D2.Eco.9.6-8: Corporations, Non-profits and Labor Unions in a Market Economy
In plain English: D2.Eco.9.6-8 is the C3 Framework economics indicator for grades 6-8 that asks students to describe the roles of institutions such as corporations, non-profits and labor unions in a market economy. Students learn that corporations gather money from many owners to produce goods for profit, non-profits use their earnings for a mission, and unions bargain with employers for groups of workers.
Describe the roles of institutions such as corporations, non-profits, and labor unions in a market economy.
C3 Framework for Social Studies (NCSS) · Dimension 2: Applying Disciplinary Concepts and Tools · Discipline: Economics · Exchange and Markets · Official standard
D2.Eco.9.6-8 asks students to describe the roles of three kinds of institutions, organizations with set rules and a lasting purpose, in a market economy, an economy where most goods, services and jobs are traded by buyers and sellers who make their own choices. A corporation is a business that the law treats as one legal "person": it gathers money from many owners, called shareholders, and uses it to produce goods and services for a profit. A non-profit is an organization that may earn money but must use what is left over for its mission, such as feeding families, instead of paying it to owners. A labor union is a group of workers who choose representatives to bargain with their employer about pay, hours and working conditions.
Students read Chief Justice John Marshall's 1819 description of a corporation (Source 1), the IRS rules for tax-exempt non-profits (Source 2), three sections of the National Labor Relations Act of 1935 (Source 3), and real 2025 data on union membership from the U.S. Bureau of Labor Statistics (Source 4). An invented scenario about three organizations in one town (Source 5) ties the institutions together for the quiz. The activities ask students to sort organizations, bargain over a contract and choose the right institution for a community need.
Learning Objectives
By the end of this lesson, students will be able to:
Define a corporation, a non-profit and a labor union, and say who owns or belongs to each
Describe the role a corporation plays in a market economy, including shareholders, dividends and limited liability
Describe the role of a non-profit, and explain what must happen to the money it has left over
Describe the role of a labor union and what collective bargaining does for workers and employers
Use primary sources and real data to support a description of these roles
Prior Knowledge Required
Students should already be comfortable with:
Explaining the roles of buyers and sellers in product, labor and financial markets D2.Eco.3.6-8
Describing how competition helps set prices and wages D2.Eco.4.6-8
Finding a percent of a quantity and comparing quantities with percents 6.RP.A.3
"Think of a company that makes something you use, a group in your town that helps people for free, and a group of workers who speak up together. How is each one paid for, and who decides what it does?"
Take a few answers and sort them into three columns on the board without labels. Then label the columns Corporation, Non-profit and Labor union. Tell students that D2.Eco.9.6-8 asks them to describe the role each of these institutions plays in a market economy. Ask: "Can an organization that helps people for free still sell things?" Leave the question open until Direct Instruction.
Direct Instruction15-20 minutes
Key terms for D2.Eco.9.6-8 (working definitions)
Term
Meaning
Example (invented)
Corporation
A business the law treats as one legal person, separate from its owners; it can own property, sign contracts and be sued
A shoe company owned by thousands of shareholders
Shareholder and stock
A shareholder owns stock, small pieces of ownership called shares, and may receive part of the profit
Owning 50 of a company's 1,000,000 shares
Dividend
The part of a corporation's profit paid to shareholders, an equal amount for each share
$0.25 paid for each share
Limited liability
If a corporation fails, its shareholders can lose what they paid for their shares, but not their homes or savings
A shareholder loses the $500 she paid, nothing more
Non-profit
An organization that may earn money, but must use any money left over for its mission instead of paying owners
A food pantry, a youth sports league, a museum
Labor union
A group of workers who choose representatives to bargain with their employer as one group
A union of nurses at a hospital
Collective bargaining
Talks between a union and an employer that end in a written agreement, the contract, about pay, hours and conditions
A three-year contract with a raise each year
Part 1: Why markets need institutions. Show Diagram 1. In a market economy, households and businesses trade with each other. Some jobs are hard for one person to do alone: building a factory costs more than one family can pay, some needs are not profitable to meet, and one worker has little say over the pay a large employer offers. Each institution solves one of these problems. For each one, ask three questions: Who owns or belongs to it? What is its goal? What happens to the money left over?
Part 2: Three roles. A corporation lets many people pool their money to produce goods and services; shareholders own it, and limited liability makes buying shares less risky. A non-profit uses donations, grants and sales to serve a mission that markets may leave unmet, such as free groceries; it has no owners to pay. A labor union lets workers bargain as a group, so the employer negotiates with one team instead of many separate workers. Work these examples.
Corporation (invented)
Invented example: Brightway Foods, Inc. has 1,000,000 shares. This year it earns a profit of $3,000,000 and pays a dividend of $1.20 a share. Sam owns 250 shares. How much does the company pay in dividends, how much does Sam receive, and how much profit does the company keep?
