Water Rights: Managing the Colorado Water System
Define allocation, scarcity, and value thorugh an active simulation.
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Curriculum Units
Saving the Environment with Economic Ideas
OVERVIEW
These simulations demonstrate the potential results of economic-related actions and policies taken and made by the government, businesses, or individuals to conserve and protect many of the natural resources used in the production and consumption of goods and services. Students see in action concepts such as resource allocation, scarcity, value, property rights, negative externalities, and emissions taxes and are encouraged to have lively discussions about what they observe and apply it in various situations.
Grade Level
Lesson 1: Water Rights: Managing the Colorado Water System
Using water from the Colorado River as an example, Lesson 1 addresses an important question: Why is a price system the best way to allocate natural resources. The students simulate a river by passing a pitcher of water down a line of students. Each time the pitcher is passed, the incentives change and each student must decide how much water to take in each scenario.
Lesson 2: Property Rights
Lesson 2 provides a quick illustration of the Coase Theorem using a lake-pollution activity. The lesson highlights two points. First, the fate of the lake (whether it will be clean or polluted) does not depend on who owns the lake. Second, while the fate of the lake does not depend on who owns the lake, ownership of the lake is important in one very important way: The lake has value, so whoever has rights to the lake will be wealthier.
Lesson 3: Marginal Analysis: How Clean Is Clean Enough?
Lesson 3 starts with a simulation in which the students clean up rugs dirtied with paper towels, beans, and paper bits/glitter. The students realize that in order to get the rugs cleaner, the marginal costs of doing so increase. The students use data collected during the simulation to construct a demand for pollution. The students observe that if the price for polluting is high, then firms will clean their waste and emit less into the environment.
Lesson 4: Supply and Demand of Pollution
Lesson 4 builds on the demand for pollution disposal illustrated in Lesson 3. The students begin by understanding that if a price is charged to dispose of pollution into the environment, then the result is a demand for pollution disposal. Students then learn about and evaluate two ways to regulate pollution through market-based systems: a cap-and-trade system and a permit system.
Lesson 5: The Emissions Simulation
The emissions simulation in Lesson 5 puts students in the roles of firms. Each firm must decide how much pollution to release into the environment. The simulation is repeated several times with different scenarios. The simulation reinforces the idea that using a price system (whether a tax or a permit) results in the lowest-cost method of controlling pollution among a large number of firms.
Lesson 6: Green Is the New Gold
The fun simulation in Lesson 6 challenges students to figure out the best way to create a product from resources with the least amount of waste. The lesson emphasizes that being green is not just something businesses do to adhere to regulations, but it’s something that can be profitable as well.
More in This Series
LESSONS & ACTIVITIES
1 HOUR+
LESSONS & ACTIVITIES
31-45 MIN
Property Rights
Illustrate the Coase Theorem using a lake-pollution activity.
LESSONS & ACTIVITIES
31-45 MIN
Marginal Analysis: How Clean Is Clean Enough?
Illustrate marginal cost of cleaning up pollution.
LESSONS & ACTIVITIES
31-45 MIN
Supply and Demand of Pollution
Examine what happens when the supply or demand of pollution disposal changes.
LESSONS & ACTIVITIES
31-45 MIN
The Emissions Simulation
Define emissions tax and tradable permit system.
LESSONS & ACTIVITIES
46-60 MIN
Green Is the New Gold
Understand factors of production and analyze businesses production processes.
