|
|
|
You are here: Home > Educators > Economics > Markets > Consumer Surplus - Lesson Plan |
|
|
Consumer Surplus - Lesson Plan: 1 x 1 hour lessonA series of 'off the shelf' lesson plans and resources for use in the classroom. This lesson deals with Consumer Surplus and is relevant to the following specifications:
Aim:This lesson deals with the concept of consumer surplus. An abstract concept that can, if grasped by students, form the basis for high level thinking about economic policy making and economic decision making. The lesson follows a series of tasks - in themselves not tricky but they will need careful explanation and monitoring to ensure it works! Essentially, students are constructing a demand curve for a selection of CDs. The intention is to highlight the difference between the value they place on the CD and the actual price they have to pay. The selection of CDs needs to be carefully planned - prior to the lesson, students can be asked to write out their five top CDs on a sheet of paper. Having collected these in, the educator can then tally the information and select the five most popular CDs. This is important for the lesson as the students must know the CDs and value them. The stages of the lesson are self explanatory - the discussion at the end of the process may well go through into a second lesson. Indeed exploring the concept along these lines is essential to reinforcing it and giving students the opportunity of internalising it and reflecting on what they have learned. The basis of the questions at the end is the use of this concept as a measure of aggregate benefit to society. Reductions in consumer surplus represent a reduction in overall benefit and can be regarded as 'bad' and vice versa. The question on an area of natural beauty therefore allows students the opportunity of asking how we value such an area. Could we place a value on it through asking how much people would be prepared to pay to view it? If a similar calculation was made for the value of the by-pass a comparison could be made on the relative level of consumer surplus and hence form the basis for informed decision making. The second question can be used to explore the reduction in benefit as a result of a firm exercising monopoly power and being able to set prices above the equilibrium. Simple supply and demand diagrams can be used to illustrate this - there is no need for traditional monopoly diagrams! Question 3 delves into subsidies - again, supply and demand can be looked at to highlight the increase in consumer surplus. The students can then be asked to consider where the money comes from to pay for subsidies and whether this causes a reduction in the overall level of consumer surplus. The final question is starting to develop the latter point further by asking students to reflect on the limitations of the concept - the difficulty in measuring it, the fact that demand is constantly changing, that values change over time and the need to ask about the 'true' value of the supply of an object - should we ever try to place a monetary value on an area of outstanding natural beauty? Learning Objectives:At the end of the lessons, students should:
Resources:
Useful Links:
Lesson Structure:The suggestion of a 1 x 1 hour lesson is flexible and will depend on the extent of the discussion that is generated and the further research that students may want to pursue on this issue. The structure here assumes that the students have been given a background to the principle of consumer surplus - the Presentation and Mind Map may be one way of doing this. This lesson therefore is based on the Activity.
|
