Why do we need money? Think about Ebay!


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Dollar In HandYou are going to explore the history and functions of money. To do that, you'll use a classroom experiment, based on Ebay. You will see why we need money in the economy. You will also find out about the crucial functions that money serve in order to be useful.


Set up an Ebay or an Amazon marketplace in your classroom to demonstrate what markets would be like without money. Then, using the information below, learn about the history of money and some of its important functions.


Make a list of items that you would like to sell on Ebay using this worksheet. Think about your room at home: Are there items in the closet that you never use? Have your parents been telling you to "get rid of that ..."?

Next, make a list of things that you would like to buy on Ebay with the proceeds from the sale of the items you listed above.
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Finally, set up a marketplace for these goods in the classroom. Print out this worksheet. Cut out pictures of the items and paste them onto the worksheet or draw pictures of the items directly on the worksheet. Then you can cut them out and use them for this activity.

There is no money in your classroom economy. Everything must be purchased via barter and trade. You will have to work out prices between yourselves. Therefore, you should concentrate on buying and selling items of similar value. Use this worksheet to fill in what you had to trade in order to get something in return. For the items you want, try to acquire as many as you can in the next 15 minutes.


Money is important in an economy. Transactions for goods and services are very difficult to complete without money. Money must serve as:

  1. A medium of exchange.
  2. A unit of account.
  3. A store of value.


  1. In your own words, define medium of exchange.
  2. How would the process of exchange have been different if money was used?
  3. Would the value of the goods that you wanted be greater or less if money was used? Why?
  4. Could any of the goods used to trade in the Ebay experiment been used as money?
  5. If any, which of the goods used to trade in the Ebay experiment could have been used as money?
  6. Give one specific example from your classroom market that shows how failure to have mutual coincidence of wants made trading impossible.


Think about goods that were used as money in the past. Also think about goods that can be used as money today. For example in prisons cigarettes are often used as a form of currency. Study this chart with different locations and the currency used in those locations.

Explore this idea further by reading and writing a short report about the article titled The Economic Organization of a P.O.W. Camp .