1. Bellringer
1. Get out the elasticity handout and complete the
bottom portion

2. Sophomores vs. Juniors vs. Seniors game
Laila version
Winners get +5 Quantitative Easing points
New rule: can’t go up twice in a row or more than 3
times total

3. White boards
Which part of TRIBE will change
in the following scenarios to the
Tucson gasoline market? &
increase or decrease
1. Summer vacation time
2. Used cars get more expensive
3. Alaskan oil spill, consumers think gas prices will
increase next month
4. Sun Tran rates increase by 10%
5. Tesla electric cars get cheaper
6. New freeway connects Eastside with rest of Tucson

4. White boards
Which part of TRIBE will
change in the following
scenarios to the Spam market
& increase or decrease?
1. US unemployment falls by 1%
2. Price of bacon drops by 5%
3. Restaurant prices increase after US minimum
wage increase
4. TUSD stops selling school lunches, students must
bring lunch from home
5. Median wage increases in Arizona

5. White boards
Which part of TRIBE will
change in the following
scenarios to the potato chip
market? & increase or decrease
1. Americans try to eat healthier
2. Consumers think price of potatoes will decrease
next month
3. Hotdog prices plummet
4. Your school stops selling school lunches, students
must bring lunch from home
5. Population of US increases by 12%

7. Bellringer
• In your notes, write the minimum per hour I would
have to pay you to clean up this yard. Should take
about 5 hours
Pretend there is no minimum wage and you could work for less than $7.90

8. Graph workers on board
• Jumping jacks market

9. Law of Supply
• As the price of a good increases, producers will produce
more (,or try to) quantity. As the price of the good
decreases, producers will produce less quantity.
P Qs and P Qs
The supply curve is always
upward sloping
$
Q
S

10. For example….
• Average prices of
• Therefore…..

11. Graph one:
A Supply Curve
Price of
Widgets
Number of
Widgets
Sellers
Want to
Sell
$1.00 10
$2.00 40
$3.00 70
$4.00 140

12. Producer Surplus
• Difference between cost and sale price
• IOW: profit
• Sale: $15
• Cost: $10
• PS = $5

13. For example….

15. In your groups
• Choose either a computer company or a car
company
• Your boss wants your group to figure out how to
produce MORE of your goods per year
• Consider every factor of production (land, labor,
capital)

16. If price changes Q*supply,
What changes supply?

17. 4 Determinants of Supply
• Price of production + or –
• Resources
• Taxes
• regulation

18. 4 Determinants of Supply
• Expectations of future price
• If future P$ might rise, hold inventory
• If future P$ might fall, increase supply

19. 4 Determinants of Supply
• Sellers (increase or decrease)

20. 4 Determinants of Supply
• Technology

21. 4 Determinants of Supply
Mnemonic
• Price of Production
• Expectations
• Sellers (#)
• Technology
•PEST = supply determinants
•TRIBE = demand determinants

22. PEST Changes Assignment
With 1 partner, see #2
1. For each part of PEST, identify one positive and
negative change to the car or computer market
and sketch a correctly drawn graph
2. Find an article either on your phone or in a
financial magazine, write the headline, the market,
part of PEST that is changing and graph it.

23. BR Full sheet
1. How many pairs of flip flops do you own?
2. What price did you or your parents pay for your favorites?
(estimate if you don’t remember) (If you don’t own a pair,
explain why)

24. Now we will learn where prices come
from

25. Trading Game
• Flip flops
• Buyers maximize consumer
surplus
• Sellers maximize producer
surplus
• Whole $1 prices
• Top 2 players get 5
Quantitative Easing points

26. Supply/Demand game Closure
5. What happened to the equilibrium price in the
different rounds?
6. How would the price have changed if we doubled
the number of buyers?
7. How would the price have changed if we doubled
the number of sellers?
8. Did you like being a buyer or seller more, explain
why?

27. White boards: Bellringer
1. Which words would you
associate with demand?
2. Which words would you
associate with supply?

