Fairy tale economics

Fairy TaleEconomics

by Nicole [email protected]

WWW.ECONOMICS4KIDS.COM

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?

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.


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.

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.


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.

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.

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.


Here's another story – this one's a bit different than

you might remember.

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!


“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!)”

“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.”


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!”

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!


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.

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.


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.

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.


- The End -


Teachers: feel free to use this story andthe conversation starters with yourstudents! Please comment and let meknow how you're using Fairy TaleEconomics in your classroom!

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Fairy tale economics