CRITICAL THINKING EXERCISES
CRITICAL THINKING EXERCISE 13-1
Bartering: Buying a Pair of Jeans
As the text notes, bartering was used rather than money in early commerce. In fact, countries suffering from hyperinflation have resorted to bartering in more recent years. Let’s see how cumbersome
bartering can become and how difficult it is to get your needs met in a barter economy.
Suppose you live in a barter economy and you need to buy pair of jeans. Listed below are six
people who live in your community. Each person has goods or services that he or she can trade to satisfy
a particular need. You must figure out how to barter so that you get that pair of jeans. Be sure to indicate
how much of each good or service is traded. Does everyone get his or her need met? Why? (This exercise
is more fun if it is done in groups, with each person playing a specific role.)
You:
Have -
Artistic talent and advertising experience
Need -
Pair of jeans
Great Value Store:
Has -
Pair of jeans
Needs - Shelves stocked
Bubbles and Bows:
Has -
Facilities to clean and mend clothes
Needs - Flyers to advertise opening of new store
Sly Sliverbottom:
Has -
Two tickets to the Falling Rock concert
Needs - Music video by the Royal Paynes
Mac Cannick:
Has -
A gas station
Needs - Clothes cleaned
Clark Clerk:
Has -
Time and ability to stock shelves
Needs - Gas for his pickup truck
13.1
NOTES ON CRITICAL THINKING EXERCISE 13-1
Students must decide how much of each good or service (represented by the Xs below) is involved in each transaction. Students will disagree on the worth of each good or service. This disagreement
is one of the problems of a barter economy.
The solution is:
First, you must trade X number of flyers for X loads of clothes cleaning with Bubbles and Bows.
Second, you must trade X loads of clothes cleaning for X gallons of gas with Mac Cannick.
Third, you must trade X gallons of gas for X hours of stock shelving with Clark Clerk.
Fourth, you must trade X hours of stock shelving for X pairs of jeans with Great Value Store
Sly Sliverbottom doesn’t seem to get his video since no one needs his concert tickets. That’s one
of the problems in a barter economy: some people have nothing to trade.
This exercise emphasizes how awkward and cumbersome a barter economy is and how important
money is in facilitating exchange of goods and services. Ask your students to identify the problems of a
barter economy.
13.2
INTRODUCTION TO BUSINESS: Instructor’s Resource Manual