Download Fabulous Friday April 24

D65
Terrific Tuesday, December 1
OPENING ACTIVITY:
• Copy the following question and write out its
complete answer.
Which factor most contributed to improved cell
phone technology in recent years?
a. Government regulations
b. Competition among companies
c. Increase in stock offerings
d. Abundant natural resources
What is Economics?
• Many people say ECONOMICS
is the driving force of human
interaction and studying it
reveals why people and
GOVERNMENTS behave in
particular ways. When you
think of the word
ECONOMICS, what are the first
3 words that come to mind?
“The Economic System at Work”
• Why you study this in Civics…
American economic freedoms include the freedom
to buy and sell, to earn a living, to earn a profit, to
compete, and to own property.
Think/Pair/Share
Which of these freedoms have you experienced in
your daily lives?
How are these freedoms important to the health and
well being of US citizens?
Chapter 17-1
• The US has a “free market” economy. This means
that if you want to start a business, you can. Your
success will be determined by your ability to run a
business and the market, not by a government
agency. This is why the US can be described as
having a “market” economy.
Economic Systems
• The purpose of an economic system is to help
people create and obtain the goods and services
they want and need.
• How goods and services are obtained is what
distinguishes different economic systems from each
other.
Competition for Resources
• In order to provide a good or service, resources are
needed.
• Resources are not unlimited, so businesses and
individuals must compete for the resources they
need.
• This competition eventually affects everyone, not
just business owners. HOW?
• It affects the prices we pay for the
goods we want.
Scarcity
• …is one result of competition for resources.
• ...is the combination of limited economic resources
& society’s unlimited wants.
• …is the most basic problem of economics because
it forces people to make decisions about how to
use society’s resources effectively.
Supply and Demand
• Changes in prices are usually the result of the laws
of supply and demand.
• These laws are among the most basic of all
economic principles.
Law of Supply
• States that businesses will produce more products
when they can sell them at higher prices.
• Businesses will produce fewer products when
prices are low.
DOES THIS MAKE SENSE TO YOU?
Why wouldn’t a business want to sell more products
at a lower price if it meant people would buy more?
Think about back-to-school sales. Notebooks @ $1
each. No limit. “SALE” = Notebooks # .25 limit 4 --Why the limit?
Law of Demand
• …states that buyers will demand or want a greater
quantity of a good when its price is low.
• As prices rise, the quantity demanded falls,
meaning when the price of a good goes up, people
buy less of that good.
• Turn to page 453.
How do businesses use the laws of
supply and demand to try to make a
profit?
• To increase their profit, businesses have to find the
highest price that customers are willing to pay for
the goods or services they offer.
Connect to Math
Jan’s Records is selling CDs for $18. Today, Jan sold 5
CDs. Nita’s Music is selling CDs for $12. Today Nita
sold 10 CDs. Which merchant made more money?
Why?
Jan made $90, while Nita made $120.
Although Jan wants to supply CDs at $18 a CD, there
is limited demand for CDs at that price. In contrast,
Nita is supplying CDs at a price which customers
prefer, or demand.
What factors might affect the
demand for a good or service?
• Price
• Quality
• Usefulness
• Ease of use
• advertising
Putting a Price on Things
Price or VALUE is based on
two basic factors
1. Supply
2. Demand
-Supply
-the amount of a good or
service that is available for
consumers to buy
-Demand
-the amount of a good or
service that consumers are
willing to buy
Determining Price
-Price is determined by
comparing the amount of
demand to the amount of
supply and finding an
amount where they are equal
--Market or Equilibrium Price
this is the point
at which
supply and demand
meet and price
is determined
Effects of Price
-Shortages
-when demand is greater
than supply
-What happens to price?
•It goes up
-Surplus
-When supply is greater
than demand
-What happens to price?
* It goes down.
The Law of Demand-quantity demanded is inversely
proportional to price.
Simply put, the higher the price, the lower the demand and
the lower the price, the higher the demand.
•In numbers it would look like this chart
Demand Schedule for Cookies:
Draw a graph
based on the
info in the
chart.
At a price of
Consumer will buy
.70 cents
100 cookies
.60
200
.50
400
.40
700
.30
1,100
.20
1,600
.10
2,300
•Economists also like
to look at things
graphically.
•It enables them to
see the quantity and
price on a limitless
scale.
•To do this they plot
what is known as a
demand curve:
• The price is always
on the vertical axis
(y) and the quantity
is always on the
horizontal axis. (x)
• If we were to plot
our points and draw a
demand curve for the
cookies it would look
like this graph.
-Elasticity Elasticity
-Is the degree to which a
change in price affects the
demand for the product
-Elastic Demand
-a change in the price DOES
affect the quantity
demanded
-Inelastic demand
-change in the price does
NOT affect the quantity
demanded
Exit Ticket (write in your NB)
• State one thing you learned about the Law of
Supply.
• State one thing you learned about the Law of
Demand.
• State the difference between elastic demand and
inelastic demand.