# Playground Business Studies - Water Balloon Price Elasticity

By Donnelly, Sandra | Teaching Business & Economics, Spring 2012 | Go to article overview

# Playground Business Studies - Water Balloon Price Elasticity

Donnelly, Sandra, Teaching Business & Economics

This is a high energy, fun and very memorable activity. It puts the concept of price elasticity of demand (PED) in action, providing both kinaesthetic and visual learning opportunities.

The lesson described below could easily be simplified to introduce the concept of elasticity, but I have written this as a revision activity. It assumes students understand elasticity and can calculate elasticity. I prefer using this as a revision activity as it gives students an incentive to persevere with what can be a complex concept and to practice elasticity calculations.

Setting up the lesson

You will need a three person water balloon catapult, available online for around £10, some water balloons and seven cones from the PE department.

With certain groups (where water balloons might be asking for trouble) or in poor weather, this activity can easily be done with beanbags in a sports hall.

I get each student to take a mini flashboard, board pen and calculator outside for the lesson. Throughout the activity they work in 'triangles' of three and these triangle teams compete to calculate answers to questions to win a go on the catapult.

You will need one of your teams to help mark out your launch pad. First, set up the starting line by getting two students to hold the handles of the catapult so that the catapult elastic is taut, but not stretched. Place a cone by each student. Once this starting line is marked with the cones, get the third student to pull back the catapult as far as they possibly can, then place a cone where they are stood. This cone will represent a 25 per cent change in price/demand. You then need to place four further cones (to represent 5 percent, 10 percent, 15 per cent and 20 per cent changes) at equal intervals between the starting line and the 25 per cent mark.

Running the activity

When I do this activity I have a sheet of calculation questions. (Don't forget the answers!) I start by giving each individual team a question to calculate. If they get it right they then come up to demonstrate the calculation. (The other teams are not just sitting idle; the other teams also do the calculation to check the team is right. If a team successfully challenges an incorrect answer they can have the turn.) Once each team has had a turn, I make the calculations more complex and have the teams competing for further turns.

To demonstrate the calculation, it is important to reinforce that a change in price is causing a change in demand - the 'stretch' of the catapult representing the change in price and the extent to which the water bomb travels the change in demand. The team first pulls the catapult to show the change in price. For example, if the change in price was 10 per cent they should pull the catapult to the 10 per cent cone. They then demonstrate the resulting change in demand. If the change in demand, represented by the distance the water bomb travels, is less than the change in price (e.g. 5 per cent) then the catapult will be inelastic - the water balloon will not go far, providing a visual illustration that in this case changing price does not have much impact on demand. …

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