Econ-2/1/13-Friday
Download Surplus and Shortage
Appetizer (Activator):
What does the word surplus mean? What does shortage mean?
Main Course:
Make up Benchmark testing if you were absent!
#7 Table of Contents-EQ: What is equilibrium, price floors, and price ceilings?
Notes on equilibrium, shortages (price ceilings), surpluses (minimum wage)
Shortages occur when prices are lower than the equilibrium price (demand is greater than amount produced) Surplus occurs when price of good is higher than equilibrium price. Surplus is more than what a consumer demands.
Governments fix prices for bread, housing, & other basic needs. Price ceilings are the maximum price the government will allow for these goods. Price floor is a minimum price for a good. Minimum wage is an example of a price floor.
You will be drawing 2 demand lines (curves) and 2 supply curves on your graph paper; be sure to make Demand lines one color and supply lines another color! Label your lines as D1, D2 and S1, S2. Indicate equilibrium (market clearing price where demand meets supply)-You will have 2 equilibrium prices (one for D1 and S1 and then another for D2, S2). This will make sense when you start constructing. Please indicate surplus, shortage, title for graph, old equilibrium (D1S1), new equilibrium (D2S2) This will be assessed
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