E1 – MARKET ECONOMY
Analysis
ECONOMICS
Topics: Demand
E1
STATION 1: For each of the following problems, state which curve would shift: the
supply curve or the demand curve. Then state whether the curve would shift to the
right (an increase in supply or demand), or shift to the left (a decrease in supply or
demand).
Market
Event
wheat
paper
Hula hoops
A drought destroys much of the crop.
The price of wood pulp rises.
Brad Pitt confides to People magazine that "he gets a
big kick out of his hula hoop."
The average price of stocks falls by over 20%
between now and the end of the year.
Large sports-utility vehicles (like Suburban’s and
Expeditions) become more popular.
E. Coli bacteria are found in another meat plant.
Two oil supertankers collide.
There's an early frost which destroys much of the
crop.
A new pesticide is developed which controls tent
caterpillars.
Scientists discover a pill that cures cancer.
yachts
gasoline
tofu
gasoline
oranges
apples
hospital
beds
cement
Video
rentals
jellybeans
Oreo
cookies
Burger
King
whoppers
Hot dogs
Cowboy
boots
A 7.9 earthquake hits San Francisco.
The price of getting cable TV goes up.
The price of jellybeans goes up.
The price of milk increases.
McDonald's lowers the price of Big Macs.
60 Minutes does an expose called "The Truth about
Hot Dogs."
Old Navy launches an ad campaign called
"Everyone in cowboy boots."
Would the
demand
curve or
supply
curve
shift?
Supply
Would the
curve shift
to the right
or left?
Left
E1 – MARKET ECONOMY
ECONOMICS
Topics: Demand
E1
STATION 2: Movie Analysis
Blood Diamond
What to Watch for and Ask Yourself
1. How is the Demand for Diamonds portrayed in this clip?
2. Why is there conflict over Diamonds, and how does that support war.
Concepts or Examples – Please check the concepts you identify in the clip.
Incentives
Opportunity Cost
Efficiency
Trade-offs
Wants
Demand
Needs
Supply
Personal Reactions- What should the US do to prevent violence as portrayed in the
clip? Why?
E1 – MARKET ECONOMY
ECONOMICS
Topics: Business Franchises
E1
STATION 3: Inferior Goods vs. Normal Goods
Part I: (Read Ch.4: Sec. 2 p. 84-88, then answer the following questions using your textbook.)
1.
Define ceteris paribus.
2.
Define a normal good.
3.
Define an inferior good.
4.
Under the assumption of ceteris paribus, what variable(s) affect demand? What variable(s) do not
affect demand?
5.
Under the ceteris paribus rule, changes in demand move ________ the curve. When other factors
are allowed to change, the entire demand curve shifts. A shift in the demand curve
means__________________
_________________________________________________________.
6.
A movement along a demand curve (when changes in price are only taken into account) is referred to as
a change in the _________________ _________________. A shift of the entire curve is referred
to as a change in __________________.
9. A consumer’s income affects his or her demand for most goods.
How does an increase in income affect the demand of a normal good?
Give 2 examples of normal goods.
How does an increase in income affect the demand of an inferior good?
Give 2 examples of inferior goods.
10. Our expectations about the future can affect our demand for certain goods today. How does
consumer expectations affect the demand of gas at certain times?
11. Changes in the size of the population will also affect the demand for most products. What is a
product that might be affected when there is a growth in the population? How?
What is a product that might be affected when there is a loss in the population? How?
12. Changes in consumer tastes and advertising also affect the demand of products. According to
your personal tastes, what are 3 products you demand?
What are 3 products you do not demand?
E1 – MARKET ECONOMY
ECONOMICS
Topics: Business Franchises
E1
STATION 4: BOYCOTTS
Have you ever heard it said, “Consumers vote with their dollars.” In
a market economy, dollars are a form of consumer power. When
consumers purchase goods and services, we are rewarding
producers and retailers who provide what we want. When we make
a purchase from a particular business, we are also – in effect –
financially supporting the company’s policies and practices.
Of course, we can also make the choice not to buy. A choice not to buy is ordinarily an
individual decision. But sometimes people decide -- as members of a group -- not to buy.
When we collectively refuse to buy a certain product, the action is called a boycott. This is
a technique we can use to register dissatisfaction with a company or a product. Consumers
have come to realize that boycotts can also influence how companies, communities, and
even nations behave.
At any point in time, a multitude of businesses are boycott targets. Several Internet sites
have been developed to help spread the word on and generate support for these consumer
actions. Use this site to find a boycott that you might support or would like to know more
about.
Responsible Shopper: Take Action to End Corporate Abuse:
http://www.greenamericatoday.org/programs/responsibleshopper/act_hub.cfm
CREATE: Explore the website. You may choose any category and any industry. Find a
boycott that you agree with and create a poster that supports the boycott. Please create
your poster on the back of this sheet or a separate piece of unlined paper. Please be
creative and use color.
REFLECT: How does this poster relate to Supply and Demand? How would mass production
of this poster affect the company and/or product? Please answer in complete sentences
and in paragraph form.