3. Small Group Problem Solving Activity Role: Small Focus Group for Target Corporation-NEED ONE PIECE OF NOTEBOOK PAPER Task: Create a Top 10 List of Trick or Treat Candy Items Demanded by consumers last year during Halloween. Goal: To match my list of “Top 10” Trick or Treat Candy demanded (purchased) last year during Halloween. Reward: “People respond to incentives in predictable ways!”: $500 prize per group! JUST KIDDING- From “Freakonomics” we know that people would probably cheat then. Prize: “Trick or Treat” candy for winning team and all the glory and honor bestowed to you for a “Job well done!”  Brainstorm a list of twenty items within your group  If you have a list greater than twenty, you must decide as a group which item (s) to eliminate from your list  Match my List: Total possible score 14 points

4. Top 10 Demand for Trick or Treat Candy 2013 Top Ten Trick or Treat Candy Purchased by consumers at Halloween 2013! 1.Skittles 2.Snickers 3.Starbursts 4.M&Ms 5.Nerds 6.Tootsie rolls 7.Sour Patch Kids 8.Twizzlers 9.Smarties 10.Candy Corn*

7. We will be using Cornell Note Taking Format Today! Smile and “Own the Day! Take one step at a time to Success in Economics class!

8. Unit Two: Learning Objectives: North Clackamas School District Social Studies Priority Standards: HS.51 (A): Explain how supply and demand represents economic activity and describe the factors that cause them to shift.

9. Lesson One: Daily Learning Target I Can define and explain in writing the following key Economic concepts: Law of Demand Substitution Effect Income Effect

12. W hy do roses cost more on V alentine’ s Day? Why do TV ads cost more during the Super Bowl ($4 million for 30 sec. ) than during Nick at Nite reruns? Why do hotel rooms in Sun Valley, Idaho cost more in the winter than in the summer? Why do surgeons earn more than butchers ? Why do pro basketball players earn more than pro hockey players? Why do Christmas lights go on sale December 26 th ? Why can I pay $40 to see Hall and Oates at the Schnitzer in 2014 When in 1984 it would have cost me $100 at Memorial Coliseum? The answer to these and other economics questions boil down to the workings of supply and demand – the subject of this chapter. “Econ, Econ”

13. “JO” $3 $3 $3 ++ 35 39 26 $3 100 [Total] “Bo” “Mo” D D D D = And, what if the price of this product decreases from $3 to $2? $2 40 $2 45 $2 30 $2 115 A point to point movement on the same “D” curve is a “ Change in QD ” D2D2D2D2 115 1

14. . One out of every 8,000 high school basketball players goes on to play in the NBA. Scouts looking for “rare talents” (scarcity) goes on to play in the NBA. Scouts looking for “rare talents” (scarcity)

20. .

22. Demand A relationship between price and quantity demanded in a given time period, ceteris paribus.

23. What is Demand? Willing and able to purchase a product at a particular price Willing and able to purchase a product at a particular price How many of you would like a Porsche [or like vehicle]? How many of you would like a Porsche [or like vehicle]? How many of you are able? How many of you are able? What’s the difference between willing and able? What’s the difference between willing and able? Idea of time and place – at this time, you may be willing to buy a Porsche, but are not able, therefore you do not have a “DEMAND” for a Porsche Idea of time and place – at this time, you may be willing to buy a Porsche, but are not able, therefore you do not have a “DEMAND” for a Porsche

24. Markets In a market economy, the price of a good is determined by the interaction of demand and supply.

25. Why do we purchase more when a sale occurs?

26. It’s obvious, isn’t it? Consumers love low prices!

27. Look at this demand curve. What happens to quantity purchased as prices rise?

28. As price goes down, demand goes up!

29. $54321 specifiedtime period … a specified time period … other things being equal P QDQDQDQD1020355580 $5$4$3$2$1 D 0 10 20 35 55 80 Quantity Demanded QD – how much will be purchased at a specific price [& date].

30. The Demand For Ice Cream Cones Quantity Demanded

31. QD 1 QD 1 6,000 6,000. “You can have it in any color you want as long as it’s black” $850 Production went from 6,000 a year to 600,000. $260 QD 2 600,000

32. The Law of Demand  The law of demand states that consumers buy more of a good when its price decreases.  Conversely, consumers buy less of a good when its price increases.  Consumers love low prices.

33. It really depends on the price, doesn’t it?

34. The Substitution Effect  One reason that the law of demand exists is the substitution effect.  The substitution effect occurs when a consumer reacts to an increase in a good’s price by buying less of that good and more of a similar yet cheaper good.  When the price of orange juice rises, consumers substitute cheaper apple juice for orange juice.

35. PriceOf 7 UP Demandfor Dr Pepper P D D1D1 D2D2

37.  Lower prices allow consumers to increase demand.  Lower prices increase consumers’ purchasing power.  This is known as the “income Effect”

38. The Income Effect The income effect is the change in consumption resulting from a change in income. The income effect is the change in consumption resulting from a change in income. In other words, when prices rise, your money buys less. In other words, when prices rise, your money buys less. Higher prices reduce your purchasing power. Higher prices reduce your purchasing power.

39. D. $1 QD 1 QID 2 QD 3 Price QD

40. Economists love graphs because graphs provide easy understanding of economic concepts.

41. If a picture is worth a thousand words, a graph is worth even more.

42. A demand schedule records the quantity demanded at various prices.

43. A demand schedule can easily be converted to a demand curve.

44. Demand curve Draw a Demand curve now. With a verical “price” line and a horizontal “quantity line” and a “0” at the axis.

45. Now plot out the numbers from this demand Schedule for Sony Blu-Ray Players at Best Buy.

46. Demand curve Draw another Demand curve again. With a verical “price” line and a horizontal “quantity line” and a “0” at the axis.

47. Law of Demand  Remember: As price falls, the quantity demanded increases. As the price rises, the quantity demanded decreases  PQD Price For Bruno Mars Ticket at the Moda Center in Portland Quantity of tickets (in thousands) demanded at the given price $500 $404 $308 $2012 $10 $0 16 20

48. TICKETPRICE $50 40 403020100 048121620 Demand for tickets (thousands) Inverse ( Negative ) Relationship Inverse - 2 variables move in opposite directions TICKET PRICE (P) 0 4 8 12 16 20 0 4 8 12 16 20 Demand for tickets IN THOUSANDS (Q) $50 40 40 30 30 20 20 10 10 a b c d e a b c f e f d In Economics the independent variable can be on either axis.

49. Finish “Freakonomics” Reading:  Finish Reading Article: Drug Dealers who live with their Moms!  Pick up Reading Questions from me.  Answer questions with a partner and turn into me please. Finished…

50. Partner Economic Book Practice:  Skim through Unit two: Lesson One in the economics book (pages 87- 90)  Answer questions 1-11 on a piece of notebook paper and turn directly into me today.