1. What Industry Is Making Albion, Nebraska a Growing Community?

6-1 Markets, Equilibrium, and Prices Introduction 99-100

1. What industry is making Albion, Nebraska a “growing” community?

2. What is making a demand for ethanol?

3. What does ethanol do to food prices? Why?

4. What is the problem with the demand of ethanol? (think back to last chapter)

5. Make a pro and con chart with ECONOMIC pros and cons of ethanol based on what you know and from the section.

6. In your opinion, is it better to produce ethanol or deal with the pollution of regular gasoline (which we import)? 6-2 What Happens When Demand Meets Supply Pg.100-103

Explain  Market equilibrium  Market-clearing price/equilibrium price  Market Price

1. Why is selling products at the market equilibrium important?

2. Look at the Watermelon Demand and Supply Schedule. Make a revenue column for the watermelon sold-include surplus and shortages

3. What types of interactions create an equilibrium price? Give two examples?

4. In 1923, the cost of food went down because of a surplus created by a lack of a demand of food oversees. In order to combat this problem farmers produced record numbers of product (one of the highest production periods ever for farmers).

a. What problem were the farmers facing? How did they try to solve the problem? b. What should the farmers done instead? c. If you were the government what would you tell the farmers to do? 6-3 What Happens When the Price Isn’t “Right”? 103-105 Explain  Disequilibrium  Excess demand  Excess supply

1. What does excess demand mean to economist? 2. Why might a producer not be willing to sell at a low price? (assuming the product still made a profit) 2 reasons 3. What does surplus mean? 4. How long does it take to get a price to equilibrium?

BONUS What word(s) do stores use to move the price to equilibrium? Most wins 1 2 3 6-4 How Do Shifts in Demand or Supply Affect Markets 105-108

1. What three questions do economists ask when there is an equilibrium change?

2. Create a hypothetical example like in the book.  Create a supply and demand curve with the following table for Lawn Care price Quantity Demanded Quantity Supplied $5.00 200 50 10.00 150 75 15.00 100 100 20.00 75 150 25.00 50 200  Mark the equilibrium point on your graph  Create a scenario that causes the demand to shift left and right AND mark the new equilibrium points on your graph  Create another scenario that causes the supply curve to shift left and right and mark the new equilibrium points 6-5 and 6-6 What Roles Do Prices Play in a Modern Mixed Economy 108-111 Explain  Price control  Price floor  Price ceiling  Rationing  Black market

1. According to the book, what does the high price of real estate in Manhattan and low price of rubber flip flops tell us? 2. How does opportunity cost factor into buying something? 3. How does consumer expectations factor into the price you spend? 4. How does price serve as an incentive to producers? 5. A drop in the price consumers are willing to pay says what to producers?

1. When have governments stepped in to control prices? Why do governments do this? 2. What is a price floor meant to do? What products have a price floor? 3. How does minimum wage cause unemployment? Is it worth having a minimum wage?(why or why not) 4. What is a price ceiling meant to do? What products have a price ceiling? 5. How does price ceiling affect markets like the rental markets? Is it worth having? Why or why not? 6. Why does the government ration? Why do people sell on black markets? 7-2 Perfect Competition

1. Write the four main characteristics (with explanations) that define a market structure. 2. What are the four characteristics of perfect competition, and explain each.

7-3 Monopolies 123-127 Explain  Public franchise  Economies of scale 1. What are the four characteristics of a monopoly? Explain each. 2. What are three types legal Monopolies?  Explain the characteristics of each.  Give an example of each 3. Make a timeline of events in the Microsoft case starting in 1980’s through 2002 in terms of its monopoly. 4. Are Monopolies good or bad for us? Explain your answer. 7-4 Oligopoly 127-130 Explain  Oligopoly  Price leadership  Price war  Collusion  Cartel

1. Explain the four characteristics of an oligopoly. 2. What are some oligopolies? 3. When does an oligopoly act like a monopoly? 4. Why are price wars hard on producers and how are they good for consumers 5.Why is collusion illegal? 6.What is an example of a modern cartel? How does it work?

Monopolistic Competition 130-132 1. Explain the characteristics of monopolistic competition. 2. Explain the four factors of nonprice competition. 3.What are some LOCAL examples of negative/positive externality? 4.What is a public good? How do they differ from private goods? Name 10 examples of public goods