Join the Green$treet$ Kids as they start their own business. Using their savings and other resources, the kids open a KID Pops stand and learn in the process all the ins and outs of operating a business. Find out if their business is success!
What does it mean to invest in a business?
People invest in a business when they purchase capital goods to help produce a good or service that they hope to sell for a profit.
What good or service did the Green$treet$ Kids decide to produce?
Short Cut wanted to produce mud pies. Why wouldn’t that work?
To succeed, businesses must produce what consumers want and be willing to pay for! Mud pies just wouldn’t work.
What productive resources did the kids invest in to start their KID Pops business?
Fruit juice, plastic wrap, wooden craft sticks, coolers, old lemonade stand, cardboard for signs.
What is one important productive resource that the kids didn’t list?
Their time! That is, their own human resources.
Was the opportunity cost of the kids’ time very great?
Probably not, since they were all bored and had nothing much to do.
When people invest in a business they hope to earn a profit. What is “profit?” Did the Green$treet$ Kids earn a profit?
Profit is the money left over after you subtract all production costs from your sales revenues. Yes, after subtracting their explicit production costs, the kids earned an accounting profit. (This does not consider the opportunity cost of their time, but we can assume that was pretty low!)
What did the kids do with their profits?
- Saved some.
- Used some to reinvest in the business – by purchasing more fruit juice.
- Gave some away to the Pool Fund.
Can you invest in a business before some sort of saving has taken place?
No. Someone must save (i.e. not consume) in order to have money to invest in a business.
Does investing in a new business always involve risk?
Yes! The future is uncertain. Things could always go wrong and the business could fail. For example, in the story, the kids made very little money on the day it rained. What if it rained a lot?
Do you want to start a business when you grow up? Discuss!
Answers will vary.
Author: Neale Godfrey
Illustrator: Randy Verougstraete
Publisher: Modern Curriculum Press