Using the labour market as an example, this unit looks at how supply and demand as well as market equilibrium are derived. The aim is for students to reflect on and understand key characteristics of markets.
Students do the ‘firework sale’ role play in groups of four. After the role play, the questions are discussed in the groups of four or by the whole class. This follow-up activity can also serve as a time buffer: while some groups are still playing, others can already start preparing for the discussion.
One to three lessons.
General studies, economics and society, economics and law.
Intermediate. No prior knowledge is required for the role play. The level of difficulty can be steered by way of the discussion.
The ‘Labour supply and demand’ unit comprises this commentary and the following teaching materials:
The students are able to:
Supply and demand as well as market equilibrium are key concepts in economics. The basic assumption is that there are two sides to a market. On the one side are the demanders, the potential buyers who determine the demand for a particular good. On the other side are the suppliers, the sellers who determine the supply of the good.
The interplay of supply and demand determines the prices and quantities of the goods traded. This market equilibrium is usually represented in a price-quantity diagram.
Experience shows that it makes sense to derive demand and supply from the same example. The labour market is often the only market where young people can realistically take on the supplier role. The ‘firework sale’ role play therefore lends itself to addressing the topic of supply and demand.
Details of the role play can be found in the document ‘Exercise and questions for discussion’.
Students do the role play in groups of four, guided by exercise instructions.
To illustrate the result graphically, the teacher can plot the supply and demand curves for a negotiating team in a price-quantity diagram and present it to the class (see sample answers).
After the role play, the questions are discussed in the groups of four or by the whole class.
The role play can also be extended. In this case, Lea or Tim, the demanders of labour, negotiate with the whole class (the suppliers of labour). This means that the supply increases while the demand remains constant. As a result, wages should fall (see discussion question 6). A further option for extension is for the negotiating teams to record the results of their negotiations themselves in a price-quantity diagram.
