The topic was – market price determination. Students were involved in a demonstration of how prices are set in the actual roadside market in Guatemala, or Ecuador, or Columbia, or Bolivia, or Peru. The lesson in laissez-faire involved various folk objects from Latin American countries (supplied by the teacher) to be traded by active bargaining (in Spanish) by students. The objects were baskets, knitted goods, blankets, masks, etc. The currency was the actual legal tender bills from the above mentioned countries (provided by the teacher). Students volunteered to be the seller or the buyer through different rounds of the game and the role-play was very engaging and at times funny.
Underneath the rowdy classroom interactions was an important lesson in economics. The students recorded prices of the goods on the board, and as the rounds progressed, they were able to experience and understand how an increase in money supply caused the prices of the goods to rise.
The discussion at the end of the lesson, still in Spanish, focused on factors that determine the price of a good in a market. Many reasons were named, such as the size, the material, and the utility of an object. However, students dug deeper and mentioned the state of the economy, the quantity of money, and the cultural differences as main factors of the market price determination. This discussion shows that interactive, hands-on activities in the classroom provide a welcome opportunity for learning.
This visit demonstrates that our Teach-the-Teachers Initiative is for more than just economics classes. It encourages teachers from various disciplines to bring creativity and non-standard approaches into their classroom and to disseminate economic and financial literacy information in an imaginative way.
Because the lesson was fun and loud and wild, students will definitely remember the main conclusion – too much money chasing the same amount of goods will raise the price level in the economy. Pretty powerful lesson!