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Games and Experiments
The Frozen Price GameThe Wage is Right!Audience: High school and college economics students
Time required: About 50 minutes
Summary: This game demonstrates the advantages of price allocation over other methods. Students are told that a hurricane has caused a major power outage. This increases the demand for ice, since homeowners want to use it to preserve food. It also decreases the supply of ice, since many local ice producers won't be able to make ice without power. This combination of an increase in demand and decrease in supply causes the equilibrium price of ice to go up.
In the first round of the game, however, the price of ice is frozen at the pre-hurricane level and allocated on a first-come, first-served basis. Students form one large line and receive two cards. One card tells how the student plans to benefit from the ice as well as the opportunity cost of his or her time. The second card tells how long the student must wait in line to get the ice. Students use the cards to weigh the costs and benefits of waiting in line in order to buy ice for $1. Most decide that it isn't worthwhile to wait and sit down. "Ice" (candy) is given to the first five students in line; all other students that are still in line must return empty-handed to their desks. Have the five students who received ice write on the board how they plan to use it, and its benefits and costs to them.
In the second round, the ice is allocated by price, with no waiting. All students begin by standing at their desks. The instructor displays a graph of the ice market and derives a demand curve by gradually raising the price (from $1 to $3 to $5, etc.) and counting the number of students at each price who want to buy ice. As soon as they're priced out of the market, students sit down and tell the class how they had hoped to use the ice. When the market clears at $9, all of the students still standing go to the front of the class to get ice (candy) and write on the board how they plan to use the ice, along with its benefits and costs.
Click here to download playing cards and a graph for the Frozen Price Game in pdf format. After students have formed a line, distribute the wait cards to students so that those in the front have the shortest wait and those at the rear have the longest. Put the identity cards in numerical order and count out as many cards as there are students. (i.e., if there are 25 students in class, use only the first 25 cards.) Shuffle these cards carefully before passing them out to the students in line.
To get detailed instructions for playing the game, see:
Alden, Lori. 2003. The Frozen Price Game. The Social Studies 94(1): 35-39Audience: High school economics students
Time required: About 10 minutes per game
Summary: This is a series of short classroom games that encourage students to apply the supply and demand model to labor markets. The games are patterned after The Price is Right, a long-running game show on CBS that asks contestants to guess the prices of various goods. In this version, students guess the median earnings of different occupations and predict which will grow the fastest. It’s a fun way to acquaint students with different occupations and help them understand how earnings are related to training, talent, and other factors.
Click here to download The Wage is Right! game sheets in pdf format.
Round 1: Select five students and have them come to the front of the classroom. Announce that you will ask the contestants to guess the median earnings of an occupation and that whoever makes the best guess—without going over—will go on to the next round. Read aloud the occupation listed under Round 1 of the game sheet, and tell the students whether they’re to guess hourly or annual median earnings. Poll each contestant, and record their guesses on the board. If a student offers the same guess as another student, have that student change it so that each guess is unique. When all the contestants have made their guesses, write the correct answer on the board and ask the winning student to stay in front of the classroom. Have the other students return to their seats.
Round 2: Write the names of the three occupations listed under Round 2 on the board. Tell the contestant that he or she can win a raffle ticket or prize by correctly ranking the occupations by earnings. Read the descriptions of each occupation from the game sheet, and ask the student to write a “1” over the occupation with the highest earnings, a “2” over the one with the second highest earnings, and a “3” over the one with the lowest earnings.
Before revealing the answer, discuss with your class why these occupations might have different earnings. In Game 1, for example, your students might observe that one must attend college for at least four years to become a civil engineer, and even longer to become a pharmacist. Education makes these workers very productive, so the demand for them is high. The supply, however, is relatively low, since the educational requirements make it difficult to enter either of these professions. With high demand and low supply, civil engineers and pharmacists are assured of high earnings.
After the discussion, allow the contestant (if he or she wishes) a chance to change the rankings, and then write the actual earnings next to each of the job titles. If the rankings are correct, give the contestant a raffle ticket or prize. Whether or not the contestant is correct, have him or her stay in front of the class for Round 3.
Round 3: Announce that the contestant has another chance to win a raffle ticket or prize by guessing which of the three occupations is predicted to grow the fastest through 2010. After the contestant has guessed, give the correct answer and (if applicable) give the contestant a raffle ticket or prize. Have the student sit down, then read the future trends for each of the three jobs and use the supply and demand model to help students understand the correct answer.
To get more detailed instructions for playing the game, see:
Alden, Lori. 2004. The Wage is Right! The Social Studies 95(2): 67-70.
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Center
for Economic Education • Department of Economics
Sonoma State
University
• Rohnert Park, CA 94928
Dr. Stephen Lewis, Director | 707-664-2549