Economics - Weebly · government controls are a barrier to entry. 2. This is an example of perfect...

ECONOMICS10/15-10-19

AGENDA 10/15

• BW-Math Minutes

• PPT/ Notes—chapters 4-6

• Exit Ticket

• Thursday—Quiz over chapters 4-6

can use any HANDWRITTEN

NOTES IN YOUR NOTE BOOK

Essential Questions

SCHEDULE 10/16

• Schedule 10/16

• All schedules stay the same

except seniors—classes will just

be relocated.

• Rachel’s challenge assembly will

be run 3 times by grade level.

• Seniors taking the ACT should

report to O hall by 8:30

• Higbe’s Classes

Relocation

• 2nd-- A 215 (if not at the

Rachel’s Challenge

Assembly)

• 4th –B205

• 5th-A 220 (should still be

at ACT)

Math Minute 5

1. Complete the table.

2. If 3a – 7 > 14, which of these could a be?

a. 8 b. 5 c. 1 d. –8

3. If y = x3 and x = –3, then what does y equal?

4. 16 =

5. 16 2 =

6.

7. 10 + (–6)(–7) – 1 =

8. 123

125

9. Find x if 4𝑥

5= 20.

10. In the equation y = 2x + 3, find y if x = 4.

Answers

AGENDA 10/17

• BW-Need to Know

• PPT Notes—Pricing

• Reading Questions Supply/Demand and Fire sales —

• Exit Ticket

• **Open Note Quiz tomorrow—all notes on last weeks weeblyPPT**

• E.11 Define supply and demand, and provide relevant examples. (E)

• E.12 Describe the role of buyers and sellers in determining the equilibrium price. (E)

• E.13 Describe how prices of products as well as interest rate and wage rates send signals to buyers and sellers of products, loanable funds, and labor. (E)

• E.16 Demonstrate how supply and demand determine equilibrium price and quantity in the product, resource, and financial markets, including drawing and reading supply and demand curves. (E)

• E.17 Identify factors that cause changes in market supply and demand. (E)

• E.18 Demonstrate how changes in supply and demand influence equilibrium price and quantity in the product, resource, and financial markets. (E)

• E.19 Demonstrate how government wage and price controls, such as rent controls and minimum wage laws, create shortages and surpluses. (E)

• E.21 Use concepts of price elasticity of demand and supply to explain and predict changes in quantity as prices fluctuate. (E)

Essential Questions

NEED TO KNOW 10/171.Why is the man eating a

salad made out of five-

dollar bills?

2. How does the cartoon

show the law of demand?

3.What products (besides

five-dollar bills) might you

substitute for lettuce if the

price of lettuce increases?

4. Does the man’s unusual solution to

the rising price of food symbolize

the substitution effect or the

income effect? Why?

5. Which groups of consumers do

rising food prices affect the most?

Which groups do rising food prices

affect the least? Why?

Income effect—the change in demand that results when a price increase causes real income to decline

I Highly recommend you write down what is in YELLOW for your benchmark

•The law of demand states that as the price of a good or service increases, the quantity of that good or service will decrease.

• Checkpoint: What happens to demand for a good when the price increases?

– Changes in price

are an incentive;

price changes

always affect

quantity demanded

because people

buy less of a good

when its price

goes up.

•The substitution effect takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good

• How does market demand change when the price falls from $3 to $2 a slice?

• How many slices does Ashely demand at $4 a slice?

If the market price for pizza is $2.00 a slice, how many slices will be supplied by all producers in the market, according to Figure 5.4? (E17)A. 200 C. 250B. 2,000 D. 2,500‘

According to Figure 5.4, how many slices of pizza will one pizzeria be willing to supply at a market price of $1.50 a slice? (E17)A. 100 C. 300B. 200 D. 1,000

• Shifts in the demand curve are caused by more than just price increases and decreases. Other factors include:

• Income• Consumer Expectations• Population

demand to fall, the demand curve shifts to the left. An increase in demand appears as a shift to the right.• If the price of a coke rose by one dollar, how would you show the change on

one of these graphs?

•Demographics are the characteristics of populations, such as age, race, gender, and occupation.

