High School Economics: Markets, Money, and Choices, Explained by Talking Them Through

A taste of a lesson on Supply, Demand, and Price Determination

The tutor asks, you answer, and it works from what you actually said. No videos to sit through.

The 20 topics in Economics

Each topic builds on the ones before it. The tutor checks what you already know and starts there.

1. Scarcity, Choice, and Opportunity Cost

   Explain that scarcity means unlimited wants meet limited resources, forcing choices. Teach opportunity cost as the value of the next-best alternative given up, and the three economic questions (what, how, for whom to produce). Students should apply opportunity cost to everyday decisions and a simple production possibilities frontier, including how the frontier shifts when resources or productivity grow.

2. Marginal Benefit, Marginal Cost, and Constructing Arguments

   Teach marginal thinking: decisions are made by comparing the additional benefit of one more unit with its additional cost; act while marginal benefit exceeds marginal cost. Students practice using marginal benefit and marginal cost to build a reasoned argument for or against a policy or approach, citing evidence and acknowledging counterarguments.

   Builds on Scarcity, Choice, and Opportunity Cost

3. Supply, Demand, and Price Determination

   Teach the law of demand, the law of supply, equilibrium price and quantity, and shifts versus movements along curves. Students should predict how shocks (income, input costs, preferences, number of sellers) change price and quantity and explain surpluses and shortages.

   Builds on Marginal Benefit, Marginal Cost, and Constructing Arguments

4. Incentives and What Markets Produce and Distribute

   Explain how prices, profits, and losses act as incentives that direct producers toward what consumers value and how goods are distributed by willingness and ability to pay. Students analyze examples such as price changes causing shifts in production and consumption, and reason about how incentives shape what gets made and who gets it.

   Builds on Supply, Demand, and Price Determination

5. Competition Among Buyers and Sellers

   Teach market structures from perfect competition to monopoly, with oligopoly and monopolistic competition between them. Key features: number of sellers, barriers to entry, product differentiation, and price-setting power. Students evaluate how much competition exists in specific real markets (e.g., local utilities, airlines, farming, smartphones) using evidence.

   Builds on Incentives and What Markets Produce and Distribute

6. Consequences of Competition in Markets

   Explain what competition produces: lower prices, higher quality, innovation, efficient allocation, and the risks of its absence such as higher prices, reduced output, and weaker innovation. Students describe these consequences in specific markets, comparing competitive and less competitive cases, and note that competition can also lead to business failure and job losses.

   Builds on Competition Among Buyers and Sellers

7. Comparative Advantage and International Trade

   Teach absolute versus comparative advantage using opportunity cost and a simple two-country, two-good numerical example (Ricardo's wine and cloth). Explain why specialization and trade based on comparative advantage raise total output and the gains from trade, and how exchange rates link prices across countries. Students compute opportunity costs and identify the trade pattern.

   Builds on Scarcity, Choice, and Opportunity Cost

8. Property Rights, Rule of Law, and Market Institutions

   Explain how clearly defined and enforced property rights, contracts, the rule of law, and stable courts make exchange, investment, and innovation possible. Teach Hernando de Soto's argument about property titling and the historical role of institutions (e.g., the Glorious Revolution, or Douglass North's work) as primary or secondary sources; students describe how weak institutions reduce investment and trade.

   Builds on Incentives and What Markets Produce and Distribute

9. Market Failure and the Government's Role

   Teach market failures: externalities (negative such as pollution, positive such as vaccination), public goods and the free-rider problem, monopoly power, and information asymmetry. Explain why these can justify government action, and generate several possible explanations for when government should intervene, including the view that government can also fail.

   Builds on Marginal Benefit, Marginal Cost, and Constructing Arguments, Consequences of Competition in Markets, Property Rights, Rule of Law, and Market Institutions

10. Evaluating Government Policies with Benefits and Costs

    Teach cost-benefit analysis of government market policies such as taxes, subsidies, price ceilings, price floors, regulation, and antitrust. Students use benefits and costs, including deadweight loss and who bears them, to judge a policy's effectiveness, and read a primary source such as a CBO or agency analysis or a historical policy debate.

    Builds on Market Failure and the Government's Role

11. Intended and Unintended Consequences of Market Policies

    Teach that policies can produce effects beyond their goals, using examples such as rent control reducing housing supply and quality, minimum wage debates on employment, tariffs prompting retaliation, and agricultural subsidies changing planting. Students describe intended and unintended consequences for several policies and explain how incentives cause them.

