Demand & Supply

DEMAND & THE LAW OF DEMAND

Who Wants One? When I reveal the "mystery" product, consider how much you are willing and able* to pay for the product. REMEMBER: *Able to pay means that you have the money with you right now.

DEMAND SCHEDULE FOR ___________________ 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 NUMBER OF STUDENTS WILLING & ABLE TO BUY $1 0 9 8 7 6 5 4 3 2 1 PRICE Price # of students willing & able to buy $10 9 8 7 6 5 4 3 2 1

DEMAND DISCUSSION QUESTIONS Why might some students be willing to pay $10 for this product? Why might some students choose not to pay even $1 for this product? You have created a demand curve for the product. What happens to the quantity demanded for this product when the price goes down? When the price goes up? Most demand curves look similar to the one you created. Given this, what do you think the "law of demand" might say?

UNIT 2 KEY TERMS Define the following terms: 7. demand 8. demand curve 9. law of demand 10. substitute good 11. complementary good Use your textbook to define each terms.

CHAPTER 5 READING Get out your “Unit 2-Chapter 5.1-5.3—Demand Comprehension Check” handout. Read page 75 to page 82. As your read, complete the handout. KEEP the handout until after the “Demand in the Headlines” partner activity. You will turn in BOTH handouts AFTER the activity.

READING QUICK REVIEW What is demand? The law of demand? What law says that the more we consume of something, the less satisfaction we get by consuming more of it? What is a substitute good? Examples? What is a complimentary good? Examples? What are the 6 factors that can cause a change in demand? Which direction does the demand curve move when demand increases? Decreases?

DEMAND IN THE HEADLINES Get into pairs. In this activity, you will work with your partner to analyze a series of newspaper headlines. Based on information in each headline, you will investigate what happens to the demand curve for a related product.

DEMAND IN THE HEADLINES Carefully read each. Determine whether the information will: --shift the entire demand curve to the left or right. --not shift the demand curve, but change the quantity demanded along the original curve. Write the headline on Student Handout A. Then draw what will likely happen to the demand curve. Finally, explain what happened to the demand curve and why.

DEMAND IN THE HEADLINES Average Wages Decline for Workers Around the Country How will this information likely affect the demand curve for movie tickets? A Quantity Price D1

DEMAND IN THE HEADLINES B 1970s Styles Popular with High School and College Students How will this information likely affect the demand curve for CDs of disco music? Quantity Price D1

DEMAND IN THE HEADLINES Fast Food Chain Raises Prices on All Menu Items How will this information likely affect the demand curve for the chain's burgers? C Quantity Price D1

DEMAND IN THE HEADLINES Analysts Predict Video Game Prices to Increase Next Year How will this information likely affect the current demand curve for video games? D Quantity Price D1

DEMAND IN THE HEADLINES Gas Prices Increase 200% Since Last Year How will this information likely affect the demand curve for new sport utility vehicles? E Quantity Price D1

DEMAND IN THE HEADLINES Price for Fresh Blueberries Skyrockets–Cold Weather to Blame How will this information likely affect the demand curve for fresh strawberries? F Quantity Price D1

DEMAND IN THE HEADLINES Hospitals Report Dramatic Decrease in Births How will this information likely affect the demand curve for baby strollers? G Quantity Price D1

DEMAND IN THE HEADLINES Computer Maker Announces 20% Price Cut How will this information likely affect the demand curve for the company's laptops? H Quantity Price D1

SUPPLY & THE LAW OF SUPPLY

There’s Never enough to go around… What are some example in the real world where there is/has been extreme lack of supply? What impact did this have on the price of the scarce items?

SUPPLY SCHEDULE FOR ___________________ 1 2 3 4 5 6 7 8 9 NUMBER OF ________ AVAILABLE $1 0 9 8 7 6 5 4 3 2 1 PRICE Price # of the item available $10 9 8 7 6 5 4 3 2 1

SUPPLY DISCUSSION QUESTIONS Who might be willing and able to pay $10 for this product? Why might some students not even pay $1 for this? You have created a supply curve for the product. What happens to the supply demanded for this product when the price goes up? When the price goes down? Most supply curves look similar to the one you created. Given this, what do you think the "law of supply" might say?

Unit 2 KEY TERMS Define the following terms: 12. supply 13. supply curve 14. law of supply Use your textbook to define each terms.

CHAPTER 5 READING Get out your “Unit 2-Chapter 5.4-5.5—Supply Comprehension Check” handout. Read pages 82 to page 87. As your read, complete the handout. KEEP the handout until after the “Supply in the Headlines” partner activity. You will turn in BOTH handouts AFTER the activity.

READING QUICK REVIEW What is supply? The law of supply? What 2 things do economists say causes prices and quantity to move in the same direction in the law of supply and demand? What are the 6 “supply shifters?” Which direction does the supply curve move when supply increases? Decreases? What does a change in price (not supply) cause to happen in a supply curve?

SUPPLY SHIFTERS

SUPPLY IN THE HEADLINES Get into pairs. In this activity, you will work with your partner to analyze a series of newspaper headlines. Based on information in each headline, you will investigate what happens to the demand curve for a related product.

SUPPLY IN THE HEADLINES Carefully read each. Determine whether the information will: --shift the entire supply curve to the left or right. --not shift the supply curve, but change the price along the supply curve. Write the headline on Student Handout A. Then draw what will likely happen to the supply curve. Finally, explain what happened to the supply curve and why.

SUPPLY IN THE HEADLINES Record Peach Harvest—Price Lowest in Decades How will this information likely affect the supply curve for frozen peach pies? I Quantity Price S1

SUPPLY IN THE HEADLINES U.S. Car Company to Close Six Factories How will this information likely affect the supply curve for company’s minivans? J Quantity Price S1

SUPPLY IN THE HEADLINES Shoe Manufacturer Increases Prices on All Styles How will this information likely affect the supply curve for the company’s sneakers? K Quantity Price S1

SUPPLY IN THE HEADLINES Gas Prices to Stay Low This Year—Rise Dramatically Next Year How will this information likely affect the current supply curve for gasoline? L Quantity Price S1

SUPPLY IN THE HEADLINES Robots Make Automobile Assembly Faster, Cheaper How will this information likely affect the supply curve for cars? M Quantity Price S1

SUPPLY IN THE HEADLINES Congress Passes New “Sugar Tax” How will this information likely affect the supply curve for the sugar? N Quantity Price S1

SUPPLY IN THE HEADLINES Fire Destroys Thousands of Acres of Forest in Pacific Northwest How will this information likely affect the supply curve for lumber from Oregon? O Quantity Price S1

SUPPLY IN THE HEADLINES President Approves Subsidy for Solar Energy Industry How will this information likely affect the supply curve for solar energy panels? P Quantity Price S1