This is a complete lesson plan about the various costs that a business incurs: fixed costs, variable costs, average costs, and marginal cost. It also explores the difference between short run and long run ATC curves. (This lesson pairs nicely with my lesson plan on Revenue and Profit
, and it is also part of a larger unit on Market Structure
THIS DOWNLOAD INCLUDES:
1) Warm Up Activity -- simulation that demonstrates the Law of Diminishing Returns.
2) PowerPoint Presentation -- contains the lecture and is a guide for all activities.
3) Note Sheet -- students fill out this note sheet during the lecture.
4) Class Activity -- students calculate the various costs for two different businesses.
5) Homework -- additional practice calculating and graphing business cost curves.
6) Teacher Materials -- includes a detailed lesson plan, answer keys, and a "Read Me" document explaining how to use the materials included.
TOPICS FOR THE LECTURE:
1) The Law of Diminishing Returns to an input
2) Variable costs and average variable costs (AVC)
3) Fixed costs and average fixed costs (AFC)
4) Total cost and average total cost (ATC)
5) Marginal cost and its relationship to the minimum cost output
6) The relationship between short run ATC curves and long run ATC
(If you would like to download one of my PowerPoint slideshows to get a feel for my style, check out my free download here
This lesson is the second day of a seven-day unit on Market Structure
that was designed using national standards from the Council for Economic Education. It should take 80 - 90 minutes, which is perfect for the block schedule, but it can also be easily split in half for classes that run closer to 50 minutes.
Business Costs - Lesson Plan and Activities
by Nick Samsal
is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License