1. EPF 3 - The student will demonstrate knowledge of the price system

2. EPF 3 - The student will demonstrate knowledge of the price system
Google Classroom Pre-Test

3. Define Supply & Demand Demand: Supply
The ability & desire of customers to own products
Supply
Products/Services available for sale

4. Be able to graph the open market using the concepts of Supply & Demand
OBJECTIVE
Be able to graph the open market using the concepts of Supply & Demand

5. ACTIVITY “The Tootsie Pop Game”
1.) Offer tootsie rolls for sale starting at a high price & working down, graph results. Then give the tootsie rolls to a student to keep, but ask at what price they may be willing to make some available for sale; graph the results.

6. Tootsie Roll “Demand Schedule”

7. Tootsie Roll “Demand Schedule”

8. Tootsie Roll “Demand Schedule”

9. Tootsie Roll “Supply Schedule”

10. Tootsie Roll “Supply Schedule”

11. Tootsie Roll “Supply Schedule”

12. Supply & Demand “Plot the Points”

13. Supply & Demand “Plot the Points”
Bring Up Active Vision on Computer One

14. Supply & Demand Graphing

15. Supply & Demand Graphing Demand

16. Supply & Demand Graphing Supply

17. Supply & Demand (Finding the Equilibrium Point)

18. Supply & Demand (Finding the Equilibrium Point)
At this point I will Max. my profit & have no waste:
Approx. 8 $ .09 each = $ .72

19. Supply & Demand A Change in Demand

20. Supply & Demand A Change in Demand

21. Supply & Demand A Change in Supply

22. The Laws of “Supply & Demand”
SEE HANDOUT

23. The Laws of “Supply & Demand” in the Movies

24. Describe the Laws of Supply & Demand
Lemonade Stand

25. What Determines the Amount of Supply
Tastes and fashion
Population
# of sellers in the market
Price Expected

26. What Determines the Amount of Demand
Price of good or service
Price of related goods
Consumer’s income
Business taxes & subsidies

27. What Determines the Amount of Supply & Demand
Tastes and fashion
Population
# of sellers in the market
Price Expected
Price of related goods
Consumer’s income
Price of good or service
Business taxes & subsidies

28. OBJECTIVE
Be able to describe what the terms “Buyer’s” and “Seller’s” market mean
&

29. Supply & Demand Graphing a Buyer’s Market
. . . When the price is above equilibrium price

30. Supply & Demand Graphing a Buyer’s Market
. . . When the price is above equilibrium price

31. Supply & Demand Graphing a Seller’s Market
. . . When the price is below the equilibrium price

32. OBJECTIVE
Be able to define elastic & inelastic demand and identify the factors that encourage elasticity

33. Supply & Demand Elasticity
Elastic Demand D1
Elasticity is a measure of a variable's sensitivity to a change in price

34. Supply & Demand Elasticity
So, as the price changes, the amount of demand changes substantially S1
Elastic Demand D1

35. Supply & Demand Inelasticity
Inelastic Demand
Inelasticity is a measure of a variable's LACK OF sensitivity to a change in price

36. Supply & Demand Inelasticity
So, as the price changes, the amount of demand changes very little S1 D1
Inelastic Demand

37. What Causes Elasticity?
The existence of substitutes
A product being a luxury
The product represents a large portion of a consumer’s income
The amount of competition

38. Be able to define derived demand
OBJECTIVE
Be able to define derived demand

39. Be able to define derived demand
OBJECTIVE
Be able to define derived demand
Noun ECONOMICS
A demand for a commodity, service, etc., that is a consequence of the demand for something else.

40. Be able to define derived demand
OBJECTIVE
EXAMPLES:
Designer clothing creates a derived demand for fabrics and textiles
If the demand for leather belts rises, the cattle handlers who sell the cowhides to the leather suppliers can plan for an increased demand
 The demand for fast food has generated demand for healthy food alternatives
Be able to define derived demand
Noun ECONOMICS
A demand for a commodity, service, etc., that is a consequence of the demand for something else.

