Transcript Supply and Demand

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I can DEFINE supply and demand and
understand how, together, they determine
MARKET PRICES
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2 functions in a
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(Demand)
(Supply)
Demand – Define
Supply – Define
Market Economy – Voluntary Exchange
◦ Seller’s problem of
◦ Buyer’s problem of
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Demand/Supply SHOWS Cause/Effect with
relation to
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I can DEFINE supply and demand and
understand how, together, they determine
MARKET PRICES
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I can describe the LAW OF DEMAND and what
FACTORS affect Demand
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PRICE GOES
DEMAND GOES
PRICE GOES
DEMAND GOES
Demand –
Inverse Relationship
Other Factors that affect Quantity Demanded:
◦ Real Income Effect
◦ Substitute Effect
◦ Law of Diminishing Marginal Utility
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Cannot buy
◦ Known as real income effect on demand
 Forces Trade-offs
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Real Income =
Works in Opposite also
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2 items nearly the same – Price of one goes
up people will buy other
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Define – Utility
People decide to buy goods based on Utility
Law of Diminishing Marginal Utility
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I can describe the LAW OF DEMAND and what
FACTORS affect Demand
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I can CREATE and INTERPRET a Demand Curve
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Demand Schedule –
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Demand Curve –
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I can CREATE and INTERPRET a Demand Curve
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I can identify Factors that cause a Change in
Demand
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Changes in
Changes in
Changes in
Substitutes
Complementary Goods
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I can identify Factors that cause a Change in
Demand
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I can explain elasticity of demand and the
difference between elastic demand and
inelastic demand products
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Elasticity – Define
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Elastic Demand –
 Examples of Products
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Inelastic Demand –
 Examples of Products
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Substitutes
How much you budget for the good
◦ Smaller percentage budgeted =
◦ Larger percentage budgeted =
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Amount of
to prepare for change
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I can explain elasticity of demand and the
difference between elastic demand and
inelastic demand products
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I understand the Law of Supply
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I can Graph and Interpret a Supply Curve
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Law of Supply – DIRECT RELATIONSHIP
Profit Incentive at Work
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Cancer Video
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Supply Schedule – Table showing quantities
supplied at different possible prices.
Supply Curve – Upward sloping line that
shows the quantities supplied at each price.
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I understand the Law of Supply
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I can Graph and Interpret a Supply Curve
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I can identify factors that cause the Supply
Curve to shift right (increasing) or shift left
(decreasing)
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Price
◦ Raw materials, LABOR, Energy,
Rent/Lease/Mortgage
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Technology
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I can identify factors that cause the Supply
Curve to shift right (increasing) or shift left
(decreasing)
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I understand the interaction of Supply and
Demand in a market economy.
◦ To Consumers AND Producers
◦ Can lead to Rationing or Black Market
◦ Minimum Wage!!
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I understand the interaction of Supply and
Demand in a market economy.