1. Interrelationships between markets Lesson aims: To be able to explain and show how different markets affect each other using demand and supply diagrams To understand how complements and substitutes affect each other, as well as derived demand, composite demand and joint supply

2. Starter (3 minutes): List examples of goods that go together (e.g. fish and chips)List examples of goods that go together (e.g. fish and chips) List examples of things that are substitutes (e.g. chocolate bars and biscuits)List examples of things that are substitutes (e.g. chocolate bars and biscuits)

3. Complements Complements are in ‘joint demand’; if one good is demanded, it is likely that the complement will also be demandedComplements are in ‘joint demand’; if one good is demanded, it is likely that the complement will also be demanded Examples include fish and chips, strawberries and cream, tennis rackets and tennis balls, pancakes and lemonExamples include fish and chips, strawberries and cream, tennis rackets and tennis balls, pancakes and lemon Fig.1, p.61Fig.1, p.61

4. Substitutes A substitute is where one good can be replaced by another; they are in ‘competitive demand’A substitute is where one good can be replaced by another; they are in ‘competitive demand’ Examples could be tea and coffee, Pepsi and Coca-Cola, bacon and sausages, cars and bicyclesExamples could be tea and coffee, Pepsi and Coca-Cola, bacon and sausages, cars and bicycles Fig.2, p.61Fig.2, p.61

5. Question 1, p.62 (8 minutes)

6. Derived demand ‘Derived demand’ is where demand is reliant on that of other goods, or that it is demanded because something else is‘Derived demand’ is where demand is reliant on that of other goods, or that it is demanded because something else is Examples could be flour due to bread, steel due to cars, computer chips due to computers, yeast due to beerExamples could be flour due to bread, steel due to cars, computer chips due to computers, yeast due to beer Fig.3, p.62Fig.3, p.62

7. Composite demand ‘Composite demand’ is when a good can have two or more uses; it may be needed for something which causes a fall in supply for something else‘Composite demand’ is when a good can have two or more uses; it may be needed for something which causes a fall in supply for something else Examples would include milk (drinking, cheese, yoghurt), oil (a whole host of things including petrol and fuels), water (lots), steel (cars, ships, etc)Examples would include milk (drinking, cheese, yoghurt), oil (a whole host of things including petrol and fuels), water (lots), steel (cars, ships, etc) Fig.4, p.62Fig.4, p.62

8. Joint supply ‘Joint supply’ is when a good is supplied for two or more purposes; an increase in the supply of one automatically increases that of its by- product‘Joint supply’ is when a good is supplied for two or more purposes; an increase in the supply of one automatically increases that of its by- product For example, the demand for beef affects the supply of leather, in a similar way that the demand for lamb affects lambs’ woolFor example, the demand for beef affects the supply of leather, in a similar way that the demand for lamb affects lambs’ wool Fig.5, p.63Fig.5, p.63

9. Now and homework Now:Now: Questions 2 and 3, p.62-63Questions 2 and 3, p.62-63 Homework:Homework: Reading – Chapter 9Reading – Chapter 9

10. Diagrams… Draw the two diagrams for: a)Complements b)Substitutes c)Derived demand d)Composite demand e)Joint supply

11. So… What is a complement?What is a complement? Examples?Examples? What is a substitute?What is a substitute? Examples?Examples? What is derived demand?What is derived demand? Examples?Examples? What is composite demand?What is composite demand? Examples?Examples? What is joint supply?What is joint supply? Examples?Examples?