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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