SS10.E.6
Describe how specialization and voluntary exchange between buyers and sellers lead to mutually beneficial outcomes.
Describe how specialization and voluntary exchange between buyers and sellers lead to mutually beneficial outcomes.
UP:SS10.E.6
Vocabulary
- supply
- demand
- marginal utility
- specialization
- division of labor
- equilibrium/market-clearing price
- price elasticity
- shortage
- surplus
- price floor
- price ceiling
Knowledge
Students know:
- The determinants of demand (demand shifters).
- The determinants of supply (supply shifters).
- The role of market prices and the impact of government-imposed prices.
- The determinants of price elasticity.
- The total revenue test to determine price elasticity of demand.
- The components of the circular flow diagram and how they interact.
Skills
Students are able to:
- Construct supply and demand curves.
- Correctly shift supply and demand curves based on changes in their determinants.
- Distinguish between shifts of the curves and movements along the curves.
- Determine whether demand and supply are elastic or inelastic.
- Determine the amounts of surpluses and shortages created by prices that are not at the equilibrium level.
Understanding
Students understand that:
- There are ways in which the determinants impact market supply and demand.
- Changes in supply and demand affect prices and equilibrium quantity.
- There are differences between shifts of the curves caused by the determinants and movements along the curves caused by price changes.
- Prices determine how resources are allocated.
- Activities in markets, businesses and households impact each other.
