Unpacked Content
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.
Vocabulary
- supply
- demand
- marginal utility
- specialization
- division of labor
- equilibrium/market-clearing price
- price elasticity
- shortage
- surplus
- price floor
- price ceiling
