Download Unit 2 LAYOUT - EricksonClassroom

Economics: Principals in Action
Unit Plans
Unit 1: How Markets Work: Supply and Demand, Prices, Market Structures
Duration: 2-3 weeks
Textbook: Economics Principals in Action
Chapters: Chapters 4, 5, 6, 7
Content Questions
1. What is the law of demand?
2. How do the substitution effect and the income effect
influence decisions?
3. What is a demand schedule?
4. How do you interpret demand graphs and schedules?
5. What is the difference between a change in quantity
demanded and a shift in the demand curve?
6. How does the change in the price of one good affect
demand for a related good?
7. What are the factors that affect elasticity?
8. What is the law of supply?
9. How do you interpret supply graphs and schedules?
10. What is the relationship between elasticity of supply and
time?
11. What are the production costs of a firm?
12. When does a firm decide to shut down an unprofitable
business?
13. What determinants cause changes in supply?
14. How can governments influence the supply of a good?
15. How does supply and demand work globally?
16. How does supply and demand create balance in the market
place?
17. How do markets in equilibrium and disequilibrium
compare?
18. How do governments intervene to control prices?
19. What effects do price ceilings and floors have
economically?
20. What are the determinants that change prices?
21. How do markets react to a fall in supply?
22. How do markets react to a shift in demand?
23. What is the role of prices in a free market?
24. What are the advantages of a price-based system?
25. What are the four conditions that are in place in a perfectly
competitive market?
26. What are prices and output in a perfectly competitive
market?
27. What is a monopoly? How are they formed?
28. What is monopolistic competition?
29. How do firms compete without lowering prices?
30. What is an oligopoly?
31. How do firms use market power?
32. What does the government do to protect competition?
Essential Questions/Concepts: Be able to explain the following concepts with examples and information from the unit:
1. People respond predictably to positive and negative incentives
2. Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods
and services.
3. Competition among sellers lower costs and prices, and encourages producers to produce more of what consumers are willing
and able to buy.
4. Prices send signals and provide incentives to buyers and sellers
5. Supply and demand work together to set the price of a good and the quantity sold
6. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay
the most for them.
7. Governments sometimes have to intercede to control prices and firms
Vocabulary
1. Demand
2. Law of demand
3. Substitution effect
4. Income effect
5. Demand schedule
6. Market demand schedule
7. Demand curve
8. Ceteris paribus
9. Normal good
10. Inferior good
11. Compliments
12. Substitutes
13. Inelastic
14. Elastic
15. Unitary elastic
16. Total revenue
17. Supply
18. Law of supply
19. Quantity supplied
20. Supply schedule
21. Variable
22. Market supply schedule
23. Supply curve
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Market supply curve
Elasticity of supply
Marginal product of labor
Increasing marginal returns
Diminishing marginal returns
Fixed costs
Variable costs
Total costs
Marginal costs
Marginal revenue
Operating costs
Subsidy
Excise tax
Regulation
Equilibrium
Disequilibrium
Excess demand
Excess supply
Price ceiling
Price floor
Rent control
Minimum wage
Surplus
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Rationing
Black market
Spillover costs
Perfect competition
Commodity
Barrier to entry
Imperfect competition
Start-up costs
Monopoly
Economies of scale
Natural monopoly
Government monopoly
Patent
Franchise
License
Price discrimination
Monopolistic competition
Differentiation
Non-price competition
Oligopoly
Price war
Price fixing
Cartel
Activities/Lessons
Lesson 1: Demand and shifts in demand, elasticity of demand
1. Read chapter 4 and do the reading guide that goes with each section
2. Divide the section up into 5 sections (2 people double up)
a. Law of demand
b. Substitution effect
c. Income effect
d. Demand schedule
e. Demand graph
3. 3 minutes to read and be able to explain the concept
4. Go around and tell every other person in the class about your concept – be sure to talk to
everyone
a. Person being talked to should say it back
5. Back to class- call outs to see what was learned and to clarify and check for understanding
a. Go over the graph
6. Whiteboard lecture on shifts in the demand curve
a. Set up demand curve
b. Put up variables that affect quantity demanded table (discuss each one)
c. Show increases/decreases of demand
7. Explain to three other people what was learned
8. Make a grid on the board – label each column: Product, demand elasticity, reason
a. Under product write: salt, steak, sports car, Picasso painting, chocolate bar, specialty
shoe, toothpaste, dainty gold necklace, milk, silverware
b. Have each student come up and choose a product and fill in the chart
9. Discuss how businesses use elasticity to decide prices
10. SCENARIO 3:
a. Create a demand schedule and graph for one of your products
b. CHANGE 1: The government has just decreased taxes which means everybody has more
money to spend – demonstrate how this will affect your demand graph
c. CHANGE 2: The government has just increased the tax rate for your business so your
over all costs have increased. You now need to change some of your prices in order to
make up for this increase in production costs – demonstrate how this will affect your
demand graph
i. REMEMBER – is your item elastic or inelastic?
11. Quiz on chapter 4
Lesson 2: Supply, costs of production, changes in supply
1. Reach Chapter 5 and do the reading guides for each section
2.