Download EFL Lesson 3 Guide Show
EFL Lesson 3 Slides IntroductionIn this lesson students reflect on their experience in the “In the Chips” activity and connect it to their real-world interactions in markets to better understand the role competition and prices play in guiding market outcomes. Fun video clips and a mini-activity where-in students play an additional round of “In the Chips” help them discover the how open competitive markets can promote economic growth. Mini Activity
ObjectivesAt the end of this lesson students will be able to:
Economic Concepts
National Content Standards AddressedStandard 7: MarketsMarkets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scare goods and services.
Standard 8: The Price SystemPrices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives.
Standard 9: Role of CompetitionCompetition among sellers lowers costs and prices, and encourages producers to produce more of what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them.
Key IdeasDownload full lesson guide for procedures and teaching tips. 1.Review:
2. Open markets are a key institution for fostering economic growth and improving standards of living.
3. Competition regulates market activity with profits acting as a motivator for sellers.
4. Economists conceptually organize the apparent chaos of markets by using the supply and demand model.
5. Equilibrium (market clearing) prices emerge from the interactions of demanders and suppliers in markets and provide incentives that shape buyers’ and sellers’ future choices.
6. Markets function most effectively when prices move freely in response to changes in supply and demand. Institutional support for markets, in the form of clearly defined property rights and the rule of law, facilitate the free movement of prices. 7. Market power results from successful efforts to reduce competition.
Ideas To Take Away From This Lesson
When free competition exists the price of a product will be that value where supply is equal to the demand?When free competition exists, the price of a product will be that value where supply is equal to the demand. The exclusive right of a company to provide a specific product or service in a given region of the coutry.
How does competition affect supply?More competition usually means a reduction in supply, while less competition gives the producer a opportunity to have a bigger market share with a larger supply.
How does competition affect demand?Competitor Impact
The very existence of a competitive marketplace can influence and shift the demand curve for any product. When options for substitutes exist, customers may change their shopping habits based on the price differences. They may choose to purchase the less expensive of the two products.
How supply and demand affects price?It's a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.
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