Grades K–2 · Societies
How does an agreed barter exchange change who has which goods?
Ava wants ribbon, and Bo wants a button: they can barter by exchanging goods directly without money. In this pretend example, Ava starts with two buttons and Bo with two ribbon pieces.
They agree to swap one button for one ribbon piece. Ava gives up a button and receives ribbon. Bo gives up ribbon and receives a button. Until the goods move, the agreement is still a plan and their possessions have not changed.
The Completed picture shows one button and one ribbon with both Ava and Bo. Opposite arrows connect the goods moving between them under their stated agreement.
In the diagramBarter exchanges goods without moneyAgreement: 1 button for 1 ribbon pieceAvaBo1 button • 1 ribbonCompletedOne stated agreement; not a universal value.
After the swap, each has one button and one ribbon piece. The total is still two buttons and two ribbon pieces: trading changes who owns them. Their one-for-one agreement does not mean these goods have the same value to everyone.
About this explanation
Starting knowledge: Count to two and distinguish who holds each pictured object.
Sources
- Federal Reserve Bank of St. Louis — Potato: A Tale from the Great Depression Q and A
- Federal Reserve Bank of St. Louis — Parent Q and A Resources on Economics