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associated story: From Raw Materials to Riches: Mercantilism and the British North American Colonies
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From Raw Materials to Riches: Mercantilism and the British North American Colonies
Sherilyn Narker
Senior Economics and Financial Education Specialist
Federal Reserve Bank of Atlanta
Lesson Description
In this lesson, students will interpret primary sources and participate in a simulation activity to learn about the
mercantilist system used in British North America. Students will discuss the strengths and weaknesses of this
system and explain how it affected the economic and societal development of the British North American
colonies. Students will also be able to describe how mercantilism and the Navigation Acts helped move the
colonies toward revolution.
Concepts
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Mercantilism
Raw materials
Scarcity
Exports
Imports
Navigation Acts
Markets
Balance of trade
Tariffs
Imperialism

Objectives
Students will
1. Define key terms such as mercantilism, market, raw materials, finished goods, exports, imports, trade
barriers, balance of trade, Navigation Acts, tariffs, imperialism.
2. Simulate trade in a free market economy.
3. Simulate the mercantilist system that existed between Britain and the North American colonies.
4. Compare and contrast the trade in a free market with trade under the mercantilist system.
5. Explain how the mercantilist system worked and why some European powers pursued these policies.
6. Read and interpret a variety of primary sources on the topic of mercantilism.
7. Evaluate the strengths and weaknesses of mercantilism as an economic system.
8. Describe how markets are affected by changes in government trade policies.
Related Content Areas
U.S. History, World History, and Economics
Time Required
(110 minutes) Two regular 55-minute class periods or one class period on block schedule
Materials
PowerPoint slides (From Raw Materials to Riches: Mercantilism and British North America)

Handout #1: Roles for Colonial Households and Roles for Businesses—one per student
Handout #2: Library of Congress Map Analysis Tool
Handout #3: Roles for Colonial Households, Round 2—one per household
Handout #4: Roles for Businesses, Round 2—one per business
Handout #5 Mercantilism Simulation Assessment
Handout #6: Graphic Organizer
Online Resource: Access to Carole Scott’s online article, “Mercantilism and the American Revolution,” found
at http://freepages.history.rootsweb.ancestry.com/~cescott/mercan.html OR
http://www.westlake.k12.oh.us/schools/whs/rcurtis/AP%20US%20History%20documents/Mercantilism%20and
%20the%20American%20Revolution.pdf.
Visual #1: Map of Early European Colonies
Visual #2: T-Chart for Mercantilism
Simulation Game Piece #1: Gold Pieces for Businesses—each business receives 10 “10 gold pieces” cards
Simulation Game Piece #2: Badges for Businesses—each business receives one badge (there should be at least
one representative from each type of business)
Simulation Game Piece #3: Badges for Colonial Households—each household receives one badge
Simulation Game Pieces #4, #5, #6: represent Land, Labor, and Capital, respectively—enough resource cards
for each colonial household to have 15 resource cards
Simulation Game Piece #7: Imported Colonial Manufactured Goods—divide the number of students in your
class by two and multiply this number by 10. This is the number of Manufactured Goods cards you should have
available.
Flip-chart paper and markers for six groups
Preparation
This lesson should be taught after students know the reasons people came from England to settle British North
America. Read the lesson description. Prior to conducting the lesson, print, cut, and organize the simulation
cards. Print copies of the handouts as specified in the Materials section.
Prepare simulation pieces. Copy, laminate, cut, and sort enough pieces for your largest class according to the
following list.
a) Round 1
Gold Pieces: There should be enough for half of your students to have 10 “10 gold pieces” cards clipped
together with a paper clip for each round. The students will participate in two rounds.

Business Badges: One sheet should be enough for a class of 30 students or less. Clip one badge onto each set of
gold pieces designated for Round 1. The businesses will keep the same badges in Round 2. For smaller classes,
make sure you have at least one representative from each type of business.
Household Badges: One sheet should be enough for a class of 30 students or less. Clip one badge onto each set
of 15 resources designated for Round 1. Students will keep the same badges in Round 2, but will have a
different set of resources.
Resource cards: Each colonial household (half of the students in your class) will have a packet of 15 resource
cards. The packets should have different distributions of the three types of resources so that some students will
have more of one resource and less of another. In an average class of 30 students, you will need a total of 225
resource cards.
b) Round 2
Gold Pieces: There should be enough for half of your students to have 10 “10 gold pieces” cards clipped
together with a paper clip for each round.
Resource Cards for Round 2
Colonial Households: Each colonial household will have a packet of 10 resource cards with only land and labor
resources clipped together in their packet. Also, prepare to give the specified capital out to the following
households:
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New England, two capital resources per household
Midatlantic, one capital resource per household
Southern, no capital resources

