A fourth grader once explained her lemonade stand to me like this. She sold eleven cups at fifty cents, so she made five dollars and fifty cents, so she was rich.
I asked what the lemons cost.
She looked at me and shrugged her shoulders.
Her mother had bought the lemons, the sugar, the cups and the poster board, so as far as she was concerned none of that was part of the story. The money in the jar was the whole story.
I had been teaching economics as vocabulary that year. Goods and services, producers and consumers, wants and needs. She could define every one of those words. She just did not have a way to think about her own five dollars and fifty cents.
What changed it for my class was a novel. Evan and Jessie in The Lemonade War run real businesses with real numbers, and a story gives a child something to argue about that a definition never will.
Here are the five ideas I teach with this book, in the order that works, all of them at a level a third or fourth grader can actually hold.
1. Start With What a Business Actually Is
Before any vocabulary, get one sentence on the board: a business makes something or does something, and people pay for it.
Then find it in the book. Evan makes lemonade. People pay him. That is a business. Jessie makes lemonade too. That is a second business, and now there are two, which is the whole plot.
The useful move here is to have students name three businesses they visited this week and say what each one makes or does. The dentist does something. The bakery makes something. The bus does something. Once a child can sort the world that way, everything after this has a place to land.
Keep the words to the ones the book uses, and the book is generous here. Every chapter of The Lemonade War is titled with a business term and opens by defining it in plain language. You are not writing a glossary; you are reading one.
2. Profit Is Not the Money in the Jar
This is the big one, and it is the misconception my fourth grader had. Almost every child thinks the money you collect is the money you made.
Teach it as a subtraction sentence, because that is all it is:
- What you took in, all the money customers handed you
- minus what it cost you, the lemons, the sugar, the cups, the sign
- equals your profit, what is actually yours to keep
Then run the fourth grader's stand on the board. Eleven cups at fifty cents is five dollars and fifty cents. The lemons and sugar cost four dollars. So she made a dollar fifty, not five fifty. Watch the room when that lands.
Two words are worth naming once you have done the subtraction. What you take in is revenue. What you spend to make the product is cost. Both words are easier to hold after a child has felt the difference than before.
The Council for Economic Education keeps a free lesson built on exactly this scenario, Resources for a Lemonade Stand, with tally charts you can print. Their whole library at EconEdLink is free with a teacher account and is the best K-12 economics collection I know of.
3. Supply and Demand, Put it into Kids Words
You do not need the graph. Third graders can hold this idea perfectly well in ordinary words, and the graph in fifth grade will be easier because they already understand the thing it draws.
Say it like this:
- Demand is how many people want it. On a hot day, lots of people want lemonade. On a cold rainy day, almost nobody does
- Supply is how much there is to sell. One pitcher is a small supply. Ten pitchers is a big one
- When lots of people want it and there is not much of it, the price can go up. When nobody wants it, the price has to come down or it does not sell at all
Then test it against the book. It is the hottest week of the summer, so demand is high, which is why a lemonade stand is a good idea in the first place. And when a second stand opens on the same street, there is suddenly more lemonade for sale than before, and both of them have to think harder about their price.
The word for lowering your price to pull customers away from the other stand is underselling, and the book gives students a whole chapter of it. That is a vocabulary word most adults would struggle to define cleanly, learned from a story instead of a list.
4. Two Business Plans, And Both Work
This is my favorite lesson in the book, and it is the one that only a novel can teach.
Evan and Jessie run their stands completely differently:
- Evan sells to people. He knows his customers, he is generous with them, he is the kind of kid people want to buy from. He is not tracking much of anything
- Jessie sells with a plan. She counts, she thinks about location, she thinks about price, she brings in help. She is not naturally the one people warm to
Put both on a two column chart and have students fill it from the text, then argue which one was the better businessperson. Make them use a page number.
The answer is that both approaches are real and both work, and that is the actual lesson. Goodwill, the trust and liking that makes a customer come back, is worth money, and so is a plan. Businesses that have one and not the other struggle, which students can see happening to each sibling in turn.
It is also the kindest thing this book does for a classroom. The planner and the people person are both good at business, and in most rooms you have both kinds of kid sitting there deciding which one they are.
5. Then Actually Run the Stand
Finish the unit by running one, because everything above becomes real the moment there is a cash box.
Keep it small. A morning, one table, a fixed budget you give them.
- Plan the costs first. Price out lemons, sugar, cups. That number goes on the board before a single cup is sold
- Choose a price together, and make them defend it. Fifty cents or a dollar? What happens to how many we sell?
- Keep a tally of cups sold, which is your real math lesson hiding inside a party
- Do the subtraction at the end, out loud, together. Revenue, cost, profit
- Decide what to do with the profit. This is the conversation worth having, and it is where saving, spending and giving stop being poster words
If you want to go bigger, Lemonade Day is a national nonprofit that runs exactly this as a full program, free for teachers, and the St. Louis Fed's Econ Lowdown has free lessons and short videos that carry the same ideas into fifth grade and beyond.
It is worth knowing that this is not too early. In a study for the Money Advice Service, researchers David Whitebread and Sue Bingham at the University of Cambridge found that the core habits behind handling money, things like planning ahead and being able to wait for something you want, are largely formed by around age seven. Your third graders are not too young for this. They are right on time, and Practical Money Skills has free family activities if you want to send some of it home.
Frequently Asked Questions
What grade is this for? Third and fourth grade is the sweet spot. Second graders can do parts one, two and five with smaller numbers. Fifth graders can take the same five ideas and add percentages and a real supply and demand graph.
Do I have to read the whole novel to teach the economics? No. The business ideas sit thickest in the middle chapters, and you can pull the two business plans lesson on its own in a single session. Reading the whole book is better, because the money only matters once students care about the two kids.
How does this fit our standards? It covers the usual elementary economics strand, which is goods and services, producers and consumers, scarcity, supply and demand, and profit. It also does real math: money, multi-step subtraction, and data from the tally chart.
Can I do this at home with one child? Yes, and honestly it is easier. Read a chapter, then price out one real thing together at the grocery store. A parent can run part two in a single trip, and the lemonade stand at the end of a driveway does the rest.
What if I cannot run a real lemonade stand? Run it on paper. Give them a budget, a price list and a weather forecast, and have them plan the stand and calculate the profit without ever squeezing a lemon. Nearly all the learning survives.
One More Thing Worth Saying
Economics has a reputation as a dry subject, and I think that is because we usually teach the words before the experience.
A child who has watched Evan and Jessie fight over a street corner, and who has then counted her own eleven cups and subtracted the cost of the lemons, has a place to put the word profit when it arrives. A child who got the word first has a definition and nothing under it.
Give them the story and the cash box. The vocabulary comes along on its own.
If You Would Rather Not Build It From Scratch
Everything above works with a copy of the book, a whiteboard and a bag of lemons. If you would rather have the reading side already written, this is what I use alongside it.
The Lemonade War Novel Study carries the comprehension half of this unit, with one quick check for each of the fourteen chapters and the chapter's own business vocabulary built in. The page that matters most for economics is the compare-the-businesses activity, where students lay Evan's approach beside Jessie's using text evidence, which is part four of this post already laid out. There is also a claims and evidence writing activity, character change charts, and a final book test, with answer keys throughout.
Please note that a copy of The Lemonade War by Jacqueline Davies is required and is not included. This is an independent companion resource and is not affiliated with the author or publisher.
Keep Going
How to teach The Lemonade War, chapter by chapter, for the reading half of this book.
The 10-minute daily math routine that makes math stick, for keeping the money math sharp after the stand comes down.
