Friday, 11 March

NOTE: NEXT CLASS IS GRANT ACT DAY. 

Mr. Zartler will teach in the following rooms:

2nd period Room 133 (normally Warfield)

3rd and 4th Period Room 129 (normally Cooper)

 Class began with a quick review of supply and demand in the Hudsucker Proxy clips from last class.

Next the class worked through the lesson presented at the end of the last blog entry; after that students are to begin studying Chapter 5.3 in the Economics text book. The questions on pages 157-159 are due at the start of class on March 17th.

Supply and Demand and Toy Fads

The relevant links are:

ABC News Report on Silly Bandz

USA Today video and print story: Silly Bandz stretch into a trend as copycat rivals hop on board (This clip may load very slowly).

Supply and Demand 1: A short animated lecture on Supply and Demand (1:40)

Supply and Demand 2: Slide lecture

Hula Hoop Case Study

Silly Bandz Case Study

After reviewing the above material, students should review the conclusions at the end of this section of the blog, and answer the questions below:

Assessment

Answer the following questions: 

Supply and Demand Questions

1. Draw a supply and demand graph and label the necessary parts. Be sure to properly label the locations of price, quantity, supply, demand, equilibrium price, surplus, and shortage.

Should Look Like This:

Supply and Demand Graph Answer

Choose the best answer.

2. Why does the supply curve slope up and to the right?

1. As the price rises the quantity supplied by producers will fall.
2. As the price falls the quantity supplied by producers will rise.
3. As the price rises the quantity supplied by producers will rise. 

3. Why does the demand curve slope down and to the right?

1. As the price falls the quantity demanded by consumers will fall.
2. As the price rises the quantity demanded by consumers will fall.
3. As the price rises the quantity demanded by consumers will rise.

4. If the quantity supplied exceeds the quantity demanded, then there is a _______ in the market.

1. Surplus
2. Shortage
3. Supply

5. If the quantity demanded exceeds the quantity supplied, then there is a _______ in the market.

1. Supply
2. Shortage
3. Demand

Conclusion

The laws of supply and demand can be used to show the relationship between producers and consumers. Prices are used in the market to help producers and consumers communicate with one another. The value-scales of producers and consumers are coordinated through the price system. If the supply of a product matches the demand for the product, the price is said to be at equilibrium and the quantity supplied will match the quantity demanded. If the price of a product is too high, then supply will exceed the demand, and there will be excess supply or a surplus of goods or services. If the price of a product is too low then demand, will exceed supply and there will be excess demand or a shortage of goods or services.

The case studies for Hula Hoops and Silly Bandz exemplify how changes in demand for consumer products can shift tremendously over short time periods. The video clip from the Hudsucker Proxy provides an example of how prices are changed in response to demand. Prices will rise or fall based on the supply and demand for goods or services. The change in demand for Hula Hoops intially decreased the price due to a lack of demand. Subsequently demand sky-rocketed for Hula Hoops and led to a large increase in the price level, as consumers who wanted to buy a Hula Hoop were willing and able to pay more for the toy. Today, we have seen a similar rise in demand for Silly Bandz, however the price level for Silly Bandz has not risen. Producers of Silly Bandz are sensitive to the idea of raising the price for their product; part of their marketing strategy is that their toy is a cheap alternative to video games and other children's toys that are more expensive. Given their unwillingness to raise prices, continued excess demand can only be met by increasing the supply, which includes substitute brands entering into the market and gathering market share.

ADDITIONAL LINKS:
New law about labor in New Zealand
Pets, debts and e-cigarettes: how millennials spend their paychecks