Overview

Essential Purpose

There is a role for government in a market economy. Government provides certain goods and services. These services are paid for by taxes, and include such things as providing for the national defense, protecting the environment, and protecting property rights. It is also the role of government to provide those services that the private sector is either unwilling or unable to provide.

In this module, students will learn about taxes and how they impact the people that must pay them. They will also learn about the relationship of taxes to the ability of consumers to buy goods and services as well as the producers' ability to sell goods and services. Students will also learn that although some may consider taxes to be an undue burden, they are essential if the federal government is to provide the services that most people expect a government to do. These unique services of government are called public goods.

Finally, students will demonstrate understanding of the essential questions by considering the powers designated to state governments and will analyze how state governments also provide public goods.

National Economics Standards

Content Standard 16

There is an economic role for government to play in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income.

Grade 4.1: Governments provide certain kinds of goods and services in a market economy.
Grade 4.2: Governments pay for the goods and services they use or provide by taxing or borrowing from people.
Grade 8.1: Public goods and services provide benefits to more than one person at the same time, and their use cannot be restricted only to those people who have paid to use them.
Grade 8.2: If a good or service cannot be withheld from those who do not pay for it, providers expect to be unable to sell it and therefore will not produce it. In market economies, governments provide some of these goods and services.

State/Local Standards

States should align these modules to their own state/local standards as appropriate.

Essential Questions

How are people affected by taxes?
How do taxes transfer resources from public to private use?
Why do markets fail to provide public goods?

Essential Content

Role of government in a market economy

Taxes
Public Goods

Non-exclusion
Shared consumption

Transfer of resources-private to public
Opportunity cost
U. S. Constitution-Article I, Section 8

Tax
Tariff
Roads
Military
Standards
Print currency/mint coins
Incur debt

Essential Skills

Problem Solving
Issue Analysis
Compare and Contrast

Summative Assessment

Essential Questions Addressed by the Summative Assessment:

How are people affected by taxes?
How do taxes transfer resources from public to private use?

This performance assessment should be reviewed with students prior to using the activities in the module. Students should do the assessment after the activities have been completed.

Note: Students will need a copy of your state's Constitution to do this activity.

Printable Student View

Prior Knowledge	Now that you have learned that the government plays a role in providing goods and services in a market economy, you are ready to decide if the state governments should also be providing goods and services and if these services should be paid for by state taxes.
Problem	Many people have begun to complain that state governments have become too large. They complain that state governments are trying to do too many things for too many people. They wonder if state governments have gone beyond their Constitutional limits and are now providing services that the framers of the Constitution never intended. They claim that one result of this expansion of state government is a drastic increase in taxes to pay for these services.
Role/Perspective	You have been selected to serve on a state committee to review the state constitution and make recommendations as to whether state governments should play a less active role in the state and local economy. Your task is to determine what economic powers the state government should have.
Criteria for an Exemplary Response	In preparation for your first meeting of the state committee, prepare an outline of pertinent information. In your outline, be sure to include: The specific powers the state has to collect taxes to provide goods and services to the citizens of the state. A list of the specific goods and services provided for in the Constitution. Your recommendations as to whether this list of goods and services should be more restricted. Support for you recommendations. Use the attached scoring tool to evaluate student performance. Include a graphic organizer to illustrate your response. Present your outline to the class as a persuasive reasoning activity.

Score Guide