Indiana Social Studies E.1.2
The Standard
Identify incentives and explain how they influence economic behavior and decision-making.
2026 Indiana Academic Standards: K-12 Social Studies · Students explain that because resources are limited, people must make choices, understanding the role that supply, demand, prices, and profits play in a market economy. Key elements of the course include study of scarcity and economic reasoning, supply and demand, market structures, the role of government, national economic performance, the role of financial institutions, economic stabilization, and trade.
Teacher's field guide
What This Standard Means
What Students Need to Do
- Students identify rewards and costs that can affect a choice. They explain how a discount, fee, or chance to earn more profit might change what buyers or sellers do.
What Mastery Looks Like
- Given a new parking fee, a student can predict that some drivers may take the bus and explain why. They can name who faces the fee without assuming everyone will respond the same way.
Common Misconceptions
- Students may assume a reward will change everyone's behavior. They may also think incentives are always money, overlooking things like saving time or avoiding a long wait.
How to Assess It
- Exit ticket: The cafeteria cuts the price of fruit cups by $1. Predict how some students might respond, and explain why others might not change their choice.
Lesson moves
Ways to Teach It
Give pairs 10 paper tokens and snack price cards; add a coupon halfway through and have them record any change in purchases.
Ask students to write whether a $2 school parking fee would change how they get to school, and why.
Match cards showing a rebate, parking fine, and sales bonus to buyer or seller choices, then explain each match to a partner.
Show a receipt offering $3 back for spending $30; ask which purchases a shopper might change to earn the reward.
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Printable E.1.2 Worksheet
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Related Standards
- E.5.3
Identify the different causes of inflation (i.e., cost-push and demand-pull), and explain the impact of inflation on economic decisions.
- P.5.5
Describe and differentiate motivational theories as an explanation of what drives human behavior.
- GE.1.3
Explain incentives and how they affect choice.
- 3.E.7
Illustrate how people compare benefits and costs when making choices and decisions as consumers and producers.
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