Economics Period 3

For this week 4/1 - 4/5

RECAP: We have begun a new topic of PRICING. We watched a clip from "The Apprentice", during which leader Pamela gets a little full of herself and ends up losing the challenge for her team by mis-pricing an item they sold on QVC. She went to Harvard business school, but she priced the magic eraser type item way too high at $30, when the rest of the team knew it should have been $20. Ultimately, Pam was fired for her huge role in that loss. Pricing will make or break a products success, specifically if it is an ELASTIC product (a product whose sales are easily affected by price). Pricing is important because consumers ideally don't want to pay anything for anything, so the cheaper the better! But, companies won't make any money if things are too cheap, making the whole business of business pointless. So this is how supply and demand push against each other. On a curve, there is eventually a point where S and D intersect, and this is the happy medium for appropriate pricing- a number the consumer is okay spending, and the producer is making a profit on. We learned that after Sandy, it may have actually been better to allow gas prices to go up to $7 a gallon because then it would have driven demand down, matching how low the supply had become. Instead, gas stations weren't allowed to charge more (or price gouge) so the demand stayed the same while the supply went down, causing a major gap between supply and demand. This led to crazy long lines and people waiting in their car for hours just to get gas, even if they had a half a tank or more.  We continue with the topic of pricing the rest of the week.

We will continue working on "market equilibrium", "surplus", "shortage", and graphing the Suuply and Demand curves given basic information.

There is a test on Thursday (I believe) and it is important that the students do well on this exam. Mr. McHugh has explained that this small exam should be an "easy A". It requires graphing, some small calculations with a calculator, and one or two comprehension questions based on the graph they make.  We will be doing plentry of practice.