Today we will learn about how the forces of supply and demand interact to create an equilibrium price and quantity in the market that allocates resources and rations goods and services efficiently. Then we will explore how government intervention such as the use of price controls, subsidies, and excise taxes affect markets. 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 7) and watch the following videos.
Problem of the Day: You will work cooperatively with your partner to construct a response to the following prompt.
Define supply and explain why the supply curve is upward sloping. Then use a diagram to explain the effect of an increase in the price of steel on the market for automobiles.
Lecture
Related readings
Michael Munger on Exchange, Exploitation and Euvoluntary Transactions
Cost-benefit Analysis
Podcasts
If you plan to take college economics or just want more depth, watch these: