Mars Monday, September 9Learning target: I can explain the laws of demand and supply. I can identify, explain and graph equilibrium.

Warm up: Create an index card that contains a supply graph, the definition of supply and the law of supply. Remember, do your card from your brain and your neighbors’ brains!

Test corrections due TODAY!

Kennedy: Please take Friday’s quiz NOW . . .

Refresher about the laws of demand and supply . . .

Law of Demand The Law of Demand states that when the price of a good or service goes up, then the quantity demanded decreases.

When the price goes down, quantity demanded increases.

It’s an inverse relationship!

Change in Quantity Demanded● Price is the factor that affects quantity

demanded

● We show a change in quantity demanded by moving to a new point along the original curve!!

We show a change in quantity demanded by moving to a new point along the original curve!!

Supply: The Other Side of the Coin

What is SUPPLY?● The willingness and ability of a producer to make or

provide a good or service at a particular price.

Law of Supply When the price of a product goes up, quantity supplied goes up. When the price goes down, quantity supplied goes down. A positive relationship.

When Supply Meets Demand …

● Buyers want to buy at the lowest price possible …

● Sellers want to sell at the highest price possible …

● What happens when they meet?

EQUILIBRIUM

EQUILIBRIUM (aka “market clearing price”)

● When the quantity demanded = quantity supplied

● Equilibrium price = Pe● Equilibrium quantity = Qe

Equilibrium

Indiana Jones explains supply and demand . . .

Let’s Buy & Sell Some Wheat● Half of class will be sellers, half will be buyers● We are selling bushels of wheat● Three rounds, each five minutes● Buyers and sellers negotiate the sale of wheat● Record each of your transactions!

● Write down the budgeted amount on your card, then write down the agreed upon price

● Once you have made a sale, come to the front of the room and tell me the agreed upon sales price. BOTH PEOPLE get new cards!!

Sellers ● Only one transaction per card—turn them in after a sale.

● Do not let people know what is on your card!

● Sellers: ● One card at a time that shows your “budget” or minimum

price for selling one bushel of wheat● As a rational seller, you want to sell at or above the budgeted

price on your card

Buyers ● Only one transaction per card—turn them in after a sale.

● Do not let people know what is on your card!

● Buyers:● One card at a time that shows your “budget” or maximum

price for purchasing one bushel of wheat● As a rational buyer, you want to buy at or below the budgeted

price on your card

Let’s Buy & Sell Some Wheat● Everyone: You might have to take a loss on one card in

order to turn it in and get a new card. You can make up the loss later!

● The more trades you make, the more likely you are to make a profit.

● Keep an eye on the tally sheet on the board to see where sales are taking place.

Economic Assumptions to Remember:

1. People behave rationally

2. People respond to incentives

3. Buyers and sellers enter into exchanges when they believe they will be better off

Practice Graphing

More practice graphing!Turn in the graphing practice packet for a classwork grade!

Tootle Tuesday, September 10

● Warm up: Create an index card that contains a demand graph, the definition of demand and the law of demand. Remember, do your card from your brain and your neighbors’ brains!

● Learning target: I can review supply and demand and equilibrium. I can graph equilibrium and describe what happens in a market when there is no equilibrium.

●● Due next Monday, Sept. 16: USA Test Prep Unit 2 #2

Phones1. Never take your phone out of your purse or backpack during class. OR2. Put your phone in the holder at the beginning of class. OR3. If I see your phone during class you must put it in the holder and

a. I will call home andb. I will submit a discipline referral andc. I will ask Dr. Jackson or Ms. Darden to confiscate your phone.

Demand . . .

Supply . . .

Equilibrium . . .

● Equilibrium = where supply meets demand● When the quantity

demanded = quantity supplied

Equilibrium

EQUILIBRIUM (aka “market clearing price”)

Qo

$5

4

3

2

1

PDemand Schedule

10 20 30 40 50 60 70 8029

P Qd

$5 10

$4 20

$3 30

$2 50

$1 80

Supply Schedule

P Qs

$5 50

$4 40

$3 30

$2 20

$1 10

Supply and Demand are put together to determine equilibrium price and equilibrium quantity

Equilibrium Price = $3 (Qd=Qs)

Equilibrium Quantity is 30

D

S

What if a market is NOT in equilibrium? Shortage or

● A shortage is a condition where the quantity demanded is greater than the quantity supplied at the market price.

● An economic shortage occurs when sellers do not make enough of a product to satisfy those who want to buy it at a given price.

● Prices _____________ equilibrium will result in a shortage.

What if a market is NOT in equilibrium? Or Surplus

● A surplus is a condition where the quantity demanded is less than the quantity supplied at the market price.

● An economic surplus occurs when sellers make too much of a product for those who want to buy it at a given price.

● Prices _____________ equilibrium will result in a surplus.

(1) What happens (Qs and Qd) in this market if the price is $2?(2) What happens (Qs and Qd) in this market if the price is $4?(3) What happens (Qs and Qd) in this market if the price is $3?