Result: Dividends: 1,000,000 x $1.20 = $1,200,000. Sam: 250 x $1.20 = $300. Kept: $3,000,000 - $1,200,000 = $1,800,000, which the company can use to grow. Role: the corporation gathers money from many shareholders, produces goods, and shares its profit with its owners. If Brightway failed, limited liability means Sam could lose what he paid for his shares, but not his house.
Non-profit (invented)
Invented example: the Riverside Animal Shelter, a non-profit, takes in $400,000 in a year: $340,000 in donations and $60,000 in adoption fees. It spends $270,000 caring for animals, $60,000 on its office and $30,000 on fundraising. What share of its spending goes to animal care, and what happens to the money left over?
Result: Total spending: $270,000 + $60,000 + $30,000 = $360,000. Animal care: 270,000 / 360,000 = 0.75, or 75%. Left over: $400,000 - $360,000 = $40,000. A non-profit may not pay this to owners; the shelter must use it for its mission, for example to build new kennels. Role: it meets a need that buyers and sellers alone may not meet, using donations as well as sales.
Labor union (invented)
Invented example: 60 warehouse workers belong to a union. After collective bargaining, their new contract raises the hourly wage from $20.00 to $21.00. Each worker works 2,000 hours a year. What is the percent raise, how much more does each worker earn in a year, and how much more does the employer pay?
Result: Raise: $1.00 / $20.00 = 0.05, or 5%. Each worker: $1.00 x 2,000 = $2,000 more a year. Employer: 60 x $2,000 = $120,000 more a year. Role: the union bargained for all 60 workers at once. The employer pays more for labor, so it may look for savings elsewhere, raise prices or hire fewer new workers; economists and employers watch this trade-off closely.
Three institutions, one market (invented)
Invented example: in one city, a hospital corporation owned by shareholders, a non-profit hospital run by a charity board, and a nurses' union all take part in the market for health care. Describe the role of each.
Result: The hospital corporation sells care and aims to earn a profit for its shareholders. The non-profit hospital also charges patients, but its leftover money must go back into its mission, such as a free clinic. The nurses' union bargains with the hospitals over pay, hours and staffing. All three are part of the same market: they compete for patients and for nurses.
Teacher tip. Students often think a non-profit cannot earn money. It can: museums sell tickets and pantries run shops. The difference is what happens to the money left over. A second confusion is that a union is the employer; it is not. The employer still hires and pays the workers, and the union speaks for the workers when pay and conditions are set.
Guided Practice15 minutes
Source 1: what a corporation is (1819). Context note: Dartmouth College in New Hampshire was a corporation created by a charter, a written grant from the British king in 1769. In 1816 New Hampshire passed laws to take control of the college. The college's trustees sued, and in 1819 the Supreme Court ruled for them. Chief Justice John Marshall wrote the Court's opinion. This passage explains what a corporation is. Dartmouth was not a business; it was a corporation run for education, which shows that a non-profit can also be a corporation. Read Source 1 aloud. Glossary: "artificial being" (something made by people, not born), "intangible" (cannot be touched), "in contemplation of law" (in the eyes of the law), "charter" (the official document that creates a corporation), "immortality" (living forever), "perpetual succession" (members keep changing, but the group goes on), "conveyances" (legal papers that pass property from one owner to another), "civil government" (the government of the state or nation).
1A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality; properties, by which a perpetual succession of many persons are considered as the same, and may act as a single individual.
2They enable a corporation to manage its own affairs, and to hold property without the perplexing intricacies, the hazardous and endless necessity, of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities, that corporations were invented, and are in use. By these means, a perpetual succession of individuals are capable of acting, for the promotion of the particular object, like one immortal being. But this being does not share in the civil government of the country, unless that be the purpose for which it was created.
Chief Justice John Marshall, Supreme Court of the United States, Trustees of Dartmouth College v. Woodward, opinion of the Court (Source 1: what a corporation is, 1819) (1819). Public domain (published 1819). Source text.
A being made by law. Prompt: in paragraph 1, what does Marshall mean when he says a corporation exists "only in contemplation of law"? Teacher note: a corporation is not a person or a building; it exists because the law and its charter create it.
Lasting longer than its members. Prompt: what two properties does Marshall call the most important, and what do they let a group of people do? Teacher note: "immortality" and "individuality." Members can come and go, but the corporation stays the same legal person and "may act as a single individual."
Why this helps in a market. Prompt: in paragraph 2, how does being a corporation make it easier to hold property? Teacher note: the corporation owns the property itself, so it does not need new legal papers each time a member leaves or joins. This is part of why corporations can own factories and sign contracts for many years.
Source 2: what makes a non-profit tax-exempt (IRS, today). Context note: Source 2 is from a current web page of the Internal Revenue Service (IRS), the federal agency that collects taxes. Section 501(c)(3) is the part of the tax law for charities. "Tax-exempt" means the organization does not pay federal income tax on the income from its exempt purposes (income from an unrelated business can still be taxed). Glossary: "exempt purposes" (purposes the law accepts, such as charity, education, religion or science), "inure to" (end up benefiting), "private shareholder or individual" (a person who could take the money for himself or herself), "legislation" (laws being made), "tax-deductible contributions" (gifts the giver can subtract when figuring his or her own taxes), "excise tax" (a tax used here as a penalty).
