Supply and Demand Lesson

Multiple Choice

Why is it important in agriculture to set price floors above equilibrium price?

Equilibrium price- the price where quantity supplied and quantity demanded are the same.

• It keeps the market for bushels of corn competitive

• it allows for lower prices on bushels of corn

• it creates a surplus of bushels of corn

• it stops producers from charging too little

TicketMaster

TicketMaster sells tickets to music, sports,
arts, and theater events worldwide,
through retail outlets, telephone, and
the Internet. In 2014, it sold 278 million
tickets generating revenue of $6.87 billion.
Concert sales in 2014 were 44.75 million
tickets, with revenue of $3.193 billion.

TicketMaster has exclusive contracts
to print and distribute tickets for about
88 percent of the top arenas and
amphitheaters in the United States, as well

as about 70 percent of the top theaters.

Multiple Choice

A ______ is when the quantity supplied is greater than the demand.

• Surplus

• Shortage

Draw

Draw the Law of Demand

Label Demand (D) and Price ($)

#1

• Mr. Benitez owns a prospering motorcycle

factory. He notices that the price of mufflers
has increased in the past few months.

– What will the effect of the increase in price of

mufflers be on supply?

– What will happen to the equilibrium price of

motorcycles?

– What will happen to the Equilibrium Quantity

purchased of motorcycles?

Multiple Choice

What will the effect of the increase in the price of mufflers be?

• The price of mufflers will decrease.
• The demand for mufflers will remain unchanged.
• The supply of mufflers will increase.
• The demand for mufflers will decrease.

Multiple Choice

What will happen to the Equilibrium price of motorcycles?

• The equilibrium price of motorcycles will fluctuate based on supply and demand.
• The equilibrium price will be determined solely by government regulations.
• The equilibrium price will only increase over time without any fluctuations.
• The equilibrium price will remain constant regardless of market changes.

#2

• Ms. Smith likes to drink orange juice in the

mornings, it helps her get ready to face the
day. However, a freak snowstorm hit Florida
and California destroying the orange crop.
– What effect will the storm have on the supply of

orange juice?

– What will happen to the price of orange juice?
– What will happen to the demand of apple juice?

Multiple Choice

What effect will the storm have on the supply of Orange Juice?

• The storm will decrease the supply of Orange Juice.
• The storm will increase the supply of Orange Juice.
• The storm will have no effect on the supply of Orange Juice.
• The storm will stabilize the supply of Orange Juice.

Multiple Choice

What will happen to the price of Orange Juice?

• The price of orange juice is likely to fluctuate based on supply and demand factors.
• The price of orange juice is determined solely by production costs.
• Orange juice prices will only increase due to seasonal changes.
• The price of orange juice will remain constant regardless of market conditions.

Multiple Choice

What will happen to the demand for apple juice?

• The demand for apple juice will remain constant regardless of market trends.
• The demand for apple juice will only increase during the summer months.
• The demand for apple juice will decrease due to a rise in orange juice popularity.
• The demand for apple juice will fluctuate based on consumer preferences and market conditions.

#3

• Tony sees that a lot of people are making

money selling kites at a popular festival. He
decides that he will go buy some kites and try
to make some money too.
– What happens to the Supply of Kites?
– What happens to the price?
– What happens to the quantity purchased?

Multiple Choice

What happens to the Supply of Kites?

• The supply of kites can increase or decrease based on production costs and demand.
• The supply of kites decreases only during summer months.
• Kite supply is solely determined by weather conditions.
• The supply of kites is always constant regardless of demand.

Multiple Choice

What happens to the price of kites?

• The price of kites is always fixed.
• Kites are never sold at a discount.
• The price of kites only increases during summer.
• The price of kites can increase or decrease depending on demand and supply.

Multiple Choice

What happens to the quantity of kites purchased purchased?

• The quantity of kites purchased is unaffected by consumer preferences.
• Kites can only be purchased in bulk quantities.
• The quantity of kites purchased can increase or decrease based on price and consumer preferences.
• The quantity of kites purchased always remains the same.

#4

• Mr. Paxston heard a story on the news saying that

there would be a decrease in the amount of oil
imported into the United States. He looks at his
gas tank and notices he is low on gas…
– What will he do?
– What is the effect on demand?
– What is the effect on supply?
– What is likely to happen to the price of gas in the

future?

#5

• It’s a cold January day and Martin found

himself wondering about the sandal market.
He compared it to a hot July day and was
wondering:
– What happened to the demand for sandals in

January?

– What happened to the price of sandals in January?
– What happened to the quantity demanded of

sandals in January?

#6

• Georgina decides to take a dozen cupcakes to

school to sell so she can raise money for her
school trip to New Orleans. She prices the
cupcakes at $5 each. At the end of the day
she is disappointed that she only sold three
cupcakes.
– This market model is in a _____________?

#7

• Ernesto is a huge fan of One Direction. He

loves the band so much that he got T-shirts
made to sell. He tries to sell them at work and
in the city park, but is not having much
success. Then inspiration strikes! He quits his
job and follows the One Direction tour.
– Once he joins the tour what happens to the

demand for T-shirts?

– What happens to the price?
– What happens to the quantity sold?

#8

• Samantha loves to eat chocolate, however she

hears that starting next year the government
will place a tax on chocolate to try to decrease
consumption.
– What will Samantha most likely do before next

year?

– What will happen to the demand for chocolate

now?

– What will happen to the price of chocolate now?

#9

• Samantha loves to eat chocolate, however she

hears that starting next year the government
will place a tax on chocolate to try to decrease
consumption.
– What will happen to the supply of chocolate now?
– What will happen to the demand of chocolate

when the tax takes effect?

– What will happen to the supply of chocolate when

the tax takes effect?

#10

• Jose is a cheese maker. He can make a good

cheddar cheese and a good mozzarella cheese,
but prefers to make cheddar. He notices that
because of a popular TV show pizza consumption
is on the rise; leading to increased demand for
mozzarella cheese.
– What will Jose do?
– What will happen to the supply for cheddar cheese?
– What will happen to the price of cheddar cheese?
– What will happen to the price of mozzarella?

#11

• Kristy is a big fan of Quest Bars, she is on

Instagram one day and sees a terrible picture
of a severed finger inside one of the bars. The
picture has 4,000,000 views within the first
day.
– What will happen to demand for Quest Bars?
– What will happen to the price?
– What will happen to the quantity demanded?

#12

• Georgina decides to take a dozen cupcakes to

school to sell so she can raise money for her
school trip to New Orleans. She prices the
cupcakes at $.50 each. With in 15 minutes she
has sold all of her cupcakes, and through out
the day teachers and students ask her if she
has anymore.
– This market model is in a _____________?

#13

• Kaitlyn loves chips and dip. She always eats

them together. One day she goes to the
grocery store and realizes that price of chips
has skyrocketed. What effects will this have on
the demand in the dip market?
– What will happen to demand of dip?
– What will happen to the price of dip?
– What will happen to the quantity demanded of

dip?

#14

• The United States government has become

concerned that corn farmers are not able to
make enough money to raise their families
comfortably. Congress has voted to increase
the level of corn subsidies given to farmers.
– What effect will this have on the supply of corn?
– What will happen to the price of corn?
– What will happen to the quantity supplied?

#15

• Georgina decides to take a dozen cupcakes to

school to sell so she can raise money for her
school trip to New Orleans. She prices the
cupcakes at $2.00 each. At the end of the day
she has sold all of her cupcakes, and it seems
as though everyone who wanted a cupcake
has gotten one.
– This market model is in a _____________?