1. Supply & Demand BBI1O1

2. Resources In most cases, it takes a combination of resources to create the goods and services that businesses provide What happens if there isn’t enough of a resource? (i.e. Oil) - The price of the good/service increases - Alternatives must be found for the resource

3. Demand the quantity of goods or services that consumers are willing and able to buy at a particular price.

4. The Law of Demand Demand↑ as Price↓ Usually consumers will buy more if price goes down Which goods might this not apply to?

5. What Creates Demand? 1. Consumer awareness and interest in the good or service 2. Price is reasonable and competitive 3. The good/service must be accessible.

6. What Affects Demand? Change in… 1. Consumers’ income - increase usually means more purchased ex. extra TV, holiday 2. Consumers’ tastes (why don’t people buy neon pink headbands anymore?) 3. What we expect in the future (e.g. if we think the price will decrease, we’ll wait to buy) 4. Population (why are more retirement homes being built?)

7. Discussion Questions Think of the things that you and your friends buy or would like to buy. What products are in high demand among your age group? Why are they in demand? Think of examples from the Fast food industry Entertainment industry Travel industry Automotive industry Recreation/sports industry Explain how a change in prices of related (complementary) goods affects demand?

8. Supply Definition: the quantity of a good or service that businesses are willing and able to provide within a range of prices that people are willing to pay Law of Supply : ↑S as ↑P Usually as prices increase, producers will increase the quantity of goods they provide Quantity Supplied PRICEPRICE

9. Conditions that Affect Supply A change in the number of producers (more producers increases the supply of goods and usually decreases the price)

10. Conditions that Affect Supply Price of related goods (if gas prices increase, people may buy more energy efficient cars) Change in technology (as cost of computers lowered, greater supply of laptops, tablets) Change in expectations ( producers plan ahead to forecast sales ) Change in cost of production (if a baker finds a lower-cost source of flour, he/she can produce more products for the same cost of production)

11. Economic Resources (factors of production) Definition: Resources needed to provide goods/services to consumers Natural Resources raw materials that come from the earth, water and air. (e.g. soil, iron ore, gold, oil, trees, wildlife, agricultural products, fish, oxygen) Human Resources the people who work to create the goods and services (e.g. farmers, factory workers, construction workers, website designers, teachers, nurses, pilots) Capital Resources resources that last for a long period of time and require investment on the part of the business (e.g. buildings, equipment, tools, trucks and factories)

12. Economic Resources In most cases, it takes a combination of all 3 economic resources to create the goods and services that businesses provide What happens if there isn’t enough of an economic resource? (i.e. Oil) The price of the good/service increases Alternatives must be found for the resource