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Virtual Economics

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Theme 5: Lesson 22 - Managing Risk: The Good News About Insurance
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
As people begin to acquire assets and an income, they begin to think about how to protect what they have from loss. Toward this end, many people buy insurance. This lesson tells how insurance works and provides an overview of the different types of insurance. Students participate in a simulation that allows them to practice their understanding of the costs and benefits associated with purchasin...
Grade(s): 9-12
Concepts: Risk, Insurance

Lesson 1 - Why Insurance and How Does It Work?
Virtual Economics: Insurance Lessons
This lesson uses readings and group work to describe the risks that are a part of everyone's life. It then elaborates on five ways to handle risk. Two of these ways are to share and transfer risk, which is the purpose of insurance.
Grade(s): 9-12
Concepts: Avoiding risk, Decision making, Insurance, Opportunity cost, Premium, Probability, Reducing risk, Retaining risk, Risk, Sharing risk, Transferring risk,

Lesson 2 - Investors and Investments
Learning, Earning and Investing: High School
In this lesson the students explore different types of investments, some of which are unconventional, in order to grasp the basic idea that investment involves trading off present benefits for future satisfaction. The students also apply the criteria of risk, return and liquidity to define more precisely the meaning of investing.
Grade(s): 6-8, 9-12
Concepts: Investing, Investment, Liquidity, Return, Risk

Lesson 6 - What Is a Bond?
Learning, Earning and Investing: High School
In this lesson the students learn what bonds are and how bonds work. They learn the basic terminology related to bonds and participate in a simulation activity aimed at showing that bonds are certificates of indebtedness, similar to an IOU note. Finally, the students explore credit ratings and calculate average coupon rates for various bond ratings in order to determine the relationship between ra...
Grade(s): 6-8, 9-12
Concepts: Bond, Bond rating, Coupon, Coupon bond, Coupon rate, Default, Face value, Maturity date, Par value, Risk, Zero-coupon bond

Theme 3: Lesson 9 - There Is No Free Lunch in Investing
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Risk is inherent in all investments. In investing, there are risks you cannot control. However, other risks can be controlled. The key is to develop a risk-reward ratio with which you are comfortable. The higher the risk, the greater the potential reward. This is why there is no free lunch in investing. In this lesson, students learn about five types of risk and then compare the risks and re...
Grade(s): 9-12
Concepts: Money management, Real vs. Nominal, Risk, Investing, Savers, Saving, Investment

Unit 6: Lesson 15 - Halloween Treats and Nonrenewable Resources
Economics and the Environment
Students are introduced to the "when" question with a Halloween variation of the "cake-eating" problem. The snacks described in the problem are then used to demonstrate how a market for a nonrenewable resource works.
Grade(s): 9-12
Concepts: Nonrenewable Resources, Assets, Interest Rate, Price, Rate-of-return, Capital Gain,

Lesson 23 - Investing Involves Decision Making
Learning, Earning and Investing: High School
This lesson provides an overall review and an opportunity for students to apply many of the concepts stressed in earlier lessons. The students examine different sorts of risk that come with investments. They are introduced to a fivestep decision-making model. After practicing with it, they apply the model in a simulation activity in which they act as financial advisors, offering financial advice i...
Grade(s): 6-8, 9-12
Concepts: Bonds, Capital gain, Certificate of deposit, Dividend, Diversification, Liquidity, Money market account, Mutual funds, Principal, Rate of return, Risk, Savings account, Stocks

Lesson 7- The Great Tulip Boom
World History: Focus on Economics
The teacher displays a transparency comparing the prices of many goods in the 1600s in the Netherlands to prices paid for rare tulip bulbs during the Great Tulip Boom of the 1630s. Students perform a simulation of the boom and write a short essay expressing their personal feelings about the relationship between risk and rates of return.
Grade(s): 9-12
Concepts: Financial Investment, Rate of Return, Risk, Speculation

Theme 4: Lesson 11 - What Is Credit?
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Credit decisions are among the most important choices that young people will make. This lesson provides an overview of what credit is and some of the advantages and disadvantages of using credit. Students examine various types of loans including home mortgages, car loans, college loans, personal loans, and credit card loans.
Grade(s): 9-12
Concepts: Credit, Risk, Interest

Lesson 12 - Building Wealth over the Long Term
Learning, Earning and Investing: High School
The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. Charlayne's success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules. It...
Grade(s): 6-8, 9-12
Concepts: Compound interest, Diversification, Forms of saving and investing, Reward, Risk