1To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
2Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.
3The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.
Internal Revenue Service (US government work), Exemption Requirements: 501(c)(3) Organizations (Source 2: what makes an organization a tax-exempt non-profit) (2026). US government work (17 U.S.C. 105). Source text.
The leftover-money rule. Prompt: in paragraph 1, what two conditions must an organization meet to be tax-exempt? Teacher note: it must be organized and operated only for exempt purposes, and it may not let its earnings benefit private people. Ask students how this differs from a corporation that pays dividends.
A penalty for private benefit. Prompt: in paragraph 3, what can happen if a person with "substantial influence" over the organization gets an "excess benefit" from it? Teacher note: the IRS may charge an excise tax, a money penalty, to that person and to the managers who agreed. The rule protects the mission from insiders.
Compare. Pairs fill in a two-column chart, Corporation and Non-profit, with three rows: Who owns it? What is its goal? Where does leftover money go? Keep the chart for Activity 1.
Independent Practice15 minutes
Source 3: the role of labor unions (1935). Context note: In 1935, during the Great Depression, Congress passed the National Labor Relations Act. It protected the right of most private-sector workers to form unions and required employers to bargain with a union the workers chose. Supporters said workers needed to bargain as a group to have a fair say. Many employers opposed the law, saying it would raise costs and limit their freedom to run their businesses. Congress later changed the act, for example in 1947, and it is still in force. Glossary: "obstructions to the free flow of commerce" (things that block trade, such as strikes, when workers stop work as a group), "mitigate" (make less severe), "collective bargaining" (bargaining as a group), "self-organization" (workers forming their own organization), "grievances" (formal complaints), "concerted activities" (actions workers take together).
1SECTION 1. [...] It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.
[...]
2SEC. 2. When used in this Act— [...] (5) The term "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.
[...]
3SEC. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.
Seventy-fourth Congress (US government work), National Labor Relations Act, sections 1, 2 and 7 (Source 3: the role of labor unions, 1935) (1935; this edition 1936). US government work (17 U.S.C. 105). Source text.
What a union is for. Prompt: in paragraph 2 (section 2), what does a labor organization deal with employers about? Teacher note: "grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work."
What workers may do. Prompt: in paragraph 3 (section 7), list the rights the act gives employees. Teacher note: to organize; to form, join or assist unions; to bargain collectively through representatives they choose; and to act together. Point out that these are rights, not requirements.
Source 4: real data on union membership. Source 4 is real government data, not invented. It comes from the U.S. Bureau of Labor Statistics (BLS) news release Union Members - 2025 (February 18, 2026; bls.gov, a US government work). The union membership rate is the percent of wage and salary workers who belong to a union. The public sector is government jobs, such as teachers, police officers and firefighters; the private sector is jobs with businesses and non-profits. BLS notes that its 2025 figures are averages of 11 months, because October 2025 data were not collected during the federal government shutdown.
Source 4: Union membership, wage and salary workers (U.S. Bureau of Labor Statistics, Union Members - 2025)
Measure
Value
Union membership rate, all workers, 2025
10.0%
Union members, all workers, 2025
14.7 million
Union membership rate, all workers, 1983 (first year of comparable data)
20.1%
Union members, all workers, 1983
17.7 million
Union membership rate, public sector (government), 2025
32.9%
Union members, public sector, 2025
7.3 million
Union membership rate, private sector, 2025
5.9%
Union members, private sector, 2025
7.4 million
Union membership rate, workers ages 16-24, 2025
4.7%
Union membership rate, utilities industry, 2025
17.8%
Union membership rate, food services and drinking places, 2025
1.8%
Median weekly earnings, full-time workers who are union members, 2025
$1,404
Median weekly earnings, full-time workers who are not union members, 2025
$1,174
Source 4: U.S. Bureau of Labor Statistics, Union Members - 2025, news release USDL-26-0229, February 18, 2026 (data from the Current Population Survey). The median is the middle value: half of the workers earned more and half earned less. BLS warns that its earnings comparison does not control for other factors, such as differences in occupation, industry, age, firm size or region. Diagram 2 shows the membership rates as a bar graph.
Students answer on their own: (1) In 2025, about how many union members were there in the public and private sectors together? Show your work. (2) Which sector has the higher membership rate, and which has more members? (3) Give one reason why young workers might be less likely to be union members, using the industries in the table. Collect the answers; Quiz questions 8-10 and 17 use Source 4.
Closure10 minutes
One town, three institutions. Introduce Source 5, an invented scenario about three organizations in one town, for the quiz and the homework. Students read it once on their own.
1Invented scenario, written for this page. Millbrook is a fictional river town of about 20,000 people. Three of its organizations are in the news this month.
