Economics unit 3 2
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This document discusses supply and demand concepts including: 1. Demand refers to how much of a good consumers are willing and able to purchase at different price levels, while supply refers to how much of a good producers are willing to sell. 2. When the quantity demanded equals the quantity supplied, the market reaches equilibrium and the equilibrium price is established. 3. Many factors can cause supply and demand curves to shift, leading to changes in equilibrium price and quantity. This includes changes in income, tastes, prices of related goods, production costs, and technology levels among producers.
Economics unit 3 2
- 1. Unit 3 The Market and Trade
- 2. Market Trade
- 3. Demand The quantity of a good or service that consumers are both willing and able to buy at various places Difference between wants and demand?
- 4. Characteristics of Consumers Willingness to buy Ability to pay for it Music examples
- 5. Quantity Demanded The amount of a good or service that consumers are willing and able to buy at a specific price Demand is expressed in terms of a time frame(per week, per day) Does price effect demand?
- 7. Law of Demand Demand and price are inverse(opposites) As price goes up, demand goes down As price goes down, demand does up
- 8. Why does demand change? Price, duh Change in income What happens if you make more money? Get laid off? Change in number of consumers What happens if a flood occurs? A festival happens? Change in consumer preference VHS and DVDs
- 9. Why does demand change? Change in consumer expectations Expect a sale Change in price of substitute goods HCF and Name Brand Change in price of complimentary goods Printers and ink, hamburgers and buns
- 11. Warm-Up Demand is always referring to _____________(producers or consumers) Write down the 7 reasons demand can change and give an example of each (write this in your notes) You may work with a partner
- 12. Graphing Changes in Demand
- 13. Changes in the curve An increase in demand causes the demand curve to shift to the right A decrease in demand causes the demand curve to shift to the left An increase or decrease in price causes the line to move stretch or shrink (up or down)
- 14. Supply The quantity of a good or service that producers are willing to and able to offer for sale at various prices Difference between supply and demand?
- 15. Characteristics of Producers The number one goal of the producer is earn maximum profit
- 16. Quantity Supplied The amount of a good or service that producers are willing and able to offer for sale at a specific price
- 18. Supply Curve Shows the relationship between price and the quantity producers are willing and able to supply
- 19. Law of Supply Price and quantity move in the same direction As price goes up, quantity supplied goes up As price goes down, quantity supplied goes down
- 20. Why does supply change? Price, duh Change in the amount of producers More producers leads to higher supplies Change in cost of factors of production Decrease in cost of production leads to an increase in supply
- 21. Why does supply change? Changes in Technology Technology can decrease cost, which leads to an increase in supply Changes in producer expectations Changes in Government policy
- 22. Supply video https://www.youtube.com/watch?v=LwLh6ax0zTE https://www.youtube.com/watch?v=ewPNugIqCUM
- 23. Warm-Up Draw a demand curve(label the x and y axis) Draw a supply curve (label the x and y axis) How does price effect demand How does price effect supply
- 24. Graphing Changes in Supply An increase in demand causes the supply curve to shift to the right A decrease in demand causes the supply curve to shift to the left
- 25. Demand and Supply Meet Market equilibrium: the quantity of a good or service that consumers are willing and able to buy equals the quantity that producers are willing and able to sell Market price is the price a willing consumer pays to a willing producer for the sale of a good or service
- 26. Supply and Demand Schedule/Curve
- 27. When the price is not right Disequilibrium- when the quantity of a product demanded does not meet the quantity of a product supplied; causing a shortage or surplus Shortage- a lack of something Surplus- an excess of something
- 28. Shortage/Excess Demand Talk with a partner or think by yourself about two examples of shortages or excess demand How to solve excess demand?
- 29. Surplus/Excess Supply Talk with a partner or think by yourself about two examples of surplus or excess supply. How to solve excess supply
- 31. Warm-Up If there is an increase in quantity on a demand or supply curve which way does the line shift? Draw an example. If there is a decrease in quantity on a demand or supply curve which way does the line shift? Draw an example. List two reasons why demand might shift on a demand curve, give an example for each. List two reasons why supply might shift on a supply curve, give an example for each.
- 32. Warm-Up What does equilibrium mean? Label the equilibrium on a graph. What is a surplus? Draw an example. What is a shortage? Draw an example.
- 33. How do shifts in the curve effect markets? If there is a shift in the demand or supply curve there is a new equilibrium price
- 34. Effect of a change in demand on equilibrium Does the change increase (shift to the right) or decrease(shift to the left) the quantity demanded What are the new equilibrium price and quantity? Did the price/quantity increase or decrease?
- 35. Effect of a change in supply on equilibrium Does the change increase (shift to the right) or decrease(shift to the left) the quantity supplied? What are the new equilibrium price and quantity? Did the price/quantity increase or decrease?
- 36. Effect of changes in both supply and demand on equilibrium Does the change increase (shift to the right) or decrease(shift to the left) the quantity supplied and quantity demanded? What are the new equilibrium price and quantity? Did the price/quantity increase or decrease?