Goods and Services
Background Information & Activities

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Economics is the study of goods and services and how they are produced, distributed, consumed, and exchanged. We recommend screening the Needs and Wants movie and completing the accompanying features before exploring the Goods and Services topic. This movie reviews different goods and services, defines supply and demand, and introduces business practices and how producers and consumers rely on each other.

Remind your children that goods are things that are made or grown. Some goods are manufactured, such as clothes, computers, and cars. Other goods are grown such as fruits, vegetables, and flowers. Your children should understand that many goods are made from natural resources. For example, wood is used to manufacture pencils, paper, books, furniture, and more. Discuss different natural resources used to produce goods. Why is it important to protect natural resources?

Review with your children that a service is work that someone does for someone else. A dentist, bus driver, store clerk, and postal worker are all people who provide services. Some people’s services are paid for by taxes, or money paid to the government. Taxes pay people like public school teachers, fire fighters, and police officers for their services. Discuss different service providers with your children. How do people rely on each other everyday?

A producer is someone who makes or grow goods, or offers services. A consumer is someone who buys goods or services. Find examples of how people consume things everyday. Some producers work locally. For example, farmers might grow crops and distribute them in their community. Other goods and services might come from other states. Farmers might ship their crops to be sold in other states. Finally, goods and services might come from other countries. Farmers in Costa Rica might ship their crops to the United States for distribution. Help your children learn about where goods and services come from. Where were their books printed? Where were their shoes made? Find the places on a map together.

A supply is the amount of something available to consumers. For example, a bookstore might have a large supply of books, CDs, DVDs, notebooks, and more. The demand is how much consumers want something. When a new book comes out, the demand might be high. The bookstore may sell a large portion of their supply of the particular book. When the demand is high for something and the supply is low or limited, producers might raise the price to maximize how much money they earn. Some people are willing to pay more for something they want that is difficult to get. However, if the supply is large and the demand is low, the price might go down. For example, the same book might have a lower demand a year from now. Thus, the price might go down. The concept of supply and demand might be challenging for some children, so we recommend discussing plenty of examples and role-playing different situations.

Help your children to understand the exchange of goods and services and to become better consumers and develop better saving and spending practices. Encourage them to think about how they purchase goods and services and how the choices they make affect local and global economies.

Goods and Services Teacher Activities – Click Here!

Goods and Services Family Activities – Click Here!

Goods and Services Teacher Activities

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Local, Domestic, and International

Have students bring in different items of their choice. They might bring in articles of clothing, toys, books, pencils, or packaged foods. Encourage them to be creative and bring in different items. Then have students figure out where their item was produced, grown, or manufactured. Find locations on a map and discuss which item traveled the farthest distance and which was produced locally. You can use this opportunity to discuss how what people consume influences the economy and environment.

Supply and Demand

Distribute beans or play money to students and then offer different items for auction. You may want to offer items that might be exciting to students, and thus a high demand, and some items that have less perceived value and will have lower demand. Then have students bid on items using their beans. Which items had higher “prices”? Why? Help students realize that supply and demand help determine and control the price of certain goods and services.

The Producers

Review what producers do with your students and challenge them to name as many producers as they can. Encourage students to be creative, and think of people who provide services and those who manufacture goods For homework you might ask them to draw two producers in the community or from around the world. The next day the class can create a chart of manufacturers vs. service providers, or local vs. global.

Goods and Services Family Activities

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Consumption Function

Challenge your child to write down what he or she consumes everyday for a week. Remind him or her that people consume far more than just food. They wear clothes, use computers, travel to places in cars or buses which use fuel, they read books, throw away paper towels, etc. Encourage him or her to be conscientious about the things they consume. At the end of the day, discuss the different items on the list. Talk about where the item might have come from and how it might have been produced, manufactured, or made.

Service the Community

Together with your child, provide a service for your community. You may want to walk pets together, help clean up a park, volunteer at a community center, help collect cans and clothing for the needy, or assist elderly neighbors with tasks. Volunteering to improve your neighborhood helps foster a sense of community and civic duty. It also empowers your child to be proactive and seek improvements in the neighborhood.