Students will be able to:
- Draw and label supply and demand curves.
- Show the impact of changes in supply and demand curves.
- Use economic reasoning to explain their choices.
In this economics lesson, students will use a wedding to explain changes in supply and demand.
Tell students they are going to hear a wonderful story of romance and compromise. They will need to use their imaginations to picture the story. Ask students to close their eyes and imagine the story you are about to tell them. Read the following narrative to the class: Picture a crowded marketplace with lots of noise and jostling crowds competing for your attention. Venders are calling out the prices of their products. A hum of shoppers, all in their own conversations, is drifting through the venue. Ms. Supply, happy to be in the market on such a beautiful day, is just meandering through the market browsing when she sees Mr. Demand standing across the way. “WOW!,” Ms. Supply says to herself. “I’ve never seen anyone with such a downward sloping curve before. He is definitely fascinating.” After watching him for a few moments, Ms. Supply crosses the market — seizing the opportunity to meet Mr. Demand. Seeing an opening to get his attention, Ms. Supply catches his eye and starts singing this song: Song 1: I Want You to Want Me. (Note: Start music at 3:05; continue to about 3:24) Continue the narrative: Mr. Demand is surprised and finds this introduction a bit odd, but is intrigued because he has never met anyone with an upward sloping curve. Mr. Demand listens to Ms. Supply’s line and wonders how they can they possibly build a relationship. After all, they have such opposite incentives. Ms. Supply wants the highest price possible while Mr. Demand is focused on the lowest price. How could they possibly make it work? Mr. Demand ponders this question but is still captivated by Ms. Supply’s promotions and decides to take a chance. Mr. Demand responds to Ms. Supply’s pickup line with his own song, Song 2: Let’s Stay Together. (Note: Start music at 4:48; continue to about 5:15) Continue the narrative: Realizing they need each other, the courageous couple begins to wonder, how can competing forces exist in the same market space? Can opposites really attract? Can Ms. Supply and Mr. Demand compromise and find balance? They can! Open your eyes! Congratulations!!!” Project or display a completed market group for students to view as they open their eyes. Be sure to include both the supply and demand curves labeled, along with the equilibrium point. Play the Song 3: The Wedding March. (Note: Start music at 1:08; continue to about 1:20. You may also choose to toss confetti in honor the marriage between supply and demand.) Explain that Supply and Demand are now married and will never be graphed separately again. This marriage is all made possible by Song 4: The Power of Love. (Note: Play music as long as you wish. It is also an opportunity to serve cupcakes or other treats to celebrate the wedding.)
Tell students that understanding the concepts of supply and demand is will help them explain what happens to prices: why they increase and why the decrease. Explain that this lesson will also help remind them of the differences between changes in quantity supplied/quantity demanded and changes in supply/demand. Draw a market graph on the board. Explain that equilibrium is found when quantity supplied and quantity demanded are equal. At this point, there is no surplus (excess supply) or shortage (excess demand); all produced units are consumed. Ask students the following questions:
- How does a store know when they need to put a product on sale? (Answers will vary but lead the discussion to the idea that stores will reduce prices when they have a surplus or notice that a product is not selling. Changes in price will help the market naturally move toward equilibrium.)
- How can they find the best price on something they want to buy? (Answers will vary but may include internet searches, asking friends, or monitoring prices over time. Explain that consumers naturally adjust their quantity demanded towards equilibrium.)
(Note: At this point, be sure that students understand the difference between a change in supply or demand — a shift of the entire curve — vs a change in quantity supplied or quantity demanded — a movement along the existing curve.) Distribute copies of The Supply and Demand of Horse Drawn Carriages to students. Review the directions and have students complete the assignment. You may choose to either walk through each step of the assignment with them, discussing each question individually as they complete it OR discussing it after they have completed the entire worksheet. Review student answers and respond to any questions about determinants of supply and demand and impact of shifts on equilibrium.
Put students into pairs or small groups. Distribute copies of the Supply and Demand Practice handout to each student. Have each student graph the scenarios described in the worksheet individually, write the rationale for their answers, and then compare answers with their group or partner. Tell them they will receive one point for each correct graph and rationale if they had a match. If their graphs and rationale do not match or are incorrect, they receive no points. Review the answers to each question before proceeding to the next one to ensure students receive immediate feedback on their answers and address student questions about the graph or rationale. (Note: You may want to set a time limit on each question to keep the activity moving. In addition, you may choose to use handheld white boards or other similar devices if available.) After completing the assignment, award a prize to the group/pair with the highest number of points.
Have students continue the story of the newly married couple by creating two new scenarios, with one scenario focused on the shifters of demand and the other focused on the shifters of supply. Tell students their stories should be centered around the new couple furnishing their new home. Require them to draw a correctly labeled graph showing the shift change and using arrows to show the change in price and quantity. Also have them write a brief explanation to support their answers. (Answers will vary.)
Have students write a wedding toast to the newly married couple. Tell them to include at least one shifter of supply and one shifter of demand as well as a statement clarifying the difference between a change of demand/supply versus a change in quantity demanded/quantity supplied. Ask for volunteers to read their toasts to the class. (Answers will vary.)
Have students work in small groups to create a wedding-styled infographic on demand, supply, and equilibrium explaining the shifters of demand and supply. In addition, have them clarify the difference between a change in demand/supply and a change in quantity demanded/supplied. Ask groups to share their infographics with the rest of the class. (Answers will vary.)