Supply and Demand Together
Introduction
Here in this chapter, we are introduced to how supply and demand work together as one. We also become familiar with the idea of equilibrium and how the changes of supply and demand have an effect on equilibrium.
Key Terms
Shortage-When quantity demanded is greater than quantity supplied.
Surplus-When quantity supplied is greater than quantity demanded.
Equilibrium-When the quantity demanded equals the quantity supplied.
Equilibrium Quantity-The quantity of a good bought and sold in a market that is in equilibrium.
Equilibrium Price-The price at which a good is bought or sold in a market that is in equilibrium.
Inventory- Stock of goods on hand.
Price Ceiling- A legislated price that is below the equilibrium price.
Price Floor- A legislated price that is above the equilibrium price.
Our Life Story
Christmas time is coming and the geese are getting fat. Santa's little elves are working hard to fill the children's orders. Little Zacharias Treadway is sitting at his desk, teaching his economics class while the students watch the snow fall.
Little Zach is pondering what to put on his Christmas list. He is just so greedy and wants it all that he gets all worked up when he writes it. To calm himself he calls his students that are Madrigal Singers up to the front of the room. He asks them to sing a few tunes. Luckily for Little Zach, his idea works and gets calm and feels all warm and fuzzy inside. Sadly for Zach, there is a shortage of madrigal singers in his classes. Little Zach decides that he will ask Santa for an early Christmas gift this year. Zach got out his handy dandy notebook and got to writin'. Zach is so willing and able to increase his supply he dares ask for an early present. The next day Zach got his early Christmas wish, a schedule change.
Little Zach could not be happier! He had madrigal singers in every class. Soon after though, Zach found that he has a surplus of madrigal singers. He gets so sick of hearing their good, jolly songs and after a while diminishing marginal utility starts to kick in. The per-unit cost (which in this case is his patience) is too high for him. He then writes Santa again to change his schedule again to bring him back to his equilibrium of his favorite madrigal singers Emily, Nicnog, Big Game, Stephanie, Katy, and Chris.
Here in this chapter, we are introduced to how supply and demand work together as one. We also become familiar with the idea of equilibrium and how the changes of supply and demand have an effect on equilibrium.
Key Terms
Shortage-When quantity demanded is greater than quantity supplied.
Surplus-When quantity supplied is greater than quantity demanded.
Equilibrium-When the quantity demanded equals the quantity supplied.
Equilibrium Quantity-The quantity of a good bought and sold in a market that is in equilibrium.
Equilibrium Price-The price at which a good is bought or sold in a market that is in equilibrium.
Inventory- Stock of goods on hand.
Price Ceiling- A legislated price that is below the equilibrium price.
Price Floor- A legislated price that is above the equilibrium price.
Our Life Story
Christmas time is coming and the geese are getting fat. Santa's little elves are working hard to fill the children's orders. Little Zacharias Treadway is sitting at his desk, teaching his economics class while the students watch the snow fall.
Little Zach is pondering what to put on his Christmas list. He is just so greedy and wants it all that he gets all worked up when he writes it. To calm himself he calls his students that are Madrigal Singers up to the front of the room. He asks them to sing a few tunes. Luckily for Little Zach, his idea works and gets calm and feels all warm and fuzzy inside. Sadly for Zach, there is a shortage of madrigal singers in his classes. Little Zach decides that he will ask Santa for an early Christmas gift this year. Zach got out his handy dandy notebook and got to writin'. Zach is so willing and able to increase his supply he dares ask for an early present. The next day Zach got his early Christmas wish, a schedule change.
Little Zach could not be happier! He had madrigal singers in every class. Soon after though, Zach found that he has a surplus of madrigal singers. He gets so sick of hearing their good, jolly songs and after a while diminishing marginal utility starts to kick in. The per-unit cost (which in this case is his patience) is too high for him. He then writes Santa again to change his schedule again to bring him back to his equilibrium of his favorite madrigal singers Emily, Nicnog, Big Game, Stephanie, Katy, and Chris.
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