2Hartwell Bikes, Inc. Hartwell Bikes is a corporation that makes bicycles in a factory by the river. It is owned by about 3,000 shareholders, people who bought shares of stock (small pieces of ownership) in the company. The shareholders elect a board of directors, and the board hires the managers who run the factory. This year Hartwell earned a profit of $2,400,000 and paid $0.40 for each of its 2,000,000 shares to its shareholders. It kept the rest of the profit to buy a new paint machine.
3Machinists Local 88. The 150 production workers at Hartwell belong to a labor union, Machinists Local 88. Last month the workers elected a bargaining team. The team met with Hartwell's managers for six weeks and agreed on a new three-year contract. Under the contract, the hourly wage rises from $24.00 to $24.96, and workers who are hurt on the job get paid while they recover. Each member pays union dues of $30 a month, which pay for the union's office and its staff.
4Millbrook Community Pantry. The pantry is a non-profit organization that gives free groceries to families who need help. It has no owners. Last year it took in $300,000: $180,000 from donations, $90,000 from a grant, and $30,000 from a used-book shop it runs. It spent $210,000 on food and delivery, $25,000 on its office, and $15,000 on fundraising. The pantry's board decided to use the money left over to rent a second building. Hartwell Bikes gave the pantry $10,000 this year, and twenty Local 88 members volunteer there on Saturdays.
SVHS (invented scenario written for this page), Three Organizations in Millbrook (Source 5: invented scenario). Original passage written for this page.
Exit ticket: Name the three institutions in Source 5. For each one, write one sentence that says who it belongs to and what it does in Millbrook's economy.
Teacher note on the sources and on balance: Source 1 is quoted exactly as printed in the 1819 U.S. Reports. Sources 2 and 3 are federal government texts: Source 2 is a current IRS page, and Source 3 is the 1935 law as first printed, which Congress has amended since. Source 4 is real 2025 data. Source 5 is invented. People disagree about how large a role each institution should play. Some argue that unions give workers a fair voice and others that they raise costs and can cost jobs; some praise corporations for producing goods at low cost and others worry about their power. Present these as views held by different groups, and let students weigh the evidence. The lesson does not take up any current union election, strike or law.
Differentiation Strategies
For Struggling Students
Give a three-column organizer (Corporation, Non-profit, Labor union) with rows for Who belongs, Goal, and Where leftover money goes
Use the sentence frame: "A ___ is owned by (or made up of) ___. Its main goal is ___. Its money left over goes to ___."
Read each source one paragraph at a time and restate it in one plain sentence before answering
For Advanced Students
Dartmouth College was both a corporation and a non-profit. Explain how that can be true, using Sources 1 and 2
Use Source 4 to compare the number of union members in 1983 and 2025 with the membership rate in both years. Explain how the number of members and the membership rate can change by very different amounts
Write a short dialogue between a union bargaining team and a company manager in which each side gives one reason for its position
Assessment Guidance
What to Look For
Strong answers say who owns or belongs to each institution, what its goal is and what happens to its money left over, and they describe its role in the market: corporations gather money from many owners to produce goods for profit, non-profits use earnings for a mission, and unions bargain with employers for groups of workers. They support each point with a quotation, a number from the data or a detail from the scenario. Watch for three confusions: thinking a non-profit cannot earn or charge money, thinking a union is the workers' employer, and thinking shareholders run the company day to day.
02
Classroom Activities
3 Activities
1
Which Institution Is It?
15 minPairs
Pairs sort 12 organization cards into three piles: Corporation, Non-profit and Labor union. On each card they write who owns or belongs to the organization and where its money left over goes.
The 12 Organization Cards (invented)
A video game company owned by 40,000 shareholders that pays a dividend each year.
A group of 300 bus drivers who elect a team to negotiate their pay with the city's transit agency.
A children's museum that charges $8 admission and spends all money left over on new exhibits.
A grocery chain whose stock is bought and sold by investors every day.
A teachers' association that bargains with the school district over class sizes and salaries.
A youth soccer league that charges a fee to play and gives free spots to families who cannot pay.
An airline company with a board of directors elected by its shareholders.
A group of hotel housekeepers who sign a contract with the hotel about hours and safety rules.
A food bank that runs a thrift shop to raise money for groceries.
A car maker that sells new shares of stock to raise money for a new factory.
A group of factory workers who pay monthly dues so their representatives can handle complaints.
A medical research charity that receives tax-deductible gifts.
Sample Answers for the Teacher
Corporation: cards 1, 4, 7 and 10. Shareholders own each one; money left over is paid as dividends or kept to grow.
Non-profit: cards 3, 6, 9 and 12. None has owners; money left over goes back into the mission. Cards 3, 6 and 9 show that non-profits can charge fees or sell things.
Labor union: cards 2, 5, 8 and 11. Workers belong to each one, and its job is to bargain or speak for them with an employer.
Discussion Questions
Which cards show a non-profit earning money? Why are they still non-profits?
On cards 2 and 5 the employer is a government. Can a union bargain with a government employer? (Yes. Source 4 counts 7.3 million union members in the public sector, where the employer is a government.)
