Teaching Basic Economics with the Trading Game
Supply and Demand in Elementary Grades Through Class Marketplaces
May 26, 2009
Before beginning, refresh yourself on the concept of supply and demand , if need be. This game will put students in a role-playing position to teach this basic economic idea by creating a marketplace where students will set their own prices for fictional commodities. Elementary age children will love the opportunity to haggle with their classmates and since the game only uses one commodity, students will easily see the relationship between supply and price.
Trading Game Materials
To get started, you will need to prepare three items. Commodities are what students will be buying and selling. You will need ten per student. Use any colored token such as pattern blocks. Pretend the commodities are from the modern world, like barrels of oil or bushels of wheat, or from your current history unit, like salt, silk, or spices from the Far East.
You will also need ten units of money per student. Raid your math kits for fake dollar bills or buy a few bags of plastic gold coins at your local discount store. But pattern blocks work here, too.
Supply cards are drawn before each turn and affect the supply of commodities and money in the game. There are two parts to the card, the event and the action. The event tells what is happening and the action will either either increase or decrease commodities and money. Write the event part of the card so it is creative and fits with the commodity. Merchants can earn five dollars of interest at the bank or pay two gold coins to the royal tax collector. Traders can invent new production processes that generate eight new barrels of oil or get attacked by pirates and lose three bolts of silk.
To put the focus on the relationship of supply and demand and to increase money and commodities overall in the game, the action part of the card should follow these guidelines (also see picture below):
- Merchants only gain or lose money and traders only gain or lose commodities.
- For every card that decreases supply, two cards should increase it.
- Amounts on the increase cards should always be more than those on the decrease cards.
Managing the Classroom Marketplace
Once you have prepared the commodities, money, and supply cards, you are ready to play the game. Half the group become traders and begin with ten commodities each. They will be able to move about the classroom. The other half become merchants and begin with ten units of money each. They will be seated at a desk for the duration of the game. There should be extra commodities and money that will come into play when supply cards are pulled.
There are two steps to each turn. First, pull a supply card and read it aloud. If the card increases supply, pay students with the extra commodities or money. If the card decreases supply, students pay the teacher immediately. If anyone cannot pay, they go bankrupt and have to leave the game.
Next, students trade. Traders can visit as many merchants as they want but may only trade once per turn. When they conclude a deal, they must return to the teacher to await the next turn. When all trades are finished (you may want to set a timer for two minutes), the next turn begins. At the end of five turns, the game is over. Everyone counts up to see which merchant and trader did the best!
Discussion Leads to Learning
Make sure to note what happens after supply cards are put into effect. Do prices go up or down? Are more commodities being traded? This is where learning about economics occurs. At the end of the game, discuss students' experiences. These questions may help:
- What strategy did you have for buying and selling? Did this change during the game?
- What happened to the price of commodities when the money or commodity supply was increased or decreased?
- Did prices increase or decrease at the end? Why or why not?
- Who was your best customer and why?
- How did you decide whether or not to make a deal?
- Did it help to be able to visit different merchants before deciding which deal to take? Was it hard having to stay in one place and wait for traders to visit you?
Easy Setup, Lots of Learning, and Great Fun!
There are other variations of the trading game but this basic version is easy to prepare and teaches the concept of supply and demand in a clear way. With only commodities, money, and supply cards to prepare, and an easy set of rules to implement, there's no excuse for not giving elementary students an interactive economics experience.
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