Businesses: In addition to the gold pieces, the remaining capital resource cards (approximately 60 for a class of
30 students) will be divided among all the businesses in varying amounts. You can prepare these packets and
clip them together before the class starts.
Procedures: Instructions for the PowerPoint slides have been put in italics. Content background is in regular
type.
1. Open the PowerPoint presentation and display the title slide (1).
2. Display slide 2. Review lesson objectives.
3. Display slide 3.
4. Introduce the lesson by asking students, “Why do you like to have money?” You will get answers like,
“I can use it to buy what I need.”
5. Tell students that money takes many forms. Remind students that when the colonists came to North
America, their money was not the U.S. dollar we use today. Tell them that the colonists probably used
several different types of money. For example, they may have used British coins, coins from other
trading partners like Spain, precious metals like gold or silver, commodity money like tobacco leaves, or
they may have bartered one good for another one.

6. Next, ask students, “How do you get money?” Students will most likely say, “I work for it” or “My
parents give me money.”
7. Access prior knowledge by asking students, “How was money a factor in motivating colonists to come
to British North America?” Students will likely talk about how poor people in England didn’t have many
opportunities to own their own land or get good jobs. By coming to the colonies, they could acquire
cheap or free land. The land would allow colonists to produce agricultural goods to support themselves.
The limited quantity of labor supplied meant they could be paid well for work they did for someone else.
8. Display slide 4. Tell students that whenever someone sells a product or their own labor to someone else,
they have created something called a market.
9. Ask students, “What kinds of markets have you experienced?” Students are likely to mention the
grocery store, restaurants, the labor market, and so forth. Explain that the colonists in British North
America also participated in different markets. Tell the students that the log cabin represents colonial
households. Explain that the households own the resources businesses need to produce products. They
sell these resources to the businesses in order to get money, called income. The households then use
their income to buy goods and services from the businesses. Tell them that these interactions between
buyers and sellers create a market.
10. Tell students the picture of the village blacksmith represents the businesses. Explain that the businesses
must buy resources from the households to make their goods and services. They then sell their products
back to the households at a higher price than they paid for the resources. Explain that the money left
over after paying for their costs is called profit.
11. Tell students that the gold pieces represent the money used by households and businesses to exchange
resources, goods, and services in the market. Remind students that the colonists in British North
America used many forms of money, not just gold coins. Explain that a market is not always a physical
location like the market shown in the picture. It exists whenever a buyer and a seller come together to
exchange resources, goods, and/or services.
12. Display slide 5.
13. Tell students they will participate in an activity to help them learn about markets. Tell them that this
market will have a few rules, but most choices will be made by the buyers and the sellers. Tell them the
simulation will help them understand the difference between what is known as a “free” market, which
they will simulate in Round 1, and the type of system called mercantilism that developed in the
American colonies under British rule, which will be Round 2.
14. Select two students to be helpers in the simulation. One of the students will handle transactions at the
factory. Designate a desk in an accessible part of the room as the factory and give the manufacturedgoods cards you prepared to the student who will be operating the factory. The other student will work
in law enforcement. Tell this student it is his or her job to go around the room and make sure everyone is
following the rules. Designate a place in the room to serve as a jail for people who violate the rules. Tell
the student responsible for law enforcement to take rule breakers to jail.
15. Divide the rest of the class in half. Explain that half of the students will play the role of colonial
households while others will play businesses.
16. Give students a copy of handout #1 and ask them to read their assigned roles. The rules of the simulation
are explained on handout #1.

