Power Point 4 Unit 2 Economics Microeconomics Supply

Power. Point 4 Unit 2 Economics Microeconomics: Supply and Demand

Essential Question 1. Explain the Law of Supply and how changes in our society result in shifts in producer’s willingness and ability to provide goods and services. 2. Give specific examples of real world events that would result in shifts in supply for particular products. Ø Write down only the words in yellow BUT answer both questions in your summary

Market Equilibrium • Equilibrium Price – price where quantity demanded = quantity supplied • Equilibrium Quantity – quantity where quantity demand =quantity supplied at the equilibrium price

Equilibrium • https: //www. youtube. com/watch? v=7 e. Zc. Ps 9 z 9 OA

Rationing Function of Prices • Definition: the ability of the competitive forces in the market to bring the market to equilibrium

Rationing Function of Prices • https: //www. youtube. com/watch? v=nj. TKa-dn. JPo

Price Floors and Ceilings • https: //www. youtube. com/watch? v=Xg. BPAuc s-W 4

Changes in Market Equilibrium • https: //www. youtube. com/watch? v=Ng. Pqy. M 3 I_8 o • Draw a few if the graphs on your paper

Surplus • When quantity supplied > quantity demanded (occurs at prices above equilibrium)

Consumer and Producer Surplus • https: //www. youtube. com/watch? v=n 0 LXk. A 9 kato

Shortage • When quantity demanded > quantity supplied (occurs at prices below equilibrium)

Market Equilibrium 200 Buyers & 200 Sellers Market Demand 200 Buyers Qd $5 2, 000 4 4, 000 3 7, 000 2 11, 000 1 16, 000 6 6, 000 Bushel Surplus 5 Price (per bushel) P Market Supply 200 Sellers S P $4 Price Floor 4 3 $2 Price Ceiling 2 7, 000 Bushel Shortage 1 0 2 4 6 7 8 10 D 12 14 Bushels of Corn (thousands per week) 16 18 Qs $5 12, 000 4 10, 000 3 7, 000 2 4, 000 1 1, 000

Essential Question 1. Explain the Law of Supply and how changes in our society result in shifts in producer’s willingness and ability to provide goods and services. 2. Give specific examples of real world events that would result in shifts in supply for particular products. Ø Answer both questions in your summary