DRAW A LINE SEPARATING TODAY & YESTERDAY1) Write: Date: 01/11/11, Topic: Supply and Demand2) Next line, write “Opener #6” and then:

1) Write 1 high+1 low in last 24 hours2) Rate your understanding of yesterday: lost<1-5>too easy (3 is perfect)

3) Respond to the Opener by writing at least 1 sentences about:Your opinions/thoughts OR/AND

Questions sparked by the clip OR/AND

Summary of the clip OR/AND

Announcements: None

SIT IN THE SAME SEAT AS YESTERDAY

Agenda1) Intro to demand + supply

End Goal, you will be able to…1) What influences demand + supply

Reminder1) Find & complete your 4 news pods

Review, Title: “Behavior Economics” 1) Incentives: Pressures used to elicit a behaviora) 5 Incentive Types:

i) Economic: Financial Pressureii) Social: Peer Pressureiii) Moral: Self Pressure

b) Perverse Incentive: Pressures that lead ppl to do the opposite of what you intended.

Notes #6a, Title: “Demand” 1) Law of Demand: Price lower, buy more of it.

Price is higher, buy less of it (not about

wanting, about really buying)

2) Market: Area the item is likely sold (geo, dem, class based)

Mr. Chiang does not focus on graphing. Graphing is a tool to understand economics, graphing is not economics.

Demand Curve: Demand shown as a line graph, dots should how much you buy at that dot(goes down)

(sUPply curve:is a “S” and goesup)

(It usually isn’t a curve or a straight line)

Individual Demand: How many 1 person will buy at different prices

Copy the Individual Demand Table and Chart on the Board

Sample, don’t copy the sample.

Market Demand: How many the whole shopping area will buy at different prices

Copy the Individual Demand Table and Chart on the Board

Sample, don’t copy the sample.

Change in Demand Quantity: Finding different dots up + down on a line (line does not move). Nothing changed but the price (ceteris paribus)

Indicates how much you’d buy at that price.Change in Demand (Overall) : Moving a line left

or line right. The SITUATION has changed to make it + - popular at all pricing points.

Change in Demand Quantity:

Change in Overall Demand:

Change in Overall Demand:

Notes #6a, Title: “Demand” 3) Utility: Benefit gained (makes you better, but

not necessarily pleasant)

Notes #6a, Title: “Demand” 4) Marginal Utility: Benefit continuing an action

1+ more time (at some point diminished return)

Notes #6a, Title: “Demand” 5) Trade Off: What you gave up to get something Example: McDonalds, trade off: not going to InnOut BigMac, trade off: $4.996) Opportunity Cost: Value of the next best option (in

some cases in hindsight, the better option)Example: McDonalds, but at InnOut, they were

passing out free burger coupons, opp cost of going to McDonald’s was the loss of those coupons, valued: $10.00

The cost of going to McDonalds isn’t an opportunity cost, but what you could have done with that money is

So that 4.99: BigMac, opp cost: $4.99 US Weekly magazine, or 5 lotto tickets, if one was the winner, the op cost would be millions for that BigMac.

Notes #6a, Title: “Demand” 7) Things that Change Demand (Whole) at Every

Price Point:a) Income Effect: Financial status makes us buy

more or less (more or less credit/loans).

7) Things that Change Demand (Whole) at Every Price Point:

a) Income Effect: Financial status makes us buy

more or less (more or less credit/loans).

b) Change in Consumer Taste: Taste make us buy more or less.

b) Change in Consumer Taste: Taste make us buy more or less.

b) Change in Consumer Taste: Taste make us buy more or less.

c) Changes in Expectations: Belief something is to happen that makes us buy more or less.

c) Changes in Expectations: Belief something is to happen that makes us buy more or less.

d) Substitutes: Pricing for alternatives can make us buy more or less.

d) Substitutes: Pricing for alternatives can make us buy more or less.

e) Compliments: Changes to things we buy together. If one changes, affects if we buy more or less.

e) Compliments: Changes to things we buy together. If one changes, affects if we buy more or less.

Pricing of Complimentary Goods are Often Coordinated

Journ #6a, Title “Review”

1) List 2 examples of compliments.

2) List 2 examples of substitutes.

3) If income drops predict the impact on hotdogs. Predict the impact on $15 threadless.com trendy t-shirts.

Notes #6b, Title: “Demand” 8) Marketing: Study of consumer demand9) Advertising: Persuading shoppers of the utility

of the product

Notes #6b, Title: “Demand” 10) Impact of Demand: Part of economic growth

is spending: buy>increase demand>increase jobs>more spending (+pollution, depletion)

Journ #6b, Title “Video: Advertising”

1) Copy Source Title: Frontline

2…) Discuss questions on the board with a partner. Summarize your discussion (include their name at the end). Remember participation points are deducted if off task. 5 Reading/Film Qs Come From These Work SectionsTime Bookmark: 00:00

Work #, Title “Marketplace”Pre-Sale1) List your items AND their pricesPost-Sale2) Record your profits at end of the simulation3) Reflect on what can be done better to increase business next time, focus on what products are in demand (not mean you can or want to supply it) and how marketing can be improved next time (branding+advertising).

-Remember you can pay with checks-If your salary is higher, you should feel obliged to spend more + pay more-Need to norm our market, treat as real $

Homework: 1) Study today’s notes + work sections

for a possible workbook quiz.2) Pick and listen to your 4 news

podcast by next Monday.

Workbook Check: If your name is called, drop off your workbook with Mr. Chiang (if requested, points lost if your workbook is not turned in)