Fairy tale economics

Fairy Tale Economics

by Nicole Royer economics4kidsdotcom gmail.com @

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Have you ever heard the stories of Goldilocks and the Three Bears, The Three Little Pigs and The Big Bad Wolf, and Jack and the Beanstalk? Well, did you know that they were based on economics? No? I ll tell you the real stories...but I can t remember how fairy tales begin. Can you help me? '

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Oh yeah once upon a time, there was a little girl named Goldilocks who had unlimited wants. She wanted a big house, a fancy car, and to vacation in Greece twice a year. She worked hard, and was definitely a consumer. Today, her goal was to relax a bit and spoil herself. Goldilocks decided to take her hard earned money and visit The Three Bear s Bed and Breakfast for the night. There, she could fill her economic wants without lifting a finger. –

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The three bears Papa, Momma, and Baby are producers. Not only do they run a bed and breakfast, but Papa also creates products to sell at the inn chairs and beds and dishes made from the natural resources that surround them, the trees from their forest. Momma also makes baked goods and arts and crafts to sell. It seems that the more people stay at the bed and breakfast, the more people want to visit and stay. The Bear s created a great demand for their goods and services, and keeping supply up was becoming more and more of a challenge.

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Goldilocks arrived at the bed and breakfast a business she inspired after imposing upon The Bear s year earlier you ve probably heard that story before! and was excited to return. She wanted to see the successful business and its effects on the local economy. The Bear s had built such a successful business that other businesses were started, and the small town was booming with commerce.

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Goldilocks pulled up to the inn, and Baby Bear met her at the door. May I take your bags, Goldi? he asked. Thank you! she replied. They walked through the hand carved wooden doors and into the lobby of the bed and breakfast. You re all checked in, Goldilocks. said Momma Bear. It was this level of service that makes everyone want to come back, Goldilocks thought to herself. You ll be staying in Suite 1, said Momma. “

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She settled herself into her room. The bed and chair were perfect just right as Papa Bear had made bed after bed and chair after chair to find the perfect level of comfort for his guests. That evening, Goldilocks went down to dinner. Momma Bear made her favorite dish, macaroni and cheese. It was perfect just right for Goldilocks.

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The whole weekend was the best example of hospitality. The Bear s understood how to run the perfect business, all because a little blonde tornado turned up unexpectedly, and broke everything, once upon a time. '

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Here s another story this one s a bit different than you might remember. '

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Jack and his mother lived on a farm on the edge of town. They worked and worked hard for their money, but their income was still a bit low. The hot summer took its toll on the vegetables, and the family had to raise the price of their produce to cover their losses.

Jack, his mother said, I need you to take these beans into town. Trade them at the dairy for some milk. Jack agreed, took the bag of beans, and headed to town. He daydreamed as he walked, and as soon as he spotted the dairy, he ran into a suspicious looking fellow. Literally Jack wasn t watching where he was going and SMACK! right into the old man! “

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Hey! cried the man. You ran into me! I ll make you a deal I ll forgive you if you take it. There s a good amount of incentive to take it anyway, but how about you give me those beans, and I ll give you and he pulls out three small items from his pocket THESE magic beans! “

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Magic beans? Jack thought to himself. Gee, what I could do with magic beans! Maybe if I throw them outside of my window, a huge beanstalk will grow all the way up in the clouds where the giants live and I could climb it and... Then Jack remembered that the family needed milk, not magic beans. They had limited resources these days and he had put in so much work his own human resources grew the beans from seeds! So much work. So much effort.

No, thank you sir I am sorry I ran into you, but it was an accident. I ll watch where I m going from now on. “

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The old man shrugged and said It was worth a shot, then walked away. Jack refocused and thought about his opportunity cost. If I had taken the man s deal, he thought, I wouldn t have the milk we need. It would have been a loss to take a deal like that! “

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Reaffirmed that he made the right choice, Jack, and his beans, made their way to the dairy. The beans and milk were an equal transaction, and Jack s trade added to the circular flow of the economy he took money, bought the seed, planted the seeds, cared for them, grew the beans, harvested them, traded them, and now has milk to consume. And this time no giants! '

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There is one last story to tell have you heard about the three little pigs? Well, they own a business now Three Pigs Construction and they have been working to expand the town with new houses and buildings. They hired Wolf as an employee, a one wolf demolition crew. That huffing and puffing comes in handy when old buildings need to come down or land needs to be cleared! That was Wolf s specialization: demolition. The Pigs were also involved in specialized work: one was a master with straw, another with sticks, and the third with bricks.

The first two pigs had to keep their specializations as hobbies, however, because straw and sticks are not up to building code.

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Wolf and the Pigs grew an interdependence within their business Wolf demolished whatever needed to be demolished, and the Pigs build shiny, new, brick buildings in their place. The division of labor helped too each construction worker knew their role within the business, so work was done efficiently.

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The Pigs added to the local capital resources by building roads, bridges, and factories, which added more goods and services to the town. The town had more resources, and eventually, many of the town s businesses were profitable. With the profits came taxes, and though the Pigs didn t enjoy giving up their hard earned money to pay them, they understood that the taxes help to pay for public goods and services, and they enjoyed giving back to the community that they, quite literally, built. '

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The Three Pigs Construction company had many successes, no competition from other construction companies, and the Pigs, Wolf, and the town lived happily ever after.

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The End

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Teachers: feel free to use this story and the conversation starters with your students! Please comment and let me know how you re using Fairy Tale Economics in your classroom! '

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