Unit 2 Supply and Demand.pdf

Economics Student Worksheet Unit 2: Supply and Demand Name: _________________________________________ Class: _________ Date: _______ Lesson 1: Understanding Macro and Microeconomics 1. What are the two broad fields of study in economics? _Microeconomics and Macroeconomics __________________ 2. W...

Economics Student Worksheet Unit 2: Supply and Demand Name: _________________________________________ Class: _________ Date: _______ Lesson 1: Understanding Macro and Microeconomics 1. What are the two broad fields of study in economics? _Microeconomics and Macroeconomics __________________ 2. What is macroeconomics? _Macroeconomics focuses on the large-scale economy whether it be regional, national or global. It is concerned with how the entire economy grows and shrinks.____________________________ 3. What is microeconomics? _Microeconomics focuses on the smaller aspects if the economy. It studies how economic choices of individuals, households and businesses affect the allocation of resources and prices._________________ 4. How are microeconomics and macroeconomics interconnected? The many every day microeconomic choices made by individuals and______ businesses add up to create broader regional and national trends studied in macroeconomics._________________________________________________________ 5. Why do government and institutions try to understand how macro and microeconomics related? Government and other institutions look for ways to affect macroeconomic trends by influencing individual and businesses choices on the microeconomics level.____________________________________________________ Page 1 of 4 Copyright © 2016 Applied Educational Systems Economics Student Worksheet Unit 2: Supply and Demand Name: _________________________________________ Class: _________ Date: _______ Lesson 2: Law of Supply . What is the law of supply? Law of supply states that, all other factors being equal, as the product price increases the quantity of the product increases. 2. Draw a graph of the supply curve? 3. When the price of a product increases what happens to the supply? It increases_______ Why? Because sellers can make more money on the product they will_______ increase supply to maximize profit.___________________________________ 4. Directions: Fill-in the first column with the Supply Non-price Factors. Next, for each factor fillin how the supply curve shifts (right or left) when the factor increases and decreases. Supply Non-price Factors How does the supply curve shift (right or left) when the non-price factor… 1. Cost of production …Increases? Shift left …Decreases? Shift right 2. Competition Shift right Shift left 3. Effects of technology Shift right Shift left Page 2 of 4 Copyright © 2016 Applied Educational Systems Economics Student Worksheet Unit 2: Supply and Demand Name: _________________________________________ Class: _________ Date: _______ Lesson 3: Law of Demand What is the law of demand? Law of demand states that, all other factors being equal, as the price of the product increases, the quantity of the product decreases._____ 2. Draw a graph of the demand curve? 3. When the price of a product increases what happens to the demand? It decreases______ Why? Because people general do not want to pay high prices for a product 4. Directions: First, fill-in the Supply non-price factors. Next, for each factor fill-in how the Supply curve shifts when the factor increases and decreases. Supply Non-price Factors How does the Supply curve shift (right or left) when the non-price factor… 2. Income …Increases? Shift right …Decreases? Shift left 2. Preferences Shift right Shift left Shift left Shift right 3. Availability of substitutes Page 3 of 4 Copyright © 2016 Applied Educational Systems Economics Student Worksheet Unit 2: Supply and Demand Name: _________________________________________ Class: _________ Date: _______ Lesson 4: Supply and Demand Curve Draw a graph of the supply and demand curve? 2. What is does the supply and demand curve show? If there is a low supply and a high demand, the price will be high. In contrast, the greater the supply and the lower the demand, the lower the price will be._______________________________________________________ 3. Describe a shortage on the supply and demand curve. A shortage is when the supply is low and the demand is high. This is represented by the lower half of the curve.___________________________ 4. Describe a surplus on the supply and demand curve. A surplus is when the supply is high and the demand is low. This is represented by the upper half of the curve._____________________ 5. What is the equilibrium on the supply and demand curve? The equilibrium is where the supply curve intersects with the demand curve. The allocation of resources is at its most efficient because the amount of product being supplied exactly matches the buyer demand. 6. What happens to the equilibrium price when the demand curve shifts right? The equilibrium price increases_______________________________________ 7. What happens to the equilibrium price when the supply curve shifts right? The equilibrium price decreases______________________________________ Page 4 of 4 Copyright © 2016 Applied Educational Systems