745:43 10 824808 UPN @( 44% K + Unit 1 - Activity : Building an Economy Around a School Vending Machine Worksheet In order to develop an understanding of the way an economy functions, let's attempt to build a simple economy around a single vending machine in your school cafeteria. On a large piece of paper, carefully draw a diagram of this economy as we build it together. Use two coloured pencils to note all of the economic activity that takes place in our simple economy. Use one colour to note all activities involving money payments (we'll call this colour #1), and a second colour (colour #2) to note all activities involving the supply of a good or a service. As the first step in building our model economy, draw a black box (3 cm x 3 cm) in the centre of the page and label it "vending machine." With no economy yet in place, the machine is empty. No cold drinks for you! To build an economy, the owner of the vending machine must purchase soft drinks and juices from a producer and use these to fill the machine. So let's draw a black circle 3 cm in diameter and about 6 cm to the right of the vending machine. Label this circle "producer." Since the owner of the vending machine gives the producer money, draw an arrow in colour #1 from the vending machine to the producer to represent this event. Draw an arrow in colour #2 to represent the products coming to the vending machine operator in return for the money being paid. The machine is now full, but the economy is still not in place. We need consumers for the cold drinks, and this is where you come in. Draw a black circle 3 cm in diameter and about 6 cm to the left of the vending machine. Label this circle "consumer." Even though you are very thirsty, before you can buy a cold drink you must have money. The most satisfying way to get money is to earn it, and one way to do this is by finding a part-time job. As luck would have it, the local beverage manufacturer (the producer) happens to be hiring students. Draw an arrow in colour #2 to represent the service of labour that you provide to your employer. Draw another arrow in colour #1 to represent the wages that your employer pays you in return for the work you do. Now that you have money in your pocket, you might decide to quench your thirst from time to time with a nice cold drink. Draw an arrow in colour #1 to represent the money you put into the vending machine to purchase cold drinks. Draw a #2- coloured arrow to represent the cold beverages you receive from the machine. At this stage, we are starting to see our economy come to life. BANK Wage CONSUMER PRODUCER Labour Product Purchase Purchase VENDING MACHINE Product SERVICE GOVERNMENT Building a model economy around a vending machine.