Barter
What the student should know…
Barter is a medium of exchange by which goods or services are directly exchanged for other goods or services without using money.
The reasons bartering is more popular are:
1) It’s not easy to decide upon an exchange rate.. ie how many chickens will you give me for my bicycle?
2) It usually takes more than two people to conduct a barter.
Value/Worth
What the student should know…
Value in the economic sense for the owner of an asset would be either the amount they have paid or foregone to own that asset. It would also be the price they would need to receive to exchange that asset with a buyer.
Value for a buyer would be the amount they would be willing to pay or forego (as in service, time, etc) to obtain an asset and/or service.
Value could change over time. Value may also be dependent upon the abundance of the item, the uniqueness of the item or an extrinsic quality such as memories attached to the item.
For depreciating assets the value will decrease with time.
Value in an exchange is the price at which a buyer and seller would agree to make a trade.
Worth is a means to express the value of something to someone (ie this is worth me spending time on it, or that car is worth $5,000, or you are priceless).
Both Value and Worth can change over time.
Value is subject to the scarcity or abundance of an item in conjunction with the desire or need for the product or service.
Value or worth is often in the eye of the beholder.
Of interest to stimulate discussion is Ariely’s Tom Sawyer Effect Concept:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=774970
Goods and Commodities
What the student should know…
Good is something that is a tangible item that is intended to fulfill a need or desire.
A good could be something that has been manufactured like a car.
A good could be something that has been processed or prepared like a loaf of bread.
A good might be a raw material such as salt or oil. This special case of good is also known as a commodity.
Bonus concept: When goods are no longer valued for anything more than their intrinsic value they are said to be priced as a commodity.
Money
What the student should know…
Money is any object or account that is generally accepted as payment for goods or services.
Money could be currency or coins. Money could be a bank entry. Most money is in the form of bank account credits.
Money in the past has also been an easily transportable and exchangeable object like salt, gold or coffee beans for example.
Markets
What the student should know…
Markets is any venue where exchanges can be made.
Typically a market is where buyers come to shop/compare among several vendors offering a similar class of asset (food, clothing, stocks, etc).
Convene
A market could be a physical location such as a store, a mall, a farmer’s market, the New York Stock Exchange.
A market could be such as an electronic exchange such as the NASDAQ or E-Bay, etc.
I don’t know if below is good, but good for insights
How To Raise Financially Savvy Kids
http://www.forbes.com/sites/jennagoudreau/2012/09/04/how-to-raise-financially-savvy-kids-teach-money-skills/