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JA Economics

http://www.youtube.com/watch?v=CouzZNjuyRM&feature=related. JA Economics. Demand – Chapter 3. http://www.youtube.com/watch?v=kKAU856roF0&feature=related. Why it Matters . Consumer Limited Income Good choices. Page 32. FREE enterprise. Market competition. entrepreneurship.

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JA Economics

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  1. http://www.youtube.com/watch?v=CouzZNjuyRM&feature=related JA Economics Demand – Chapter 3 http://www.youtube.com/watch?v=kKAU856roF0&feature=related

  2. Why it Matters • Consumer • Limited Income • Good choices

  3. Page 32 FREE enterprise Market competition entrepreneurship Voluntary exchange Private Property The Price System Specialization

  4. Influences of the Market • Entrepreneurs bring new products to the market • Interest in the new product • Economy evolved • People traded with one another

  5. Law of Demand

  6. Demand • What does it mean? • Economists usage. • Page 33, “How many hamburgers would you buy?” TEST QUESTION

  7. TEST QUESTION Think of prices

  8. Diminishing marginal utility • Diminishing • = reduced • Marginal • =additional • Utility • = satisfaction

  9. Market Demand

  10. Price Elasticity of demand • Measurement • Indicator • See page 39 (milk and cola) TEST QUESTION

  11. Prices in 1990 • Stamp: $0.25 • Gallon of Gas: $1.16 • Gallon Milk: $2.78

  12. Prices in 2011 • Stamp: $0.44 • Gallon of Gas: $3.09 • Gallon Milk: $3.67

  13. Change in Demand • Does a change in price change demand? • Look at page 41 • What could cause the demand for gas to shift?

  14. 7 Factors that Affect Demand • Change in Income • Prices or Availability of Substitutes • Prices or Availability of Complementary Goods • Change in the Weather or Season • Change in the Number of Buyers • Change in Styles, Tastes, Habits • Change in Expectations TEST QUESTION

  15. Change in Income • What can change your income?

  16. Prices or Availability of Substitutes • Public transportation

  17. Prices or Availability of Complementary Goods • Price of chips goes down due to sale… • What will consumer also buy? • Shift to the right when the two goods tend to be consumed or used together in relatively fixed or standardized proportions

  18. Change in weather or season

  19. Change in number of buyers Shift to the right due to more quantity being demanded.

  20. Changes in styles, tastes and habits. • Electric cars

  21. Change in expectations • Consumers look to the future

  22. Your Future • SUPPLY! • How does supply illustrate the price effect?

  23. JA Economics Supply – Chapter 4

  24. Why it Matters • Understanding how the producers think. • What good and services to produce? • How should they be produced? • Who will they be produced for?

  25. Price Effect • Demand • Consumers buy less of something at a higher price than a lower price • Supply • Producers are willing and able to produce more at a higher price

  26. Law of Supply

  27. Graphing Supply

  28. Market Supply • More than one producer in a market • Marginal Costs differ • Higher prices provide an incentive

  29. Price Elasticity of Supply • Like demand there is elasticity in supply • Depends on the response or ability of producers

  30. Entrepreneurs • Increase supplies • Raise employment • Push incomes higher

  31. Price effect and supply

  32. Changes in Supply • Changes in marginal cost of production • Changes in the number of producers • Change in expectations TEST QUESTION

  33. Changes in Marginal Cost of Production • Research • Worker suggestion for efficiency • Marginal cost of productions falls

  34. Changes in the Number of Producers • New businesses • Popularity

  35. Change in Expectations • Price of oil • Price of SUVs

  36. Your Future • Market-Clearing Price • Combine chapters 3 and 4 • Roles of prices in a market economy

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