Economy is dynamic and changing. One of the biggest problems with the introductory economics courses is that they are too static. System Dynamics can help us in teaching dynamic aspects of economy. “Supply Demand World” (SDW) is an Interactive Learning Environment (ILE) to teach introductory microeconomics based on the system thinking and system dynamics concepts. The paper presents the underlying system dynamics models used in the software as the base of the games and other teaching materials. It also introduces the teaching structure used in the software based on the learning theories discussed in the paper. Furthermore, the paper presents many unique features of the software and discusses how these features supports learners in developing a better understanding of the subject. An experiment conducted in a high school, to measure the teaching effectiveness of the software, shows that students worked with the software achieved much better results compared to the students did not work with the software in a similar test. The test was designed to measure students’ understanding of the basic system thinking, system dynamics and economics concepts.