41. The Laws of Supply & Demand
Seed Questions
Identify three products that are elastic and three products that are inelastic
PLUS . . .

42. The Laws of Supply & Demand
Seed Questions
What two products are you aware of that generate derived demand?
Which two entrepreneurs (businesses) have taken advantage of the examples of derived demand?

43. OBJECTIVE
Be able to describe how demand for a product can generate higher wages for the workers in that field
No matter what the type of demand is in play, any increased in demand can lead to higher wages for those employed in the industry and vice versa.

44. OBJECTIVE
Be able to describe how demand for a product can generate higher wages for the workers in that field
For example, real estate salespeople do much better financially during periods of economic rallies

45. OBJECTIVE
Be able to describe how demand for a product can generate higher wages for the workers in that field
For example, real estate salespeople do much better financially during periods of economic rallies
OTHER EXAMPLES???

46. “That Price is Out of Whack!”
Sometimes the market for a product or service goes “out of whack.” This results in either surpluses or shortages.
If there’s a surplus, then precious resources were wasted in the creation of the product.
If there’s a shortage, then people in need will go without

47. “That Price is Out of Whack!”
Sometimes the market for a product or service goes “out of whack.” This results in either surpluses or shortages.
If there’s a surplus, then precious resources were wasted in the creation of the product.
If there’s a shortage, then people in need will go without
What are some “Out of Whack” prices?

48. “Out of Whack” Price Fixes
Price Freezes
Price Ceilings
Price Floors

49. “Out of Whack” Price Fixes
Price Freezes
When Prices are fixed at a particular level and no increases are allowed
Price Ceilings
Price Floors

50. “Out of Whack” Price Fixes
Price Freezes
Price Ceilings
Price Floors
A control or limit on how low a price can be charged for a product

51. “Out of Whack” Price Fixes
Price Freezes
Price Ceilings
A control or limit on how high a price is charged for a product
Price Floors

52. “Out of Whack” Price Fixes
Price Freezes
When Prices are fixed at a particular level and no increases are allowed
Price Ceilings
A control or limit on how high a price is charged for a product
Price Floors
A control or limit on how low a price can be charged for a product

53. “Out of Whack” Price Fix Examples
Price Freezes
1970’s Nixon Price Freeze
Hurricane Price Freezes
Price Ceilings
New York City Rent Controls
Florida Insurance Rates
Venezuelan Limits on the Cost of Food
Price Floors
Minimum Wage Laws
U. S. Grain Subsidies

54. “Out of Whack” Price Fix Graphs
Price Floors
Price Floors
A control or limit on how low a price can be charged for a product

55. “Out of Whack” Price Fix Graphs
Price Floors
What does a price floor do to the interaction between the Laws of Supply & Demand?
NOTE THAT THE PRICE FLOOR IS HIGHER THAN EQUILIBRIUM

56. “Out of Whack” Price Fix Graphs
Price Floors
Because demand is less than supply, there will be a surplus of product on the market
NOTE THAT THE PRICE FLOOR IS HIGHER THAN EQUILIBRIUM

57. “Out of Whack” Price Fix Graphs
LIKEWISE

58. “Out of Whack” Price Fix Graphs
Price Ceilings
Price Ceilings
A control or limit on how high a price is charged for a product

59. “Out of Whack” Price Fix Graphs
Price Ceilings
What does a price ceiling do to the interaction between the Laws of Supply & Demand?
NOTE THAT THE PRICE CEILING IS LOWER THAN EQUILIBRIUM

60. “Out of Whack” Price Fix Graphs
Price Ceilings
Because demand is higher than supply, there will be a shortage of product on the market
NOTE THAT THE PRICE CEILING IS LOWER THAN EQUILIBRIUM

61. “Out of Whack” Price Fix Impacts
Price Ceilings & Floors
Seed Question
With a partner, do some research on the economic impacts of price ceilings & floors on an economic system. Use real life examples

62. “Supply & Demand” (Not)