Practice Graphing:Wheat

+Additional Practice

Wish-You-Were-Here Wednesday, September 11

● Warm up: Create an index card for equilibrium. Be sure to include a graph that shows equilibrium, surplus and shortage.

● Learning target: I can describe the demand shifters/ determinants. I can define substitute & complimentary

goods.● USA Test Prep Unit 2 #2 due Monday!!

Qo

$5

4

3

2

1

PDemand Schedule

10 20 30 40 50 60 70 8035

P Qd

$5 10

$4 20

$3 30

$2 50

$1 80

Supply Schedule

P Qs

$5 50

$4 40

$3 30

$2 20

$1 10

Supply and Demand are put together to determine equilibrium price and equilibrium quantity

Equilibrium Price = $3 (Qd=Qs)

Equilibrium Quantity is 30

D

S

How to show a change in quantity demanded . . .

Can our demand change?● What do you think happens to the demand for roses

before Valentine’s Day? What about the demand for chicken wings before the Super Bowl?

● Come up with other examples of changes in demand

What Causes a Shift or Change in Demand?

● 6 Shifters (Determinants) of Demand:

1. Income of consumers

2. Number of Consumers

3. Substitutes—change in price or availability

4. Expectations for the future price of the product

5. Complements—change in price or availability

6. Tastes and Preferences of the consumer42

What Causes a Shift in Demand Curve?● 6 Shifters (Determinants) of Demand:

1. Income of consumers

2. Number of Consumers

3. Substitutes—change in price or availability

4. Expectations for the future price of the product

5. Complements—change in price or availability

6. Tastes and Preferences of the consumer43

INSECT!!!!

What happens when demand or supply change (i.e., not just Qd or Qs)?

• Increase = moves Right

• Decrease = moves Left

• Meet my friend, IRDL the Turtle:

44

Increase in Demand: Entire curve moves RIGHT

Decrease in Demand:Entire curve moves LEFT

Change in Demand for Cereal

Qo

$5

4

3

2

1

PriceDemand Schedule

Quantity of Cereal10 20 30 40 50 60 70 80

47

PriceQuantity

Demanded

$5 10

$4 20

$3 30

$2 50

$1 80

D

S

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8048

PriceQuantity

Demanded

$5 10

$4 20

$3 30

$2 50

$1 80Demand

What if a new study

reveals that cereal makes

you smarter?

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8049

PriceQuantity

Demanded

$5 10 30

$4 20 40

$3 30 50

$2 50 70

$1 80 100

DD2

Increase in Demand

Prices didn’t change but

people want MORE cereal at

every price

Change in consumer tastes

What if Toyota minivans became very popular?

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8051

PriceQuantity

Demanded

$5 10

$4 20

$3 30

$2 50

$1 80

What if scientists

discover that cereal

causes baldness?Demand

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8052

PriceQuantity

Demanded

$5 10 0

$4 20 5

$3 30 20

$2 50 30

$1 80 60

DD2

Decrease in Demand

Prices didn’t change but people want LESS cereal

at every price

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8053

PriceQuantity

Demanded

$5 10

$4 20

$3 30

$2 50

$1 80Demand

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8054

PriceQuantity

Demanded

$5 10

$4 20

$3 30

$2 50

$1 80

What if the price

of MILK goes up? Demand

Change in Demand

Qo

$5

4

3

2

1

Price of Cereal

Quantity of Cereal

Demand Schedule

10 20 30 40 50 60 70 8055

PriceQuantity

Demanded

$5 10 0

$4 20 5

$3 30 20

$2 50 30

$1 80 60DemandD2

Decrease in Demand

Prices didn’t change but

people want LESS cereal at

every price

Consumer Tastes and Preferences

You have 15 minutes to finish your poster!

Each group will present their shifter in front of the class--be sure

each member of the group participates.

Thrilling Thursday, September 12

● Warm up: Get out your blue unit 2 overview sheet. Underline the standards we have covered and star * the vocabulary words we have used. What questions do you have so far?

● Learning target: I can describe the demand shifters/determinants and show a change in demand on a graph by moving the entire demand curve.

● USATP Unit 2 #2 due Monday, Sept. 16 by midnight!● Current event due Friday, Sept. 20 in class

Current Events

Current Events

New York Times www.nytimes.com

Wall Street Journal www.wsj.com

Time Magazine www.time.com

NPR www.npr.org

The Economist www.economist.com

BBC www.bbc.com

Washington Post

www.washingtonpost.com

Newsweek Magazine

www.newsweek.com

The Atlanta Journal-Constitution

www.ajc.com

● Title and date of article

● Author’s name and publisher (e.g., NY Times)

● HOW is this story connected to economics?

● WHO is this article about?

● WHAT is this story about? Your summary should

include at least four facts or opinions from your

article and identify them as facts or opinions.

● WHERE is this event or issue occurring? (Specify

city, country, region, etc. - Is this story

international, national or local?)

● WHEN did this story take place?

