- Description: This lesson plan for supply and demand is an interactive way to learn about graphs, shifts, and properties. The teacher administering this lesson plan should thoroughly explain each part of the graph, and draw examples on the board. The video to aids in this lesson explain supply and demand using the Indiana Jones movie, to make the lesson fun and exciting. The supplementary worksheet makes supply and demand seem applicable to the students lives and the real world, while giving them practice with questions they may see on a quiz or test. The class activity is used to reinforce the material and spark student's interest. The goal of this lesson was to clearly explain supply and demand to students, and have them view supply and demand from a real world perspective.
- Instruction:
- Ask students "What is supply?" (Supply is the amount of a good or service that is provided at a specific price)
- Ask students "What is demand?" (Demand is the amount of a good or service that customers are willing/able to buy at a specific price)
- Ask students "Why are supply and demand important to the economy?" (Supply and demand determine pricing of goods and services, and how much of a good or service a firm will produce)
- Draw a supply and demand graph. Start with labeling the axis (quantity horizontal, price vertical). Then, add a downward sloping demand curve. Explain that demand is always downward sloping because of Law of Demand (as price increases, demand decreases). Explain that this is because as the price increases, the customer cannot buy as much because of their limited amount of money. This is because there are unlimited wants, but limited supply, also known as scarcity. Next, add an upward sloping supply curve. Explain that supply is always upward sloping because of the Law of Supply (as price increases, quantity supplied increases). Explain that this is because as the price increases the marginal revenue (money made from additional unit) of a firm increases, thus their total revenue increases, so to make more money, firms want to supply more of the good or service.
- Explain that equilibrium is the intersection of the supply and demand curves. Tell students that equilibrium is where firms want to produce, because it is the point where the quantity the firm wants to supply equals the amount that the producer wants to buy. Draw equilibrium on the graph and follow the lines down to the axis to show the equilibrium quantity and price.
- Next, demonstrate on the graph a shift in demand. Explain that a shift to the right shows an increase in demand (good) and a shift to the left shows a decrease in demand (bad). Write the determinants for a demand shift on the board and explain them (population, income, tastes/preferences, substitutes/compliments, expectations for future prices). Demonstrate new equilibrium price and quantity, where the new demand curve intersects the supply curve.
- Show the same concept with the supply curve. Explain that a shift right is an increase in supply and a shift left is a decrease in supply. Write the determinants for a shift in supply on the board, and explain them (cost of production, number of sellers, price of other goods, technology, taxes and subsidies, and expectations for future price). Demonstrate new equilibrium price and quantity, where new supply curve intersects demand curve.
- Ask students if the have any questions so far
- Split class into two "teams" and move the desks so they face each other. Each team must have one representative to answer the following questions for the group by raising their hand before the other team. The team who answers the most questions correctly wins.
Questions: (Tell if shift is left or right)
- A news story informs consumers that there is a harmful bacteria in pasta. What happens to the demand for pasta? (shift left)
- Technology for production of iPhones improves and cuts down on production costs. What happens to supply? (shift right)
- Hunter boots are a new trend for teenage girls. What happens to their demand? (shift right)
- There is a shortage of wood, what happens to the supply of pencils? (shift left)
- Press releases state that a manufacturing error in GM cars caused recent crashes. What happens to the car's demand? (shift left)
- Show videos on supply and demand https://www.youtube.com/watch?v=RP0j3Lnlazs
- Pass out supplementary worksheet, and have students finish it for homework
4. Summary:
- Students should have background knowledge on what a firm does. Students should know that a firm supplies a good or service at a specific price. Students should also know what a consumer does. A consumer buys a good or service at a specific price. Most importantly, students should know that the interaction between the two creates the price the good is sold at, and the quantity of the good that is produced. Students do not need extensive knowledge of economics for this particular topic, however, basic understanding of economic concepts would help their understanding of this unit.
- This activity helps students learn by repetition. The material presented in the teacher explanation is repeated in the video, and practice problems in the homework assignment relate back to both, Studies show that students must see/hear material more than once before it truly sticks in their memory, so by repeating the key concepts, students will be more likely to remember the information. Also, on the worksheet, students will see the concepts represented in real world situations, which helps them remember the material. It is easy to see school work as irrelevant, memorize it for a test, and then completely dismiss the information, but if students see the information as relevant to their lives, they are more likely to remember and understand the concepts in the long run.
- If a student could draw a supply and demand graph and name the determinants, then they understood the lesson. The teacher should check to see if they got it by asking questions at the end that relate back to the material, and also by checking their homework the next day. If a student can explain the concept back to the teacher, then they understand the material.
- For the students who do not get it, the teacher should work with them one on one to figure out what concept(s) they struggle with. Since this is a basic, yet important unit in Micro, the teacher should take the time to slow down and make sure all students feel comfortable, because if they start out struggling with the basics, it will only get harder for them. The teacher should supply the students with the link to the video and other similar videos, as well as another worksheet similar to the one used in the lesson. Study sessions after school (if possible) would be another good way to help students who are struggling.
.jpg)
.jpg)
