Beatrice’s Goat
Standard
Standard: 13
- Students will understand that: Income for most people is determined by the market value of the productive resources they sell. What workers earn primarily depends on the market value of what they produce.
- Students will be able to use this knowledge to: Predict future earnings based on their current plans for education, training, and career options.
Standard: 1
- Students will understand that: Productive resources are limited. Therefore, people cannot have all the goods and services they want; as a result, they must choose some things and give up others.
- Students will be able to use this knowledge to: Identify what they gain and what they give up when they make choices.
Standard: 3
- Students will understand that: People who have sufficient income can choose to save some of it for future uses such as emergencies or later purchases. Savings decisions depend on individual preferences and circumstances. Funds needed for transactions, bill-paying, or purchases, are commonly held in federally insured checking or savings accounts at financial institutions because these accounts offer easy access to their money and low risk. Interest rates, fees, and other account features vary by type of account and between financial institutions, with higher rates resulting in greater compound interest earned by savers.
Concepts
This lesson from the Federal Reserve Bank of St. Louis’ EconLowdown site teaches students what it means to save and reach savings goals through the book Beatrice’s Goat by Page McBrier.
Introduction
In this lesson, students listen to a story about Beatrice, a little girl from Uganda who receives a goat, and the impact of that goat on her family. Students learn what it means to save and use estimation to decide whether or not four people have enough money to reach their individual savings goals. They also work through a set of problems requiring them to identify how much additional money must be saved to reach given savings goals. Students learn what opportunity cost is and identify the opportunity costs of savings decisions made by Beatrice and her family.
For access to the complete lesson plan, please visit EconLowdown , the Federal Reserve Bank of St. Louis’ website of award-winning, free classroom resources for use by pre-K through college educators who teach economics, personal finance, money and banking, and the Federal Reserve.
Learning Objectives
- Define income, opportunity cost, saving, savings goal, and short-term and long-term savings goals.
- Identify the opportunity cost of a decision.
- Give an example of a savings goal.
- Explain the difference between long-term and short-term savings goals.