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LESSON: LEAHS PONY
Lesson
Summary
This Depression Era story paints a realistic
picture of the hard life of American farm families during the
l930s. Leah decides to sell her beloved pony in order to raise
enough money to help her family keep their farm. The day of the farm
auction arrives - what will happen to all of Mama and Papas prize
possessions?
Concept: Price
Definition: The price is what people pay when
they purchase a good or service, or what they receive when they sell a
good or service. Market prices are determined by supply
and demand - the buying and selling decisions of producers and
consumers.
Comprehension
Questions
Why was Papa able to buy Leah a
pony at the beginning of the book?
Papa had a very good (tall and
straight) corn crop. We can infer that he probably produced a lot
of bushels that year and got a corn price high enough to afford the
pony.
Why did Leahs family have to sell
their possessions?
Leahs papa had borrowed money from the bank to
buy seeds, but the seeds had dried up and blown away. Now they had
no crop to harvest and sell in order to pay back the bank. Even if
the market price of corn was high, papa had no corn to sell! The
bank was going to sell the family cattle, chickens, pickup truck, tractor,
and other farm items to recoup the money it had loaned to Papa.
The bank was going to sell the
familys possessions in a farm auction. What is an auction? How
are prices determined in an auction?
In an auction, items are sold
to the highest bidder. The item is supplied by the auctioneer; the
item is demanded by the those bidding on it. Thus, in an auction,
the price is determined by supply and demand.
How did Leah decide to help her
family pay back the loan to keep from selling all the farm animals and
equipment?
She sold her pony to Mr. B., the grocery store
owner. She used the money she earned from the sale to bid on items
in the auction.
What was Leahs opportunity cost
when she decided to sell her pony?
Leah had a choice to sell or
keep her pony. When she chose to sell the pony, her opportunity cost
was giving up all the benefits of riding the prized possession she loved
so much.
Explain how selling the tractor in
order to keep the land would affect the family.
Selling the tractor
(a valuable capital resource) at a high enough price would help pay the
bank debt; however, Leahs father wouldnt be able to plant anymore corn
without a tractor. This might force the family leave the
farm.
Explain how Leahs neighbors helped
her family save their possessions.
The neighbors held a penny
auction. (See Authors Note in back of book for information about a
penny auction.) Rather than purchasing papas possessions and
keeping them for themselves, they bid very low at the auction, purchasing
the items for very small amounts of money. After the auction was
over, they gave the items back to Leahs family - absolutely
free!
The penny action helped Leahs
family save their possessions? How did it affect the bank?
It
hurt the bank because the bank was not paid back for the money it had
loaned to Papa. Many banks failed during the Great Depression
because many debtors were not able to pay back loans.
How was Leah rewarded for her
efforts to save her familys farm?
Mr. B., the grocery store owner,
gave her back the pony for helping to save her familys farm.
Other concepts: Economic
Wants, Scarcity, Opportunity
Cost, Supply and
Demand | 
