Warm Up – November 26 Answer the following questions on a post-it: 1. What are the four factors of production? Describe each. 2. What is specialization? 3. What are the benefits of specialization? What are the problems with specialization? 4. What is the definition of supply? What is the law of supply? 5. What are the factors that effect a businesses willingness to supply a product 6. How does a surplus and shortage effect the price of a product? QUIZ – tomorrow – on Unit 7 – Intro to Economics, Free Market and Command Economies, Supply and Demand

UNIT 7: The economy Supply and Demand

DEMAND DEMAND - willingness of consumers to buy goods and services (Demand always deals with consumers) LAW OF DEMAND- consumers are more willing to buy more goods at lower prices than they are at higher prices. THINK about it, to say you demand something means you want it and as a consumer you want to get more for your money. Ex. Which would you be more willing to buy: 1 candy bar for $1.00 or 2 candy bars for $1.15 Income - The amount of money you have available to spend.

WHAT DETERMINES YOUR DEMAND FOR A PRODUCT? 1. Taste/Trends- What you like. Advertising has a lot to do with this. 2. Expectations for the future- What you think might happen in the future that could effect how much you have to spend 3. COMPLIMENTARY GOOD - a good you use along with another good. For example, car and gas, DVD player and a DVD 4. SUBSTITUTE GOODS- a good you use in place of another good. For example, butter for margarine, Coke for Pepsi, white bread for wheat bread.

TOD – November 26 Answer the following questions on the same post it as the warm up: What is the definition of Demand? What is the law of demand? What four factors determine demand for a product? Explain each.