Modification for English Learners
Add a small picture to each card, and post the words corporation, shareholder, dividend, non-profit, mission, union and contract with a one-line definition in English and the student's home language.
2
The Bargaining Table
20 minGroups of 4 (2 for the union, 2 for the company)
Each group simulates collective bargaining at an invented company, Lakeside Canning Co. Two students are the union's bargaining team and two are the company's managers. They must agree on a one-year contract.
The Facts (invented)
Lakeside employs 40 union workers at $19.00 an hour. Each works 1,900 hours a year.
The union asks for a raise of $1.25 an hour and a safety-training program that costs $12,000 a year.
The managers say the company can spend at most $76,000 more a year on wages and training without raising prices.
Each $0.10 an hour of raise costs the company $0.10 x 1,900 x 40 = $7,600 a year.
Steps
Each team finds the cost of the union's first request. (Teacher key: $1.25 x 1,900 x 40 = $95,000, plus $12,000 for training, is $107,000, which is $31,000 more than the $76,000 limit.)
Teams meet for 8 minutes and trade offers. Every offer must say the hourly raise and whether the training is included.
Each group writes its final contract and checks that it costs $76,000 or less. (One possible deal: a raise of $0.85 an hour costs $64,600, and the training costs $12,000, for a total of $76,600, just over the limit. A raise of $0.80 an hour costs $60,800, and with the training the total is $72,800, which fits.)
Debrief (5 min)
Why did the workers bargain as a group instead of one at a time?
What could the company do if labor costs rose more than its limit? Who would be affected?
Did any group fail to agree? In real life, what might each side do next?
Modification for a Shorter Class
Skip the bargaining rounds. Show the facts, compute the cost of the first request together, and ask the class to vote on one of two ready-made contracts.
3
Which Institution Fits the Need?
15 minGroups of 3, then whole class
Each group draws one invented community need and decides which institution, a corporation, a non-profit or a labor union, is best suited to meet it. Groups present their choice in one minute.
Need Cards (invented)
A town needs a large factory that will cost $50 million to build.
Teens in a town need a free after-school tutoring program.
Nurses at a big hospital want a say in how many patients each nurse must care for.
A neighborhood wants a bookstore that also hosts free reading clubs for children.
Group Task
Answer on chart paper: Which institution would you choose? Who would own it or belong to it? Where would its money come from, and where would money left over go? What is one problem your choice might face?
Discussion Questions
Which need could be met in more than one way? (The bookstore could be a business or a non-profit.)
Why might a corporation be the best choice when a project needs a very large amount of money?
03
Diagrams & Visual Aids
2 diagrams
Diagram 1: Three Institutions in a Market Economy
Each institution answers three questions differently: who belongs to it, what its goal is, and where its leftover money goes. Corporations pool money from many shareholders to produce goods for a profit; non-profits put their leftover money back into a mission; labor unions bargain with employers for groups of workers. All three take part in the same market economy.
Diagram 2: Union Membership Rates (BLS, real data)
Union membership rates from Source 4, drawn to scale. Each bar is one group of wage and salary workers in one year; compare the length of the bars with the gridlines at 10%, 20% and 30%.
04
Homework Assignment
~30 min
D2.Eco.9.6-8 Homework: Corporations, Non-profits and Labor Unions
Directions: Part 1 uses invented organizations. Part 2 uses Sources 1-5 in the lesson plan. Answer in complete sentences and show any arithmetic.
Part 1: Roles of Institutions (Problems 1-3)
For each organization, name the institution (corporation, non-profit or labor union) and describe its role in one sentence: (a) a group of nurses who elect a team to negotiate pay with a hospital; (b) a phone company owned by 50,000 shareholders; (c) a science museum that charges admission and uses all money left over to build new exhibits.
Invented example: Greenleaf Tools, Inc. has 500,000 shares. This year it earns a profit of $1,000,000 and pays a dividend of $0.60 a share. Lina owns 150 shares. (a) How much does Greenleaf pay in dividends in all? (b) How much does Lina receive? (c) How much profit does Greenleaf keep? (d) What percent of the company does Lina own?
Invented example: a union contract raises the hourly wage of 40 workers from $18.00 to $18.54. Each works 1,800 hours a year. (a) What is the percent raise? (b) How much more does each worker earn in a year? (c) How much more does the employer pay in a year? (d) Give one reason the employer might agree and one concern it might have.
Part 2: Using the Sources (Problems 4-6)
Use Source 4. (a) How many times larger is the public-sector membership rate than the private-sector rate? Round to one decimal place. (b) Show that the public-sector and private-sector members add up to the total for 2025. (c) In two sentences, say where unions play the largest role today, using the numbers.
Use Sources 1 and 2. Dartmouth College was a corporation but not a business. In four or five sentences, explain how an organization can be both a corporation and a non-profit. Quote Source 1 once and Source 2 once.
Write a paragraph of 6-8 sentences: "What role does each institution play in a market economy?" Use at least one quotation from Sources 1-3 and one detail from Source 5. Include one argument a supporter of labor unions might make and one concern a critic might raise.
