Supply and Demand
What is the difference between supply and demand?
Supply = how much of a product there is in circulation
Demand - the want by consumers to buy a product
On your boards, identify where surpluses and shortages take place along the supply and demand graph.
Surplus = above equilibrium
Shortage = below equilibrium
What are all 5 factors of production?
To win
When was the Declaration of Independence signed?
July 4th 1776
Who came up with the idea of a market economy?
Adam Smith
Imagine that I raise my price and consumers go and buy a similar, cheaper product. What is this effect called?
Substitution effect.
What factor of production is this an example of.
I pay all of my workers a base wage of $14 an hour
Labor
How is competition a good thing in a market economy? (three things)
1. better quality products
2. Inspire innovation
3. Keep prices fair
What was Thomas Hobbes's belief about humans' social nature?
All people were selfish and competitive.
What two things was the government supposed to do to support market economies?
have open trade and little restriction on production?
Imagine that over time consumers feel less satisfaction when they buy my product. What is this effect called?
Law of diminishing marginal return.
What factor of production is this an example of.
In all, my machines, computers, and fabric will cost me about $10,000 to start.
Capital
What is a monopoly? Is it a good or bad thing?
Monopolies are a bad thing because they can control entire markets and manipulate consumers.
What do lines that are close together on a topographic map mean?
Steep elevation.
On your boards, label the supply and demand lines on a supply and demand graph
Supply is the positive line
Demand is the negative line
If I experience a surplus, what should I do with my price?
If I experience a shortage, what should I do about my price?
Surplus = lower it.
Shortage = raise it.
What factor of production is this an example of.
After adding up all my costs for production, I will need to charge my customers $20 per product to make a profit.
Entrepreneurship
How can the Sherman Antitrust Act be used?
To break up monopolies who have too much power
Christopher Columbus sailed the ocean blue in 1492
Infer what dangers could come along with no restrictions on production
Child labor, poor safety conditions, poor quality food items.
Create a supply and demand graph and let your ranges be from $2-$10 and 4-20 for quantity.
If I raise my price to $8, what is my quantity demanded and what is my real supply?
Quantity demanded = 6
Real Supply = 12
To find out how much money their business start up will cost, to make a business, To organize their business, etc.
Who was the first company the Sherman Antitrust Act broke up?
Standard Oil
What were all three of the natural rights again?
Life, Liberty, and Property.