This lesson will help students become good consumers and producers by taking turns buying and selling things in a classroom-created market. Students will establish prices for items and observe what happens during the sale of those items.
This lesson will help you become good consumers (people who buy or use goods and services) and producers (people who make or sell goods and services). The price sellers are willing to take compared with the amount buyers are willing to pay is what makes a marketplace work. Today you'll work with your classmates to make a market and take turns buying and selling things. Some of you will be producers, people who sell things; and some of you will be consumers, people who buy them.
Use the flash cards from A+ Math to test your ability to add coins and see how much money you have. Don't forget to use the decimal point to show the difference between dollars and cents!
- Participate in a marketplace simulation.
- Be role-playing producers and consumers throughout this simulation.
- Explain how prices affect people’s willingness to buy things in markets.
The Market: This flash activity allows students to practice buying items with play money in this interactive activity.( Note: Once students put money into the cash register, they will not be able to retrieve it if they were incorrect. However, they will have another opportunity to buy another object. This will provide them with an incentive and challenge to pay the correct amount of money.)
Data Retrieval Chart: Students will use this chart to keep track of the items they sell and purchase during activity 2.
Data Retrieval Chart
"Practical Money Skills for Life": This financial education site sponsored and developed by VISA presents a series of lessons designed to help students understand what money is, make decisions about spending, and gain a better understanding of financial planning issues.
"Money Flash Cards": From A+ Math, this site presents a set of flash cards students may use to practice adding coin values.
"Funbrain": Presents several activities in which children use money and calculate change.
Have your students work with their classmates to complete the flash activity The Market .
Students will now recreate a marketplace in the classroom.
Tables and chairs arranged so that they can be used as the market tables; students must be able to pass between them as they peruse the items for sale.
Materials students can use as goods to sell in the market (e.g. pencils, matchbox cars, beads or jewelry, gummy worms or other types of food, paper flowers, etc.)
$2.00 in change for each student in denominations of pennies, nickels, dimes, and quarters.
Change boxes (shoe boxes work well) for each producer to use for collecting payments.
- Containers for students to use in carrying their purchases.
Have your students work with their classmates to make a list of items for sale; also list the producers who will sell them. Divide your students into two groups: Producers and Consumers. Take a few minutes to prepare for the marketplace activity by thinking about the following things:
- Set a price for your products.
- Make signs showing the prices.
- Count your money.
- Have the consumers make a sheet which they may use to keep track of what they spend.
Have students use the data retrieval worksheet to keep track of the items they sell and purchase.
As students are pricing their products, ask them:
- “What do you think would be a reasonable price for your product?
- Do you think your product is worth more or less than a can of soda?
- A can of soda costs about $1.00. Do you think your product should be $1.00, more than $1.00 or less than $1.00? (Use any other examples of prices that are similar in scope to the products they are selling).
[NOTE: The purpose of this activity is to help the students understand how price affects a market. It is acceptable to have students price their products unrealistically. During the conclusion, students will reflect on how their pricing practices affected the market and if they would change their prices in the future.]
To Market! Open the marketplace and allow time for all the consumers to make their purchases.
Have the students keep track of how many items they sell; they also should add the amounts of money people pay to keep a record.
Have the students make a list of the things that they buy and the amount they spend on each item. Instruct them to keep track of the total amount they spend.
Students who are not ready to add two-digit numbers can keep track by making a pictorial representation or circling the number of coins they spend in each denomination.
Think about how many things you sold, or how much money you spent on the things you bought.
- What has to happen for a market to work?
- What does a market mean?
- If you were to do another round of the market activity, would you charge more or less for your items? Why?
- What do you think might happen if you put fewer items out on the table?
- If you were to do another round of the market activity, would you buy the same things?
- What if the prices were different?
- What would make you want to buy something you didn’t choose today?
- What would make you want to pay a higher price for something?
Guide student discussion toward the concept of supply and demand. If a price is higher, fewer items will be sold, so the producer may wish to drop the price. If a price is lower, more may be sold, encouraging the producer to charge more. Encourage the children to think about the turning point for some of the items in today’s activity. At what price would something become less desirable? At what price would a producer no longer think it worthwhile to sell something? Explain to the students that this is how a market economy works.
[For Teachers: Use these related lessons to reinforce concepts having to do with money and spending.]
http://www.practicalmoneyskills.com/resources/practical_money_matters . A financial education site sponsored and developed by VISA; presents a series of lessons designed to help them understand what money is, make decisions about spending, and gain a better understanding of financial planning issues.
For Students: These activities will help you practice calculations using money.
https://www.funbrain.com/games/change-maker Complete the activity at this site to test your ability to calculate change. You’ll be given a price for something and the amount of money someone paid. You’ll have to calculate the change the buyer should receive.
Instruct the students to draw a picture of a marketplace, showing what happens when producers raise or lower their prices. Have the students write a sentence about their picture.
Observe student drawings as well as their behavior during the marketplace follow-up discussion. Students should demonstrate a basic understanding of the way prices influence the market by making statements about raising or lowering prices according to consumer behavior.