Rubric
Criterion
Full Credit (2 pts)
Partial Credit (1 pt)
No Credit (0 pts)
Institutions Identified
Every organization named correctly with who owns or belongs to it
Most named correctly
Institutions missing or confused
Roles Described
Role of each institution in the market described accurately
One role vague or confused
Roles missing
Evidence and Math
Problems 2-4 correct with work; quotations and details from the sources
An arithmetic slip or loose evidence
No work or evidence
Perspectives
Problem 6 gives a supporter's argument and a critic's concern fairly
Only one side given
No perspectives
05
Quiz: 20 Questions
Interactive, with answers
Instructions
Questions 1-3 use Source 1 (John Marshall, 1819) and Questions 4-5 and 19 use Source 2 (IRS) in Guided Practice. Questions 6-7 use Source 3 (the 1935 labor act) and Questions 8-10 use Source 4 (BLS data) in Independent Practice; Question 17 uses Source 3 or 4. Questions 11-16 and 18 use Source 5, the invented scenario in Closure. Question 20 uses invented situations. Your score updates as you answer, and Reset quiz clears everything.
Multiple choice: pick an option to check it. Short answer: write your answer, then reveal the model answer.
0 of 20 answered · 0 correct
Question 1 of 20 · Multiple Choice
Source 1 says a corporation "possesses only those properties which the charter of its creation confers upon it." Invented example: a town creates a library corporation with a charter to run a public library. Based on this sentence, which is true?
Answer: B
Marshall says a corporation is "the mere creature of law" and has "only those properties which the charter of its creation confers upon it." Its powers come from its charter. Choice A ignores the word "only." Choice C reverses the relationship: the charter creates the corporation, not the other way around. Choice D confuses "perpetual succession," new members joining, with new powers.
Question 2 of 20 · Multiple Choice
Invented example: a ferry company was created by charter 40 years ago. All of its first members have retired and been replaced. Using Source 1, paragraph 1, is it still the same corporation?
Answer: A
Marshall says a corporation's "immortality" and "individuality" mean that "a perpetual succession of many persons are considered as the same, and may act as a single individual." Members change, but the corporation stays the same legal person. Choices B and C deny that immortality. Choice D contradicts the end of the passage: the corporation "does not share in the civil government."
Question 3 of 20 · Multiple Choice
According to the last sentence of Source 1, does a corporation become part of the government?
Answer: C
Marshall writes that "this being does not share in the civil government of the country, unless that be the purpose for which it was created." A corporation is created by law, but it is not a government body. Choice A mixes up being created by law with being part of the government. Choice B misreads "immortality" as political power, which the sentence rules out. Choice D goes too far: the source does not forbid working with governments.
Question 4 of 20 · Multiple Choice
Invented example: a 501(c)(3) theater ends the year with $20,000 left over. Under the rules in Source 2, paragraph 1, which use of the money is NOT allowed?
Answer: A
Source 2 says "none of its earnings may inure to any private shareholder or individual," so dividing the money among private owners is not allowed; a 501(c)(3) organization has no owners to pay. Choices B, C and D all use the money for the theater's own purposes, which the rules allow. A student who rejects them may think "non-profit" means "may never have money left over."
Question 5 of 20 · Multiple Choice
Source 2 says a 501(c)(3) organization may not
Answer: B
Paragraph 1 says it "may not participate in any campaign activity for or against political candidates." Source 2 does not forbid selling, receiving grants or owning property, so choices A, C and D add rules that are not there. Source 5 shows a non-profit that runs a shop and receives a grant.
Question 6 of 20 · Multiple Choice
According to Source 3, paragraph 2 (section 2), a labor organization exists to deal with employers about
Answer: C
Section 2 defines a labor organization as one that exists for "dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work." Choice A describes the company's own decisions about the product market. Choice B describes the relationship between a corporation and its owners. Choice D is not part of the definition.
Question 7 of 20 · Multiple Choice
Invented example: 200 warehouse workers want to use their right in Source 3, paragraph 3 (section 7), "to bargain collectively through representatives of their own choosing." What would they do?
Answer: D
"Collectively" means as a group, and "representatives of their own choosing" are people the workers themselves pick. Choice C is individual bargaining, the opposite of collective bargaining. Choice B reverses who does the choosing. Choice A is not in the act: wages are still set by agreement between the employer and the workers.
Question 8 of 20 · Multiple Choice
Use Source 4. How did the union membership rate for all workers in 2025 compare with the rate in 1983?
Answer: A
10.0% in 2025 and 20.1% in 1983: 10.0 / 20.1 is about 0.50, so the rate was about half. Choice B reverses the years. Choice C has the right size of change, 10.1 percentage points, but the wrong direction. Choice D may come from comparing the number of members (17.7 million and 14.7 million), which fell much less than the rate.
Question 9 of 20 · Multiple Choice
Which statement is supported by Source 4?
Answer: B
The public sector had 7.3 million union members and the private sector 7.4 million, about the same. Choice A confuses the rates (32.9% against 5.9%, more than five times) with the numbers of members; the private sector has many more workers in all. Choice C is wrong: the private-sector rate was 5.9%. Choice D is wrong: workers ages 16-24 had the lowest rate shown, 4.7%.
Question 10 of 20 · Multiple Choice
In Source 4, union members had median weekly earnings of $1,404 and nonunion workers $1,174. Why does BLS warn against deciding that union membership alone caused the difference?
Answer: D
BLS says its comparison does "not control for many factors," such as occupation, industry, age, firm size or region. Union members are more common in some jobs and places, so part of the $230 gap may come from those differences. Choice A is wrong: Source 4 is real BLS data. Choice B is wrong: medians are often used to compare groups. Choice C is not supported: Source 4 says nothing about dues.
Question 11 of 20 · Multiple Choice
Use Source 5. How much of its profit did Hartwell Bikes keep this year?
Answer: D
Dividends: $0.40 x 2,000,000 shares = $800,000. Kept: $2,400,000 - $800,000 = $1,600,000, which Hartwell will use for a new paint machine. Choice A is the amount paid to shareholders, not the amount kept. Choice B forgets to subtract the dividends. Choice C assumes the company split its profit in half.
Question 12 of 20 · Multiple Choice
Use Source 5. By what percent did Local 88's new contract raise the hourly wage?
Answer: C
The raise is $24.96 - $24.00 = $0.96, and $0.96 / $24.00 = 0.04, or 4%. Choice A treats the $0.96 raise as a percent. Choice B divides by the new wage ($0.96 / $24.96 is about 3.8%) instead of the old one. Choice D is the new wage as a percent of the old wage ($24.96 / $24.00 = 1.04), not the increase.
Question 13 of 20 · Multiple Choice
Use Source 5. What percent of the pantry's spending went to food and delivery?
Answer: C
Total spending: $210,000 + $25,000 + $15,000 = $250,000, and 210,000 / 250,000 = 0.84, or 84%. Choice A divides by the money the pantry took in ($300,000) instead of the money it spent. Choice B is the share spent on the office and fundraising together. Choice D is the share spent on the office alone.
Question 14 of 20 · Multiple Choice
Which describes the role of Millbrook Community Pantry in the town's economy?
Answer: A
The pantry "gives free groceries to families who need help," has no owners, and its board will use the money left over to rent a second building. Choice B describes a business corporation. Choice C describes Machinists Local 88. Choice D is wrong: the pantry is a private non-profit, and its money comes from donations, a grant and its shop.
Question 15 of 20 · Multiple Choice
In Source 5, Hartwell Bikes gave the pantry $10,000. Using Source 2, paragraph 2, what does the pantry's 501(c)(3) status allow that a payment to an ordinary business would not?
Answer: B
Source 2 says organizations described in section 501(c)(3) "are eligible to receive tax-deductible contributions," so the giver may subtract the gift when it figures its taxes. Choice A breaks the rule that no earnings may "inure to any private shareholder or individual." Choices C and D treat the gift as if it bought Hartwell ownership or control, but a donor to a non-profit does not become an owner.
Question 16 of 20 · Short Answer
Use Source 5. Explain how Hartwell Bikes, Machinists Local 88 and Millbrook Community Pantry are connected to each other. Give two connections, each with a detail from the source.
Model answer: Hartwell Bikes is the employer of the 150 workers who belong to Local 88, and the union's bargaining team met with Hartwell's managers for six weeks to agree on a new contract with a higher wage. Hartwell also gave the pantry $10,000 this year, and twenty Local 88 members volunteer at the pantry on Saturdays. So the corporation buys labor, the union bargains for the sellers of that labor, and both support the non-profit. Rubric: 1 point for each connection with a correct detail (2 points); 1 point for naming the role of at least one institution.
Question 17 of 20 · Short Answer
Using Source 3 or Source 4, describe one way a labor union can affect workers' pay in a market economy. Then describe one possible cost or trade-off that a critic or an employer might point out.
Model answer: A union lets workers bargain as a group "through representatives of their own choosing" (Source 3), so the employer cannot simply set each worker's pay alone; through collective bargaining, unions often win higher wages or better conditions. A critic or an employer might point out that higher labor costs can lead a company to raise prices, hire fewer workers or move work elsewhere. Source 4 shows union members earned more per week, but BLS warns that other factors also explain part of that gap. Rubric: 1 point for a way unions affect pay with evidence; 1 point for a fair statement of a cost or trade-off.
Question 18 of 20 · Short Answer
Hartwell Bikes in Source 5 is owned by about 3,000 shareholders. Who makes the company's decisions, and how do the shareholders benefit? Then explain one way the pantry is different.
Model answer: The shareholders elect a board of directors, and the board hires the managers who run the factory, so shareholders do not run the company day to day. They benefit from the profit: this year they received $0.40 for each share, and the company kept the rest to grow. The pantry has no owners at all, so its money left over cannot be paid out; its board will use it to rent a second building. Rubric: 1 point for who decides; 1 point for how shareholders benefit; 1 point for a correct difference with the pantry.