17. While students are reading, pass out the packets you prepared before class. Give the resource packets to
the households and the gold packets to the businesses. Tell the students that they do not have to
exchange a specific item listed on their cards. Explain that these are examples of resources and goods
that may have been exchanged in the British colonies. Tell them to attach their household and business
badges to their clothes.
18. Remind students that they are all both buyers and sellers in these markets. Remind them that people
usually try to buy at low prices and sell at high prices. Colonial households that have the most
manufactured goods at the end have done the best. Businesses with the most gold at the end have done
the best. (Consider offering a small prize to the best household and best business to encourage
competition.) It is a good idea to demonstrate one cycle of the game. A business buys resources from the
household, trades them in for a manufactured good at the factory, and then sells the manufactured good
to another household at a profit. Ask if there are any questions. Begin the activity.
19. When the majority of the students have completed the trading they wish to do, give the remaining
students a one-minute warning and then end the game. Ask the households to count up their goods cards
and the businesses to count up their gold pieces. Find out which household and which business did the
best and award the prizes.
20. Display slide 6.
21. Debrief Round 1 of the simulation. Ask the households and businesses to explain their strategies. Solicit
responses from students who did well and from those who were not successful. Ask students, “Why do
you think the market worked for most people even though there were few rules?” Students are likely to
say that there were a lot of buyers and sellers competing with one another so they could go to someone
else if they didn’t like an initial deal they were offered. Ask them, “Why didn’t the market work for
everyone?” They will likely say that some people had less valuable resources or they priced their
resources or goods too high for the market and couldn’t sell them.
22. Check with law enforcement and see how difficult his/her job was. Most of the time, the law enforcer
will have had very little to do and the jail is relatively empty. Ask why this is so.
23. Allow the students to retain their business and colonial household badges, but ask them to return all their
other cards. Tell them they will play the same role in Round 2 so they can compare the two experiences
and make inferences about how mercantilist policies affected colonial households and different types of
businesses.
24. Tell the students they will now explore the rules of an economic system called mercantilism. Ask the
students to divide themselves into groups of five or six students for a short group activity.
25. Display slide 7.
26. At the front of the room, place one napkin or paper towel on the table for each student group. Take out
large, round, soft cookies and place one cookie on each napkin along with a plastic knife. Tell the
students that each group will receive a cookie and will need to divide it among the people in the group.
Tell them they can divide it any way they want, but they will need one group member to explain to the
class the method used to divide it and why it was divided in that way. Ask one person from each group
to come get a cookie. Give the students some time to divide the cookie and then ask each group to
describe their process.

27. Ask the groups to discuss whether they think dividing the world and its resources among people is like
dividing the cookie. Ask them to list what about the world is similar to and different from dividing a
cookie among their group members. Put a copy of the chart on the board and have students come to the
board and record some of their ideas. Be sure to talk about different geographic areas being good for
different things. Also, be sure to discuss how new technologies and changes in the prices of
commodities can change wealth. (Consider talking about how hydraulic fracturing technology has
allowed people to access a natural resource that could not be extracted economically in the past.)
28. Tell the students that during the time when the Americas were colonized, the European imperialist
countries viewed the world like the cookie. There was a finite amount of everything and one country
getting more meant that another country got less. Explain that this was part of the belief underlying
mercantilism.
29. Display slide 8.
30. Give students handout #2, the Library of Congress map analysis tool and template. Ask students to use
the guidelines to analyze the map. Ask students to share their analysis.
31. Be sure students compare the size of colonial territories held by each country and the proximity of the
other European colonies to the colonies of British North America. Ask the students how they think the
British may have felt about the other colonial powers. Students may say that the British felt like they had
to compete with the other countries.
32. Display slide 9.
33. Ask students to make some observations about the cartoon. Some possible observations may include the
mother country is being served and the colonies are the servants, the mother country is fat and the
colonies are thin, the mother country looks like she is saying, “For me?” with pleasant surprise on her
face while the servants look pleased to present their items to the mother country, and the mother country
wants resources and money, not manufactured goods.
34. Tell students they will soon participate in Round 2 of the simulation, which is designed to show the
basics of how mercantilist policies worked in the British North American colonies. Tell them that the
policies implemented to support mercantilism affected how markets operated in the colonies. Some of
these changes eventually motivated some colonists to consider separating from England. Discuss each of
the policies displayed on the slide.
35. Display slide 10.
36. Discuss each of the acts and how they limited trade for the colonies.
37. Display slide 11.
38. Remind the students that they are still playing the role of either colonial households or a business. Give
students a copy of handout #3 (for households) or handout #4 (for businesses) and ask them to read their
assigned roles. While students are reading, pass out the packets for Round 2 you prepared before class.
Give the resource packets to the appropriate households, paying attention to the instructions given under
“Preparation.” Give the gold packets and the remaining capital resources to the businesses according to
the instructions given under the “Preparation” section. Talk with the law enforcer and the factory
operator. Make sure they know what to do.

39. Restate who is able to trade with whom given the new instructions. Remind students that they are all
both buyers and sellers in the market. Remind them that people usually try to buy at low prices and sell
at high prices. Colonial households that have the most finished goods at the end have done the best.
Businesses with the most gold at the end have done the best. (Consider offering a small prize to the best
household and best business to encourage competition.) You may want to consider a demonstration of
the businesses paying their tax at the factory.
40. Begin the simulation. Circulate in the room and help the law enforcer make sure that students are only
trading with whom they are allowed to trade and that all colonial and European businesses are paying
their taxes.
41. When the majority of the students have completed the trading they wish to do, give the remaining
students a one-minute warning and then end the game. Ask the households to count up their goods cards
and the businesses to count up their gold pieces. Find out which household and which business did the
best and award the prizes.
42. Display slide 12.
43. Debrief Round 2 of the simulation. Ask the households and businesses to explain their strategies. Solicit
responses from students who did well and from those who were not as successful. Ask students, “How
was this round different from Round 1?” Students are likely to say that the restrictions made it harder to
find a trading partner. The southern colonies and the European businesses are likely to be the most upset
about the rules. The British businesses are likely to be the most happy and have the most money. Ask
them, “Who was most successful and why?” They will likely say that taxation hurt all the businesses
except British ones. They will mentioned the difficulty the other European businesses had getting their
resources from the colonies and selling their manufactured goods back to the colonies. Southern
colonies are likely to complain about the lack of capital they had, which caused them to go into debt,
and the stricter enforcement of the rules on them.
44. Display slide 13.
45. Tell students they will participate in an activity to help them understand the system of mercantilism
better. Distribute handouts #5 and #6. Ask students to read the assignment. While they are reading,
direct where each group should meet by putting a sign in that area.
46. Help students get into their groups and provide a computer to access the article they must read. If
computers are not available you can provide print copies by accessing the URL in the assessment
description and making copies for the students. Give each group some flip-chart paper and markers for
their graphic organizer.
47. Circulate around the room helping students complete their assigned tasks.
48. Ask students to place their graphic organizers on the wall around the room. Ask each group to stand
beside their work. Rotating counterclockwise, give students two to five minutes (based on the ability
level of your students) at each poster to read and respond to the chart, then rotate them.
49. Optional activity: Ask students to complete a writing assignment at home discussing the benefits and
costs of the mercantilism system.

50. Slides 14 and 15 show the national standards for economics and history as well as the Common Core.
Use these slides if you discuss standards with your students.

Handout #1: Roles for Colonial Households and Roles for Businesses Round 1
Colonial Households
Congratulations! You survived your passage to America and have started a new life for yourself here in
the British colonies. Now all you have to do is find a way to get goods like food, shelter, and clothing. The
American colonial slang words for these items were viands (food), cotes (cottages), and weeds (clothing). All
these goods are produced with three types of resources: land, labor, and capital. Land resources are gifts of
nature like wood, plants, animals, and water. Labor is provided by human beings who can use their time and
skills to make goods such as a baker making bread. Capital includes any tools or machines used to produce a
good such as when a farmer uses a plow to turn the soil in a field. If you have these resources, you can sell them
to businesses for gold and buy the goods you need with the gold. Be sure to get a good price for your resources
so you will have enough money to pay the businesses for their goods. The households that are able to purchase
the most goods are the most successful.

Businesses
You feel great! Whether you are a businessperson from Europe or one who started your business right
here in the American colonies, you are providing goods the colonists want. They are willing to give you gold to
get their hands on your products. Without you, the colonists would have to make everything themselves or live
without the item. It is your role to buy resources to make your goods. You should be careful how much you pay
for resources. You must have a combination of one land, one labor, and one capital resource to produce a
finished good. When you have one of each of these resources, bring them to the Finished Goods Factory and
receive a Finished Good card to sell back to the colonial households. After you have created a finished good,
you will have to sell it back to the colonists at a profit. Profit is equal to how much you made selling your goods
minus the cost of the resources you had to buy to make the goods. Since businesses start with 100 gold pieces,
they must have more than 100 gold pieces at the end to have made a profit. The businesses that finish the
simulation with the most gold pieces are the most successful.

Simulation Game Piece #1: Gold Pieces for Businesses
10 Gold Pieces

10 Gold Pieces

Simulation Game Piece #2: Badges for Businesses

Business France

Business Spain

Business Portugal

Business Netherlands

Business Britain

Business American Colonies

Simulation Game Piece #3: Badges for Colonial Households
Colonial Household
New England

Colonial Household
New England

Colonial Household
Mid-Atlantic

Colonial Household
Southern

Colonial Household –
Southern

Colonial Household
Southern

Colonial Household –
Southern

Simulation Game Piece #4: Land Resources for Colonial Households
Cereal Crops, Fish, Iron, Wood,
Indigo, Tobacco, Potash, Pine Sap,
Rice, Whale Oil, Furs, Cotton

Cereal Crops, Fish, Iron, Wood,
Indigo, Tobacco, Potash, Pine Sap,
Rice, Whale Oil, Furs, Cotton

Simulation Game Piece #5: Labor Resources for Colonial Households
Farmers, Whalers, Skilled
Craftsperson, Millworkers, Bakers,
Domestic Servants, Blacksmiths,
Fishermen, Miners, Sailors

Farmers, Whalers, Skilled
Craftsperson, Millworkers, Bakers,
Domestic Servants, Blacksmiths,
Fishermen, Miners, Sailors

Simulation Game Piece #6: Capital Resources

CAPITAL