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How we teach Scarcity in YE

May 03, 2018

How we teach Scarcity in YE

In Youth Entrepreneurs, students learn how to use economic thinking to solve entrepreneurial problems. Students explore this framework for economic problem-solving through what we call the “4 Ss,” which are Scarcity, Self Interest, Subjective Value and Sunk Cost. We’re taking a look at each one, diving first into Scarcity.

“Scarcity is the root of economic thinking,” says Jon Bachura, National Outreach Director for Youth Entrepreneurs. “Scarcity is the idea that we live in a world of seemingly limited resources, but unlimited wants and needs. And what we do with these limited resources determines our prosperity, our success and our life.”

As students discuss scarcity, educators also introduce students to which resources are the most scarce. “When we ask students, ‘What’s the most scarce resource in the world?’ they often think of answers like oil, water and people,” Jon says. “But we need students to understand that the scarcest resource is time. With time, we’re always spending it, we know we will run out of it and we can never get it back.”

The next most scarce resource is attention. “Everyone wants it, but you can only point it at one thing at a time,” Jon says. And the third most scarce is money. “When we have a job, when we’re producing a good or a service, we’re literally trading time and attention for money. So the question becomes, how do we best put our scarce resources to use to get what we want in life?”

Furthermore, Jon says, when students understand scarcity, they can also understand abundance. “Over time, with innovation, iteration and invention, we can use entrepreneurial problem solving to create greater abundance. We want students to see the opportunities they have to be productive. They have the freedom to use their scarce resources to create value for others.”

Students learn about scarcity hands-on by using classroom currency. YE educators distribute classroom currency for a wide variety of behaviors. At the start of the class, students receive currency for basic classroom behavior, like arriving to the classroom on time and completing homework by the due date. They practice earning, managing and spending this scarce resource.

“Then, to give that money actual value, we have classroom auctions,” Jon explains. The more popular an item, the higher the price. “Students learn how scarcity and abundance can affect the price they pay. They are immediately and completely involved in trade, and they get to practice making economic decisions. They see what it looks like to convert scarce resources into something that benefits them.”

YE educators also use timers in the classroom to help students understand how time is a scarce resource. “We use timers a lot, in activities like PIT, Disruptus, Boneyard and the Paper Airplane Factory. Time is a scarce resource, and in timed activities, students understand what it’s like to have a finite amount of time. They also begin to get a sense and feel for time.”

Ultimately, as students understand the concept of scarcity, they become equipped to overcome barriers and seize opportunities for good. “We want students to use the idea of scarcity as a way to solve problems,” Jon says. Together with other Youth Entrepreneurs concepts, the understanding of scarcity helps students develop an entrepreneurial mindset.

See how YE students learn other crucial concepts, like our Foundational Values.