Good Day!

DRAW A LINE SEPARATING TODAY & YESTERDAY1) Write: Date: 01/25/10, Topic: Pricing and Elasticity2) On the next line, write “Opener #11” and then:

1) Plot your mood, reflect in 1 sent.2) Respond to the opener by writing at least 2 sentences about:Your opinions/thoughts OR/AND

Questions sparked by the clip OR/AND

Summary of the clip OR/AND

Other things going on in the news.Announcements: NoneIntro Music: Untitled

Agenda1) Pricing and Elasticity

End Goal, you will be able to…1) What effects prices?

Reminder1) Study for Test 1 on Friday

Company 1 Company 2

Cost

Profits

Review1) Law of Demand: Price lower, buy more of it.

Price is higher, buy less of it (not about wanting, about really buying)

2) Law of Supply: Price lower, supply less of it. Price is higher, supply more of it (not about wanting, about really making+selling)

Free Market: Scarcity rules the world. We need to be use resources wisely. With capitalism, Prices are efficient ways of determining value.

If something is rare, prices go up, and people buy less.

Free Market: Scarcity rules the world. We need to be use resources wisely. With capitalism, Prices are efficient ways of determining value.

If something is rare, prices go up, and people buy less.

Free Market: Scarcity rules the world. We need to be use resources wisely. With capitalism, Prices are efficient ways of determining value.

If something is rare, prices go up, and people buy less.

Notes #11a, Title: “Pricing” 1) Price Equilibrium (PE): Most transactions

possible. Competition pulls price to PE.Above PE: Surplus, Below PE: Shortage..(Does not mean anyone is happy!)

Notes #11a, Title: “Pricing” 1) Price Equilibrium (PE): Most transactions

possible. Competition pulls price to PE.Above PE: Surplus, Below PE: Shortage.(Does not mean anyone is happy!)

Under Price Equilibrium: Shortage, not enough supplied, much demand unmet.

Reaching Price Equilibrium: Shortage, push shoppers to pay MORE.

Price Equilibrium: Most TransactionMOST demand met (not mean you’re happy)

Over Price Equilibrium: Surplus, many people refuse to buy (surplus = profit loss).

Over Price Equilibrium: Suppliers drop prices to clear out the surplus (cut losses)

Price Equilibrium: Most TransactionMOST demand met (not mean you’re happy)

Price Equilibrium: Most Transaction:MOST people happy (NOT everyone)

Shift in Overall Demand (Example: Income Up)Price Equilibrium: Most transactions possible.

Competition pulls price to this stabilizing point. (does not mean anyone is happy!)

Shift in Overall Supply (Example: Salaries Up)Price Equilibrium: Most transactions possible.

Competition pulls price to this stabilizing point. (does not mean anyone is happy!)

The market moves towards a price where there are the most buyers and sellers who willing to transact a sell. 1) Of course, many supplier will feel the price isn’t high enough.

2) And many buyers will feel the price is still too high.

3) There also are a few who sell low, buy high, regardless of PE, but they are the exception.

Are some items we should create laws to set a price at some level, regardless of what the market wants?

Be ready to present.

5 Reading/Film Qs Come From These Work Sections

Notes #11a, Title: “Pricing” 2) Price Floor: Gov passes law that bans any

price below a set point (minimum wage, farm products)

In a Job MarketSupply: is the Worker “selling their labor”Demand: is the Employer “buying workers”

Work #11a, “Mim Wage Debate”1) Read the 2 sides, choose 1 side, and write

which you choose and explain why.2) Then write down what your partner thinks

(include their name at the end).1 2 3 4 5

CON: Reduce Mim Wage1) Reduce wages will create jobs

2) Having ppl work is better than having high wages no one will pay

3) Market will find a fair price

PRO: Raise Mim Wage1) Cost of living is increasing

2) People who work deserve enough to live

3) Market will fall to global rates, which isn’t what American life is about

Notes #11b, Title: “Pricing” 3) Price Ceiling: Gov passes law that bans any

price above a set price (rent control)

Work #11b, “Rent Control Debate”1) Read the 2 sides, choose 1 side, and write

which you choose and explain why.2) Then write down what your partner thinks

(include their name at the end).1 2 3 4 5

CON: Get Rid of Rent Control1) Profits make builders build more apts and better up keep apts 2) Owners just want to charge a market price3) Owners have rights too

PRO: Keep Rent Control1) Poorer ppl rent, so they need the help

2) It’s terrifying not knowing if you have to move b/c rent may go up

3) Landlords make enough money

Work #11c, “Housing Debate”1) Why does Cupertino have such expensive

housing? (include your partner’s name) Cupertino Tokyo

Work #11d, “City Zoning Debate”1) Read the 2 sides, choose 1 side, and write

which you choose and explain why.2) Then write down what your partner thinks

(include their name at the end).1 2 3 4 5

CON: Prevent dense housing1) More homes will increase supply, lower current home values2) More homes will mean more traffic, more school crowding, and other problems like crime

PRO: Let priv investors build more homes1) If homes are expensive, investors can profit from more + smaller homes (density), reducing price for low income buyers

2) More efficient use of scarce land (ecological)

Notes #11c, Title: “Pricing” 4) Elastic Demand: Change in price drastically

changes demand (you can delay or don’t need) FLATTER

CURVE

5) Inelastic Demand: Change in price doesn’t change much demand (can’t delay or real cheap)

STEEPER CURVE

Flatter little, quantity Steeper, quantity changes a lot changes little

6) Elastic Supply: Suppliers easily make more or less (inputs are plentiful or simple to make)

FLATTER CURVE

7) Inelastic Supply: Suppliers can’t easily make more. (inputs are limited or complex to make)

STEEPER CURVE

Homework: 1) Study today’s notes + work sections

for a possible workbook quiz.2) Study of Test 1 on Friday.

Workbook Check: If your name is called, drop off your workbook with Mr. Chiang (if requested, points lost if your workbook is not turned in)