ECONOMICS DEFINITIONS TERMS YOU MUST KNOW! "Most simply put, economics is the study of making choices." "The study of the production, distribution and consumption of wealth in human society." The Economist's Dictionary of Economics

DEFINITIONS TERMS YOU MUST KNOW! Resources Scarcity Goods Services RESOURCES Available stocks or supplies on which we can draw to satisfy our needs and wants SCARCITY Shortage; in economics, something is SCARCE when someone will buy it for a price GOODS Commodities or products such as lumber, sugar, or computer chips; in economics, a good is any item scarce enough to command a price SERVICES Work done for other people; for example, barbers, musicians and architects provide services for other people. In economics, a service is any service scarce enough to demand a price.

DEFINITIONS TERMS YOU MUST KNOW! Opportunity cost Impulse buying OPPORTUNITY COST Something given up to obtain something else IMPULSE BUYING Making a purchase without weighing the opportunity cost Maybe CASH Maybe TIME Maybe RESOURCES

SPENDING TRENDS For this assignment you are going to focus on spending trends for your age group. 1.) First you are going to identify between needs and wants for your age group. Minimum of 5 for each need and want. 2.) Next you are going to identify the needs and wants for the opposite sex; if you are unsure, ask a peer in your class. Identify trends that you see. 3.) Once you have gathered this information you are going to identify a factor that creates purchasing trends for each of the wants for both sexes. ( 10 factors in total, factors must be different) 4.) For each of the wants for both sexes you are going to explain how advertising affects those particular purchases in 1-2 complete sentences. For this assignment you are going to focus on spending trends for your age group. 1.) First you are going to identify between needs and wants for your age group. Minimum of 5 for each need and want. 2.) Next you are going to identify the needs and wants for the opposite sex; if you are unsure, ask a peer in your class. Identify trends that you see. 3.) Once you have gathered this information you are going to identify a factor that creates purchasing trends for each of the wants for both sexes. ( 10 factors in total, factors must be different) 4.) For each of the wants for both sexes you are going to explain how advertising affects those particular purchases in 1-2 complete sentences. For this assignment you are going to focus on spending trends for your age group. 1.) First you are going to identify between needs and wants for your age group. Minimum of 5 for each need and want. 2.) Next you are going to identify the needs and wants for the opposite sex; if you are unsure, ask a peer in your class. Identify trends that you see. 3.) Once you have gathered this information you are going to identify a factor that creates purchasing trends for each of the wants for both sexes. ( 10 factors in total, factors must be different) 4.) For each of the wants for both sexes you are going to explain how advertising affects those particular purchases in 1-2 complete sentences. For this assignment you are going to focus on spending trends for your age group. 1.) First you are going to identify between needs and wants for your age group. Minimum of 5 for each need and want. 2.) Next you are going to identify the needs and wants for the opposite sex; if you are unsure, ask a peer in your class. Identify trends that you see. 3.) Once you have gathered this information you are going to identify a factor that creates purchasing trends for each of the wants for both sexes. ( 10 factors in total, factors must be different) 4.) For each of the wants for both sexes you are going to explain how advertising affects those particular purchases in 1-2 complete sentences.

The producer’s side of the market The consumer’s side of the market THE LAWS OF SUPPLY AND DEMAND SUPPLYDEMAND as the price of a good or service rises, its quantity demanded falls; as the price of a good or service falls, its quantity demanded increases as the price of a good rises, its quantity supplied will rise;

CATHERINE’S DEMAND SCHEDULE AND DEMAND CURVE Copyright © 2004 South-Western Price of Ice-Cream Cone Quantity of Ice-Cream Cones $ A decrease in price increases quantity of cones demanded. 7 SUPPLY AND DEMAND

MARKET DEMAND IS THE SUM OF INDIVIDUAL DEMANDS

BEN’S SUPPLY SCHEDULE AND SUPPLY CURVE Supply curve Price of Ice-cream cone Quantity of Cones supplied $ cones Quantity of Ice-Cream Cones $ Price of Ice-Cream Cones 1. An increase in price increases quantity of cones supplied. -When consumers start paying more for cupcakes than for donuts, bakeries will increase their output of cupcakes and reduce their output of donuts in order to increase their profits. -When your employer pays time and a half for overtime, the number of hours you are willing to supply for work increases. The law of supply summarizes the effect price changes have on producer behavior. For example, a business will make more video game systems if the price of those systems increases. The opposite is true if the price of video game systems decreases. The company might supply 1,000,000 systems if the price is $200 each, but if the price increases to $300, they might supply 1,500,000 systems.

At $2.00, the quantity demanded is equal to the quantity supplied! SUPPLY AND DEMAND TOGETHER Demand ScheduleSupply Schedule

Supply Quantity of Ice-Cream Cones $ Price of Ice-Cream Cones Equilibrium Demand Equilibrium price Equilibrium quantity EQUILIBRIUM OF SUPPLY AND DEMAND

THE HIDDEN MARKET The SUBSTITUTION effect: For every good or service, there is a substitute available: A hot dog for $1 instead of a slice of pizza for $3 Smaller pieces of pizza for less money Cheaper pizza with fewer toppings If you are selling a slice of pizza for $3, there are many consumers out there who may only have $1, or $2 in their pocket. These consumers are, for you, a HIDDEN MARKET. How do you reach them?

SUPPLY AND DEMAND ASSIGNMENT QUESTION 1 Create a supply and demand chart for a product of your choice. Use what you are familiar with and know to be REASONABLE prices!! Identify the following: a)supply line b)demand line c)market equilibrium d)excess goods e)scarcity f)the target market for your good

SUPPLY AND DEMAND ASSIGNMENT QUESTION 2 What would happen to the supply and demand for your good under the following situations? a. an increase in price of $2-$5 b. a decrease of $2-$5 c. the price doubles

Supply Quantity of Ice-Cream Cones $ Price of Ice-Cream Cones Equilibrium Demand Equilibrium price Equilibrium quantity EQUILIBRIUM OF SUPPLY AND DEMAND

3. Define hidden market. Identify 3 separate items that are designed to reach the hidden market for the product you chose in #1. 4. What is the difference between your target market and your hidden market? 5. What is the difference between a need and a want? Give examples, using product or service examples from your own life experience. SUPPLY AND DEMAND ASSIGNMENT QUESTION 3 - 5