1. Unit 3 Notes Supply and Demand Videos Current Events in Business

2. Price is the amount of money given or asked for when goods and services are bought or sold Supply is the amount of goods and services producers will provide at various prices The price for an item is determined through the interactions of supply and demand

3. Demand is the amount of goods and services that consumers are willing to buy at various prices higher price – lower demand lower price – higher demand Equilibrium price is the point at which the quantity demanded and the quantity supplied meet

4. Demand has an inverse relationship between price and quantity. The higher the price, the less consumers will demand. Supply tends to have a direct relationship between price and quantity. The greater the price, the greater the amount a producer will supply. Market Price (equilibrium)

5. Demand and Supply Curve for DVD’s DVD’s Demanded and Supplied (in thousands) Price Per DVD Equilibrium

6. Supply and Demand Video Supply and Demand News Clip http://www.cbsnews.com/video/watch/?id=736 2063n

7. 1600’s 1700’s1800’s1900’s Colonists bartered and traded Shift to agricultural based economy Big machines for producing goods leads to the Industrial Revolution Computers transform the ways goods and services are produced, delivered and sold While we live in the information age, we also still rely upon aspects of the economies from our past to contribute to the health of the US economy.

8. Brainstorm some industries/products that are on the verge of going extinct due to the age of technology in which we currently live.

9. What are some figures used to measure athletic performance? Figures used to measure economic performance are called economic indicators. Economic indicators measure things such as: * How much a country is producing * Whether the economy is growing * How a country compares to other countries

10. Gross Domestic Product (GDP) * The total value of the goods and services produced in a country in a year * Economists compute the sum of goods and services sold to consumers, businesses, consumers, and other countries * If GDP increases from year-to-year, it is typically a good sign that the economy is healthy and growing * Constant dollar (or real) GDP is used to take into effect price changes from one year to the next to “adjust” for inflation

11. Standard of Living * The level of material comfort as measured by the goods and services that are available * The more goods and services produced per person, the higher the standard of living Unemployment Rate * Measures the number of people who are able and willing to work but cannot find work during a given period of time * Changes in the unemployment rate show whether an economy is picking up or slowing down

12. Inflation * Inflation is a general increase in the price of goods and services * Inflation can be caused by: * Resources transferred to a war effort * Increase in the cost of raw materials, expenses, salaries * The government allowing too much money to circulate in the economy Deflation * The general decrease in the price of goods and services * When the supply of goods in greater than demand, deflation can result

13. National Debt * The main source of income for a government is taxes * Tax money is used to pay for programs such as defense, education and Social Security * When a government spends more on programs than it collects in taxes, the difference is called a budget deficit * To pay for a budget deficit, governments borrow money from the public, banks, and even other countries * The total amount a government owes is called its national debt

14. * Economies go through ups and downs * Wars, foreign competition, changes in technology, and changes in consumer wants influence the cycle * The rise and fall of economic activity is called the business cycle

15. The four stages of the business cycle are: * Prosperity – low unemployment, high production, new business development * Recession – lower production means businesses need fewer employees, increase in unemployment, people have less to spend * Depression – high unemployment and low production, can spread to other countries * Recovery – production starts to increase, citizens go back to work and have money to buy goods and services, new demand stimulates growth in the economy