Basic Economic Problem Activity - A great way to start an economics course

This fun activity is a great choice to use in your first class of any economics course because it introduces concepts such as:

-scarcity, resource allocation, and the basic economic problem

-command economy vs. market economy

-how economies try to answer the basic economic problem

Following discussion of foundational knowledge, the activity asks students to suggest solutions to a chair shortage in the classroom. Their solutions are written on the board and evaluated through different lenses such as fairness and efficiency. The common free market solution is then adopted, which requires students to bid on the right to use a chair. Once completed, further discussion explores the fairness of this solution and whether there was a better way to answer this excellent illustration of the basic economic problem.