Students Learn Supply and Demand Through Pearl Exchange Activity

Clark Thomson’s 12th Grade Economics students have been using the concept of a valuable goods exchange – The Pearl Exchange – to learn about supply and demand. In the activity, economics students act as the sellers of pearls, while a Grade 9 Religion class stands in as the buyers. The concept of buyer’s maximum price and seller’s minimum price drives a voluntary exchange and creates a supply and demand curve with an equilibrium price. After an initial agreement (equilibrium price) is reached between the buyers and sellers, Clark provides unexpected situations, which shift the supply and the demand curve, for the students to work through. For example, an oyster blight impacted the value of the pearls, and an interest in a substitute good, such as diamonds, changed the buyers interest in what was being offered by the sellers.