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Commodity Trading - Whole class business activity

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Ability level: Intermediate to advanced
Prep time: 5-10 minutes (printing and cutting)
Time: 1 to 1 1/2 hrs
Class size: any

Each student receives one commodity. You can make and cut out slips or just write the commodities below on the board and assign by pointing to people. In a larger class, commodities do not need to be distributed evenly; you can have students choose a commodity from a hat for a random balance.
500 tonnes of steel, 2000 tonnes of wood, 6000 tonnes of wheat, 4000 tonnes of rice, 350 barrels of oil, 7000 tonnes of coal, 800 tonnes of copper, or 1000 tonnes of fish

Teacher writes available contracts on board (can write more or less). At the beginning, be sure that each commodity is included in at least one contract. You can take the demand away later if you like.
i.e. $2 million for 200 T steel, 500 T wood, 700 T rice, 10 T oil, and 300 T fish
$3 million for 650 T coal, 200 T copper, 1000 T wheat, 200 T wood, 80 barrels oil

Students trade commodities to get the required amounts for one or more contracts, keeping records of their commodities on paper.

The money is to be paid to the student (written on the board by the studentís name) by the teacher in exchange for the commodities listed. The student then removes the commodities from their record sheet. The student then has the option of buying one extra commodity from the teacher for each contract completed (for a price of say $1 million)

They then return to the fray and continue to trade and try to make money.

If you see any students not participating because they have traded so badly that they are now stuck with only 500 T wood and 700 T rice you can offer them a loan of $1 million to buy a new commodity from you, chosen randomly ($1.5 million if they want to choose a specific commodity). The terms are that they pay you back $1.5 million (high risk = high interest rate). Write their name on the board at -$1.5 million. (I advertised this type of loan on the board)

Set a time limit and whoever has earned the most money is the winner

If you have a small class (20 or less) or the commodities were chosen randomly, it may be necessary to tweak the market occasionally by:
 Changing the contracts periodically or adding new ones
 Offering a certain commodity at a low price
 Encouraging loans
Sometimes certain commodities become so scarce that it becomes a major hindrance to trade. Sometimes this scarcity is because several students have formed a cartel to force up prices (good time to offer the commodity at a low price to anyone willing to compete with the cartel).

Ian Ostrom
China

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