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Economics

Economics. Do Now: Imagine two rooms- one with three switches, the other with three lightbulbs . Each switch controls a different lightbulb . Because the lightbulbs are in a different room, however, you cannot immediately see the lightbulbs go on.

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Economics

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  1. Economics Do Now: Imagine two rooms- one with three switches, the other with three lightbulbs. Each switch controls a different lightbulb. Because the lightbulbs are in a different room, however, you cannot immediately see the lightbulbs go on. You may spend as much time as you like in the room with the light switches, but you must eventually go into the room with the lightbulbs. Once you enter that room, you may not return to the one with the switches and you must determine within 30 seconds which switch is connected to which bulb. How do you do it? Do Later: answer two questions on the wiki site. Read chapter 4 Actively

  2. Review: • The law of demand: • The law of supply: • What does it mean for a market to be at or not at equilibrium? • What do the demand and supply curves look like?

  3. Reading the demand and supply curves Which is the demand curve? What does line 1 mean? What does line 2 mean? What does line 1 mean on the supply curve? Line 2? What happens when we are not at the market clearing price?

  4. Price floors: • Price floors are limits on how low a price can fall. • Why do you think they might use them? • What happens to the rest of the goods?

  5. Price ceilings • Price Ceilings are restrictions on how igh a price can go • Why do you think they might be used? • What might develop to fulfill the demand?

  6. What do you think? • What are the effects of price ceilings and floors?

  7. Your turn! • Please turn to the questions at the back of chapter 3: answer the true/false questions with explainations.

  8. Do Later • Answer two questions on the wiki site. • Read chapter 4 Actively

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