Scarcity and Choice: Designing Your Living Space
Unit 1 · Lesson 1.2 · Last updated September 17, 2026
A 45-minute hands-on lesson using a $750 living-room budgeting scenario to introduce scarcity and the principles of economic thinking, with no personal finance background required.
Overview
In this lesson, students will design a shared living room to learn how the principles of economic thinking are central to all decision making. Following the primary activity, students will be guided through a debrief to introduce them to economic vocabulary, the principles of economic thinking, and their connection to personal finance. These principles will be further explored in Lessons 1.3 and 1.4 and will be used throughout Unit 1.
Learning Objectives
- Explain the role scarcity plays in decision making.
Materials
- Instruction Slides (display during class period)
Paper Option
- Student Handout (1 copy per student)
- Shopping List (1 copy per pair of students)
Electronic Option
- Digital Priorities Inventory (1 editable copy per student)
- Digital Student Handout (1 editable copy per pair of students)
- Laptop or device (1 per student)
Lesson Sequence
Slides 2–3
- Display Slide 2. Distribute 1 copy of the Student Handout to each student. Direct students to individually complete the instructions on the slide. Additional educator tips, details, and suggested answers are in the notes section throughout the Instruction Slides. Digital option: substitute the Digital Priorities Inventory for the Student Handout here. Students return to their ranking in Step 26.
- Proceed to Slide 3. Explain the learning objective and that students will be connecting decisions about designing their living space to personal finance and economics.
Slides 4–10
- Advance through Slides 4–5. Place students into pairs, or groups of three if needed, and provide an overview of the primary activity using the text on Slide 5.
- Display Slide 6. Tell students what they should focus on as they complete the task described on the slide.
- Read aloud, or have a student volunteer read aloud, the Introduction and Goal on the Student Handout. Digital option: substitute the Digital Student Handout for the Student Handout and Shopping List throughout the lesson.
- Proceed to Slide 7. Read the Instructions on the handout aloud, pausing between sections to allow for questions.
- Progress through Slides 8–9. Explain the procedure for selecting items and tracking the expenses on the Shopping List. Pairs are not required to spend every dollar of their allotted money, but they cannot spend more than their allotment. Digital option: navigate to the Shopping List tab of the Digital Handout and model how to enter information into the sheet.
- Advance to Slide 10. Distribute 1 copy of the Shopping List to each pair. Tell students not to worry if they are unable to complete all of Step C, since the class will discuss these questions later.
- Allow pairs 12 minutes to complete Steps A and B, and as much of Step C as possible, on the Student Handout.
- Circulate while students work to answer questions and clarify as needed. Note which pairs discuss purchasing multiples of an item, debate between different items, or consider why an item belongs in their living room. If students are reluctant to participate during the debrief, call on those pairs.
- After 12 minutes, move on to the class debrief even if not all groups have finished Step C.
Slides 11–25
- Proceed through Slides 11–12 to introduce the class debrief. Ask students to share their response to the question on Slide 12. Students can add notes under the Debrief Questions section of the Student Handout throughout the lesson.
- Display Slide 13. Click to define scarcity and economics. Tell students they will get more information and examples of each principle of economic thinking in Lessons 1.3 and 1.4 and should not become preoccupied with writing everything down.
- Advance to Slide 14. Use the text on the slide to reinforce that personal finance and economics are directly relevant to the task students just completed, because scarcity requires people to make financial choices.
- Display Slide 15 and ask students to share their responses to the question on the slide.
- Progress to Slide 16. Click to explain how students applied the cost-benefit principle in their purchasing decisions.
- Progress to Slide 17. Use the text on the slide to highlight the role of individual preferences when weighing costs and benefits and making a rational decision.
- Display Slide 18 and ask students to share their responses to the question on the slide.
- Advance to Slide 19. Click to describe how students applied the marginal principle in their purchasing decisions. Note that many choices are made incrementally.
- Display Slide 20 and ask students to share their responses to the question on the slide.
- Proceed to Slide 21. Click to explain how students applied the opportunity cost principle, and define opportunity cost.
- Advance to Slide 22 and ask students to share their responses to the question on the slide.
- Display Slide 23. Click to describe how students applied the interdependence principle in their purchasing decisions. Emphasize again the role that individual preferences play in making rational decisions.
- Advance to Slide 24. Allow students 1 minute to consider the prompt on the slide, then call on several students to share their responses. If you are tight for time, pose the question and move immediately to the next step.
- Proceed to Slide 25. Use the text on the slide to emphasize that priorities vary and, as such, the right financial decision depends on the individual.
Slides 26–28
- Progress through Slides 26–27. Tell students to confer with their partners about the question on Slide 27, then call on several students to share their responses with the class. Digital option: substitute the Digital Priorities Inventory for the Student Handout here.
- Display Slide 28. Use the visual on the slide to explain that what matters to an individual informs how the principles of economic thinking are applied to a decision.
Aligned Standards
Voluntary National Content Standards in Economics
Standard 1 Scarcity and Allocation
Standard 2 Decision-Making
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