SS10.E.6

Social Studies (2010) Grade(s): 12 - Economics

SS10.E.6

Describe how specialization and voluntary exchange between buyers and sellers lead to mutually beneficial outcomes.

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
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