1. DRAW A LINE SEPARATING TODAY & YESTERDAY 1) Write: Date: 01/11/11 , Topic: Supply and Demand 2) Next line, write “ Opener #6 ” and then: 1) Write 1 high + 1 low in last 24 hours 2) Rate your understanding of yesterday: lost < 1-5 > too easy (3 is perfect) 3) Respond to the Opener by writing at least 1 sentences about : Your opinions/thoughts OR/AND Questions sparked by the clip OR/AND Summary of the clip OR/AND Announcements: None

2. SIT IN THE SAME SEAT AS YESTERDAY

3. Agenda 1) Intro to demand + supply End Goal, you will be able to… 1) What influences demand + supply Reminder 1) Find & complete your 4 news pods

4. Review , Title: “ Behavior Economics ” 1) Incentives : Pressures used to elicit a behavior a) 5 Incentive Types : i) Economic : Financial Pressure ii) Social : Peer Pressure iii) Moral : Self Pressure b) Perverse Incentive : Pressures that lead ppl to do the opposite of what you intended.

5. Notes #6a , Title: “ Demand ” 1) Law of Demand : Price lower, buy more of it. Price is higher, buy less of it ( not about wanting, about really buying )

6. 2) Market : Area the item is likely sold (geo, dem, class based)

7. Mr. Chiang does not focus on graphing. Graphing is a tool to understand economics, graphing is not economics.

8. D emand Curve : Demand shown as a line graph, dots should how much you buy at that dot (goes down ) (s UP ply curve: is a “ S ” and goes up ) (It usually isn’t a curve or a straight line)

12. Individual Demand : How many 1 person will buy at different prices Copy the Individual Demand Table and Chart on the Board Sample, don’t copy the sample.

13. Market Demand : How many the whole shopping area will buy at different prices Copy the Individual Demand Table and Chart on the Board Sample, don’t copy the sample.

14. Change in Demand Quantity : Finding different dots up + down on a line ( line does not move ). Nothing changed but the price ( ceteris paribus ) Indicates how much you’d buy at that price. Change in Demand (Overall) : Moving a line left or line right. The SITUATION has changed to make it + - popular at all pricing points.

15. Change in Demand Quantity :

16. Change in Overall Demand :

17. Change in Overall Demand :

18. Notes #6a , Title: “ Demand ” 3) Utility : Benefit gained (makes you better, but not necessarily pleasant)

19. Notes #6a , Title: “ Demand ” 4) Marginal Utility : Benefit continuing an action 1+ more time (at some point diminished return)

23. Notes #6a , Title: “ Demand ” 5) Trade Off : What you gave up to get something Example: McDonalds, trade off: not going to InnOut BigMac, trade off: $4.99 6) Opportunity Cost : Value of the next best option (in some cases in hindsight, the better option) Example: McDonalds, but at InnOut, they were passing out free burger coupons, opp cost of going to McDonald’s was the loss of those coupons, valued: $10.00 The cost of going to McDonalds isn’t an opportunity cost, but what you could have done with that money is So that 4.99: BigMac, opp cost: $4.99 US Weekly magazine, or 5 lotto tickets, if one was the winner, the op cost would be millions for that BigMac.

24. Notes #6a , Title: “ Demand ” 7) Things that Change Demand (Whole) at Every Price Point : a) Income Effect : Financial status makes us buy more or less ( more or less credit/loans ).

25. 7) Things that Change Demand (Whole) at Every Price Point : a) Income Effect : Financial status makes us buy more or less ( more or less credit/loans ).

26. b) Change in Consumer Taste : Taste make us buy more or less.

27. b) Change in Consumer Taste : Taste make us buy more or less.

28. b) Change in Consumer Taste : Taste make us buy more or less.

29. c) Changes in Expectations : Belief something is to happen that makes us buy more or less.

30. c) Changes in Expectations : Belief something is to happen that makes us buy more or less.

31. d) Substitutes : Pricing for alternatives can make us buy more or less.

32. d) Substitutes : Pricing for alternatives can make us buy more or less.

33. e) Compliments : Changes to things we buy together. If one changes, affects if we buy more or less.

34. e) Compliments : Changes to things we buy together. If one changes, affects if we buy more or less.

35. Pricing of Complimentary Goods are Often Coordinated

36. Journ #6a , Title “ Review ” 1) List 2 examples of compliments . 2) List 2 examples of substitutes . 3) If income drops predict the impact on hotdogs. Predict the impact on $15 threadless.com trendy t-shirts.

37. Notes #6b , Title: “ Demand ” 8) Marketing : Study of consumer demand 9) Advertising : Persuading shoppers of the utility of the product

38. Notes #6b , Title: “ Demand ” 10) Impact of Demand : Part of economic growth is spending: buy > increase demand > increase jobs > more spending (+pollution, depletion)

39. Journ #6b , Title “ Video: Advertising ” 1) Copy Source Title: Frontline 2…) Discuss questions on the board with a partner. Summarize your discussion ( include their name at the end ). Remember participation points are deducted if off task. 5 Reading/Film Qs Come From These Work Sections Time Bookmark: 00:00

40. Work # , Title “ Marketplace ” Pre-Sale 1) List your items AND their prices Post-Sale 2) Record your profits at end of the simulation 3) Reflect on what can be done better to increase business next time, focus on what products are in demand (not mean you can or want to supply it) and how marketing can be improved next time (branding+advertising). -Remember you can pay with checks -If your salary is higher, you should feel obliged to spend more + pay more -Need to norm our market, treat as real $

41. Homework: 1) Study today’s notes + work sections for a possible workbook quiz . 2) Pick and listen to your 4 news podcast by next Monday. 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 )