1. Chapter 6 Prices
More real world situations

2. Prices Bring Markets to Balance
Market Price: _____________________________________
__________________________________________________ willing producer for the sale of a good or service.
Market Price is found by:
_________________________________________________
___________________________________________________
Consumers send signals to producers:
__________________________________________________________________________________________________

3. What Happens When the Price isn’t “Right”?
Disequilibrium: __________________________________________________
________________________________________________________________
Leads to excess demand
or to excess supply
Excess Supply – Supply exceeds demand, ___________________
_____________________________
Excess Demand – Demand exceeds supply, _______________________
_______________________________
$15.00
Ex) $ 10.00
Equilibrium
$5.00

4. Excess Demand ---> Shortages
To get back to equilibrium, ___________
________________________

5. Excess Supply ---> Surplus
Excess surplus
To get back to equilibrium, ___________
________________________
insert think pair share slide before this

6. How Price is Affected by Demand Shift
New market

7. How Price is Affected by Supply Shift

8. What do the Shifts Tell Us?
What do you think the shifts tell us (Hint: There’s 3 things)
jot down your thoughts

9. What do the Shifts Tell Us?
Changes in prices….
Tells __________________________________
Shows ________________________________ for a product
Prices give incentives---> encourages producers to produce more to make a profit
Allows markets to adjust to changing conditions
Able to respond to global issues
able to use resources efficiently

10. Think-Pair-Share
When the government decides that prices are __________ or ______________,
it gets involved in _____________.
What do you think those ways are?
Try and think of real world examples if you can.

11. What Happens when the Government is Involved?
Government affects prices in 2 ways:
Price Ceilings: ___________________________
Price Floor: _____________________________
It can be difficult to stop _______________ ________________ due to _______________ _______________ from those ____________ _________________
Price Ceilings and Floors- Economics 2.6
Max. Price
Min. Price

12. What Happens when the Government (federal, state, or local) is Involved?
What are some examples of Price Ceilings?
________________________________________________________
What are some examples of Price floors?
Max. Price
Min. Price

13. How to you Determine a shortage or surplus?
Shortage=Quantity Demanded - Quantity Supplied
QD - QS
Surplus=quantity supplied – quantity demanded
Qs - QD

14. Black Markets
Black markets: an _______________ where goods are traded at __________ _____________________ than those set by law.
They are usually ____________________________________________________ that can create shortages or surpluses