Chapter 21 https://www.youtube.com/watch?v=RP0j3Lnlazs Supply and Demand Chapter 21 https://www.youtube.com/watch?v=RP0j3Lnlazs

Demand Chapter 21 Sections 1 and 2

Demand Demand- desire, willingness, and ability to buy a good or service Demand Curve- shows the amount bought at all prices (Goes down) Law of Demand- people are willing to buy less if the price is high and more if the price is low Graphing Notes: Quantity X-axis Price Y-axis Each point on the graph shows how many bought or sold at that price

Change in Demand When demand is down people buy less at all prices Demand curve shifts to the left When demand is up, people buy more at all prices Demand curve shifts to the right Graph Drink Machine Example http://www.stlouisfed.org/education_resources/economic-lowdown-video-companion-series/episode-2-demand/ Do Law of Demand & Changes in Demand Worksheets 1 2 3

Supply Chapter 21 Section 3

Supply Supply- quantities of a good or service that producers sell Supply Curve- shows the amount of a product producers are willing to supply at all prices (Goes up) Law of Supply- suppliers will offer more if the price is high and less if the price is low

Changes in Supply When supply is down sellers have less at all prices Supply curve shifts to the left When supply is up sellers have more at all prices Supply curve shifts to the right http://www.stlouisfed.org/education_resources/economic-lowdown-video-companion-series/episode-1-supply/ Do Law of Supply & Changes in Supply Worksheets

Supply and Demand Chapter 21 Section 4

Price Adjustment Process Supply and Demand Graphing Notes: -Quantity always on X-axis -Price always on Y-axis Price Adjustment Process Price Quantity Demanded Quantity Supplied $50 100 275 $40 150 225 $30 180 $20 230 105 $10 300 55 $5 400 30

Equilibrium Where supply and demand curves intersect is equilibrium Equilibrium Price- price at which the amount producers supply is equal to the amount consumers demand Ex. Equilibrium price for the video game is $30 http://www.stlouisfed.org/education_resources/economic-lowdown-video-companion-series/episode-3-equilibrium/

Surplus Surplus- amount by which the supply is more than the demand Surplus signals that the price is too high and there is not enough demand for the product– sellers will have to lower prices to sell products Ex. If the video game is $40 sellers will supply 225 but buyers will buy 150– a surplus of 75

Shortage Shortage- amount by which the demand is more then the supply Shortage signals that the price is too low and too many people demand the product– prices will rise Ex. If the video game is $20 sellers will supply 105 but buyers will buy 230– a shortage of 125