1. 9/3/13 “Wants vs. Needs” 1.What makes something an economic “need”? Needs have to be necessary for survival. 2.Explain why someone might argue that getting an education is an economic need. On desk: Your object of value

2. 9/3/13 Econ. Agenda 1.Silent Auction 2.What gives things value? (class notes) 3.Supply & Demand, Substitutes (class notes) 4.Assignment: Substitutes, Supply & Demand HW (write in agendas): Substitutes, Supply & Demand assignment due Wed. (A) & Thurs. (C)

3. Silent Auction Fill out bid sheet for your object Walk around and SILENTLY bid on everyone’s objects. 5 MINUTES.

4. Take a look at your bid sheets…. Did you get the amount of money you were hoping for? Why or why not?

5. 9/3/13 Class notes What gives things value? 2 types of value: 1.Sentimental value: Worth based on personal or emotional association. How much is something worth to you? 2.Real value: Generally agreed upon material worth. How much is something worth to everyone else? Silent Auction examples:

6. 9/3/13 Class notes Different factors affect the real value of products: Supply: Quantity available How much or how many of a product is available? Demand: Quantity wanted How many people want a product? **Demand is generally measured by a product’s price How much are people willing to pay for a product?

7. 9/3/13 Demand & price example Nike releases Air Jordan 7’s & everyone wants them. Demand: high or low? Price: high or low? Harrison tries to sell his dirty old sneakers that no one wants. Demand: high or low? Price: high or low?

8. 9/3/13 Class notes How does supply affect demand? As supply increases…demand decreases As supply decreases…demand increases

9. Supply and Demand Candy Auction You are starving & I have….Bid as much as you want. 1 package of candy package of candy

10. What happened to the demand for candy as the supply increased? Candy supply: Demand for candy (price you were willing to pay for each piece):

11. 9/3/13 Class notes 2 ways to increase the supply of a product: (increase in supply = ______________ in demand/price) 1.Increase supply of a particular product 2.Increase the number of substitutes Substitute: Similar goods that give consumers the option to buy basically the same product

12. Substitutes affect supply and demand Example: Cell Phones Now that Nokia, Samsung, and Verizon make smart phones, the supply of smart phones has increased. Thus, the iPhone price has decreased because the supply of smartphones has increased. Original iPhone - $500

13. 9/3/13 Class notes How does supply affect demand? As supply increases…demand decreases As supply decreases…demand increases

14. Substitutes Assignment (due: next class) Choose any brand name product that you use. Think of at least 4 substitutes for your product. Find prices for all items & fill out chart. Write 2 scenarios about how your product’s supply might affect it’s demand & vice-versa.

15. Brand-name product: Price: Substitute #1: Price: Substitute #3: Price: Substitute #2: Price: Substitute #4: Price:

16. Substitutes for Lots of Curls Shampoo Aroma Therapy $4.99 Lots of Curls 6.99 Baby Shampoo 2.99 Pert Plus 5.99 Cheer Chicks 3.99 By Harrison Delfin

17. Substitutes Assignment (due: next class) Choose any brand name product that you use. Think of at least 4 substitutes for your product. Find prices for all items & fill out chart. Write 2 scenarios about how your product’s supply might affect it’s demand & vice-versa.