Supply and Demand Lesson Plan

Objectives:

Students will be able to define vocabulary terms related to supply and demand.

Students will be able to analyze what happens when there are changes to supply and demand.

Students will be able to make and support predictions with reasoning based on changes in supply and demand.

Materials:

• Building Blocks of Finance Text Set

• Different colored marbles, chips, or other manipulatives you have on hand

• Containers to hold the manipulatives (sort them by color)

• Play currency (or other manipulatives to use in place of play currency)

• Supply and Demand article

• Supply and Demand graph

• Student notebooks

• Pencils

• Headline Activity Teacher Version

• Headline Activity Student Version

• Optional: Simplified Supply and Demand article

Lesson Duration:

Approximately 40-55 minutes.

Requisite Prior Knowledge:

In this lesson, students will read about the concept of supply and demand. They will also analyze a graph to help deepen their understanding of this idea. Prior to engaging in this lesson, students must understand the relationship between cause and effect.

In addition, students may benefit from reading (or re-reading) two sections in the Building Blocks of Finance series: What Is Money? pages 28-31 and Spending Money pages 14-19. If you would like, you can include this reading as a pre-teaching activity for your students. Below are possible prompts to help guide your discussion.

What Is Money?, pages 28-31:

1. What is the Law of Demand?
2. What is the Law of Supply?
3. What did Paycheck do differently this year compared to last year?
4. How did Paycheck decide to try and solve his problem? Do you think this will be effective? Why?

Spending Money, pages 14-19:

1. Why do you think Bill’s friend was willing to sell her ice skates for so cheap?
2. Think about the farmer’s market example. Why did the potatoes cost so much less than the pineapple?
3. What often happens to the price of something when demand for it is low? What about when demand is high?

Assessment:

Headline Activity Student Version (formative or summative)

Vocabulary:

Supply – the amount of a product businesses are willing and able to offer for sale at various prices.

Demand – the amount of a product that users can and would like to buy at various prices.

Equilibrium Price – the price at which producers can actually sell and consumers agree to purchase.

Differentiation Considerations:

Consider using the Simplified Supply and Demand article. This is written at a lower Lexile level than the one included in the lesson plan.

Assign partners/groups strategically prior to engaging in the lesson.

Note: Consider the variety of headlines provided in the Headline Activity. Some of these have a lower cognitive demand (headlines 1 and 2) whereas others have a higher cognitive demand (headlines 3 and 4). Consider strategically assigning these headlines to specific pairs/groups.

Lesson and Instruction:

Teacher Actions

This hook is intended to simulate trends in an active market so students can see what happens when supply and demand change.

Separate the manipulates by color and place into separate containers. Assign the same price to each one.

Provide students play currency (you can choose to give the same or different amounts to each student).

For the first round of purchasing, invite students to buy whatever colors they like best. Determine the most popular color and explain that the demand was high. There aren’t as many left (low supply) so we will change the prices. Increase the price of the popular color, decrease the least favorite, and adjust other prices how you see fit.

Open “purchasing” for a second round, this time asking students to provide their reasoning behind their purchases.

Discuss how demand affected the supply, how costs can shift, and how new supply can change demand.

Explain that we will do some reading and some creative writing about this concept today. Our goals today are to define terms related to supply and demand, analyze what happens when those change, and make predictions based on reasoning about supply and demand.

Teacher Actions

Read the Supply and Demand article with students. Use your preferred note-taking strategy to take notes on the following vocabulary: supply, demand, and equilibrium price (see below for sample definitions).

Supply – the amount of a product businesses are willing and able to offer for sale at various prices.

Demand – the amount of a product that users can and would like to buy at various prices.

Equilibrium Price – the price at which producers can actually sell and consumers agree to purchase.

After reading, direct students’ attention to the Supply and Demand graph. Read the associated paragraph and point out the trends for supply and demand as well as the equilibrium price.

Optional discussion prompts:

• • What typically happens to the demand when the supply is low?
• • What typically happens to the demand when the supply is high?
• • What is interesting about where the lines intersect (cross) on the graph?

Explain to students that we are going to transition to an activity to help us more deeply understand how supply and demand works in the real world.

Teacher Actions

Present the Headline Activity Teacher Version to students and read the headline aloud. This headline is based on the 2020 toilet paper shortage across America due in large part to COVID-19 fueled panic-buying. Provide some background on this as needed for your students.

Ask students to predict what might happen based on this headline. Have students think about how supply and demand might relate to this situation. Solicit some student responses, focusing on the reasoning behind the predictions. Model how to write a prediction sentence that includes reasoning. Toilet paper prices might increase because there is such a high demand and a low supply.

Next, explain that students will use their creativity to write a follow-up headline. The goal here is to show how results vary based on changes in supply and demand. Stores Place Restrictions on Number of Toilet Paper Products Individuals Can Purchase.

Teacher Actions

Pass out the Headlines Activity sheet and place students into pairs or groups (or individually) as you see fit. Review the directions with students and allow them to work collaboratively to analyze, predict, provide reasoning, and write a follow-up headline.

If needed, pull a group of students for extra support or for further extension.

Teacher Actions

After students have completed the Headline Activity, choose 2-3 pairs/groups to share their headline, predictions, reasoning, and follow-up headline. Ask nonpresenting students to comment on the likelihood of their predictions and on follow-up headlines.

Close the lesson by reminding students that supply and demand are economic forces that determine how much of a product is produced as well as its price. When one changes, it often affects the other.

Next Steps and Reflection:

What went well?

What changes might be beneficial?

Reteaching Needs

Extension Needs