Today we will learn about the concept of demand, the relationship between the quantity of a product consumers will buy and the price of the product. This will be our introduction to the model of supply and demand. You should have read the text chapter identified below in the homework section and watched the related videos. We will start class today with you working cooperatively with a partner to find a solution to the "Problem of the Day" and then there will be a lecture on our next topic. This page contains all the information you need for today's class: homework, the problem of the day, helpful resources (videos, podcasts, etc.) and an explanation of the activities we will do in class. Use the table of contents on the right to help you navigate.
Read Mankiw (Chapter 4 - demand section) and watch the following videos.
Problem of the Day: You will work cooperatively with your partner to construct a response to the following prompt. This one counts!
Imagine a society that produces capital goods and consumer goods.
Draw a production possibilities frontier for capital goods and consumer goods. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape.
Show a point that is impossible for the economy to achieve. Show a point that is possible to achieve but inefficient.
Identify a point that is productively effiicient and explain why it is productively efficient.
Define allocative efficiency. Identify a point that might be allocatively efficient and explain what must be true for this to be an allocatively efficient outcome.
Identify a point on the production possibilities curve that would be representative of a country that allocates more resources to capital goods than consumer goods. On the diagram illustrate the economic growth that will result from this choice and explain why a country that uses its resources for consumer goods instead of capital goods would experience less growth.
Lecture: Demand
Ted Talks
Irrational Behavior: Dan Ariely asks, Are we in control of our decisions?
If you plan to take college economics or just want more depth, watch these: