Yum-onomics: The Economics of Yummy Stuff

The lesson plan Finding Fabulous Financial Literacy Vocabulary with Fancy Nancy has been published online with ReadWriteThink.org, in association with the International Reading Association. The lesson and associated resources are free! Enjoy!

What would happen if you gave a cat a cupcake? How does this relate to economics? If you click on the book to look inside, you will have a mini lesson for teaching these concepts: wants/needs & goods/services.

Before Reading: Discuss wants and needs. Is a cupcake a need? What other foods are needs?

After Reading: Discuss the difference between needs and wants. We want many things, but there are some things that we need to survive or keep us healthy: food, shelter, clothing, medicine. Cupcakes are a food, but are they a food we need for health or are they an extra food? Extras are wants but not necessarily needs.  Play the Brain Pop Game about needs and wants with the students together or have them use the game individually on computers.  Here are some yummy cupcake recipes!

Here are some extra activities to use with the book!

Brain Pop Needs/Wants activity.

Goods and Services drag and drop activity from EconEdLink.

There are some excellent children’s books available to teach economics through the real-life activity of a lemonade stand. Use these books to provide a context for learning the economic concepts of operating a lemonade stand.

Then, use the EconEdLink Lesson plan The Lemonade Squeeze. In this lesson, students read “The Lemon Story” to learn where lemons come from. They also put on a play and discuss economic concepts about having a lemonade stand. They also learn elementary economic concepts–

Choice, Consumers, Demand, Price, Producers, Scarcity, Supply

–and play The Lemonade Stand Game in the lesson Not Your Grandma’s Lemonade Stand.

After they use the lesson, they can read the online book Make and $ell Fresh Lemonade by Sunkist…who also provides lemonade stand tips!

How many of you have seen this Lemonade commercial from Verizon?

Think of the commercial in terms of the 6 Core Economic Principles.

1. People choose. We always want more than we can get and productive resources are scarce. How does Suzy get human, natural, and capital resources for her lemonade empire?
2. All choices involve costs. An opportunity cost is the next best alternative you give up when you make a choice. Suzy makes the choice to go big with her lemonade stand. When she chose to go corporate, she refused something else…
3. People respond to incentives. Did incentives change in the commercial? How did people respond?
4. Economic systems influence individual choices and incentives. When her dad gave her the phone, he introduced a good that helped change the economic system from a roadside lemonade stand. What were the changes in the system as compared to a regular lemonade stand?
5. Voluntary trade creates wealth. What were the different types of specializations  of goods and services that helped Suzy’s lemonade empire?
6. The consequences of choices lie in the future. What were the consequences for Suzy’s dad? What were other unexpected consequences–good and bad?

BEFORE READING: School fundraisers are a good opportunity to discuss economics concepts. In this Babymouse Graphic Novel, Babymouse accidentally sets off the sprinkler system in the library so the school decides to do a fundraiser to raise money for new books. Babymouse recalls previous school fundraisers where she sold things like magazines, candles, toothpick holders, etc (p. 24). You can click on the book icon to see this first part of the story. Now in the retell below, I have highlighted some economics concepts for the first half of the book.

DURING READING: When she hears this fundraiser involves selling cupcakes, she is all ears (p. 25)!  Then she hears the top fundraiser will receive a prize. Thoughts of this prize become an incentive for Babymouse. From p. 26 on, Babymouse encounters a variety of challenges in trying to sell the most cupcakes. First of all, once school is let out (p. 28) the students all race out to sell cupcakes. By the time Babymouse gets home (p. 30) another student has already hit her house! Babymouse has a problem. There are too many kids selling in the neighborhood! Customers are a scarce resource! So she devises some plans to find customers in other ways…

p. 31 At dinner, Babymouse’s family members suggest she try selling to relatives. Have you ever tried to sell fundraisers to family members? What happened? What happens to Babymouse? Why is she having problems? Is there enough demand for the cupcakes from her relatives?

p. 37 What happens when Babymouse hears Felicia has already sold a hundred cupcakes? How does she feel?

p. 45-46 Babymouse sees that Felicia is advertising. She sees that Felicia has a good slogan, so she makes up her own advertising poster.

AFTER READING: Have students visit the ReadWriteThink Printing Press interactive, so they can create a brochure or flyer to help Babymouse advertise her cupcakes.

