Arthur E. Foulkes describes his experience Teaching Basic Economics to Fifth Graders:
Lesson 1: TradeThe first week’s “word for the day” was trade.
To illustrate trade, I gave each student a very small, inexpensive gift I had purchased at a Dollar General nearby. I distributed the gifts randomly, then told the students they could trade their gifts (if they wanted to) with their immediate neighbors. Some did. Then I opened the class up to unrestricted trade and said they could trade with anyone in the whole classroom. Many more now traded. When they were finished I asked how many of them had traded because they believed by trading they would be better off. All said they had.
Once they settled down again, we talked about the concept of trade in general. I was impressed with how well they already understood this concept; they seemed to clearly understand that exchange involves giving up something you value less for something you value more and finding someone else with opposite valuations. For good measure, I ended the day by snatching away the gifts of two students and forcing a trade where none had been performed. One student was happy with the exchange, the other unhappy. This allowed us to discuss the idea of a “fair” trade — which I defined as a trade where both parties voluntarily take part. Again, I was impressed with how easily they seemed to grasp this idea as I replaced the items I had snatched away for my “forced” trade.