Equilibrium Essentials Slides Price Pendulum
Economics Concept Review
The Law of Demand
Inverse Relationship
Price ↑
Quantity ↓
D Price Quantity
The Law of Supply
Direct Relationship
Price ↑
Quantity ↑
S Price Quantity
Market Shifters
Demand (TIMER)
T tastes & preferences
I ncome levels
M arket size
E xpectations of price
R elated goods (sub/comp)
Supply (NICEJAG)
N ature (weather/events)
I nput costs
C ompetition
E xpectations
J oint supply
A lternative goods
G ov action (taxes/subs)
Market Equilibrium
Perfect Balance
Equilibrium occurs when quantity supplied equals quantity demanded.
Eq Price Quantity
Price Point Problems Worksheet Price Point Problems
Market Shift Analysis
Name:
Demand Determinants (TIMER)
T astes & Preferences, I ncome, M arket Size, E xpectations, R elated Goods
Supply Determinants (NICEJAG)
N ature, I nput Costs, C ompetition, E xpectations, J oint Supply, A lt. Goods, G ov. Action
Ex
Market: Sneakers
Scenario: A top athlete launches a signature shoe that becomes an overnight fashion trend. What happens to the market for these sneakers as a result?
1. Curve Shifting
Demand Supply
2. Direction
Left Right
3. Determinant
Tastes & Preferences
S1 D1 D2 P Q
01
Market: Electric Vehicles (EVs)
Scenario: The government announces a new $7,500 tax credit for buyers of new Electric Vehicles. What happens to the market for EVs?
1. Curve Shifting
Demand Supply
2. Direction
Left Right
3. Determinant
S1 D1 P Q
02
Market: Fast Food Burgers
Scenario: The price of ground beef increases significantly due to a national shortage. What happens to the market for burgers?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
03
Market: Smartphones
Scenario: A breakthrough in robotics drastically reduces the cost of component assembly. What happens to the market for smartphones?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
04
Market: Coffee
Scenario: A peer-reviewed study proves that drinking coffee daily improves long-term memory. What happens to the market for coffee?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
05
Market: Peanut Butter
Scenario: The price of Jelly (a complement) increases by 100%. What will happen to the market for Peanut Butter?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
06
Market: Solar Panels
Scenario: Dozens of new manufacturers enter the green energy market. What happens to the market for panels?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
07
Market: Luxury Watches
Scenario: The economy enters a boom period and average household income levels rise significantly. What happens to the luxury watch market?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
08
Market: Wheat
Scenario: A massive, multi-state drought destroys half of the year's wheat crop. What happens to the market for wheat as a result?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
09
Market: Houses
Scenario: Mortgage interest rates rise to their highest level in 20 years, making loans much more expensive. What happens to the market for houses?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
10
Market: Corn
Scenario: The government places a new $5 per bag tax on all agricultural fertilizers. What happens to the market for corn?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
11
Market: Bicycles
Scenario: The global price of raw steel (the primary material for bike frames) drops by 30%. What happens to the market for bikes?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
12
Market: Movie Tickets
Scenario: High-quality home streaming services drop their subscription prices by 75%. What happens to the market for theater tickets?
1. Curve Shifting
DemandSupply
2. Direction
LeftRight
3. Determinant
S1 D1 P Q
Price Point Problems Key Price Point Problems
Teacher Answer Key
12-Scenario Shift Analysis
Ex. Sneakers (Trend)
C: Demand S: Right
DET: Tastes & Prefs
01. EVs (Tax Credit)
C: Demand S: Right
DET: Gov. Action
02. Burgers (Shortage)
C: Supply S: Left
DET: Input Costs
03. Phones (Robotics)
C: Supply S: Right
DET: Input Costs
04. Coffee (Study)
C: Demand S: Right
DET: Tastes & Prefs
05. PB (Complement)
C: Demand S: Left
DET: Related Goods
06. Solar (Compet.)
C: Supply S: Right
DET: Competition
07. Watches (Income)
C: Demand S: Right
DET: Income
08. Wheat (Drought)
C: Supply S: Left
DET: Nature
09. Houses (Rates)
C: Demand S: Left
DET: Related Goods
10. Corn (Tax)
C: Supply S: Left
DET: Government Action
11. Bikes (Steel)
C: Supply S: Right
DET: Input Costs
12. Movies (Stream)
C: Demand S: Left
DET: Related Goods
Demand (TIMER)
T astes, I ncome, M arket Size, E xpectations, R elated Goods
Supply (NICEJAG)
N ature, I nput Costs, C ompetition, E xpectations, J oint, A lt, G ov
Money Mastery Slides Currency Command
The History & Types of Money
What is "Money"?
