WEEK 2
Markets
The Role of the Market
You will learn about:
• determining solutions to the economic problem
• the importance of relative price in reflecting opportunity costs in the goods and services and factor markets
You will learn to:
Examine economic issues
• determining solutions to the economic problem
• the importance of relative price in reflecting opportunity costs in the goods and services and factor markets
You will learn to:
Examine economic issues
- identify how business and governments can use information from the market
- explain how market solutions can lead to improved efficiency
- graph demand and supply curves and interpret the impact on the equilibrium of changes in market forces
- analyse non-equilibrium market situations and propose solutions to them
Traditional economics sets out some basic premises. Let's think these through and see where they are happening in our everyday lives.
Write down these notes in your workbook.
- A market serves buyers and sellers
- Markets can be described as product markets where buyers buy finished or consumer goods and services
- Markets can also be described as factor markets where buyers buy capital goods and services that produce other goods and services
- Product and factor markets interact to determine equilibrium prices and quantities
- Prices reflect how scarce or abundant goods and services are in terms of their supply
- Prices help send resources where they're most needed
- Prices act as incentives
- Prices ration goods and services
- Prices bring about equilibrium
What is happening to markets during the global pandemic?
Watch this clip from MRU and answer the MC, when the clip stops and prompts you, so you can check for understanding as you watch.
Now go to Google classroom and complete the assignment "The Economics of Ideas"
Can you?
Explain how market solutions can lead to improved efficiency
Watch this 3:43mins clip "How to make a $1500 sandwich in only 6 months"
Watch this follow-up clip "Why chicken sandwiches don't cost $1500". It goes for 10:41mins but you don't have to watch all of it to understand the basic premise it examines.
Now complete these 5 questions in "Week 2 Market Equilibrium" and see if you can apply your understanding.
Click on the image to read the full article:
After reading the article and reflecting on what you've learned this week, how would you advise the government to manage this economic behaviour? Put your ideas in the padlet below and then comment on another student's post to start a discussion.
