Description
What our Cost and Benefits lesson plan includes
Lesson Objectives and Overview: Cost and Benefits teaches students about cost-benefit and how to perform a cost-benefit analysis. At the end of the lesson, students will be able to identify and analyze the costs/benefits of the alternatives of a decision and suggest a choice based on cost-benefit analysis. This lesson is for students in 4th grade, 5th grade, and 6th grade.
Classroom Procedure
Every lesson plan provides you with a classroom procedure page that outlines a step-by-step guide to follow. You do not have to follow the guide exactly. The guide helps you organize the lesson and details when to hand out worksheets. It also lists information in the orange box that you might find useful. You will find the lesson objectives, state standards, and number of class sessions the lesson should take to complete in this area. In addition, it describes the supplies you will need as well as what and how you need to prepare beforehand. To prepare for this lesson ahead of time, you can pair students for the activity and copy the handouts.
Options for Lesson
Included with this lesson is an “Options for Lesson” section that lists a number of suggestions for activities to add to the lesson or substitutions for the ones already in the lesson. Some optional adjustments to the lesson activity are to include more scenarios, discuss short vs. long-term cost/benefits, or assign one scenario to larger groups of students. For the closing discussion, you can ask students about the costs and benefits of decisions about the school or local community, or national politicians. Finally, you can invite an economic expert to speak to your class about costs and benefits.
Teacher Notes
The teacher notes page includes a paragraph with additional guidelines and things to think about as you begin to plan your lesson. This page also includes lines that you can use to add your own notes as you’re preparing for this lesson.
COST AND BENEFITS LESSON PLAN CONTENT PAGES
Costs and Benefits
The Cost and Benefits lesson plan includes three content pages. This lesson begins by stating that all decisions have costs and benefits. Some might have more than one cost or benefit, which may or may not be financial. If you sleep in and go to school late, there are no financial costs but there are other costs. You might miss a test or get in trouble with your parents. However, you could also see some benefits, like extra sleep and time to eat a good breakfast. It’s important to think about the costs and benefits of the decisions you make.
Benefits are monetary (related to money) or non-monetary (not related to money) gains made because of a decision or action that you take. Costs are paid or spent to obtain something. They can also be the effort, loss, or sacrifice needed to achieve something.
When you examine the advantages or benefits and the disadvantages or costs of a choice, we call that a cost-benefit analysis. Included in this is opportunity cost, the value of the alternative decision that you must give up when you use scarce resources for one purpose instead of another. People tend to focus on the benefits of their decisions instead of the costs.
Analyzing Costs and Benefits
Once you understand what costs and benefits are, you can analyze the costs and benefits for the financial and other decisions that you make every day. Costs can be in dollars (like prices), time, trouble, or opportunity. Benefits can be either obvious or hidden. Benefits can be a new product, values, personal satisfaction, or status.
Examples
The lesson then provides some example scenarios. The first describes a person and their friends who needs to walk to and from school every day. It then lists some advantages and disadvantages of walking to and from school. Some advantages might be spending time with friends, getting some exercise, spending time outdoors, having fun, and having no adult supervision. Some disadvantages might be needing to wake up earlier, dealing with bad weather, and losing free time after school.
The next example scenario describes someone having a birthday and receiving money for a new bike. If you buy a bike with the money, you have to ride it to and from school. Before you make a decision whether or not to buy the bike, you can do a cost/benefit analysis. The lesson lists the advantages or benefits and disadvantages or costs of either buying and using the bike or not buying and using the bike.
Both scenarios have many different costs and benefits, some of which are monetary and some of which are not. These costs and benefits can be either short or long term. For example, a long-term benefit of buying a bike is that you’ll have the bike for a long time. An opportunity cost for buying the bike is the possible loss of friendship if you stop walking to school with your friends.
You can do a cost-benefit analysis for every decision. After your analysis, you can work on addressing the costs or disadvantages. If you buy the bike, for example, you need to address the cost of the bike upkeep and can use the bike to make some extra money.
If you understand the costs (disadvantages) and benefits (advantages) of a purchase you want to make or an action you want to take, you can create a CBA (cost/benefit analysis) chart like the one shown in the lesson.
COST AND BENEFITS LESSON PLAN WORKSHEETS
The Cost and Benefits lesson plan includes three worksheets: an activity worksheet, a practice worksheet, and a homework assignment. You can refer to the guide on the classroom procedure page to determine when to hand out each worksheet.
MAKING A CHOICE ACTIVITY WORKSHEET
Students will work with a partner to complete the activity worksheet. Each pair will discuss five scenarios and list the costs, benefits, and what their choice would be in each scenario.
Students can work alone or in groups for this activity if you’d prefer.
HIDDEN COSTS PRACTICE WORKSHEET
For the practice worksheet, students will complete two short exercises. For the first, they will read the description and decide whether each item listed below would be a cost or benefit, based on the description. And for the second, they will look at an advertisement that shows the benefits of adopting a pet. They will then list some hidden costs associated with adopting a pet.
COST AND BENEFITS HOMEWORK ASSIGNMENT
The homework assignment asks students to fill in the blanks in a paragraph about cost and benefits. They will also work with a partner, friend, or family member to think about a family decision (such as buying a new TV) and list the advantages or benefits and disadvantages or costs of making or not making that decision.
Worksheet Answer Keys
This lesson plan includes answer keys for the activity worksheet, the practice worksheet, and the homework assignment. If you choose to administer the lesson pages to your students via PDF, you will need to save a new file that omits these pages. Otherwise, you can simply print out the applicable pages and keep these as reference for yourself when grading assignments.
