Module E.1.3: Supply & Demand

Standard: EPF.E.1.3

Objective: Explain the laws of supply and demand and how they determine prices in a market economy.

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Lesson Overview

• Define supply, demand, equilibrium
• Illustrate shifts in supply/demand curves
• Analyze real-world price changes

Teacher Notes

• Use graphing activities
• Relate to current events (e.g., gas prices)
• Emphasize cause/effect of shifts

Activities

• Graphing supply/demand scenarios
• News article analysis
• Price prediction challenge

Assessment

• Graph interpretation quiz
• Written explanation of a price change

Resources

• NC DPI EPF Standards
• Supply & demand graphing tools

Questions

1. Multiple Choice: What happens to the price when demand increases and supply stays the same?

   • a) Price goes up
   • b) Price goes down
   • c) Price stays the same
   • d) Supply increases

2. Short Answer: Define equilibrium price.

3. Multiple Choice: Which of the following would cause a shift in the supply curve?

   • a) Change in consumer income
   • b) Change in production technology
   • c) Change in tastes
   • d) Change in population

4. Short Answer: Give an example of a real-world event that shifted demand for a product.

5. Multiple Choice: If the price of a substitute good rises, what happens to demand for the original good?

   • a) Increases
   • b) Decreases
   • c) Stays the same
   • d) Supply increases

6. Short Answer: Explain what happens when there is a surplus in the market.

7. Multiple Choice: Which of the following best describes the law of supply?

   • a) As price increases, quantity supplied increases
   • b) As price increases, quantity supplied decreases
   • c) As price decreases, quantity supplied increases
   • d) Price and supply are unrelated

8. Short Answer: Why do prices act as signals in a market economy?