Subject:
Economics
Material Type:
Module
Level:
Community College / Lower Division, College / Upper Division
Provider:
Ohio Open Ed Collaborative
Tags:
Macroeconomics
Creative Commons Attribution-NonCommercial 4.0
Language:
English
Media Formats:
eBook, Text/HTML

# Supply and Demand: Course Map & Recommended Resources

## Overview

This is a lesson on the basic economic tools of supply and demand.  Students will use be introduced to the potential results of the interactions of buyers and sellers in a market using basic supply and demand data.  Students will be asked to explore different examples of the use of market information to determine market price and the reasons for changes in market price.

# Learning Objectives

1. Define the quantity demanded in a market and demonstrate using a demand curve (1,16)
2. Distinguish between change in quantity demanded and change in demand (1,16)

3. Identify and analyze demand shifters (1,16)

4. Define the quantity supplied in a market and demonstrate using a supply curve (1,16)

5. Distinguish between change in quantity supplied and change in supply (1,16)

6. Identify and analyze supply shifters (1,16)

7. Use a supply and demand graph to illustrate market equilibrium (1,16)

8. Understand the concepts of surpluses and shortages (1,16)

9. Explain the impact of a change in supply or demand on the equilibrium outcome (1,16)

# Recommended Textbook Resources

### Principles of Economics: Chapter 3 – Demand, Supply, and Equilibrium

This resource provides a modern treatment of demand and supply analysis covering all the learning objectives as outlined.  It uses good data examples and explains the construction of demand and supply curves. Data are used to demonstrate market equilibrium, shifts in demand and supply curves, and shortages and surpluses.  The examples on simultaneous shifts in demand and supply curves provide excellent practice examples.

Authored by: University of Minnesota (2016). License: CC BY-NC-SA 4.0

# Supplemental Content/Alternative Resources

### Federal Reserve Bank of St. Louis Economic Lowdown Video on Demand

This is part of a series from the Federal Reserve Bank of St. Louis.  It is an excellent supplement to the introductory discussion on the demand curve, change in demand, and change in quantity demanded.

### Federal Reserve Bank of St. Louis Economic Lowdown Video on Supply

This provides discussion on supply and additional applications on supply, change in quantity supplied, and change in supply.

### A Coming Crisis in Teaching? Teacher Supply, Demand, and Shortages in the U.S.

An excellent application article from the Learning Policy Institute.  The discussion covers supply shifters and demand shifters in relation to the market for teachers.  This can be used to facilitate discussion on the determinants of teacher wages and policy responses to address emerging issues in the market for teachers.

# Topic Exercise

### International Energy Agency (IEA)

This link takes the student to a current public service report which is a part of its Market Report.  More detailed data and statistics are by subscription, but the public report has ample data and information on demand and and supply conditions for the global oil markets.

1. Using the dropdown arrow, select world oil demand, world oil demand, and world oil prices.  Describe trends in world oil demand and world oil supply.

2. What factors are identified as demand shifters and supply shifters in the global oil market? Discuss how the expected demand and supply shifts would impact global oil prices.

3. The student may also go to <charts> and examine closely output trends by specific suppliers and OECD as part of the report.

4. In combination with research from other sources, complete a two-page summary report.

### Additional Data Exercise

The following represent hypothetical monthly market data for SUVs in a city.

 Average Price of SUVs Number of SUVs Demanded Number of SUVs Supplied $42000 25000 42000$37000 31000 37000 $35000 34000 34000$33000 38000 28000 \$30000 40000 25000
1. Plot the market demand curve for SUVs and the market supply curve of SUVs on the same diagram.

2. Identify the equilibrium price and quantity in this market.  What are the prices at which you would have excess demand for SUVs and excess supply of SUVs?  Describe the market adjustment process necessary to restore equilibrium price in each case?

3. Assume everything else remains the same, but that the city population grows by 10 percent causing an equal increase in the quantity demanded of SUVs at each original price.  Adjust the demand curve and repeat a. and b. above.

4. Find and read two articles from your local publications that explain at least two other demand shifters and supply shifters in the market for SUVs in your city.  How have they impacted market equilibrium for SUVs in your city?

# Active Learning Exercise

### Exercise I

Identify a service or good that you or members of your household consume or purchase on a regular basis.  Find two articles in the media (local newspaper, The WSJ, The Economist, The New York Times) that describe developments/conditions in the market for the good or service.

Complete the following:

1. Describe the good or service.

2. Identify determinants that have increased/decreased the demand for the good/service.

3. Identify determinants that have increased/decreased the supply of the good/service.

4. Discuss the expected changes in equilibrium price and quantity based on the above information. Draw graphs to illustrate the changes in equilibrium price and quantity.