Fancy Nancy and the Delectable Cupcakes, by Jane O’Connor is a great book to use to introduce the economics of cupcakes. Not only are you able to discuss the productive resources necessary to make cupcakes (natural, human, capital) but the story also involves a school bake sale to raise money for the library. Below I have provided a think-aloud/read-aloud of the economics concepts in the book.

Before Reading: Discuss the ingredients necessary to make cupcakes. What goods would you need to buy in order to make cupcakes? When goods like a bag of flour or sugar are used to make cupcakes, these are known as intermediate goods. Discuss the concept of a bake sale. Have you been to a bake sale? Who provides the goods to sell–the baked goods? Who provides the services–the selling and packaging? How does a bake sale produce money for the school library? Do the workers or producers get paid for their services?

During Reading: During reading, there are spaces in the book that are perfect opportunities for discussing these concepts.

Cover: Fancy Nancy is making cupcakes. What goods do you need to buy at the supermarket to make cupcakes? Look at the picture. What are some of the resources she is using?

P. 6: There is a bake sale at school the next day. The bake sale is to raise money for library books. How does that work? How does the school make money from the bake sale? (People donate goods and services)

P. 12: At the market, what are the goods Nancy’s mom buys? These goods will be used to make other goods–cupcakes–so they are called intermediate goods. What are the natural resources that were used to create these goods? (sugar cane, wheat, etc.)

P. 13-15: Capital resources are the tools used to make the cupcakes. What tools are used? Human resources are the people who help make the cupcakes. Who are the human resources and what jobs are they doing?

P. 19: Nancy is making a deal with a friend to exchange two brownies for two cupcakes. Does that make money for the school library? How does that exchange benefit both Nancy and her friend? Nancy will exchange some cupcakes for other goods. She will also sell cupcakes in exchange for currency-money.

P. 25: After Nancy’s disaster where the dog eats the cupcakes, her father also brought home some “stuff” or resources to make cupcakes. What goods did he have in his bag? Were these the same goods mom bought? Anything different? Do you remember what you call goods that are used to make another product? That’s right! Intermediate goods. They are in the middle of being goods themselves (flour, sugar, etc.) and being made into another product (a cupcake).

P. 27: Check out the baking. What jobs were people doing on pages 25-27 in order to make cupcakes? What equipment (capital resources) or tools did they use? Was there anything different from the tools on pages 13-15?

P. 29-30: Finally! The bake sale. Who are the buyers? Who are the sellers? What are all of the goods for sale? How do you think people paid for the baked goods? Where do you think they stored the money?

After Reading: After you finish reading, review the economics concepts/ vocabulary words that you discussed in the read/aloud think/aloud questions and comments.

Welcome this summer series of snippets of ideas for Cupcake Economics.

For the first discussion, I’d like to focus on the book Hello Cupcake, by Karen Tack and Alan Richardson. Rather than fiction, I have chosen this non-fiction recipe book to begin. You can find many interesting cupcake ideas on the Hello Cupcake website.

Cupcakes are great to eat, Yum, but they are also great beginnings to use to talk about economics concepts. For example:

1. What are the productive resources needed to make cupcakes? Let’s start with ingredients. Pinky Pie (from My Little Pony) can help us with some of these in this delightful little video: Pinky-Pie’s Cupcake Song. Ingredients can be considered intermediate goods in creating the final cupcake good. What intermediate goods are mentioned in the song? What intermediate goods are mentioned in your favorite cupcake recipe?
2. Now think of those ingredients. What are the natural resources necessary to create those goods? For example, where does flour come from? How do we get sugar? Where do we get vanilla? Or chocolate? These are all questions that can lead to the natural resources.
3. Now think of the capital resources necessary to make those cupcakes. What tools and equipment do you use when baking. Pinky Pie can show you a few things–bowls, mixers, wooden spoons–but what other capital resources can you think of?
4. Now comes the human resources or human capital. What human resources are necessary to make cupcakes? This is different in your home than in a factory. For example, watch this series of Khan Academy Cupcake Economics videos to understand the complex economics of creating cupcakes in a factory:

• Economics of  a Cupcake Factory
• Cupcake Economics 2: More Analysis of the Cupcake Business
• Cupcake Economics 3 : Using our spreadsheet to show why prices decrease when utilization is low and prices