1. Introduction to Supply and Demand Windy Mulder Horizon Middle School

2. Happy Friday!  Please write today’s agenda in your planner  Warm up:  Read the article about the butter shortage in Japan. Then answer this question in the warm up section of your binder:  Why are dairy producers less motivated to produce butter?

3. Video and Questions  Hula Hoop video clip Hula Hoop video clip  Think about these questions as you watch the video: 1.Why does a business owner lower the price of a product that is not selling quickly? 2.When would a business owner have the incentive to raise prices? 3.What does the rising price of a good or service tell consumers about the demand for that product?

4. Vocabulary  MARKET ECONOMY Economic system in which there is free competition and prices are determined by the interaction of supply and demand

5.  SUPPLY The quantity(amount) of the demanded item at a particular price

6.  SURPLUS When the supply exceeds the demand

7.  SHORTAGE When there is more demand for an item than there is available supply

8.  CONSUMER Person who buys or uses a good or service

9.  PRODUCER Someone who makes a good or provides a service

10.  GOODS Inherently useful and relatively scarce tangible items

11.  SERVICES Intangible products that are provided by someone to another in exchange for payment

12. Closure  Auction  Class Debrief  What happened when the demand for the item was high?  What was the incentive to raise the price?  What does the rising cost of the good tell consumers about the demand for the product?