- Understand the law of demand and the law of supply
- Distinguish what causes a movement along supply and demand curves from the factors shifts supply and demand curves.
- Describe substitutes, complements, normal goods and inferior goods.
- Identify when shortages and surpluses exist and predict what happens to the market price when they exist
- Determine the equilibrium price and quantity.
- Show how changes in supply and demand affect price and quantity traded in markets
- Chapter 4-2, 4-3 and 4-4
- This story from Planet Money (7:04) describes how changes in supply and demand have driven oil prices down, up, and then down again.
- This story from Planet Money shows how wages have increased in response to a shortage of labor.
- This report shows how a surplus of marijuana drives down price.