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CHAPTER SIX. PRICES. When demand meets supply Demand greater than supply – shortage Supply greater than demand - surplus. Equilibrium. Price ceilings Rent control Price floors Minimum wage. Government interference with prices. Read 137-140

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CHAPTER SIX

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CHAPTER SIX

PRICES


  • When demand meets supply

  • Demand greater than supply – shortage

  • Supply greater than demand - surplus

Equilibrium


  • Price ceilings

    • Rent control

  • Price floors

    • Minimum wage

Government interference with prices


  • Read 137-140

  • What 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

Prices


  • With table partner, complete Number 11 on page 140

Assessment


What are the two ways in which the government controls prices?

Please provide an example of each.

Question of the Day


Moving toward Equilibrium

- Price and quantity will move toward equilibrium levels

Two Factors that can lead to Disequilibrium

-Shift in supply curve

-Shift in demand curve

Changes in Market Equilibrium


  • 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


  • Supply shock

  • Rationing

  • Black market

Vocabulary


  • In your notebook:

    • Design a supply/demand curve that illustrates a change in equilibrium based on an increase in supply.

Question of the Day


  • Review

    • How does the government affect supply? (3)

    • How does the government affect prices? (2)

Review


  • Equilibrium

  • Disequilibrium

  • Shortage

  • Surplus

  • Supply shock

  • Rationing

  • Black Market

  • Price ceiling

  • Rent control

  • Price floor

  • Minimum wage

  • Inventory

  • Fad

Chapter 6: Pictionary Time


  • What could be negative consequences to:

    • A. Rent control

    • B. Minimum wage

Question of the day.


  • Sketch:

    • Advantages of Price-based system

    • Shortage and Surplus

    • P. 155


  • Pop Quiz


  • Design your own business

  • Select a name and product

  • Graph how your business would respond to:

    • Supply shock

    • Increase in supply

    • Decrease in demand

    • Increase in demand

  • Explain the reasons for the above

  • Be realistic and be neat!

  • Due at the end of class on Friday

  • Your Group Project (1-3 members)


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