Medium of Exchange
Used to determine value during the exchange of goods and services.
Unit of Account
A means for comparing values (a yardstick).
Store of Value
Keeps its value if you decide to hold on to it.
The Evolution of Currency
Commodity
Objects with intrinsic value.
• Salt (Ancient Rome)
• Cowrie Shells
• Cigarettes (War zones)
Representative
Paper stands for an object.
• The Gold Standard
• Silver Certificates
• Warehouse receipts
Fiat
Value by gov't decree.
• Modern US Dollar
• Euro, Yen, Peso
• "Legal Tender"
The "Ideal" Money Checklist
01
Durability
Withstands physical wear.
02
Portability
Easy to carry and transfer.
03
Divisibility
Easily split into smaller parts.
04
Uniformity
Units have consistent value.
05
Scarce / Limited Supply
Must be rare enough to hold value.
06
Acceptability
Everyone agrees to take it.
Future of Money
Think-Pair-Share
"If the U.S. government launched a purely digital dollar tomorrow, would it still meet all 6 characteristics? What about Bitcoin?"
Prepare to defend your stance.
Currency Comparison Worksheet Currency Comparison
Evaluating Evolution & Value
Name:
Part 1: The Currency Spectrum
Identify each example as Commodity , Representative , or Fiat money. Briefly justify your classification.
Example Item
Money Type
Classification Justification
A Gold Bar
US $20 Bill
Tobacco
Silver Certificate
Part 2: The Characteristic Audit
Choose an alternative currency (e.g., Bitcoin , Salt , Cowrie Shells , Gold ) and evaluate it against the 6 characteristics of sound money.
Selected Alternative Currency:
Durability
Uniformity
Portability
Scarce / Limited Supply
Divisibility
Acceptability
The Audit Verdict
Does this currency function effectively as a standard form of payment today? Why or why not? Explain using your audit findings above.
Part 3: The Trillion Dollar Tragedy
Hyperinflation Case Studies
Hyperinflation occurs when a government prints too much money, causing prices to double every few days. The currency becomes so common that it loses all trade value.
Weimar Germany (1923)
Prices doubled every 3 days. Workers were paid 3x daily just so they could buy bread before the price changed. Money was so worthless that stacks of cash were burned in stoves for heat or used as building blocks.
Zimbabwe (2008)
Monthly inflation hit 79 billion percent. The gov issued a $100 Trillion note. By 2009, trust in the currency hit zero. Zimbabwe abandoned their money and allowed merchants to accept stable U.S. Dollars instead.
1. During hyperinflation, which function of money fails FIRST? Why?
Choose: Medium of Exchange, Unit of Account, or Store of Value.
2. Printing too much money directly violates which specific Characteristic of sound money?
3. Why would Zimbabwe merchants start demanding U.S. Dollars instead of their own currency? Relate this to Acceptability .
Part 4: Price Hike Panic
Scenario: The Hourly Doubling
A $5.00 sandwich doubles in price every hour on the hour. You start your day at 8:00 AM with $1,000.00 .
Currency Comparison Key Currency Comparison
Teacher Answer Key
90-Minute Expansion
Part 1: Spectrum
Gold Bar: Commodity. intrinsic value; usable for jewelry/tech.
$20 Bill: Fiat. Value by decree. Not backed by physical metal.
Tobacco: Commodity. Leaves have value as a consumable item.
Silver Cert: Representative. Paper represents physical silver in vault.
Part 2: Audit Tips
Example: Bitcoin
Strengths: Scarce/Limited Supply (21M cap), Portability.
Weaknesses: Acceptability (major), Durability (loss of private keys).
Part 3: Case Study
1. First Failure: Store of Value.
(Options: Medium of Exchange, Unit of Account, Store of Value)
Value vanishes so fast it cannot be stored.
2. Root Cause: Scarce/Limited Supply. Governments printing too much removes scarcity.
3. Zimbabwe Switch: Acceptability. Citizens stopped accepting the local currency; they switched to USD because they knew it would be accepted by others.
