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Transcript

I can DEFINE supply and demand and
understand how, together, they determine
MARKET PRICES

2 functions in a
◦
◦



(Demand)
(Supply)
Demand – Define
Supply – Define
Market Economy – Voluntary Exchange
◦ Seller’s problem of
◦ Buyer’s problem of

Demand/Supply SHOWS Cause/Effect with
relation to

I can DEFINE supply and demand and
understand how, together, they determine
MARKET PRICES

I can describe the LAW OF DEMAND and what
FACTORS affect Demand
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PRICE GOES
DEMAND GOES
PRICE GOES
DEMAND GOES
Demand –
Inverse Relationship
Other Factors that affect Quantity Demanded:
◦ Real Income Effect
◦ Substitute Effect
◦ Law of Diminishing Marginal Utility

Cannot buy
◦ Known as real income effect on demand
 Forces Trade-offs


Real Income =
Works in Opposite also

2 items nearly the same – Price of one goes
up people will buy other



Define – Utility
People decide to buy goods based on Utility
Law of Diminishing Marginal Utility

I can describe the LAW OF DEMAND and what
FACTORS affect Demand

I can CREATE and INTERPRET a Demand Curve

Demand Schedule –

Demand Curve –

I can CREATE and INTERPRET a Demand Curve

I can identify Factors that cause a Change in
Demand

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

Changes in
Changes in
Changes in
Substitutes
Complementary Goods

I can identify Factors that cause a Change in
Demand

I can explain elasticity of demand and the
difference between elastic demand and
inelastic demand products

Elasticity – Define

Elastic Demand –
 Examples of Products

Inelastic Demand –
 Examples of Products


Substitutes
How much you budget for the good
◦ Smaller percentage budgeted =
◦ Larger percentage budgeted =

Amount of
to prepare for change

I can explain elasticity of demand and the
difference between elastic demand and
inelastic demand products

I understand the Law of Supply

I can Graph and Interpret a Supply Curve

Law of Supply – DIRECT RELATIONSHIP
Profit Incentive at Work

Cancer Video


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Supply Schedule – Table showing quantities
supplied at different possible prices.
Supply Curve – Upward sloping line that
shows the quantities supplied at each price.

I understand the Law of Supply

I can Graph and Interpret a Supply Curve

I can identify factors that cause the Supply
Curve to shift right (increasing) or shift left
(decreasing)

Price
◦ Raw materials, LABOR, Energy,
Rent/Lease/Mortgage

Technology

I can identify factors that cause the Supply
Curve to shift right (increasing) or shift left
(decreasing)

I understand the interaction of Supply and
Demand in a market economy.
◦ To Consumers AND Producers
◦ Can lead to Rationing or Black Market
◦ Minimum Wage!!

I understand the interaction of Supply and
Demand in a market economy.