Using the Class Store to Teach Economic Principles
- Grades: 3–5
While the classroom economy is used as a form of behavior management, its real purpose is to help students learn necessary principles of economics.
You can check out my suggestions for using the class store to teach students about spending vs. saving, opportunity cost, inflation, scarcity, the laws of supply and demand, and how advertising affects the law of demand in the full "Teaching Economic Principles" lesson plan.
Inflation is an economic concept necessary to teach students, but it is not included in the lesson plan above. I teach an inflation lesson once students have earned quite a bit of money. Oftentimes students choose to save up their money over time. For that reason, many students become "rich," and they have lots of money to spend at the store. When this happens, I raise the prices at the class store without forewarning the students. While they are understandably disappointed with the increase in prices, it is a great way to explain the concept of inflation.
This lesson shows students that the value of our class money decreases as the volume of money earned increases. I can't continue to sell my inventory at low prices when the students have earned so much money.
Check out my economics book list that includes a variety of trade books that can be used to teach economic principles including scarcity, supply and demand, spending vs. saving, opportunity cost, and consumer decision making.