2020-06-29
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Interpreting cartoons: Study the cartoon and answer the questions:
1. What does the cartoon depict?
2. What economic observation does the cartoon illustrate?
a) Increases in price decreases demand.
b) Decreases in price increases demand.
c) An increase in price can sometimes increase demand.
d) Consumer preferences can effect demand.
e) Population effect demand.
f) As demand increases for a good, so does the price of that good.
3. Will the meaning change if “lemonade” is replaced with “petrol”?
Understanding economics jokes:
1) A man goes into a butcher to buy some steak.
Man: "How much is your steak?"
Butcher: "$4.99 a pound."
Man: "That's ridiculous! The butcher across town sells steak for $3.99 a
pound!"
Butcher: "Then buy it from him."
Man: "I tried, but he's all out"
Butcher: "Well, when I'm out, I sell it for $1.99 per pound!"
2) Top reasons to study economics:
· Economists are armed and dangerous: Watch put for our Invisible hands!
· Economists can supply it on demand.
· You can talk about money without having to make any.
· When you are in the unemployment line, at least you will know why you are there.
· When you get drunk, you can tell everyone that you are just researching the law of diminishing marginal utility.
Perceiving quotes about economists and economy:
· The number of economists is the only thing that contradicts the Law of Supply and Demand.
· Ultimately, it comes down to supply and demand. (Bradford Smith)
· As scarce as truth is, the supply has always been in excess of the demand. (Josh Billings)
· Advice is the only commodity on the market where the supply always exceeds the demand.
Unit 6
THE LAW OF SUPPLY
Pre-reading competency focus
The unit explains what supply is and how the incentive of greater profit – including the law of diminishing returns – affects it.
Previewing: While consumers demand products at the lowest possible prices, producers seek the highest possible profits. The law of supply states the relationship between the quantity supplied and price.
Predicting: Why are sellers willing to provide more goods and services at higher prices?
Vocabulary previewing: Match the words (A) and their definitions (B)
A
(1) law of supply, (2) quantity supplies, (3) supply curve, (4) technology, (5) law of diminishing returns, (6) equilibrium price
B
(a) the price at which quantity demanded and quantity supplied meet
(b) economic rule that price and quantity supplied move in the same direction
(c) upward-sloping line on graph that shows the quantities supplied at each possible price
(d) the amount of a good or service that a producer will supply at a specific price
(e) economic rule that says as more units of production (such as labor) are added, total output increases at a diminishing rate
(f) any use of land, labor, and capital that produces goods and services more efficiently
Skimming: The law of supply establishes the relationship between the quantity supplied and price. Look through the text and find out (1) what it states and (2) what factors can affect the supply.
