Lesson Plan - Demand and Supply
- I. Demand Defined
- - definition
- - the law of demand (as P increases => Qd decreases)
- - Why?
- - substitution effect
- - income effect
- - absolute vs. relative price for the law of demand
- - market demand
- - class example
- II. Other influences on Demand (besides the good's own price)
- - tastes and preferences
- - income
- - normal goods
- - inferior goods
- - the price of related goods
- - substitutes in consumption
- - complements in consumption
- - the number of demanders (buyers) in a market
- - expectations about the future
- III. Change in Demand (D) vs. change in Quantity Demanded (Qd)
- - why does this matter?
-
IV. Supply Defined
- - definition
- - the law of supply (as P increases => Qs increases)
- - Why?
- - absolute vs. relative price for the law of supply
- - market supply
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V. Other influences on Supply (besides the good's own price)
- - costs of production
- - technology
- - input prices
- - the price of related goods
- - substitutes in production
- - complements in production
- - the number of suppliers (firms) in a market
- - expectations about the future
-
VI. Change in Supply (S) vs. change in Quantity Supplied (Qs)
- - why does this matter?
-
VII. Demand and Supply as flow variables (vs. stock variables)
- - what is a flow variable?
- - what is a stock variable?
- - examples.
- - D & S as flows