Lesson 14 - Savings and Personal Investments: If You're So Smart, Why Aren't You Rich?
Personal Decision Making: Focus on Economics
Students view a transparency showing the difference between economics definitions and personal finance definitions of the terms capital and investment. They read and discuss a handout listing four basic rules for wise investment decisions.
Grade(s): 9-12
Concepts: Capital, Investment, Savings, Opportunity cost, Securities, Stocks, Bonds, Mutual funds, Savings accounts, Certificates of deposit, Risk versus return, Liquidity,

Lesson 16 - What We've Learned
Learning, Earning and Investing: High School
This lesson features a game in which the students review key vocabulary words and concepts presented in earlier lessons. The game is called Flyswatter Review. The teacher divides the class into two teams. Using transparencies, the teacher projects financial terms from the visuals onto a screen or wall. The teams compete to select the correct definition.
Grade(s): 6-8, 9-12
Concepts: Stock Market, Stock, Mutual Fund, Risk, Liquidity, Liquidity Risk

Lesson 12: Profits and entrepreneurship
Master Curriculum Guide: Economics and Entrepreneurship
People become entrepreneurs for many reasons, including the desire to earn a profit. A commonly used measure of profit is the difference between a firm's revenue and its costs. Such as simple definition can be misleading if it excludes considerations of alternative uses for the entrepreneur's time or money.
Grade(s): 9-12
Concepts: Total Revenue, Cost of Production, Profit, Return on Investment, Fixed Costs (Optional Activity), Variable Costs (Optional Activity),

Unit 4: Lesson 9 - Weighing the Pluses and the Minuses: Benefit-Cost Analysis
Economics and the Environment
By analyzing a decision that may be very familiar to them -- studying versus playing a game -- students are introduced to the idea of weighing benefits and costs. The concepts are then applied to a case study of a typical environmental problem: emissions control.
Grade(s): 9-12
Concepts: Allocative Efficiency, Benefits, Costs, Net Value, Present Value, Benefit-Cost Analysis,

Lesson 15 - What Can Yesterday's Choices Tell Us about Tomorrow?
United States History: Focus on Economics
Students work in small groups to write brief speeches. Panelists present those speeches and then respond to questions from a student audience.
Grade(s): 9-12
Concepts: Incentives, Choice, Benefits and costs, Risk

Lesson 7 - What Are Mutual Funds?
Learning, Earning and Investing: High School
The students form class investment clubs that work much in the way mutual funds do. They invest $3,000 (300 shares at $10 a share) in up to six stocks. One year later they revalue their shares and determine whether a share in their class investment clubs has increased or decreased in value. Finally, they read about mutual funds and learn that the concept behind mutual funds is similar to the conce...
Grade(s): 6-8, 9-12
Concepts: Diversification, Liquidity, Load, Mutual fund, Net asset value, Risk and reward

Lesson 2 - The Basics of Life Insurance
Virtual Economics: Insurance Lessons
This lesson focuses on basic information that everyone should know and be able to apply when they purchase life insurance. This knowledge is especially important for recent high school graduates who are approached to buy life insurance.
Grade(s): 9-12
Concepts: Beneficiary, Cash-value life-insurance policy, Endowment policy, Face value, Limited-payment policy, Term-life insurance, Whole-life policy,

Lesson 4 - Why Renter's Insurance?
Virtual Economics: Insurance Lessons
This lesson focuses on a question that many of your students will face in college and/or in their first job as they live in apartments: Should they buy renter's insurance? Many students do not know what renter's insurance covers or even that it is available.
Grade(s): 9-12
Concepts: Cash-value coverage, Deductible, Depreciation, Landlord, Liability, Renter's insurance, Replacement-cost coverage, Tenant,

Lesson 3 - Everything You Ever Wanted to Know About Automobile Insurance
Virtual Economics: Insurance Lessons
The topic of automobile insurance is important to most high school students because of their interest in owning and operating a car or truck. But many teenagers think vehicle insurance is esoteric and mysterious. This lesson provides some basic information about auto insurance to help the students make better choices when they buy these policies.
Grade(s): 9-12
Concepts: Bodily-injury liability coverage, Collision coverage, Comprehensive coverage, Deductible, Fault insurance, Financial-responsibility law, Liability, Medical-payments coverage, No-fault insurance, Personal-injury coverage, Property-damage liability coverage, Uninsured and underinsured, motorist coverage,

