The paper examines current thoughts on leadership (specifically the works of James MacGregor Burns) and presents a simulation exercise developed as a practical application of Burns' model which can be used in secondary social studies classes for gifted students. Concepts of leadership and its development are addressed, as is the relationship of leadership development to moral development. The simulation activity is designed to develop transactional leadership (in which goals are independently held by leader and follower). The dilemma encourages the students to decide as a group on a course of action and evaluate the consequences. (CL)