hey gun teachers this is Jacob Clifford let me tell you a story about 10 years ago I was in Leander Texas and I was presenting to AP teachers and right before I went on the superintendent came out and he told them this I'm gonna be walking around on the first day of school if I see any of you guys doing a syllabus I'm gonna be Fury okay I don't remember if he actually had a Texas accent but he did have a good point which is don't do the syllabus on the first day and the reason is simple the purpose of day one is to get students excited about day two to get them excited about the class so in the next school year came around I decided to listen to him say I'm not going to syllabus I'm gonna do something completely different if you do this activity with your students or any activity the first week of school please send me a picture or a short video of your students getting excited about economics I want to make a compilation video from a ton of different schools showing students actively engaged in learning this stuff I think it'd be super awesome so here's what I do so the students walk in the room they take a seat I introduce myself say a few things about economics then I ask for two volunteers the students walk up and I hand one of them my cell phone and I say hey you're a seller you want to sell a cell phone you're the buyer you want to buy this cell phone for the buyer I write down on a piece of paper three hundred dollars and I said this is how much you're willing to pay for the cell phone not a dollar or more and I show the entire class but obviously not the seller and for the seller I write down twenty dollars show it to them and say listen don't sell it for a dollar less than this this is your minimum one to sell it for you're a seller selling that cell phone I show the entire classroom but I don't show the buyer then I say all right let's watch you guys negotiate the price for a product ready and go and there's two students negotiate a price at the end I make sure they shake hands and the seller gives the buyer that cell phone we all give them a round of applause and I spend just a few minutes talking about strategies that buyers and sellers use when they're negotiating for example buyers will talk about how crappy the product is or they saw other ones at a lower price or they low ball and say okay I only pay you a dollar for that sellers on the other hand talk about how great the product is and say they can sell it to anybody you know thousand dollars but they'll make a deal just for you and it's at this point when I introduce the idea of consumer surplus and producer Surplus now this is a concept that students learn in microeconomics it's not something you really teach in macro but it's not hard it's very intuitive on the board you write down the buyer's maximum to pay of 300 and you write down the seller's minimum which was twenty dollars and you write down their negotiated price somewhere in the middle of that let's just say a hundred and twenty dollars then you actually calculate that consumer surplus so the difference between what the buyers want to pay of 300 and the actual price of 120 is a hundred and eighty dollars and for the producer the producer Surplus the difference between the price what they want to sell it for that was a hundred dollars then comes the big question who won the buyer or the seller and of course the students will say oh the buyer won because they made more consumer surplus than the producer plus and you give them the big reveal which is they both won they're both walking away from this transaction super happy the buyer's happy anything less than 300 they're stoked sellers sold it for anything more than 20 their Stoke both people are happy and that's the key to the free market this quote from Milton Friedman says it best the most important single Central fact about a free market is no exchange takes place unless both parties benefit and I tell students that this is going to happen a lot in my class there's things you think you understand but economics to help you understand it better at a deeper level and most importantly taking this class learning economics is going to make you a better decision maker by the way if you want more details about the Pearl exchange activity I made a video that goes over it in detail take a look at that in this video I'm giving an overview and a strategy an idea which is do something active and exciting on the first day next I tell the students okay you saw two students do it now let's have everybody practice their negotiation skills I cut the class in half I send the sellers to one side of the room buyers the other side of the room sellers have them crumple up a piece of paper this becomes the Pearl they're trying to sell to the buyer and I tell them you're only going to sell this once so you're making one sale hand them the Pearl over and you're done and then most important certainly come up to me afterwards just the seller come to me and tell me what you sold it for and I'll keep track of these different prices on the board for this first round round one I give the sellers a minimum one to sell it for a price whatever it is it doesn't really matter what the numbers are so it could be 10 or 30 whatever it is and I give the buyers a maximum one to pay you know 500 or 120 doesn't matter what it is they say all right here we go let's create a market ready begin the students are actively engaged they're buying and trying to sell from each other and trying to negotiate prices and they're all super excited and it gets all super loud the students start sitting down when they're done sellers come to me report their actual number and then I say all right got you know 10 seconds left finish up your sale and then we stop everyone sits down and we look at the numbers and of course the numbers are all over the place and there's outliers and I say all right we're gonna do it again except now the sellers are the buyers and the buyers the sellers and we're gonna do it again what do you think is gonna happen in these numbers do you think that they're gonna look like this they're gonna look different so I have all the sellers go to one side buyers go to the other side give them the numbers I just give them the same numbers I don't make any changes the same numbers the last time ready and go let's make a market they do it again and sellers have to report the score to me at the front bore and I have you know round two written down up there again the classes allow students are super excited they're buying and selling from each other and you finish off the round stop take a look at the numbers and they have got less outliers they're starting to get closer to the middle closer towards something like an equilibrium now the key here is I'm not having them draw supply and demand I'm not having them write down definitions I'm just having them getting actively engaged and excited about economics now round three is when it gets really good remember I told them the economics to make you better decision maker let's see if you can use economics intuitively if you can put things together and I do it this way I say a mysterious virus has killed many oysters and therefore they have destroyed these pearls we have less sellers than buyers so before I had you know 15 students who are sellers 15 buyers I go to each of the sellers and I take away you know five or six pearls so now there's only 10 or 9 Sellers and I tell those students to go sit down and so you have more buyers than sellers but I don't want students just sitting there not doing anything so I have those students who used to be able to sell their Pearl actually become buyers so now I have over here you know 20 students and over there only 10 students who are selling the pearls and before I begin I say make a prediction what do you think is going to happen to the price of pearl so you're going to go upwards and go down it's going to stay the same what's gonna happen I give the sellers their minimum the buyers their maximum I said all right here we go let's start a market they get moving and the sellers report to me the numbers and of course the numbers Skyrocket they go all the way up to like 120 whatever the maximum is they end up somewhere around there but a few of them might actually be at the same numbers round one and round two and you can tell the students listen and don't pick on that student who did it but it's to say listen this is why you're an econ class you should have recognized before we started the price was going to go up the quantity supplies greater than the quantity demanded prices have a tendency to go up as a seller if you knew that you knew you could sell it for higher price understanding economics is going to make you a better decision maker you can do more with it but at that point I usually stop and the Bell Rings the kids leave and they're excited about day two but the big takeaway here is not just for economics it's for all your classes think about how much better doing an activity like this is than doing the syllabus mic drop if you do this activity with your students or any activity the first week of school please send me a picture or a short video so send that my way in early September I'll make sure to make that compilation video give you and your students a shout out and show all these students getting excited about this amazing class and let me know if you need anything if you haven't already take a look at my ultimate review packet or my worksheets on my teacher resources I want to give you a free trial so you can take a look and see if it's something that you want to buy and get for you and your students so take a look at my website ACDC econ.com if you want to learn more about any of that kind of stuff thanks for watching till next time