Unit 5: Lesson 3 - Entrepreneurship Case Study: George Mason
United States History: Eyes on the Economy - Through the Civil War
This lesson features a class discussion of a case study of an entrepreneur.
Grade(s): 9-12
Concepts: Entrepreneurship,

ONLINE LESSONS:

online Discover How Two Way Tables Are Used To Determine Auto Insurance Deductibles and Premiums
Students collect data from a hands-on activity involving Colors Goldfish® Baked Snack Crackers to learn how to create a two-way table, find the marginal distribution, and find the conditional distribution. Students then use given data to find marginal and conditional distributions to determine which groups are at higher risks of receiving a traffic ticket. Lastly, students use this information...
Grade(s): 9-12
Concepts: Risk,Deductible,Insurance,Premium,Personal Finance

online The Entepreneur in you?
Throughout this lesson students take note of the role of risk and incentives as factors found in all entrepreneurial pursuits. They will analyze, compare and evaluate personal characteristics of entrepreneurs. They will also develop a greater self-understanding as they determine if they have the traits found in successful entrepreneurs. Finally, students set goals, which will help them to ...
Grade(s): 9-12
Concepts: Entrepreneurship,Incentive,Risk

online Three Types of Business Organizations
In this lesson, students research the three basic types of business organization: sole proprietorships, partnerships, and corporations. Considering the advantages and disadvantages of each, they function as consultants offering advice on which form of business is best suited for different business scenarios. The case studies all feature real- life entrepreneurs who started businesses produ...
Grade(s): 9-12
Concepts: Business,Entrepreneurship,Entrepreneur,Legal Forms of Business,Risk

online Pop Goes the Housing Bubble
In this lesson, students will learn about a speculative bubble within the context of the U.S. real estate market.
Grade(s): 9-12
Concepts: Credit,Decision Making,Incentive,Investment,Risk,Debt,Borrow,Asset,Collateral,Lender,Real Estate

online Business Ownership: The Franchise Option
Students explore an alternative to starting a business from scratch – investing in a franchise. They begin by considering the pros and cons of a franchise and whether this form of business is an option that would fit their personality and needs. Students then research and analyze franchise opportunities, ultimately selecting one that they think they might be able to successfully op...
Grade(s): 9-12
Concepts: Business,Choice,Decision Making,Entrepreneurship,Benefit,Costs,Legal Forms of Business,Risk

online President Jackson and the Veto of the Second National Bank
ESSENTIAL DILEMMA Could the conflict over the Second National Bank have been resolved in a way that supported the values advocated by both President Jackson and Congress?
Grade(s): 9-12
Concepts: Money Supply,Definition of Money,Monetary Policy,Money,Risk,Government Failure,Market Failures,Bank,Fraud Risk,Paper Money,Characteristics of Money

online Earning Credit
Students participate in a series of activities that provide them with a simulated credit score and an auto loan interest rate based on their credit score. Then they learn to use compound interest and amortization schedules to calculate the real cost of buying a car, and they compare the total cost of buying a car for individuals with high and low credit scores. At the conclusion, students have a s...
Grade(s): 9-12
Concepts: Credit,Interest Rate,Risk,Compound Interest,Credit Report,Principal,Simple Interest

online Collecting for Fun . . . and Profit?
Art, baseball cards, coins, comic books, dolls, jewelry and stamps are just a few examples of the many things people collect. While some people collect for fun — others hope to profit. In this lesson, students explore how supply and demand influence the price of collectibles. They also evaluate speculation in collectibles as an investment option. They learn that collectibles are one ...
Grade(s): 6-8, 9-12
Concepts: Demand,Investing,Price,Supply,Investment,Risk

online Getting Out of Debt
This lesson uses the Better Money Habits video Steps to Help You Get Out of Debt to explain the concept of debt.
Grade(s): 9-12
Concepts: Credit,Interest,Risk,Debt

online What's the Cost of Spending and Saving?
This lesson examines the benefits and opportunity cost of spending and saving. The students learn how compound interest makes savings grow. Compounding provides an incentive to save and invest early. The benefits of saving and investing when you are young can increase substantially over time when funds are allowed to compound.
Grade(s): 9-12
Concepts: Interest Rate,Opportunity Cost,Saving,Investment,Compounding,Rate of Return,Rule of 72,Spend

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