What Economic Concepts Do Students Need to Learn?

The Terrific Twelve

The Terrific Twelve builds upon the learning concepts in The Significant Seven:

8.  Economic Systems: People and societies develop economic systems to deal with the basic economic problems raised by scarcity and opportunity costs. Economic systems answer these three basic questions:

  1. What to produce?
  2. How to produce?
  3. For whom to produce?

The three fundamental economic systems are market, command and traditional.

9.  Productivity: Productivity is the amount of output per unit of input used. The most common measure of productivity is labor productivity - output per hour worked.

10.  Price (Supply and Demand): The price of a good or service is always determined by the interaction of supply and demand.

    1. Supply - The amount of goods and services that people are willing and able to supply at various prices.
    2. Demand - The amount of goods or services that people are willing and able to buy at various prices.

11.  Money: Money is anything that is generally acceptable in exchange for goods and services. It does not necessarily need to have any intrinsic value to serve as a medium of exchange. It is someone's willingness to accept it as payment that gives money its value.

12.  Profit: Profit is a business’s remaining income after all costs of production have been paid.  Businesses who make a profit have successfully satisfied the wants of consumers.

Learn more about the next stage of economic concepts.