1. The Market Never Stands Still

2. 1. According to the schedule and the graph, what is the equilibrium price and quantity demanded in this example? 2. Priced at $19, what is the surplus / shortage? 3. If there is a shortage of -800, then what was the price of the DVDs? Please write down the three questions below. Use the chart on page 195 to answer. Thanks.

3. SSEMI3 The student will explain how markets, prices, and competition influence economic behavior. a. Identify and illustrate on a graph factors that cause changes in market supply and demand. b. Explain and illustrate on a graph how price floors create surpluses and price ceilings create shortages. c. Define price elasticity of demand and supply.

4. How can changes in supply and demand be illustrated?

5. Determinants of Demand Change in consumer income Change in tastes and preferences Change in the price of a substitute good Change in the price of a complementary good Change in consumers’ price expectations Change in number of consumers in the market

6. Shifts in Demand Demand price Quantity of pecans per day

7. Determinants of Demand (Things that shift the entire line!) R I P E N elated goods (Complements and Substitutes) ncome – references – xpectations – umber of buyers –

8. Determinants of Demand (from Cannon) (Things that shift the entire line!) R I P E N elated goods (Complements and Substitutes) Complements: if price of complement increases, demand for the other good decreases; if price of the complement decreases, demand for the other good increases Substitutes: if price of substitute increases, demand for other good increases; if price of substitute decreases, demand for other good decreases

9. Related goods (Complements and Substitutes)

11. Determinants of Demand (from Cannon) (Things that shift the entire line!) R I P E N ncome – income increases, demand increases; income decreases, demand decreases

12. Income – income increases, demand increases; income decreases, demand decreases

15. Determinants of Demand (from Cannon) (Things that shift the entire line!) R I P E N references – preferences increase, demand increases; preferences decrease, demand decreases

16. Preferences – preferences increase, demand increases; preferences decrease, demand decreases

19. Determinants of Demand (from Cannon) (Things that shift the entire line!) R I P E N xpectations – expect higher prices in future, current demand increases expect lower prices in future, current demand decreases

20. Expectations – expect higher prices in future, current demand increases expect lower prices in future, current demand decreases

22. Determinants of Demand (from Cannon) (Things that shift the entire line!) R I P E N umber of buyers – # of buyers increase, demand increases; # of buyers decrease, demand decreases

23. The demand for a particular good may increase or decrease due to more or less people in the market for the good. For example, before the advent of ecommerce (using the world wide web to buy and sell), most businesses sold products to people who lived in their area of the country or who ordered products from their mail order catalogs. As people began to use online shopping in greater numbers, many businesses with little or no web presence probably experienced a decline in consumers of their products due to increased competition from online businesses while businesses who quickly and effectively adapted to the ecommerce model probably saw an increase in consumers of their products. Number of buyers – # of buyers increase, demand increases; # of buyers decrease, demand decreases

25. IRDL the Turtle!!!! I ncrease R ight, D ecrease L eft

26. Pecan Article http://online.wsj.com/news/articles/SB100014240527487040768045 76180774248237738

27. Pecan statements 1.Lunar New Year, Chinese love Pecans on New year 2.Corn syrup, used with pecans to make pecan pie, has risen in price 3.Price of walnuts increases 4.Household income increases in China 5.Price of pecans drops 6.US trade agreements allow for more pecans to be sold in more countries 7.Pecan prices expected to be higher next year 8.Famous celebrities seen eating pecans at award ceremonies

28. SSEMI3 The student will explain how markets, prices, and competition influence economic behavior. a. Identify and illustrate on a graph factors that cause changes in market supply and demand. b. Explain and illustrate on a graph how price floors create surpluses and price ceilings create shortages. c. Define price elasticity of demand and supply.

29. How can changes in supply and demand be illustrated?

30. Determinants of Supply (from lesson) Change in the cost of productive resources Change in technology Change in profit opportunities of producing other products Change in producers’ price expectations Change in number of sellers in the market Change in the government tax or subsidy

31. Shifts in Supply Supply price Quantity of pecans per day

32. Determinants of Supply (from Cannon) G R E N T

33. Determinants of Supply (from Cannon) G R E N T overnment decisions TAXES – taxes increase, supply decreases; taxes decrease, supply increases SUBSIDIES –subsidies increase, supply increases; subsidies decrease, supply decreases REGULATIONS – regulations increase, supply decreases; regulations decrease, supply increases

35. Determinants of Supply (from Cannon) G R E N T esource prices or availability - resource prices have an inverse relationship with supply resource availability has a direct relationship with supply

37. Determinants of Supply (from Cannon) G R E N T xpectations – expect to sell more, supply increases; expect to sell less, supply decreases; expect to sell at future higher prices, immediate supply decreases.

39. Determinants of Supply (from Cannon) G R E N T umber of producers – direct relationship to supply

40. Determinants of Supply (from Cannon) G R E N T echnology or training – direct relationship to supply

42. Determinants of Supply (from Cannon) G R E N T overnment decisions TAXES – taxes increase, supply decreases; taxes decrease, supply increases SUBSIDIES –subsidies increase, supply increases; subsidies decrease, supply decreases REGULATIONS – regulations increase, supply decreases; regulations decrease, supply increases esource prices or availability - resource prices have an inverse relationship with supply resource availability has a direct relationship with supply echnology or training – direct relationship to supply xpectations – expect to sell more, supply increases; expect to sell less, supply decreases; expect to sell at future higher prices, immediate supply decreases. umber of producers – direct relationship to supply

43. Shifts in Supply Supply price Quantity of pecans per day