Senior Economics

1. Unit 3
The Market and Trade

2. Market Trade

3. Demand
• The quantity of a good or service that consumers are both willing and
able to buy at various places
• Difference between wants and demand?

4. Characteristics of Consumers
• Willingness to buy
• Ability to pay for it
• Music examples

5. Quantity Demanded
• The amount of a good or service that consumers are willing and able
to buy at a specific price
• Demand is expressed in terms of a time frame(per week, per day)
• Does price effect demand?

6. Demand Schedule/Demand Curve

7. Law of Demand
• Demand and price are inverse(opposites)
• As price goes up, demand goes down
• As price goes down, demand does up

8. Why does demand change?
• Price, duh
• Change in income
• What happens if you make more money? Get laid off?
• Change in number of consumers
• What happens if a flood occurs? A festival happens?
• Change in consumer preference
• VHS and DVDs

9. Why does demand change?
• Change in consumer expectations
• Expect a sale
• Change in price of substitute goods
• HCF and Name Brand
• Change in price of complimentary goods
• Printers and ink, hamburgers and buns

10. Demand Video
• https://www.youtube.com/watch?v=QvGLcCTXk9o

11. Warm-Up
• Demand is always referring to _____________(producers or
consumers)
• Write down the 7 reasons demand can change and give an example of
each (write this in your notes)
• You may work with a partner

12. Graphing Changes in Demand

13. Changes in the curve
• An increase in demand causes the demand curve to shift to the right
• A decrease in demand causes the demand curve to shift to the left
• An increase or decrease in price causes the line to move stretch or
shrink (up or down)

14. Supply
• The quantity of a good or service that producers are willing to and
able to offer for sale at various prices
• Difference between supply and demand?

15. Characteristics of Producers
• The number one goal of the producer is earn maximum profit

16. Quantity Supplied
• The amount of a good or service that producers are willing and able
to offer for sale at a specific price

17. Supply Schedule/Supply Curve

18. Supply Curve
• Shows the relationship between price and the quantity producers are
willing and able to supply

19. Law of Supply
• Price and quantity move in the same direction
• As price goes up, quantity supplied goes up
• As price goes down, quantity supplied goes down

20. Why does supply change?
• Price, duh
• Change in the amount of producers
• More producers leads to higher supplies
• Change in cost of factors of production
• Decrease in cost of production leads to an increase in supply

21. Why does supply change?
• Changes in Technology
• Technology can decrease cost, which leads to an increase in supply
• Changes in producer expectations
• Changes in Government policy

22. Supply video
• https://www.youtube.com/watch?v=LwLh6ax0zTE
• https://www.youtube.com/watch?v=ewPNugIqCUM

23. Warm-Up
• Draw a demand curve(label the x and y axis)
• Draw a supply curve (label the x and y axis)
• How does price effect demand
• How does price effect supply

24. Graphing Changes in Supply
• An increase in demand causes the supply curve to shift to the right
• A decrease in demand causes the supply curve to shift to the left

25. Demand and Supply Meet
• Market equilibrium: the quantity of a good or service that
consumers are willing and able to buy equals the quantity
that producers are willing and able to sell
• Market price is the price a willing consumer pays to a
willing producer for the sale of a good or service

26. Supply and Demand Schedule/Curve

27. When the price is not right
• Disequilibrium- when the quantity of a product demanded does not
meet the quantity of a product supplied; causing a shortage or
surplus
• Shortage- a lack of something
• Surplus- an excess of something

28. Shortage/Excess Demand
• Talk with a partner or think by yourself about two examples of
shortages or excess demand
• How to solve excess demand?

29. Surplus/Excess Supply
• Talk with a partner or think by yourself about two examples of surplus
or excess supply.
• How to solve excess supply

30. • https://www.youtube.com/watch?v=RP0j3Lnlazs

31. Warm-Up
• If there is an increase in quantity on a demand or supply curve which
way does the line shift? Draw an example.
• If there is a decrease in quantity on a demand or supply curve which
way does the line shift? Draw an example.
• List two reasons why demand might shift on a demand curve, give an
example for each.
• List two reasons why supply might shift on a supply curve, give an
example for each.

32. Warm-Up
• What does equilibrium mean? Label the equilibrium on a graph.
• What is a surplus? Draw an example.
• What is a shortage? Draw an example.

33. How do shifts in the curve effect markets?
• If there is a shift in the demand or supply curve there is a new
equilibrium price

34. Effect of a change in demand on equilibrium
• Does the change increase (shift to the right) or decrease(shift to the
left) the quantity demanded
• What are the new equilibrium price and quantity? Did the
price/quantity increase or decrease?

35. Effect of a change in supply on equilibrium
• Does the change increase (shift to the right) or decrease(shift to the
left) the quantity supplied?
• What are the new equilibrium price and quantity? Did the
price/quantity increase or decrease?

36. Effect of changes in both supply and demand
on equilibrium
• Does the change increase (shift to the right) or decrease(shift to the
left) the quantity supplied and quantity demanded?
• What are the new equilibrium price and quantity? Did the
price/quantity increase or decrease?