Janae is so excited for her sixth birthday. All she can think about is the cake, the ice cream, and all of her new toys that she will get for her special day. Janae wanted the new Baby Alive doll more than anything.

Janae's Big Day

All day, she thought about the fun things that would happen on her birthday. She started to think, “Hmm, I wonder how mom will get it for me. Maybe it’s just magic. Money and other things just pop up out of nowhere.”

Janae's Thoughts

Janae thought and thought until she couldn’t anymore. “It has to be magic..”, she said. The more Janae thought the more she knew magic was the trick.

Janae's Thoughts

Janae’s mother walked in and said, “There’s my big girl. Are you ready for your big day?” “Mom, I am so excited, and I am glad that I know you get money for my gift because of magic.”, said Janae. “You silly girl. Money doesn’t come from magic. It all happens with a circular cycle.”

Janae Learns

What’s a circle cycle?” “A circular cycle is a process where things continue to happen, almost like a circle because things go round and round non stop.” “So.. you’re saying it’s not magic?” “ No, it all starts with something called a factor market.”

Janae Learns

“Just like you want your doll, other people might have things they want too or maybe even need, like food. “ “Well I want a doll and cake and ice cream, but I need food to live.” “ That’s right, people get what they want or need from producers.

Wants

Needs

Janae Learns

Producers are businesses or firms that make products or give services. This is called the product market.” “ Okay, I think I’m understanding more.” “Good, you see, people like me are able to get money to buy what we want or need from something called labor. That means people work to get money that’s called a salary or a wage.”

Janae Learns

Makes Products

Provides Services