• Strand E1 The Market Economy
    Standard 1.3
    Prices, Supply, and Demand
    Grade Level  HS
     
     
     
     
    1.3.1
     
     
    1.3.2
     
     
    GLCE/HSCE
    Law of Supply Explain the law of supply and analyze the likely change in supply when there arechanges in prices of the productive resources (e.g., labor, land, capital including technology), or the profit opportunities available to producers by selling other goods or services, or the number of sellers in a market.
     
    Law of Demand Explain the law of demand and analyze the likely change in demand when there are changes in prices of the goods or services, availability of alternative (substitute or complementary) goodsor services, or changes in the number of buyers in a market created by such things as change in income or availability of credit.
     
    Price, Equilibrium, Elasticity, and Incentives Analyze how prices change through the interaction
    of buyers and sellers in a market including the role of supply,  demand, equilibrium, elasticity, and explain how incentives (monetary and non-monetary) affect choices of households and economic organizations
     
    Key concepts
    Essential understandings
    (Procedural or Conceptual)
    Vocabulary
     - law of supply, profit, opportunities, goods, services, sellers, market, law of demand, change in demand, buyers, equillibrium, elasticity, incentives, monetary, economic organizations
    Aligned Assessments
     Students will know
     
    1. The law of supply as it relates to the factors of production
    2. The law of demand as it relates to substitute and complementary goods
    3. How price can change through supply/demand elasticity and incentives
     
     
     
     
     Students will be able to
    1. Justify changes in the law supply by plotting a graph to show how the factors of production, subsitutes, and the impact of sellers have on the market
    2. Justify changes in the law of demand by plotting a graph to show the impact of alternative goods and services, changes in number of buyers and changes in income and credit
    3. Plot a graph and interpret the effect supply/demand elasticity has on the equilibrium price, and how incentives affect the behavior of households and economic organizations
     
    Student Friendly Language Target Assesment
    1. I can justify change in the law of supply by plotting a graph to show how the factors of production, substitutes, and the impact of sellers have on the market
    2. I can justify changes in the law of demand by plotting a graph to show the impact of alternative goods and services, changes in number of buyers and changes in income and credit
    3. I can plot a graph and interpret the effect supply/demand elasticity has on the equilibrium price, and how incentives affect the behavior of households and economic organizations
     
    Assessment: 1

    Supply/Demand Scenarios and effects on Market Price and Quantity

    1. Heavy frost destroys a large portion of the coffee crop this year and people switch more to drinking tea. What will happen to the demand, supply, market price and market quantity of coffee and tea? Circle the correct answer in each box below.


    Coffee

    Tea

    Demand

    Increase Decrease

    Increase Decrease

    Supply

    Increase Decrease

    Increase Decrease

    Market Price

    Increase Decrease

    Increase Decrease

    Market Quantity

    Increase Decrease

    Increase Decrease

    1. People’s taste has changed regarding type of shoes being bought. People are buying more leather shoes versus tennis shoes. What will happen to the demand, supply, market price and market quantity of leather shoes and tennis shoes? Circle the correct answer in each box below.

     
    Leather Shoes
    Tennis Shoes
    Demand
    Increase Decrease
    Increase Decrease
    Supply
    Increase Decrease
    Increase Decrease
    Market Price
    Increase Decrease
    Increase Decrease
    Market Quantity
    Increase Decrease
    Increase Decrease
     
     

    Assessment 2:

    T-Shirt Factory Law of Supply

    Price per T-Shirt

    6.00

    8.00

    10.00

    13.00

    14.00

    16.00

    Number of T-Shirts

    25

    50

    60

    100

    200

    400

    Creating a Supply Curve

    Use the information above for the questions below.
     
    Create a supply curve for the number of T-Shirts and price per shirt.  Then analyze the graph and answered the
    following questions
    1. At what price would suppliers supply 75 T-Shirts
    2. What would be the supply of T-Shirts at 9.00 Dollars?
    3. Would you say, in this scenario, the supply of T-shirts is elastic or inelastic?
    Change in Supply

    Identify the change in supply (increase or decrease) and why supply has changed in each of the following scenarios.

    1. The cost of materials used to make the T-shirts falls
    1. The T-shirt company sends employees to a seminar to learn new training methods improve worker efficiency
    1. The T-Shirt company opens its first store in a town
    1. The corporate tax increases
    1. The T-shirt company machines have broke down recently and replacement parts are hard to find.
    1. The government issues subsidies for all T-shirt manufacturers
    1. Government passes a law stating all T-shirts must be made of non-flammable material.
    Assessment 3

    Market Price Homework

    Market for DVD Players

    Price per Player

    Quantity Demanded

    Quantity Supplied

    $599

    25

    600

    $499

    75

    525

    $379

    150

    400

    $279

    325

    325

    $199

    500

    75

    1. Create a graph representing both demand and supply curves


    Answer the following questions using the chart above

    1. Estimate the following
      1. What is the market price
      2. What is the quantity supplied/demanded at the market price
    1. If the electronic store decided to sell the DVDs at 199 dollars
      1. The quantity demanded at that price is _________ units
      2. The quantity supplied at that price is ________ units
      3. This situation has created a shortage/surplus (circle one)
      4. What is the quantity of the shortage or surplus _________

    1. If the electronic store decided to sell the DVDs at 499 dollars
      1. The quantity demanded at that price is _________ units
      2. The quantity supplied at that price is ________ units
      3. This situation has created a shortage/surplus (circle one)
      4. What is the quantity of the shortage or surplus _________
     
    Assessment 4

    Below are newspaper headlines regarding beef sales in the United States. Decide whether the headline would increase or decrease demand, which determinant is causing the shift and what line on the graph would represent the shift of demand.

    Headline

    Increase or Decrease of Demand

    Which determinant is causing the shift?

    Which line on the graph would this shift represent? (See chart below)

    Price of Chicken increases

    Millions of immigrants swell US population

    Pork prices to drop

    Income across the US drops for the 3rd month

    Shortage of charcoal across the US

    Ray Kroc opens the first McDonald’s and invents the Big Mac

    Glenn’s has a sale on hamburger buns

     


    Assessment 5
     
    For each product, identify whether it is elastic or inelastic for each reason. At the end, write a paragraph for each, explaining why you think the product is more elastic or inelastic

    Product

    Substitutability

    Portion of Income

    Luxury or Necessity

    Habit

    Time

    Gasoline

    Playstation3

    Butter

    Automobile

    Cigarettes

    1. Is Gasoline elastic or inelastic, why?
    1. Is Playstation3 elastic or inelastic, why?
    1. Is butter elastic or inelastic, why?
    1. Is an automobile elastic or inelastic, why?
    1. Are cigarettes elastic or inelastic, why?
     
     
     
Last Modified on February 14, 2018