Supply and Demand
Welcome to the most important concept in economics: supply and demand! Supply and demand determine the price of goods, services, labor, capital, money, and how much should be produced and consumed, who gets what. The market is central to the functioning of our economies.
Assignments for this topic:
We will start off with a muffin auction (for real), in class. Download the document 'Understanding supply and demand: Auctioning off muffins' to work on in class. Then, at home, please read the textbook (chapter 4: 'The Market Forces of Supply and Demand) or watch the videos and answer the quizzes to check your understanding. Make sure to note any questions you have and bring them to class.
In the following class, we will work on the worksheet and newspaper article, using changes in supply and demand to analyse changes in price and quantities.
Read more about the Bansky picture self-destructing during its auction (image above)
We will work on this in class together.
Oil tops $70 a barrel for first time since November _ Financial Times.pdfIn the news
Read the Financial Times article, then use a supply and demand graph to explain the change in the price of oil:
- draw a supply and demand graph for oil at the equilibrium
- which curve is affected: supply, demand or both?
- In which direction does it move? do they move?
- How does the price and quantity of oil change? Make it clear on the graph.