Question 19 of 20 · Short Answer
Source 2 says a 501(c)(3) organization can receive tax-deductible gifts but may not let its earnings benefit a private shareholder. Explain why these two rules go together.
Model answer: The tax benefits help an organization that serves a public purpose, such as charity or education, raise money from donors. If its earnings could go to private owners, the tax break would help those owners instead of the public purpose. So the law gives the benefit only to organizations that keep their earnings for their exempt purposes. Rubric: 1 point for what the tax benefit does; 1 point for explaining why private benefit is not allowed.
Question 20 of 20 · Short Answer
Invented situations: (a) a group of 25 bakery workers think their work schedules are unfair; (b) a town wants a free summer swim program for children. For each, name the institution best suited to help and describe the role it would play.
Model answer: (a) A labor union. The workers could form or join a union and choose representatives to bargain with the bakery about schedules and hours, which is the kind of issue a union deals with. (b) A non-profit. It could raise donations and grants, perhaps charge families who can pay, and use all of its money for the program, since a business might not find a free program profitable. Rubric: 1 point for each correct institution with a role that fits the need (2 points).
0 of 20 answered · 0 correct
06
Frequently Asked Questions
10 Questions
What does D2.Eco.9.6-8 mean?
D2.Eco.9.6-8 asks middle school students to describe what corporations, non-profits and labor unions do in a market economy. The full text is "Describe the roles of institutions such as corporations, non-profits, and labor unions in a market economy." It belongs to the Exchange and Markets part of the C3 Framework's economics indicators for grades 6-8.
Does D2.Eco.9.6-8 cover only corporations, non-profits and unions?
No. The words "such as" mean these three are examples. Other institutions, such as banks, credit unions, cooperatives and stock exchanges, also play roles in a market economy, and a teacher can add them. This lesson concentrates on the three named examples so students can compare them closely.
What is the difference between a corporation and a non-profit?
The main difference is where the money left over goes. A business corporation has owners, its shareholders, and it may pay them part of its profit as dividends. A non-profit has no owners, and the law requires it to use its leftover money for its mission. A non-profit can be organized as a corporation, as Dartmouth College was, and it can still charge fees or sell goods.
Can a non-profit make money?
Yes. Non-profits often sell tickets, charge fees or run shops, and they can end a year with money left over. What they cannot do is pay those earnings to private owners or individuals; the money must serve the organization's purpose. Many students think "non-profit" means "never has extra money," so this point is worth checking on the exit ticket.
What does a labor union actually do?
A union speaks for a group of workers with their employer. Its members choose representatives, who bargain with the employer about wages, hours and working conditions and handle workers' complaints. The agreement they reach is written in a contract. The employer still hires and pays the workers; the union is not their boss.
Are labor unions good or bad for the economy?
People disagree, and the lesson presents both views. Supporters argue that unions give workers a fair voice, raise pay and improve safety. Critics, including many employers and some economists, argue that higher labor costs can lead to higher prices or fewer jobs. Students should describe the role unions play and weigh evidence, such as the BLS data in Source 4, rather than be told which view is right.
What is limited liability, and why does it matter?
Limited liability means that if a corporation fails, its shareholders can lose the money they paid for their shares, but not their homes or other savings. It makes people more willing to invest in companies, which is one reason corporations can raise large amounts of money for factories, stores and research.
Why does the lesson use a Supreme Court case from 1819?
Chief Justice John Marshall's opinion in Dartmouth College v. Woodward gives one of the most quoted descriptions of what a corporation is: "an artificial being" that lasts as its members change. It also shows that a corporation can be a non-profit, since Dartmouth was a college. The passage is short and works well with a glossary for grades 6-8.
How can students practice D2.Eco.9.6-8 at home?
Ask them to pick three organizations they know, such as a company, a charity and a group of workers, and answer three questions for each: who owns or belongs to it, what its goal is, and what happens to its money left over. Then ask how the three might work together in one town.
What comes after D2.Eco.9.6-8?
In high school, D2.Eco.9.9-12 asks students to describe the roles of other institutions, clearly defined property rights and the rule of law, in a market economy. The civics indicator D2.Civ.6.6-8, on the roles of political, civil and economic organizations, is a natural partner at the same grade band.
07
Related Standards
5 standards
These standards connect to D2.Eco.9.6-8: prerequisites to review first, parallel standards at the same level, and next steps that build on it.
Before this lesson
D2.Eco.3.6-8Prerequisite
Explain the roles of buyers and sellers in product, labor and financial markets
Describe the roles of property rights and the rule of law in a market economy
Lesson coming soon
Standard text: National Council for the Social Studies (NCSS), The College, Career, and Civic Life (C3) Framework for Social Studies State Standards: Guidance for Enhancing the Rigor of K-12 Civics, Economics, Geography, and History (Silver Spring, MD: NCSS, 2013). NCSS was not involved in the production of this lesson and does not endorse it.
