CHAPTER SIX PRICES
Jan 11, 2016
CHAPTER SIXPRICES
Equilibrium
When demand meets supplyDemand greater than supply – shortageSupply greater than demand - surplus
Government interference with prices
Price ceilings◦Rent control
Price floors◦Minimum wage
Prices
Read 137-140What is the argument for and against rent
control?With partner, answer number 1 + 2 on p.
138
Prices
What is the argument for and against minimum wage?
With partner, answer number 1 + 2 on p. 139
Assessment
With table partner, complete Number 11 on page 140
Question of the Day
What are the two ways in which the government controls prices? Please provide an example of each.
Changes in Market Equilibrium
Moving toward Equilibrium- Price and quantity will move
toward equilibrium levelsTwo Factors that can lead to Disequilibrium
-Shift in supply curve-Shift in demand curve
An Increase in Supply◦A Changing Market that increases supply Inventory will pile up (surplus)Suppliers will reduce prices to clear out the surplus
With the lower price, demand will increase and the market will find equilibrium
A Decrease in Supply◦As supply decreases, suppliers will raise their prices
◦Demand will fall◦With the lower price, demand will increase and the market will find equilibrium
An Increase in Demand◦ Supply . . . ◦ Price . . .
A Decrease in Demand ◦ . . . ◦ . . .
Complete Number 10 on page 147
Vocabulary
Supply shockRationingBlack market
Question of the Day
In your notebook:◦Design a supply/demand curve that illustrates a
change in equilibrium based on an increase in supply.
Review
Review◦How does the government affect supply? (3)◦How does the government affect prices? (2)
Chapter 6: Pictionary Time
EquilibriumDisequilibriumShortageSurplusSupply shock RationingBlack Market
Price ceilingRent controlPrice floorMinimum wageInventoryFad
Question of the day.
What could be negative consequences to:◦A. Rent control◦B. Minimum wage
Sketch:◦Advantages of Price-based system◦Shortage and Surplus◦P. 155
Pop Quiz
Your Group Project (1-3 members)
Design your own businessSelect a name and productGraph how your business would respond to:
Supply shock Increase in supply Decrease in demand Increase in demand
Explain the reasons for the aboveBe realistic and be neat!Due at the end of class on Friday