Teacher's Guide - The Curriculum Project

7. Supply and DemandSupply and Demand is one of the most important concepts in economics. Therefore, it isvery important that students understand this chapter well.Bring a small number (about five) of some kind of snack to the classroom.Hold one up and ask the students, ‘Put your hand up if you would like some______?’ Probably, all or most of the students will put their hands up. Thensay, ‘I only have (five) of these, so I can only give them to five people.’ Handthe snacks to five students in the class at random. Explain that Demand isthe number of people that want goods and services, and how many theywant, i.e. every student wants a snack. Then explain that Supply is theamount of goods or services available, i.e. only five in this case.GroupworkPairwork1. Put the students into groups of 3-5. Ask them to make two lists. One list ofgoods and services where demand is greater than supply, and one list ofgoods and services where supply is greater than demand. The lists should beheaded ‘Demand greater than Supply’, and ‘Supply greater than Demand’.Give them 10-15 minutes to discuss and write down ideas. Then elicit oneidea from each group in turn for each list and check agreement with therest of the class.2. Put the students into pairs and ask them to read the information on StyleClothes and answer the questions. Give them about 5 minutes. The elicitanswers from different pairs and check agreement with the rest of the class.a. There are 200 buyers (Demand) and 40 jackets (Supply). So Demand is greater than Supply.The price of each jacket will probably be high because many buyers are competing to buy fewjackets. The shop can ask more money for each jacket because it has lots of customers.b. There are 30 buyers (Demand) and 80 jackets (Supply). So Supply is greater than Demand.The price of each jacket will probably be low because few buyers are competing to buy manyjackets. The shop has to lower the price of each jacket because it does not have many buyers.On Your Own3. Ask the student to think about the picture for a few minutes. Then elicitideas and check agreement with the rest of the class.The picture shows the relationship between supply and demand. For every good / service in a freeeconomy there is supply and demand. Companies can choose freely which goods / services tooffer, and people can choose freely what to buy. However, the supply and demand for a particulargood / service is constantly changing. Often, there is not enough supply to satisfy demand, or notenough demand to satisfy supply.In a free economy, neither supply or demand would win because the two depend on each other.Without demand there would be no supply. Without supply there would be no demand. If nobodywants to buy shoes, then shops will not offer them for sale. If there are never any shoes in theshops, people will not try to buy them.The Curriculum Project ECONOMICS: an introduction - Teacher’s Guide15