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Name: _____________________________________Period: ____________EconomicsDate: _____________Aim: How are prices determined in the market place?Do Now: Answer the following questions below.Do you believe people buy more at lower prices and less at higher prices? Why?Do you believe that sellers want to sell more at higher prices and less at lower prices? Why?In the American economy, __________________________________________________ work together to set prices.375031011811000DemandDemand is the consumer’s ____________________________ to purchase a good or service.A ________________________________ is a table that a visual representation of various quantities of a product or service that someone is willing to buy over a range of prices. -190511747500A demand schedule can be shown as points on a __________________________. The graph lists _______________ on the vertical axis and quantities __________________ on the horizontal axis. Each point on the graph shows how many ____________________ of the product or service an individual will buy at a particular price. The demand curve is the _____________________ that connects these points.The demand curve slopes ______________________________. Consumers typically buy ____________ of a product at a ________ price and __________ at a _________ price. According to the law of demand, quantity demanded and price move in ___________________ directions.We buy products for their _______________________- the pleasure, usefulness, or satisfaction they give us.One reason the demand curve slopes downward is due to diminish _______________________The principle of diminishing marginal utility says that our additional ___________________ tends to go down as we consume more and more units.To make a buying decision, we consider whether the satisfaction we expect to gain is worth the money we must give up.4370705952500Demand Curves can also _______________ in response to the following factors: Buyers (# of): changes in the number of consumersIncome: changes in consumers’ incomeTastes: changes in preference or popularity of product/ serviceExpectations: changes in what consumers expect to happen in the futureRelated goods: compliments and substitutes___________________: factors that shift the demand curveDecrease in Demand shifts to the Left (Less demanded at each price)ORIncrease in Demand shifts to the Right (More demanded at each price)Supply37445955143500Supply refers to the various quantities of a good or service that producers are ___________________________________ at all possible market prices. Supply can refer to the output of one producer or to the total output of all producers in the market (___________________).A ______________________________ is a table that shows the quantities producers are willing to supply at various prices-1905254000A supply schedule can be shown as ______________ on a graph. The graph lists _______________ on the vertical axis and ___________________ supplied on the horizontal axis. Each point on the graph shows how many ___________________or service a producer (or group of producers) would be willing sell at a particular price. The __________________ is the line that connects these points.241998514859000As the price for a good _____________________, the quantity supplied _______________ and the quantity demanded falls. As the price _______________, the quantity supplied ______________and the quantity demanded rises.Businesses provide goods and services hoping to make a ___________________. Profit is the money a business has left over after it covers its ____________________.Businesses try to sell at prices _______________________ to cover their costs with some profit left over. The higher the ____________ for a good, the more _________________ a business will make after paying the cost for resources.45891455524500Supply Curves can also shift in response to the following factors: Subsidies and taxes: government subsides encourage production, while taxes discourage productionTechnology: improvements in production increase ability of firms to supplyOther goods: businesses consider the price of goods they could be producingNumber of sellers: how many firms are in the marketExpectations: businesses consider future prices and economic conditionsResource costs: cost to purchase factors of production will influence business decisions________________________: factors that shift the supply curveDecrease in Supply shifts to the Left (Less supplied at each price)ORIncrease in Supply shifts to the Right (More supplied at each price)Supply and Demand at Work_____________________________bring buyers and sellers together.The forces of supply and demand work together in markets to ______________________________.In our economy, prices form the basis of __________________________________.Supply and Demand Schedule can be combined into one chart.A _________________________ is the amount by which the quantity supplied is higher than the quantity demanded.A surplus signals that the price is ________________________. At that price, consumers will not ______________ all of the product that suppliers are willing to supply. In a competitive market, a surplus will not last. Sellers will __________________ their price to sell their goods.A __________________________ is the amount by which the quantity demanded is higher than the quantity suppliedA shortage signals that the price is _____________________. At that price, suppliers will not __________________ all of the product that consumers are willing to buy. In a competitive market, a shortage will not last. Sellers will __________________________ their price.-495307366000When operating without _________________________, our market economy eliminates shortages and surpluses. Over time, a surplus forces the price ________________ and a shortage forces the price _______________ until supply and demand are balanced. The point where they achieve balance is the _________________________________________. At this price, neither a surplus nor a shortage exists.Once the market price reaches equilibrium, it tends to stay there until either _____________________________ changes. When that happens, a temporary surplus or shortage occurs until the price _____________ to reach a new equilibrium price.Supply and Demand IntroductionRiley’s clothing store wants to set a price for a new pair of jeans. Help Riley find the best price that will satisfy both customers and Riley.Plot the points for selling price and number supplied on the graph below. Draw a line through these points and mark the line "Supply".Plot the points for selling price and number demanded. Draw a line through these points and mark the line "Demand".Estimate where supply and demand are equal (in equilibrium). Circle this point and identify the selling price and units sold.Question:From the activity above, how would you define supply and demand in your own words?Comparison of Three Companies’ Prices and Quantities SoldCompany ACompany BCompany CPrice: $5.50Price: $12.50Price: $25Quantity Sold: 1000Quantity Sold: 425Quantity Sold: 10Profit Margin: $0.10Profit Margin: $4.10Profit Margin: $17.75Questions:Which company could continue to sell their product and continue to make a profit for a long period of time?Why do you think so students? Which company over priced their product? What affect did this have on the quantity sold? Why?Which company sold a large quantity? Why would this business not be able to continue to produce this product if the cost went up $.20?What are examples of how you face supply and demand on a daily basis?Task: This activity connects supply and demand to the real world. Students will read articles that show changes in supply or demand, or simply analyze the articles’ summaries and translate the content to the analysis of demand, supply, quantity demanded and quantity supplied, and market equilibrium.U.S. spending on movies and TV shows for home viewing fell 1.8 percent to $17.8 billion last year, as soaring outlays on digital products failed to counter the continued decline of DVDs.The drop accelerated in the fourth quarter, when sales of DVDs fell 16 percent to $2.34 billion and rentals shrank 8.5 percent to $833 million, according to the Digital Entertainment Group, a Los Angeles-based consortium founded by the studios. Digital spending, including rentals, purchases and streaming services, grew 16 percent to $2.12 billion.Home entertainment is a major source of revenue for Hollywood, with sales 70 percent larger than the box office in the U.S. The business has been buffeted by change as online viewing and purchases have grown and spending on DVDs withered. Total home entertainment spending shrank 4.1 percent in the fourth quarter to $5.3 billion, a reflection of those trends.“Consumers embraced the convenience and accessibility of purchasing and collecting digital content, while studios reaped higher margins from these digital sales,” according to the statement.DVD sales are sliding because more consumers are watching content digitally. (This involves two markets.) ................
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