Rebuild Your Community
This lesson will focus on priorities for a community’s post-disaster economic recovery. Specifically, it will examine the importance of the revival of the cultural, educational, and religious institutions in the Gulf Coast. Using the Nightly Business Report Special, "The Gulf Coast: Road to Renewal"
, students will examine concepts of scarce resources, cost-benefit analysis, opportunity costs, and economic incentives in determining how to rebuild and revitalize a neighborhood. Watch the embedded videos in class.
3 class sessions at 45 minutes per class -or- each of the 3 sessions can be run independently. If you teach them independently be sure to play the associated videos.
Opportunity costs; cost-benefit analysis; economic incentives; economic development
Students will learn about:
- Analysis of priorities: culture, education, healthcare
- Role of the private sector in lending and investment
- Cost-benefit analysis
- Opportunity costs of different financial decisions
- Economic role of government in a crisis
Standards for this lesson are provided by McREL, or the Mid-continent research for Education and Learning (McREL). The organization, which has a 30-year history in education research, provides educational standards across a variety of subjects. More information is available at the following url:
Standard 1: Understands that scarcity of productive resources requires choices that generate opportunity costs
Standard 2: Understands characteristics of different economic systems, economic institutions, and economic incentives
- Understands that marginal benefit is the change in total benefit resulting from an action, and marginal cost is the change in total cost resulting from an action
- Understands that optimal levels of output (e.g., production output, output of services provided by a public program) can be determined by comparing the marginal benefits and costs of producing a little more against the marginal benefits and costs of producing a little less
- Understands that increases in productivity are affected by incentives that reward successful innovation and investments (e.g., in research and development, and in physical and human capital)
- Understands that investing in new physical or human capital involves a trade-off of lower current consumption in anticipation of greater future production and consumption
- Understands that technological change and investments in capital goods and human capital may increase labor productivity but have significant opportunity costs and economic risks
Standard 6: Understands the roles government plays in the United States economy
- Understands that the effectiveness of allocation methods can be evaluated by comparing costs and benefits
- Understands that economic institutions (e.g., small and large firms, labor unions, not-for-profit organizations) have different goals, rules, and constraints, and thus respond differently to changing economic conditions and incentives
- Understands that incorporation encourages investment by allowing firms to accumulate capital for large-scale investment and reducing risk to individual investors
- Knows that property rights, contract enforcement, standards for weights and measures, and liability rules affect incentives for people to produce and exchange goods and services
- Understands that in every economic system consumers, producers, workers, savers, and investors respond to incentives in order to allocate their scarce resources to obtain the highest possible return, subject to the institutional constraints of their society
- Understands that because citizens, government employees, and elected officials do not always directly bear the costs of their political decisions, sometimes policies have costs that outweigh their benefits for society
- Understands that most federal tax revenue comes from personal income and payroll taxes, and these taxes are used to fund social security payments, the costs of national defense, medical expenditures, and interest payments on the national debt
- Understands that most state and local government revenues come from sales taxes, grants from the federal government, personal income taxes, and property taxes, and are used to fund education, public welfare, road constructions and repair, and public safety
- Understands that government can use subsidies to help correct for insufficient output, use taxes to help correct for excessive output, or can regulate output directly to correct for over- or under-production or consumption of a product
- Understands that governments provide an alternative method to markets for supplying goods and services when it appears that the benefits to society of doing so outweigh the costs to society but that not all individuals will bear the same costs or share the same benefits of these policies
- Understands that incentives exist for political leaders to implement policies (e.g., price controls, barriers to trade) that disperse costs widely over large groups of people and benefit relatively small, politically powerful groups of people.
- Understands that few incentives exist for political leaders to implement policies that entail immediate costs and deferred benefits, even though these types of programs may be more economically effective
This lesson was prepared with the support of the Citigroup Foundation.
Written by: Written by: Melissa Donohue