Chapter+5

=Chapter 5: Market-Clearing Price=

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 * Chapter Objectives:**
 * Through "A Classroom Market in Oil" activity, understand that buyers compete against buyer, and sellers against sellers
 * Identify the market-clearing (equilibrium) price on a graph using supply and demand curves
 * Differentiate between movement along a s/d curve vs. a curve shift of s/d, and identify any changes in market-clearing price
 * Understand meaning/significance of a shortage or surplus
 * Understand the difference between a price floor and a price ceiling, and identify particular examples of each
 * Read newspapers and identify issues of supply, demand, and market-clearing price, and analyze appropriately.
 * What does a "buyers" or a "sellers" market look like with a graph?

=Chapter 5 Extra Credit: //(To get full credit, answer each question correctly, in 4-5 sentences)//=
 * 1) How is it possible to change a shortage into a surplus without changing either demand or supply? (Hint: What do supply and demand mean in economics? How are they shown graphically?)
 * 2) Suppose you belong to a national organization called Hamburger Lovers USA. Its main purpose is to reduce the price of hamburgers. To accomplish this, the organization wants the government to establish a maximum price (called a price ceiling) that ranchers can charge for beef. The reasoning is that with a lower cost of beef, supermarkets and hamburger chains will charge less. Do you think this reasoning is correct? Explain.
 * 3) As more schools require students to wear uniforms, more uniforms will have to be produced. Use your knowledge of demand, supply, and market-clearing prices to explain how our free enterprise economy is likely to ensure the production of these uniforms.