BUS: Buying and Selling: Getting Cherries into a Pie (Ag)

Instructional Procedures

Activity Procedures

1. Clear the center of the room and designate it as the marketplace. Place the Cherry Fact Sheet on an overhead projector and briefly review the information.
2. Select one student to be the "Keeper" who will distribute the Buyer and Seller cards (cards cut from Worksheets B and C).
3. Explain that the goal of the game for both buyers and sellers is to make a profit.
4. Select one student to be the "Recorder," or inform the students that you (the teacher) will be the "Recorder." The Recorder will record all the buying/selling transactions on the Transaction Record Worksheet (Worksheet E.) Make a transparency master of the Transaction Record Worksheet and place it on an overhead projector and record the transactions with an overhead marker, or, as an alternative, use your computer, keyboard, projector and the fillable PDF included at the end of this lesson to record the transactions.
5. Divide the class into two equal groups. One group will be Sellers, one group Buyers. Explain that Buyers will be buyers throughout the game, and Sellers will be sellers throughout the game.
6. Provide each student with an Individual Score Sheet (Worksheet D) and request that each student record his or her transactions as they are made. Review details on the score sheet if necessary.
7. Ask the Keeper to distribute one card to each student (a Seller Card to sellers and Buyer Card to buyers); the amount on the card should be kept secret.
8. Buyer and Sellers will engage in three 10-minute rounds of trading. Announce a one-minute warning before the end of each round. (Trading time may be reduced to accommodate short class periods so long as each round runs for the same length of time.)
9. Explain that Buyers and Sellers can buy and sell in multiples of $5.00 and $10.00 only, and that they may not get the price they are seeking but that they should make as many deals as they can during the session. Explain that it is permissible to take a loss in order to get a new Buyer or Seller Card. Do not give away the fact that the students who engage in the most transactions will have the largest profits. This fact will be "discovered" during and upon the completion of the activity.
10. After each transaction, students should record their transactions on the Cherry Pie Individual Score Sheet and report the transaction to the Recorder to record the deal. Then both the Seller and Buyer get new cards from the Keeper and they re-enter the marketplace. (It is a good idea to have the Keeper and the Recorder located in the same part of the classroom.)
11. After each trading round, ask students to figure their net losses or gains.
12. During non-trading time between round 1 and round 2, direct students' attention to the market prices on the Transaction Record Worksheet. Say that it contains useful information for them. Do not elaborate. Conduct post-activity discussion:
• What price are the cherries most frequently sold at in Round 1? Round 2? Round 3?
• In which round was there the greatest spread in price?
• Why did the prices become more clustered? Answer: Increasing competition is the most important cause for the clustering of prices. This phenomenon represents the tendency of a competitive market to move toward an equilibrium price.
• Who determined the "market price" for cherries--buyers or sellers? Answer: Both buyers and sellers interacting in the marketplace.
• How did supply and demand (sellers and buyers) influence price? Answer: Sellers tried to get higher prices, buyers tried to get lower prices. Because there was competition among members of each group, no one had control over the price.
• Why were some students able to make more total profits than others? Possible answer: They were able to conclude many transactions, each of which yielded a small profit.
13. Using data from the Transaction Record Worksheet, ask students to create a bar graph either on graph paper or utilizing classroom software.

1. Students should have gained a better understanding about how prices are determined for the things they buy. They should be able to explain how supply and demand affect price and that sometimes producers are price takers--selling below cost to gain market share in volume.
2. Students should be able to identify other commodities that would be bought and sold like the cherries (most agricultural commodities).

1. This round is identical to the first day's activity except that the number of Seller Cards of each denomination used in the game is cut in half. Also, deals must take place within 5 minutes.
2. Allow time to record gains/losses.
3. Post-activity discussion: Did prices go up or down? (They should have gone up.) Why did the prices change as they did? Can the students relate this price change to price behavior in the national economy?

1. Put in as many Seller Cards as in the first three rounds, but cut the number of Buyer Cards of each denomination in half and follow the same directions as in Round 4.
Deals must take place in 5 minutes.
3. Allow time to record gains/losses.

• Did prices go up or down during Round 5? (They should have gone down.)
• Does this suggest a method of reducing inflation? How might it be accomplished?
• What negative effect could occur using this method? (Loss of jobs, loss of income for business.)
• Have students graph market deals for Rounds 3, 4, and 5, and write generalizations about what the graphs show.
• Review equilibrium concepts:
• Price equilibrium (price at which most transactions take place) occurs between $50-$65.
• Equilibrium price tends to go up when an item in demand is scarce, as in Round 4 (fewer sellers relative to buyers).
• Equilibrium price tends to drop when an item is in oversupply, as in Round 5 (fewer buyers relative to sellers).

1. Assess quality of student response to post-activity questions (oral or written). Try to avoid grading based upon the amount of profit each student earned.
2. Use the Agriculture in the Classroom "Supply and Demand: What If" activity to check student learning.