● WHY did it happen? (the cause)

● Of all the 5 “W’s” and “H”, star the one you think is

the most important. Tell why.

● PREDICT what you think might happen as this story

develops.

Demand--Refresher & More Practice

• Demand = the quantity of a good or service that buyers are willing and able to buy at all possible prices during a certain time period.

Non-price determinants OR “Demand Shifters”

Factors other than price that will impact how much of a good or service that we buy at every price.

– Shifters change our “demand”

– A change in demand is shown by moving the entire demand curve!

What Causes a Shift or Change in Demand?

● 6 Shifters (Determinants) of Demand:

1. Income of consumers

2. Number of Consumers

3. Substitutes—change in price or availability

4. Expectations for the future price of the product

5. Complements—change in price or availability

6. Tastes and Preferences of the consumer63

Income of Consumers

• As consumers’ income , demand will• As consumers’ income , demand will

Number (#) of Consumers

• As the # of consumers , demand will• As the # of consumers , demand will

Substitute Goods (change in price + availability)

• Substitutes are goods used in place of one another. – Ex: If price of Pepsi falls, demand for Coke

will increase. Ex. Glasses & contact lenses.– If the price of one , the demand for the other

will (or vice versa).– If the availability of one , the demand for the

other will (or vice versa).

Expectations of Future Price Changes

• If consumers expect prices to in the future, then demand NOW will

• If consumers expect prices to in the future, then demand NOW will

Complimentary Goods (or Complements)(change in price + availability)

Complements are two goods that are bought and used together. – Ex: If price of hot dogs falls, demand for hot dog

buns will increase. Ex. PS4 and PS4 games.– If the price of one , the demand for the other

will (or vice versa).– If the availability of one , the demand for the

other will (or vice versa).

Tastes and Preferences of Consumers

• What are other things that can make people buy more or less of something? Things like…– Celebrity endorsements– Health reports or studies – Popular trends (like Silly Bands, Greek yogurt)

What happens when demand or supply change (i.e., not just Qd or Qs)?

• Increase = moves Right

• Decrease = moves Left

• Meet my friend, IRDL the Turtle:

70

Increase in Demand: Entire curve moves RIGHT

Decrease in Demand:Entire curve moves LEFT

Shifts or Changes in Demand

CHANGES IN DEMAND • When factors other than the price of your product

changes, the entire demand curve shifts. • An increase in demand means that at the same prices,

more people are willing and able to purchase that good.

• A decrease in demand means that at the same prices, fewer people are willing and able to purchase that good.

73

Changes in price

DON’T shift

the curve!

Demand Shifters Foldable

Freakonomics Friday, Sept. 13

Warm up: Quiz your neighbor on the demand shifters. We will have a quiz today after we do some more practice.

Learning target: I can practice demand shifters and explain the non-price determinants that shift the entire demand curve.

76

Substitutes or Complements?

Copyright ACDC Leadership 2018

77

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for SUVs when the price of gas increases?

78

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for maple syrup when the price of waffles decreases?

79

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for cell phone chargers when the price of cell phones decreases?

Complements?

80Copyright ACDC Leadership 2018

Substitutes

81Copyright ACDC Leadership 2018

Substitutes

82Copyright ACDC Leadership 2018

Substitutes

83Copyright ACDC Leadership 2018

Substitutes

84Copyright ACDC Leadership 2018

Substitutes

85Copyright ACDC Leadership 2018

Substitutes

86Copyright ACDC Leadership 2018

87

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for ice cream when the price of frozen yogurt decreases?

88

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for electric cars when the price of gas-powered cars increases?

89

Substitutes or Complements?

Copyright ACDC Leadership 2018

What happens in the market for CFA sandwiches when the availability of Popeyes sandwiches decreases?

Shifters Practice

1. Will there be an increase or decrease in demand?

2. What is the determinant (shifter)?

3. Draw the movement on a graph.

Cigars

• A new study shows that smoking cigars results in lots of wrinkles.

Butter

• The price of margarine goes up.

Jelly Beans

• The price of jellybeans goes up

Hula Hoops

• Jay Z confides to People magazine that he “gets a big kick out of his hula hoop.”

Yachts

• The average price of stocks falls by over 20% between now and the end of the year

Redwood Lumber

Environmentalists urge consumers to boycott redwood products.

Gasoline

• Large sports-utility vehicles (like Suburbans and Expeditions) become more popular.

Umbrellas

• Heavy rain is forecast.

U.S. Cars

• The U.S. imposes a tariff on Japanese car imports.

Taxi Service

• MARTA workers go on strike

Candles

• An electric company official announces that a computer bug will likely result in power outages.

Cowboy Boots

• Old Navy launches an ad campaign called "Everyone in cowboy boots."

BK Whoppers

• McDonald's lowers the price of Big Macs.

Cement

• A 7.9 earthquake hits San Francisco.

Hot Dogs

• 60 Minutes does an expose called "The Truth about Hot Dogs."

Why does Ms. Browngive us so many darn quizzes?