1 / 16

Economics

Economics. Economics Learning Targets. Define supply and demand Draw a supply and demand curve and label the parts. Demonstrate the relationship that prices play in supply and demand for different goods and services. Define surplus, shortage, and equilibrium.

lbakken
Download Presentation

Economics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Economics

  2. Economics Learning Targets • Define supply and demand • Draw a supply and demand curve and label the parts. • Demonstrate the relationship that prices play in supply and demand for different goods and services. • Define surplus, shortage, and equilibrium. • Label the parts of the supply and demand curve which identify shortage, surplus, and equilibrium.

  3. What is Economics? • The social science that analyzes the production, distribution, and consumption of goods and services.

  4. The Law of Supply • Law stating that in general, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.

  5. The Law of Supply

  6. The Law of Demand • Law that states that, in general, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.

  7. The Law of Demand

  8. Equilibrium • Equilibrium- the price at which the quantity demanded by buyers equals the quantity supplied by the sellers. Also: market-clearing price • At equilibrium, every buyer finds a seller and every seller finds a buyer

  9. Shortage • Shortage- occurs when the quantity demanded for a product exceeds the quantity supplied. • Why? Price of the product is below the market equilibrium price. • The price is low enough where people will buy it up. • What SHOULD happen?

  10. Surplus • Surplus- occurs when the quantity supplied EXCEEDS the quantity demanded • Examples? • What happens to the price in response? • Increase or Decrease?

  11. Opportunity Cost • Opportunity cost-is the best alternative that we give up, when we make a choice or a decision. • Nearly all decisions involve trade-offs. • Examples?

  12. Elasticity • Elasticity- is the measurement of how changing one economic variable affects others. For example: • "If I lower the price of my product, how much more will I sell?" • "If I raise the price, how much less will I sell?" • "If we learn that a resource is becoming scarce, will people scramble to acquire it?"

  13. Complementary Goods • Complementary goods-are described as those goods that are used with another good. • Examples? • Peanut Butter & Jelly • A ↓ in the price of one good will result in ↑ in demand of both the goods. Conversely, an ↑ in the price will result in a ↓ of demand of both the goods.

  14. Complementary Goods • Example of a complimentary good is pizza and pizza bread. Demand for pizza bread is proportional to demand for pizza. ↑ or ↓ in pizza demand will result in ↑ or ↓ of demand of pizza bread. • A perfect complement of a good one that MUST be used with another good. • Ex: A pair of shoes. • Ex: Computer & Software

  15. Substitute Goods • Substitute goods- are those where one good can be used in place of other. • Examples? Butter and margarine. • ↑ price of one substitute good shall be accompanied by a proportional ↑ in demand of the other. • Conversely, a ↓in price of one will ↓ the demand of another. A perfect substitute is one that can be used in exactly the same way as its counterpart.

More Related