•The law of supply states that as the price increases, the quantity supplied increases.

• As the price of a good increases, producers will offer more of it and as the price decreases, they will offer less.

• What does the individual supply schedule tell you about the pizzeria owner’s decisions?

• How does the market supply schedule compare to the individual supply schedule?

• A supply curve always rises from left to right because higher prices leads to higher output.

• Checkpoint: What are the two variables represented in a supply schedule or supply curve?

A. A sandwich shop increases the number of sandwiches they supply every

day when the price is increased.

B. A catering company buys a new dishwasher to make their work easier.

C. A milling company builds a new factory to process flour to export.

D. A food producer increases the number of acres of wheat he grows to

supply a milling company.

Which of the following is the best example

of the law of supply? (E21)

•Elastic•When elasticity is greater than one, supply is

very sensitive to price changes• Inelastic

•When elasticity is less than one, supply is not very responsive to price changes.

•The addition of new workers will increase production until it reaches its peak, at which point, production actually decreases.

• Factors that reduce supply shift the supply curve to the left, while factors that increase supply move the supply curve to the right.

• Which graph best represents the effects of higher costs?

• Which graph best represents advances in technology?

• Life is full of signals that help us make decisions.

• For example, when we pull up to an intersection, we

look to see if the traffic light is green, yellow, or red.

• We look at the other cars to see if any have their

blinkers on, and in this way we receive signals from

other drivers regarding their intentions to turn.

• something as simple as a price–

the monetary value of a product

as established by supply and

demand–is a signal that helps us

make our economic decisions.

•How many slices are sold at equilibrium?

• How much is the shortage when pizza is sold at $2.00 per slice?

• Rent Control

• Sets a price ceiling on apartment rent

• Prevents inflation during housing crises

• Helps the poor cut their housing costs

• Can lead to poorly managed buildings because landlords cannot afford the upkeep.

• The sudden increase in market demand cause the demand curve to shift to the right.

• What impact did the change in demand shown in the graph have on the equilibrium price?

shortages are common.

•One response to shortages is rationing.

• During World War II, the federal government used rationing to control shortages.

The Wealth of Nations, Adam Smith wrote that businesses do best when they provide what people need.

• Financial rewards motivate people.

1. Look at the graph. What does the line that slopes down to the rightrepresent?a. supply b. demandc. market d. equilibrium

2. Look at the graph. What does the point where the two lines crossrepresent?a. supply b. demandc. market d. equilibrium

Perfect Competition Exit ticket

Directions: Read the description of each market. Then tell whether the market is an example of nearly perfect competition. Explain your answer.

Perfect Competition Exit ticket

1. Aspirin is one of the most widely used drugs in the world. Although many companies make and sell aspirin, all aspirin is pretty much the same. Because aspirin is a drug, the government has some control over companies that make it.

Is this an example of perfect competition? Why or why not?

Perfect Competition Exit Ticket2. Wheat is one of the most important agricultural products in the United States. Wheat is grown by many farmers throughout the country, especially in the Midwest. Buyers from many companies travel throughout the United States to find wheat for breakfast cereals, bread, flour, animal food, and many other products. Buyers seek out the best prices, knowing they’ll get essentially the same product wherever they find it. Farmers may grow more or less wheat from year to year, depending on the prices they can expect. If wheat prices fall too low, they can switch to corn or other grains if they believe they can make more profit. Buyers likewise may switch to other grains if wheat prices rise too high, or if other grains become cheaper.

Is this an example of perfect competition? Why or why not?

Perfect Competition Exit Ticket

3. Two firms, Boeing and Airbus, produce most large passenger airplanes. It costs billions of dollars to develop a new type of airplane. One airplane can cost more than $260 million. The competition between these two firms is fierce.

Is this an example of perfect competition? Why or why not?

Answers1. This is not perfect competition because there are high start-up costs, and

government controls are a barrier to entry.

2. This is an example of perfect competition. There are many buyers and sellers, the product is standardized, buyers and sellers are informed, and sellers can easily get into or out of the market

3. This is not a perfectly competitive market. There are only two major manufacturers. The high cost of developing and building the planes is a barrier to entry.