Lemonade For Sale!

STUDENT'S VERSION

This lesson printed from:
http://www.econedlink.org/lessons/index.php?lid=865&type=student

INTRODUCTION

Money BagWho wants to be a millionaire? How would you go about becoming a millionaire? (Win the lottery; get a great job, etc.) Today we're going to learn one way people can become millionaires, and you can do it too! It has to do with becoming and entrepreneur. Entrepreneurs are people who start up new businesses. They take the risks that are involved in organizing productive resources to make goods and services. Typically, entrepreneurs take the risks of this sort because they hope to earn a profit. Let's see who has the most potential to become a profitable entrepreneur.

TASK

We'll be doing on online simulation of running a lemonade stand. You will be the entrepreneur- the person who is taking all the risks. That means you will either make a profit or take a loss. We will work at our businesses for 30 days. Along the way, you will complete a chart to track your business decisions. This chart will provide the information needed to analyze the success of your business at the end of the lesson. At the end of the 30 days we'll stop and see who has made the most profit. That entrepreneur will then discuss the decisions he or she made explaining the reasoning behind them. We'll then have other business people discuss their business decisions and see if we can determine what changes they might have made to increase their profits.

PROCESS

Go to the Lemonade Stand game and allow it time to load.

Once it appears, read through the instructions. After doing so, proceed to the living room area to watch the weather forecast on the television. Remember, your consumers are not going to want to buy ice cold lemonade on a cold and rainy day, so make sure to check the television every day.

Next, you must decide how many advertisements to purchase, the price you will charge per cup, and how many glasses you will make (remember that each glass has a supply cost). As you will see (by clicking on 'Go!'), the next screen will open, showing the profit, assets, and expenses for that day. You will also be able to see how many cups were sold, and you can determine the factors that influenced your profit, such as weather or the cost per glass.

Then press 'Go!' again to move on to the next day. Proceed with this pattern for the 30-day period, making sure to fill out the My Lemonade Stand Chart with your decisions each day. (Your teacher will provide you with a copy of the chart, or provide an example of what the chart should look like.) As you proceed, you may notice that your funds are disappearing (ideally, of course, you are making millions). If you are losing money, you will not be allowed to purchase advertisements, or you will not be able to sell as many cups as you sold before.

Lemonade Stand

At the end of 30 days you will stop and note the amount of profit/loss from each day. Express what you did to either come out with a profit, or why you did not receive a profit.

The 'highest scoring' entrepreneur will share his or her decisions. The class then will discuss these decisions, comparing them to the decisions made by other business owners.

CONCLUSION

This simulation was designed to help you understand how day-to-day decisions affect a business, and to appreciate the risks entrepreneurs accept daily. Would you change your decisions tomorrow, based on what you learned today? How might this experience affect other decision-making strategies? What economic factors influence an entrepreneur? Under what conditions would operations be shut down?

ASSESSMENT ACTIVITY

This simulation was designed to help you understand how day-to-day decisions affect a business, and to appreciate the risks entrepreneurs accept daily. Would you change your decisions tomorrow, based on what you learned today? How might this experience affect other decision-making strategies? What economic factors influence an entrepreneur? Under what conditions would operations be shut down?


1. Describe two negative decisions you have made, and what you learned from them.

2. Describe two positive decisions you have made, and what you learned from them.

3. What could you have done to increase your profit?

EXTENSION ACTIVITY

Lemon Man

See if you can improve your business. Replay the "Lemonade Stand " game to try to better your total income. Use your My Lemonade Stand chart and your essay question answers, which will provide you with extra knowledge that may help you to improve your score.