Explain how needs, unlimited wants and scarcity of resources lead people to make economic choices

Learning goal: Explain that individuals make economic choices based on unlimited wants, needs, and scarcity of resources, and use the words need, want, scarcity and choice correctly. This lesson teaches a statement from Ohio's July 2026 K–8 social studies standards, which the Ohio Department of Education and Workforce anticipates districts will begin to implement in the 2027-28 school year.

For the adult: Use classroom tokens and pretend stories. Children should never have to talk about their own family's money.

Needs. A need is something a person must have to live and be healthy. Food, water, clothing and shelter are needs. Care when we are sick is a need too.

Wants. A want is something a person would like to have but can live without. A new toy, a treat, a video game and a trip to an amusement park are wants. Wants are nice, but we can be healthy without them.

Some things can be both. A coat is a need in a cold Ohio winter. A second coat in a favorite color is a want. Water is a need; a fancy flavored drink is a want. Ask: "Could I live and stay healthy without it?"

Unlimited wants. People always think of more things they would like. When you get one toy, you may soon want another. That is what "unlimited wants" means: wants never run out. It does not mean a person wants everything in the world; it means there is always something more.

Resources. Resources are what we use to get what we need and want: money, time, materials and space.

Scarcity. Scarcity means there are not enough resources to get everything people need and want. Resources are limited, but wants are unlimited. Scarcity happens to everyone, even very rich people, because time is limited too. Nobody has enough time to do everything they would like.

Economic choices. Because of scarcity, people must make choices. An economic choice is a choice about how to use resources. When we choose one thing, we give up something else we could have had.

Needs for a job. Sometimes we also say we "need" a thing to do a job, such as needing a pencil to do schoolwork. That is different from the basic needs of food, water, clothing and shelter, but it still comes before a want when the job must be done. In the story below, Leo needs a pencil for his schoolwork.

Needs usually come first. A wise chooser takes care of needs first, then uses what is left for wants. If a family has money for either lunch or a toy, lunch meets a need, so it comes first. This is not a rule that people can never choose wants. It means needs should be met.

Read this to the children — Original story: Leo's Five Tokens.
Leo had five tokens at the class store. A pencil cost two tokens. He needed a pencil because his old one was broken and he had to write his name on his work. A shiny sticker sheet cost three tokens. A little toy car cost four tokens. Leo wanted the sticker sheet and the car. "Can I get all three?" he asked. His teacher helped him count. Two and three and four make nine. Leo had only five.

Working it out together. Leo cannot buy all three, because they cost nine tokens and he has five. That is scarcity: his tokens are limited, but his wants keep going. First, Leo takes care of his need: the pencil, two tokens. Five take away two leaves three. Now he can choose the stickers (three tokens) or keep his three tokens, but he cannot buy the car, which costs four. Leo chose the pencil and the stickers. He gave up keeping his last three tokens for another day. (Once he bought the pencil, the car was already out of reach, because three tokens are not enough for a four-token car. If Leo had skipped his need, he could have bought the car with four of his five tokens; choosing the pencil first meant giving up the car.) That was an economic choice.

The misconception. Some children think scarcity means "none at all." Scarcity means not enough for everything, even when there is some. Leo had five tokens, not zero. Another mix-up: thinking a want is bad. Wants are fine; we just cannot have all of them, so we choose.

A worked model inside the lesson. Resource: 30 minutes of free time. Wants: play outside (20 minutes), paint a picture (20 minutes), build with blocks (15 minutes). All three would take 20 + 20 + 15 = 55 minutes, but there are only 30. Time is scarce. Check the pairs: outside and painting take 40 minutes, outside and blocks take 35, painting and blocks take 35. Every pair is more than 30. So the child can choose only one activity. If the child plays outside for 20 minutes, 10 minutes are left, which is not enough for painting or blocks. Choosing one means giving up the other two for today.

Worked example 1 — need or want? Sort: milk, a toy robot, a winter coat, a movie ticket, a bed. Needs: milk (a food, and food is a need; other healthy foods and drinks can meet the same need), winter coat (clothing), bed (a place to sleep is part of shelter). Wants: toy robot, movie ticket. Reason: we can live and stay healthy without the robot and the ticket.

Worked example 2 — spot the scarcity. Mia has 6 tokens. Crayons cost 3, a book costs 4, a ball costs 5. All three cost 3 + 4 + 5 = 12 tokens. Mia has 6, so she cannot get all three. That is scarcity. She could get the crayons (3), leaving 3, which is not enough for the book or the ball. Or she could get the book (4), leaving 2, or the ball (5), leaving 1. Any choice means giving up the other things.

Worked example 3 — needs first. A pretend family has 10 dollars left for the day. Bread and milk cost 7 dollars. A kite costs 8 dollars. They cannot buy both, because 7 + 8 = 15, more than 10. Bread and milk meet a need (food), so a wise choice is to buy them first. That leaves 3 dollars, not enough for the kite. The family gives up the kite for now and might save for it later.

Representation task — the class store. The adult sets up a pretend store with price cards (2, 3, 4 and 5 tokens) on items such as a pencil, a snack card, a sticker, a toy and a book. Each child gets 5 tokens and a sorting mat labeled "Need" and "Want." Children first sort the items, then "shop," counting tokens on a ten-frame. After shopping, each child tells one thing they chose and one thing they gave up.

Independent performance: The child draws a picture story in three boxes: (1) what I needed and what I wanted, (2) why I could not get everything (scarcity), (3) what I chose and what I gave up.

Success criteria: The child sorts at least two needs and two wants correctly with a reason; uses the word scarcity to explain why not every want could be met; shows the token counting correctly; names one thing given up; and explains why the need came first. An adult may scribe.