino), Nancy Hanlon (Willow Elementary School, Homewood, IL), Robert Highsmith (Pace University), Donna McCreadie (Temple City High School, Temple City, CA), Robert Smith (Texas Council on Economic Education), Mary Suiter (University of Missouri-St. Louis), Gary Walton (University of California-Davis and Foundation for Teaching Economics), Michael Watts (Purdue University), and Donald Wentworth (Pacific Lutheran University). In addition, the writing committee had a user committee of teachers who provided input through the two teacher representatives on the writing committee.
4. The document was published in New York by National Council on Economic Education [NCEE] in 1997.
5. The standards document, Voluntary National Content Standards in Economics, and the instructional packages correlated with the benchmarks are available from the National Council on Economic Education, 1140 Avenue of the Americas, New York, NY 10036. The standards, the correlations and the instructional materials are also available on the cd-rom Virtual Economics which may be purchased from NCEE. Virtual Economics ties all the NCEE publications as well as many from the Federal Reserve Banks and other publishers to the economic standards. The economics standards document can also be purchased from National Council for the Social Studies (1-800-683-0812).
6. NCEE, Master Curriculum Guide: Teaching Strategies K-2 (New York: NCEE, 1993).
7. NCEE, Personal Finance Economics K-2: Pocketwise (New York: NCEE, l996).
8. Stephan Buckles and Michael Watts, "An Appraisal of Economics Content in the History, Social Studies, Civics, and Geography National Standards," American Economic Review Papers and Proceedings 87 (May 1997): 254-59.
9. W. Lee Hansen, "From the Framework of Concepts to Principles-Based Standards: On the Voluntary National Content Standards in Economics." Journal of Economic Education, forthcoming.
10. Stephan Buckles and Michael Watts, "National Standards in Economics, History, Social Studies, Civics and Geography: Complementarities, Competition or Peaceful Coexistence?" Journal of Economic Education, forthcoming.
11. National Council on Economic Education, Civics and Government: Focus on Economics (New York: National Council on Economic Education, 1996).

Bonnie Meszaros is Associate Director of the Center for Economic Education and Entrepreneurship,, University of Delaware, Newark, Delaware. She served as Project Director and as a member of the Writing Committee responsible for the preparation of the Voluntary National Content Standards in Economics.

An Example of the Economics Standards


Students will understand that:
Effective 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.
Students will be able to use this knowledge to:
Make effective decisions as consumers, producers, savers, investors, and citizens.
To make decisions that provide the greatest possible return from the resources available, people and organizations must weigh the benefits and costs of using their resources to do a little more of some things and a little less of others. For example, to use their time effectively, students must weigh the additional benefits and costs of spending another hour studying economics rather than listening to music or talking with friends. School officials must decide whether to use some school funds to buy more books for the library, more helmets for the football team, or more equipment for teachers to use in their classrooms. Company managers and directors must choose which products to make and whether to increase or decrease the amount they produce. The President, Congress, and other government officials must decide which public spending programs to increase and which ones to decrease.
Focusing on changes in benefits and comparing them to changes in costs is a way of thinking that distinguishes economics from most social sciences. In applying this approach, students should realize that it is impossible to alter how resources were used in the past. Instead, past decisions only establish the starting points for current decisions about whether to increase, decrease, or leave unchanged resource levels devoted to different activities.

At the completion of Grade 4, students will know that:
1.Few choices are all-or-nothing decisions; they usually involve getting a little more of one thing by giving up a little of something else.
2.A cost is what you give up when you decide to do something.
3.A benefit is something that satisfies your wants.

At the completion of Grade 4, students will use this knowledge to:
1.Analyze how to divide their time on a Saturday afternoon when the possibilities are raking leaves to earn money, going roller skating with friends, and shopping at the mall with their aunt. Students will identify the possible uses of their time and explain how devoting more time to one activity leaves less time for another.
2.List the costs of buying and caring for a pet.
3.List the benefits of buying and caring for a pet.

At the completion of Grade 8, students will know the Grade 4 benchmarks for the standard and also that:
1.To determine the best level of consumption of a product, people must compare the additional benefits with the additional costs of consuming a little more or a little less.

At the completion of Grade 8, students will use this knowledge to:
1.Solve the following problem: Your grandmother gave you $30 for your birthday and you are trying to decide how to spend it. You are considering buying compact discs ($12 each), going to the movies ($5 per ticket), or taking some friends out for pizza ($7.50 per person). You do not have to spend all your money on one thing. You can use some money for one thing and some for another. How would you spend your money to get the greatest satisfaction?

At the completion of Grade 12, students will know the Grade 4 and Grade 8 benchmarks for this standard and also that:
1. Marginal benefit is the change in total benefit resulting from an action. Marginal cost is the change in total cost resulting from an action.
2.As long as the marginal benefit of an activity exceeds the marginal cost, people are better off doing more of it; when the marginal cost exceeds the marginal benefit, they are better off doing less of it.
3.To produce the profit-maximizing level of output and hire the optimal number of workers and other resources, producers must compare the marginal benefits and marginal costs of producing a little more with the marginal benefits and marginal costs of producing a little less.
4.To determine the optimal level of a public policy program, voters and government officials must compare the marginal benefits and marginal costs of providing a little more or a little less of the program's services.

At the completion of Grade 12, students will use this knowledge to:
1.Explain why beyond some point they are unwilling to buy and consume an additional slice of pizza.
2.Apply the concepts of marginal benefit and marginal cost to an environmental policy to find the optimal amount of pollution for two firms that have substantially different costs of reducing pollution.
3.Decide how many workers to hire for a profit-maximizing car wash by comparing the cost of hiring each additional worker to the additional revenues derived from hiring each additional worker.
4.Use the concepts of marginal cost and marginal benefit to evaluate proposals for a pollution-control ordinance aimed at maximizing economic efficiency; then select the best proposal and explain why it seems best.

Voluntary National Content Standards

(New York: National Council on Economic Education, 1997): 3-5.