AGED 570: Teaching H.S. Agricultural Economics Day 8: Teaching Farm and Agribusiness Concepts Part 3

Todays agenda Terms Share Pair Muddiest Concept Activity 1: Market Equilibrium Exercise Activity 2: Price and Quantity Prediction Terms for Tomorrow

Terms Share Pair Equilibrium Price Equilibrium Quantity Market Shortage Market Surplus Supply and Demand Analysis

Muddiest Point and Terms Discussion

Activity 1: Market Equilibrium Exercise Objective: To see how price has an effect on shortages and surpluses in terms of market supply and market demand and obtain an understanding of a market equilibrium Each individual is given a card that represents a personal supply curve or a personal demand curve Individuals with the supply curve will go to one side of the room, while individuals with the demand curve will go to the other side of the room

Activity 1: Market Equilibrium Exercise For each group, discuss what is the underlying feature for your group that makes your card either a demand curve or a supply curve If you are in the wrong group, please change to the other group I will call out a price If you are a supplier (producer), you want to find demanders (consumers) who are willing to take your goods for the given price (Note: you may need to find multiple individuals) Get the individual’s or individuals’ name(s) and how much they are willing to take

Activity 1: Market Equilibrium Exercise If you are a demander (consumer), you want to find a supplier (producer) who is willing to sell you the amount you want to consume (Note: you may need to find multiple individuals) Get the individual’s or individuals’ name(s) and how much they are willing to give If your goal as a supplier was to get rid all the goods you had available at the given price or your goal as a demander is to get as many goods as possible up to the amount written on your card, were any of you unhappy with the price? If so why? This process will be repeated multiple times

Activity 1: Market Equilibrium Exercise Thought questions What was the price that everyone was satisfied with? When prices were above this satisfying price, who was unhappy with the situation? Why? When prices were below this satisfying price, who was unhappy with the situation? Why? How can you relate this to the labor market and the idea of minimum wage?

Activity 2: Price and Quantity prediction Objective: To understand how the shifting of supply and demand affect the equilibrium price and quantity Two of you will be chosen randomly to come to the board You each will be required to write on the board a supply curve that you will denote as S1 and a demand curve that will be denoted D1 Show the equilibrium price and quantity which you will denote as P1* and Q1*

Activity 2: Price and Quantity prediction The teacher will give each of you the same scenario, which you will be given two minutes to think about When the teacher says go, you will write up a new supply and/or demand curve on your graph Whether you do a supply, a demand, or both will depend on the scenario If you do a new demand curve you will label it D2 and if you draw a new supply curve you will label it S2

Activity 2: Price and Quantity prediction Once you have put the new supply and/or demand curve up, write on the board what you believe will definitively happen to equilibrium price and quantity If the two of you disagree, you will each need to explain why your diagram is correct If you both agree, you will play a round of rock-paper- scissor, where the winner gets to decide who gives the explanation Will repeat this multiple times

Activity 2: Price and Quantity prediction Thought Questions Can we always definitively say what is going to happen to equilibrium price and quantity when they are changes in supply and demand? What conditions do you expect would allow for a definitive result? How can we use this supply and demand analysis to make predictions?

What kind of examples could you use in your classroom to help students with these concepts?

Terms to know for Next Class Marketing Time Utility Corporation 4 P’s of Marketing, Production Place utility Limited Liability Company Form Utility Assembly Possession Utility Processing Marketing Margin Wholesaling Commodity Markets Retailing Contracting Consumption Sole Proprietor Supply Chain Partnership