Embedded Files
Post date: Sep 08, 2011 3:4:13 AM
Economics and Personal Finance Standards of Learning
Economics and Personal Finance Standards of Learning
EPF.5
The student will demonstrate knowledge of a nation’s economic goals, including full employment, stable prices, and economic growth by
describing economic indicators, such as gross domestic product (GDP), consumer price index (CPI), and unemployment rate;
describing the causes and effects of unemployment, inflation, and reduced economic growth;
describing the fluctuations of the business cycle; and
describing strategies for achieving national economic goals.
DESCRIPTION
DESCRIPTION
Students learn how to identify headlines in the news and current events as illustrations of problems in supply and demand. Students will be linked to news sites to create their own analysis of supply and demand issues in problems facing our society.
KEY CONCEPTS CLICK ON LINKS
KEY CONCEPTS CLICK ON LINKS
Complete Interactive "1" Supply and Demand Site - Click & "2" Think Economics
Copy and Paste" print screen" your answers to a word doc. SAVE as Interactive Supply
Define the terms below Demand, Equilibrium Price, Markets, Price, Supply
Review Substitute-in-Consumption
STUDENTS WILL
Identify factors that change supply and demand for products.
Explain how changes in supply and demand affect prices and quantities produced.
Analyze actual news stories to determine how changes in supply and demand affect prices and output.
INTRODUCTION
INTRODUCTION
Why did the price of gas suddenly go up last week? What prompted the local shoe store to have a sale? Why are scalpers able to charge prices so much higher than those printed on the concert tickets? Supply and demand are at work in our everyday lives, causing changes in prices and quantities sold, and affecting our decisions about what to buy.
PROCESS
PROCESS
How can changes in supply and demand affect the prices of the products we buy? Demand is the willingness and ability of a person to buy a product. Demand can be affected by changes in income, changes in desire for a product, expectations about the economy, and changes in the prices of related products. For example, if a substitute product is offered at a lower price, people will demand less of the initial product; if a complement necessary to use the product goes up in price, people will again demand less of the initial product. Supply is the willingness and ability of a supplier to produce a product. Supply can be affected by the number of firms in the industry, the cost of production, productivity, government policy, and natural disasters.
Equilibrium is the point at which the supply and demand curves cross; at this point, the quantity demanded and the quantity supplied are equal. The price indicated at that point is the price we see in the market, and the quantity illustrates the amount produced.
However, in the real world, supply and demand curves are constantly on the move. People are hired and fired; they receive raises or find their work hours reduced. They tend to reduce their spending if they fear a recession, and they often change their desires for products -- the whole purpose of advertising! Companies face competition and changes in their costs of production, and they must try to improve worker productivity. They must contend with changes in government tax and regulatory policy, and they face the threat of fire and other disasters.
As events unfold, we can predict what will happen to product prices and output, based on changes in supply and demand. If demand increases (shifts to the right), the equilibrium point changes, as prices rise and the quantity produced rises.
However, if supply increases (shifts to the right), we will find that the price decreases, while quantity produced increases . Decreases in demand and supply will produce the opposite effects.
Now let’s translate this theory to real life.
Download Word doc below : Answer question
Complete and save to your Personal Google Doc folder as Supply and Demand lesson.
Page updated
Report abuse