    Builds on Comparative Advantage and International Trade, Evaluating Government Policies with Benefits and Costs

12. Money, Banking, and the Federal Reserve

    Teach the functions of money (medium of exchange, unit of account, store of value), how banks create money through fractional reserve lending, and the structure and tools of the Federal Reserve: open market operations, the discount rate, and reserve requirements. Include the money supply (M1, M2) and why the Fed's 1930s failures are debated.

    Builds on Supply, Demand, and Price Determination, Property Rights, Rule of Law, and Market Institutions

13. Circular Flow, Factor Markets, and Labor Markets

    Teach the circular flow model: households supply labor, land, and capital to firms in factor markets and receive wages, rent, interest, and profit; firms sell goods and services to households in product markets. Explain how wages are set by labor supply and demand, why employment depends on the wage and on labor demand, and how minimum wages and labor market frictions affect employment. Students trace money and goods through the circular flow and explain how a change in one market affects the others.

    Builds on Supply, Demand, and Price Determination, Incentives and What Markets Produce and Distribute

14. Economic Indicators: GDP, Inflation, Unemployment

    Teach how GDP measures total output (expenditure approach C+I+G+NX), real versus nominal GDP, the CPI as a measure of inflation, and the unemployment rate and its types (frictional, structural, cyclical), along with labor force participation. Students read current BLS, BEA, and Fed data and interpret what they indicate about current and future conditions, including leading indicators.

    Builds on Money, Banking, and the Federal Reserve, Circular Flow, Factor Markets, and Labor Markets

15. The Business Cycle

    Teach the phases of the business cycle: expansion, peak, recession (contraction), and trough, and how output, employment, and prices typically move through them. Explain that the NBER dates recessions and that a common rule of thumb defines a recession as two consecutive quarters of falling real GDP. Students identify the phase of recent US data and explain why stabilization policy and indicator interpretation depend on knowing where the economy is in the cycle.

    Builds on Economic Indicators: GDP, Inflation, Unemployment

16. Changes in Spending, Production, and Money Supply Effects

    Teach how changes in aggregate spending, production, and the money supply affect prices, output, employment, and interest rates in the short run, using the aggregate demand and aggregate supply model and the quantity theory idea that money growth affects inflation over time. Students use current data to explain the effects of recent changes in spending or money supply on economic conditions.

    Builds on The Business Cycle

17. Fiscal and Monetary Policy in Different Economic Conditions

    Teach expansionary and contractionary fiscal policy (government spending and taxes, automatic stabilizers, multiplier idea) and monetary policy (interest rates, money supply), and how each is chosen in recessions, inflation, and stagflation. Students evaluate which policy mix fits a given condition, and debate the tradeoffs, including the view of Keynesian economists versus monetarists and supply-side economists, and lags and political constraints.

    Builds on The Business Cycle, Changes in Spending, Production, and Money Supply Effects

18. Economic Growth, Technology, and Human Capital

    Explain that sustained growth in output per person depends on productivity, driven by capital goods (machines, infrastructure), technological advancement, and human capital (education, training, health). Students explain why these investments raise living standards, using Solow-style intuition, historical examples such as the Industrial Revolution, and recent data on productivity and education.

    Builds on Scarcity, Choice, and Opportunity Cost, Economic Indicators: GDP, Inflation, Unemployment

19. Globalization: Growth, Labor, Rights, Environment, and Distribution

    Explain current globalization trends (supply chains, trade agreements, capital flows, offshoring, migration) and evaluate their effects on growth, labor markets and wages, citizens' rights, the environment, and the distribution of income and resources across nations. Students read primary sources such as trade agreement excerpts or labor reports and present competing views, such as the China trade shock literature, and leave judgment to the student.

    Builds on Comparative Advantage and International Trade, Intended and Unintended Consequences of Market Policies, Economic Growth, Technology, and Human Capital

20. Personal Finance: Saving, Credit, Investing, and Insurance

    Teach personal financial decisions: budgeting, compound interest and the time value of money, saving versus spending, credit card and loan costs (APR), investing and risk-return tradeoffs and diversification, and insurance as risk pooling. Students apply marginal and opportunity cost reasoning to a personal financial plan.

    Builds on Marginal Benefit, Marginal Cost, and Constructing Arguments, Money, Banking, and the Federal Reserve

Practice questions in Economics

A few of the kinds of questions you will work through, with answers.