Part 4: Math Check
8 AM: $5.00
9 AM: $10.00
10 AM: $20.00
11 AM: $40.00
12 PM: $80.00
1 PM: $160.00
2 PM: $320.00
3 PM: $640.00
4 PM: $1,280.00
5 PM: $2,560.00
6 PM: $5,120.00
7 PM: $10,240.00
8 PM: $20,480.00
1. Out of funds: 4:00 PM (Cost exceeds $1,000).
2. Commodities: Their "use value" remains constant (bread is food) while currency fails.
3. Reflection: 8 AM: 100 sandwiches. 8 PM: approx 0 sandwiches. Hyperinflation makes saving impossible.
Teaching Strategy
Circulate during Part 4. The math doubling usually leads to students realizing how quickly their life savings would vanish. Use this to emphasize the 'Store of Value' failure.
Growth Gauge Slides Growth Gauge
Measuring National Output (GDP)
The Big Picture
Gross Domestic Product
The total dollar value of all final goods and services produced within a country's borders in a given year.
Final goods only (no parts)
Domestic production only
New products only (no used goods)
The Formula
C + I + G + Xn
C: Consumption
I: Investment
G: Govt Spending
Xn: Net Exports
The "Off Limits" List
Nonmarket
Productive tasks done for free.
Mowing your own lawn.
Underground
Unreported cash payments.
Cash tips or babysitting.
Intermediate
Parts used for final goods.
Flour sold to a bakery.
Transfers
Govt money for no service.
Unemployment checks.
Output Analysis Worksheet Output Analysis
GDP Measurement & Evaluation
Name:
Part 1: The GDP Audit
Determine if the scenario is included or excluded from current US GDP.
01
A student buys a used textbook from a friend for $40.
02
A stay-at-home parent cleans their own house every week.
03
A family buys a new Ford truck made in a Michigan factory.
04
A retired veteran receives a $1,200 Social Security check.
05
A Texas-based software firm sells 500 subscriptions to users in Brazil.
Part 2: Categorizing the Components
Identify the component: Consumption (C) , Investment (I) , Government (G) , or Net Exports (Xn) .
06. Family buys groceries from a market.
07. Factory robotics assembly line.
08. Highway repaving project.
09. Texas pecans exported to Canada.
10. Teenager buys new game console.
11. New apartment complex build.
12. 500 new school district laptops.
13. Boeing sells a jet to China.
14. Haircut at a professional salon.
15. New fleet of delivery vans.
16. Hiring 50 new state firefighters.
17. A local household buys a Toyota.
Part 3: The Leisure Paradox
GDP is often used to measure a nation's economic health, but there is more to a truly thriving society than just its total economic output.
Consider two countries with the exact same GDP. Country A's citizens work 80 hours a week with zero vacation time. Country B's citizens work 35 hours a week and have ample time for family, exercise, and hobbies.
Based on GDP alone, which country looks better? Why is this a flawed way to measure a society's "Standard of Living"?
Output Analysis Key Output Analysis
Teacher Answer Key
GDP Review
Part 1: The GDP Audit
01
Excluded: Used Good. (Textbook)
02
Excluded: Nonmarket Activity. (Cleaning own house)
03
Included: Consumption (C) . (New truck purchase)
04
Excluded: Transfer Payment. (Social Security)
05
Included: Net Exports (Xn) . (Software sold to Brazil)
Part 2: Component Classification
Consumption (C)
• 06. Family groceries
• 10. Game console purchase
• 14. Salon haircut
Investment (I)
• 07. Robotics assembly line
• 11. New apartments
• 15. Delivery vans
Govt Spending (G)
• 08. Repaving highway
• 12. Student laptops
• 16. Firefighter payroll
Net Exports (Xn)
• 09. Wine to France
• 13. Jet to China airline
• 17. Imported Car (Subtract)
Part 3: The Leisure Paradox
"GDP measures economic output, but there is more to a good country than its economic health."
GDP View: Both countries look identical. GDP only counts market transactions. It ignores the "human cost" of constant labor or the "human benefit" of time.
The Flaw: GDP fails to account for Leisure Time . Time for rest and hobbies has no price tag, so it is ignored. Country B has a higher quality of life, but GDP cannot show that.