Naked Economics, Current Reading Writing Assignment / QuizReview Supply and DemandInteractive GraphsCeilings and FloorsDrawing Supply and Demand curvesArticle WorksheetsHomework
Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)
TEST #2•Period 2 – •Period 6 – •Period 7 –
Who feeds Paris?
What motivates these people?
What is an example used in Naked Economics Chapter 1?
How does this relate to Supply and Demand?
Now draw and label a supply and demand curve on the back.
Review Supply and Demand
Draw a supply and demand curve
Five Parts
Supply and Demand
Price
Quantity
Demand
Supply
Equilibrium5 Parts toa fully labeledSupply andDemand graph1. Price2. Quantity3. Supply4. Demand5. Equilibrium
Supply and DemandNow show the effect of an decrease in demand
Price
Quantity
Demand
Supply
Equilibrium
Supply and DemandIncrease shifts the curve to the right (I = R, D = L) and changes the equilibrium
(i.e. price and quantity)
Price
Quantity
Demand
Supply
New Equilibrium
Supply and DemandWhat was the effect on price? _______ On quantity?_________
Price
Quantity
Demand
Supply
New Equilibrium
Old Equilibrium
Supply and DemandWhat was the effect on price? _______ On quantity?_________
Price
Quantity
Demand
Supply
New Equilibrium
Old Equilibrium
Interactive stuff
http://www.reffonomics.com/TRB/chapter4/sd12.swf
Students demonstrate the impact of changes in demand, supply, and both.
Shortages and Surpluses
Price
Quantity
Demand
Supply
Equilibrium
SURPLUS(excess supply)
SHORTAGE(excess demand)
supply and demand curves(a challenging problem)
Show the effect on film as result of the increase in supply of memory cards.The key is that Memory Cards and Film are Substitute Goods.
You will need to draw two supply and demand curves; one for memory cardsand one for film.
price price
quantity quantity
Memory Cards Film
Worksheets
Remember..if both curves move, you cannot
solve for both price and quantity.
articles
Draw a supply and demand curvefor each explaining what is going on.
Caps (Ceilings) and Floors (Minimum Prices)
Price
Quantity
Demand
Supply
Equilibrium
Floor(minimum price)
Cap(Ceiling)
Minimum Wage
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
So…What is the effect of the Minimum Wage?
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
So…What is the effect of the Minimum Wage?
Price
Quantity (jobs)
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
So…What is the effect of the Minimum Wage?
The quantity of labor demanded (i.e. the number of jobs available) shrinks.
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
Why are some smiling?
Why are some frowning?
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
But what if demand for workers is inelastic?
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
Minimum Wage
But what if demand for workers is elastic?
Price
Quantity
Demand (employers Looking for workers)
Supply of labor(you and me looking for a job)
Equilibrium(Market price)
THREE MINUTE BREAK
http://www.online-stopwatch.com/bomb-countdown/
worksheet
Pri
ce
pe
r s
lic
e
Equilibrium Point
Finding Equilibrium
Price of a slice
of pizza
Quantity demanded
Quantity supplied
Result
Combined Supply and Demand Schedule
$ .50 300 100
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$.50
Slices of pizza per day
050 100 150 200 250 300 350
Supply Demand$2.00
$2.50
$3.00
150
100
50
250
300
350
Surplus from excess supply
$1.50 200 200 Equilibrium
Equilibrium Price
a
Eq
uili
briu
m
Qu
an
tity
$1.00 250 150
Shortage from excess demand
Reading graphs and tables
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What is the equilibrium price? ____ Quantity? _____
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What is the equilibrium price? ____ Quantity? _____
Where Qd and Qs are equal.
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What is the equilibrium price? ____ Quantity? _____
Where Qd and Qs are equal.
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What is the equilibrium price? $5.00 Quantity? 30 units
Where Qd and Qs are equal.
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What happens is price is $2.00?
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What happens is price is $2.00?
Qd is 45, Qs is 15 and therefore there is a shortage of 30
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
What happens is price is $6.00?
Qd is 25, Qs is 35 and therefore there is a surplus of 10
Reading a Supply and Demand Schedule
Combined Supply and
Demand Schedule
Price Qs Qd
$1.00 10 50
$2.00 15 45
$3.00 20 40
$4.00 25 35
$5.00 30 30
$6.00 35 25
$7.00 40 20
Shortage
Surplus
Equilibrium
Is this an example of a tax, regulation, or subsidy?
HOMEWORK
Worksheets Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)
HANDOUTS (supply and demand t-shirt)
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