Cookieville

Worksheet Description

“The Economy of Cookieville” is a worksheet set in the fictional town of Econoville, where the concept of inflation and its effects on supply and demand is explored through the analogy of baking cookies. The story involves residents embarking on a quest to understand how inflation influences their purchasing power and the availability of goods. It describes inflation as a sneaky thief that reduces the value of money, causing prices to rise and affecting how much of something like cookies one can buy with a given amount of money. The narrative also touches on the broader impact of inflation on the supply of goods and services, as well as on consumer behavior.

This worksheet is designed to educate students on the economic principle of inflation and its ripple effects on supply, demand, and spending habits within a community. By presenting inflation in the context of a relatable activity, such as making cookies, it demonstrates how rising costs of ingredients can decrease supply due to higher production costs, or reduce demand as fewer people can afford to buy cookies. The scenarios within the worksheet aim to show how inflation can affect everyday decisions, like choosing which goods to buy or whether to spend money on essential services versus luxury items. The goal is to help students grasp the concept of inflation and its significance in the real-world economy, preparing them to understand and navigate financial landscapes.