Pt 1: Café Chico’s Burritos
Click on the following links:
https://americanheritage.byu.edu/pages/gamesandactivities/supply-and-demand-interactive-chart.aspx
https://americanheritage.byu.edu/Pages/GamesandActivities/Market-Economy.aspx
1) The first link is an interactive site which will allow you to see how price reflects a change in demand
and supply or can instigate.
2) The second link is an interactive that will show you how a market economy works through the
quaint story of Café Chico’s Burritos
3) Use the information from the websites and digital interactive to answer the following questions by
writing your answers in the space right of the question.
Use the images below to ensure you are on the right page.
Questions
What does the Dark Gray Line represent?
Answers
Two Word answer: Demand Curve
What does the Law of Demand state?
As the price of a good goes decreases, more people
will “demand” or be willing purchase that good.
What does the Light Gray Line represent?
Two Word answer: Supply Curve
What does the Law of Supply State?
As the price of a good increases, more suppliers will
be willing to produce that good.
What does it mean when the graph is at
equilibrium?
The quantity demanded equals the quantity
supplied.
When the price is at $5.00, what is the numerical
(number) value of the supply and demand?
60
When you change the price to $6.70, what is the
numerical value of the supply and the numerical
value of the demand?
Demand: 38 Supply: 80
At the price of $6.70, Does the Graph show a
Shortage, Surplus or Equilibrium? Explain your
answer.
A surplus because the price is so high that produces
want to make more than people want to buy, leaving
extra burritos.
When you change the price to $3.20, What is the
numerical value of the supply and the numerical
value of the demand?
Demand: 91 Supply: 38
At the price of $3.20, Does the graph show a
Shortage, Surplus, or Equilibrium? Explain your
answer.
A shortage because the prices are so low that
consumers are buy more than what producers are
willing to supply, leaving not enough burritos.
Critical thinking: Let say a farm which makes a key
ingredient for the burritos suddenly faces a drought.
How might this affect a produces willingness to
make burritos and how might the price change?
With a drought affecting a key ingredient of the
burrito, the cost of making the burrito will increase
and, so the produce will be unwilling to sell the
burrito at its current price thus the price for selling
the burrito will also increase.
With a competing restaurant, the demand for the
Café Chico’s burritos may now no longer be as high,
in order to regain customers, the Café may lower
their prices.
Critical thinking: If a competing Burrito restaurant
called Buri-todos opens up near Café Chico. How will
the demand of Café Chico’s burritos be affected and
how might such a development change their price?
Pt 2: Understanding the language of Supply and Demand
Click on the following links and answer the following questions on this sheet.
http://www.investopedia.com/terms/c/complement.asp
http://www.investopedia.com/terms/s/substitute.asp
Make sure to read the “Definition” and “Investopedia Explains” sections.
Questions
Answers
What is the definition of a complement good?
What is another example of a complement good
that was not mentioned in the website?
What is the definition of a substitute good?
What is another example of a substitute good that
was not mentioned in the website?
Pt 3: Let’s see how well you really understand Supply and Demand!
The following link will lead you to a “game” which will put you in the role of an entrepreneur to see who
well you understand how to make money in a market governed by supply and demand.
http://www.shmoop.com/supply-demand/game-D623795642C84F09A486C99993F88056
You will work in groups to answer the questions on the website then reflect on your experience in the space
below.
Synthesize all the data collected in this Webercise into 1 paragraph (Five sentences) to answer the
following question.
How do the notions of Supply and Demand help business owners create a successful business?