28. Diff between supply and Demand
Xbox 360 games
• Supply or demand change?
• Determinant
released

29. Diff between supply and Demand
Wheat
• Supply or demand change?
• Determinant
Locusts
Infest Kansas

30. Diff between supply and Demand
Mexican food
• Supply or demand change?
• Determinant

31. Diff between supply and Demand
airline tickets
• Supply or demand change?
• Determinant

32. Diff between supply and Demand
gasoline
• Supply or demand change?
• Determinant

33. Diff between supply and Demand
Demand increases, decreases or no change
Market: New Cars
Change: US
government
increases income
tax rates

34. Diff between supply and Demand
Market: New Cars
Change: Price of
steel decreases
15 %

35. Diff between supply and Demand
Market: New Cars
Change: population
of US increases
by 6 %

36. Diff between supply and Demand
Market: New Cars
Change: US media
reports next year’s
car models will be
more expensive
due to
environmental
laws

37. Diff between supply and Demand
Market: New Cars
Change: gasoline
prices increase to
over $4 gallon

38. Diff between supply and Demand
Market: Sun Tran
bus rides
Change: Average
Tucson gets a 2%
raise

39. Diff between supply and Demand
Market: Sun Tran
bus rides
Change: Population
of Tucson
decreases for
fifth straight year

40. Diff between supply and Demand
Market: Sun Tran
bus rides
Change: Gasoline
prices increase to
4%

41. Diff between supply and Demand
Market: Smart
phone apps
Change: prices of
new apps
decreasing due
to
advertisements

42. Diff between supply and Demand
Market: Smart
phone apps
Change: New
iphone released

43. Diff between supply and Demand
Market: Smart
phone apps
Change:
Consumers think
apps will no
longer be free
starting May 1

44. Diff between supply and Demand
Red Roses
Market: red roses
Change: prices of
chocolate
decreases

45. Diff between supply and Demand
Red Roses
Market: red roses
Change: cost of
fertilizer
increases

46. Diff between supply and Demand
Red Roses
Market: red roses
Change: Its
February 14

47. Diff between supply and Demand
Red Roses
Market: red roses
Change: Its
February 16

48. Diff between supply and Demand
New cars
• Supply or demand change?
• Determinant

49. Diff between supply and Demand
Used clothing
• Supply or demand change?
• Determinant

50. Diff between supply and Demand
Dog food
• Supply or demand change?
• Determinant

51. Diff between supply and Demand
Dog food
• Supply or demand change?
• Determinant

52. Diff between supply and Demand
Salsa
• Supply or demand change?
• Determinant

53. Diff between supply and Demand
Salsa
• Supply or demand change?
• Determinant

54. Diff between supply and Demand
Salsa
• Supply or demand change?
• Determinant

55. Diff between supply and Demand
Salsa
• Supply or demand change?
• Determinant

56. Diff between supply and Demand
Spurs Clothing
• Supply or demand change?
• Determinant

57. Diff between supply and Demand
Spurs Clothing
• Supply or demand change?
• Determinant

58. Diff between supply and Demand
Office supplies
• Supply or demand change?
• Determinant

59. Bellringer
1. Do an OPTIC for this graph
2. Hold onto this for #2
OPTIC

60. OIL!!!

61. #2 OPTIC

62. Oil Drilling
Crude oil from
ground
Sent to refinery

63. Uses of Oil

64. 2011 Oil Consumption
Rankings (Source: CIA
FACTBOOK)
Amount (top to bottom)
#1 United States:
19,150,000 bl/day
#2 : European Union
13,680,000 bl/day
#3 China:
9,400,000 bl/day
#4 Japan:
4,452,000 bl/day
#5 India:
3,182,000 bl/day

66. #2 OPTIC

70. solve this problem?
• Constant supply of oil, high demand
• What to do? Substitutes?
• 8 minutes in groups

71. Corn!
• US government
provides incentives to
grow corn for fuel
• Recent regulation has
caused corn prices to
increase since 2000
• If you were a farmer,
what would you do?