Introducing Supply and Demand A Market in Wheat Introducing Supply and Demand

“How to Play a Market in Wheat” Q & A with last night’s Homework/ reading.

Activity 7.4 - Scoresheet Circle whether you are a buyer or a seller. You will not change roles during the simulation

Notice that there is room for several rounds Notice that there is room for several rounds. Record all of your information!

Profit is a gain (+) Loss is a loss(-)

After each transaction, only the buyers go to the tally sheet and have the recorder check off your transaction There will be three rounds of buying/selling The first round is a practice round There will be a prize for the most profitable buyer and the most profitable seller After each round you will have time to add up your profits and losses Any Questions?

Help!? I need a few volunteers for: Tallying Redistributing “buy” and “sell” cards

Visual 7.1 - Classroom Tally Sheet Price Round 1 Round 2 Round 3 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10

After Round One In order to make a large profit, should you be making many or few transactions? Should you let other students see your card? Do you have to make a profit on every transaction to have a profit at the end? Should you watch the tally sheet during the trading rounds?

Visual 7.1 - Classroom Tally Sheet Price Round 1 Round 2 Round 3 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10

Follow-up questions, starting with… At what price was wheat most frequently sold in each round?

Follow-up questions, contd. In which round did the greatest spread in prices occur? Did the prices tend to cluster more in the later rounds? Why? Did the buyers or sellers determine the price of wheat? How did competition among the sellers and the buyers influence price?

Follow up questions In the first part of the simulation, there was an equal number of buyers and sellers. What happened to the price when there were more buyers than sellers?

Activity 7.5 – Supply and Demand Plot this Information on your graph Then, plot this information of your graph. You may want to use two colors, one for supply and the other for demand Answer the following questions using complete sentences.

Your graph should look like this!

Where is the equilibrium price? It is where demand and supply intersect

Reflection - So, what did we learn? Take 10 – 15 minutes to construct a written response/ reflection of the Wheat market Game – what you do not finish in class you may take home to complete; this will be graded and entered into Infinite Campus. In your response, be sure to complete the following: Use PEA format Construct a complex Thesis/ claim Include talking points on your role (buyer/ seller) as well as both of the concepts supply and demand Include discussion on the economic concept of equilibrium