The objectives of this study are to explain the extent of economic understanding and to identify the factors affecting economic knowledge of elementary school students. This study relates economic test scores to the characteristics of students in a production function model. The survey contains 20 questions testing economic knowledge and gathers information on the gender, the number of family members, parents\' academic career, reading newspapers, attitudes toward social studies, and pocket money. For the sample of 527 elementary school students of grades five and six, the mean score is 61.1 points. Two basic conclusions can be drawn from the study. First, economic knowledge of elementary school students is affected by the level of father\'s education, but not mother\'s education. Students whose father had completed some college scored 9-10 points higher than students whose father only a high school education or less. Second, there is significant effect of favorable attitudes towards social studies on economic knowledge. Students with neutral attitudes towards social studies scored 4 points higher and students with favorable attitudes scored 9-10 points higher than students who dislike social studies. The estimated coefficients of the amount of pocket money and the number of family members are also positive but their statistical significance varies depending upon estimated equations. On the other hand, the estimation results show that the variables such as grade, gender, and reading newspapers are statistically insignificant in explaining economic knowledge of elementary school students. Although it is heartening to see that students with some characteristics do score higher on economic test than others, it is premature to conclude that those are the most critical factors determining economic knowledge. Further studies are needed in two directions. One is to extend the sample to various groups, for example, high school students, college students, adults, and teachers. And the other is to add teacher, class, and school characteristics as independent variables in the production function.