Supply and Demand in Economics
Explore the concepts of supply and demand in economics, including creating demand schedules, demand curves, and analyzing the impact of fads on the economy. Learn about the law of supply and movements along supply curves.
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Check-list 1/ Draw a representation or picture of your fad 2/ Create a demand schedule for your fad 3/ Create a demand curve for your product based on the demand schedule. Include the points for quantity demanded 4/ Explain whether your fad would qualify as a normal or inferior good/service 5/ Describe which of the 5 shifters applies to your fad (can be more than one). Be sure to be able to explain. (tastes, income, related goods (prices), size of market, and expectations) 6/ List both good/services that compliment your fad, and would act as a substitute 7/ Create the demand curve shifts for 1 complimentary good and 1 substitute good 8/ Decide whether you think that your fad had a positive or negative effect on the economy
Fads are Rad Each group will share what their fad was and its effect on demand We cannot satisfy demand without a supply
Primary Updates! Take an article from the front of the room and read it on your own. Answer the questions on the back. When you are finished, take out the worksheets and note sheet from yesterday http://www.nytimes.com/elections/results http://www.chesco.org/DocumentCenter/View/32946 Democrat http://www.chesco.org/DocumentCenter/View/32940 Republican http://www.chesco.org/DocumentCenter/View/32939 Independent
What is Supply? The amount of a good that a firm is willing to supply when looking at the price. Quantity Supply: The amount of a good that a firm is willing to supply at a certain price Supply: The amount of a good that a firm is willing to supply at any price
The Supply Curve The supply curve slopes upward to the right. The slope tells us that the quantity supplied varies directly in the same direction with the price.
The Law of Supply There is a direct relationship between price and quantity supplied. Quantity supplied rises as price rises, other things constant. Quantity supplied falls as price falls, other things constant.
Practice! Hourly Wages Worksheet First portion of the Hot Wings Worksheet
Movements Along a Supply Curve Changes in price causes changes in quantity supplied represented by a movement along a supply curve. For Quantity Supplied, we assume all else is equal Again, one good that will only be affected by price
Change in Quantity Supplied S0 B Price (per unit) Change in quantity supplied (a movement along the curve) A $15 1,250 1,500 Quantity supplied (per unit of time)
Shifts in Supply Versus Movements Along a Supply Curve If the amount supplied is affected by anything other than a change in price, there will be a shift in supply.
Side by Side Comparing Demand and Supply
Shifters of Supply U Unexpected disasters Resources (Inputs-change in the price/availability of needed goods and services) Government Policies (taxes, regulations, subsidies) Expectations Number of firms Technological changes R G E N T
Shift in Supply S0 S1 Price (per unit) A B $15 Shift in Supply (a shift of the curve) 1,250 1,500 Quantity supplied (per unit of time)
Unexpected Disasters Natural disasters, weather, and events affect the supply in negative ways The curve will shift to the left and there will be a lower quantity supplied for each price Cost of production and resources can increase
Resources The price of the resources used to make a product shifts the supply curve If inputs are less expensive, the curve shifts right If inputs are more expensive, the curve shifts left
Government Policies Regulations- will shift the curve left, restrictions on production Taxes- will shift the curve left- less profit per good Subsidies- will shift the curve right- added benefit to production
Expectations If suppliers expect prices to rise in the future, they may store today's supply to reap higher profits later.
Number of Firms The number of firms that produce a good If the number of firms increases, supply will increase and vice versa
Technology Advances in technology reduce the number of inputs needed to produce a given supply of goods. Costs go down, profits go up, leading to increased supply and shift to the right
Practice! 1. Hot Wings Worksheet 2. Supply Review Sheet 3. Supply Change Worksheet 5.14.2 4. Supply and Demand Packet https://www.youtube.com/watch?v=V0tIOqU7m-c
Headline Change Draw It Explain It New technological breakthrough makes plastic cheaper than ever before S2 Technology S2 Government to give all businesses tax breaks Taxes Gates and Jobs join forces, raise prices for all computers Price No Change
Apple shuts down 100 stores nationwide S2 Number of Suppliers S2 Government raises minimum wage to $10 an hour Resources S2 Fire destroys Dell production plant Number of Suppliers
