TEKS 113.31(d)(2), Social Studies (Economics)
Subject: Economics – High School
TEKS 113.31(d)(2)
Summary of TEKS 113.31(d)(2)
The TEKS 113.31(d)(2) explains the interaction of supply, demand, and price. Prices influence how much consumers want to buy and how much businesses want to sell. Non-price factors, like trends and production costs, also play a role. Supply-and-demand graphs visually explain these relationships and help us understand how markets adjust to changes.
Key Concepts of TEKS 113.31(d)(2)
- Price Effects: Higher prices reduce demand and increase supply; lower prices increase demand and reduce supply.
- Non-Price Determinants: Factors like income, trends, and technology shift supply and demand.
- Equilibrium Price: The price where supply equals demand.
- Supply-and-Demand Graphs: Tools that show how prices balance the market.
Section 1: How Does Price Affect Supply and Demand?
TEKS 113.31(d)(2)(A)
Explanation: Prices change the way people buy and sell. Here’s how it works:
- Demand: When prices go up, people buy less because it costs more. When prices go down, people buy more because it’s cheaper.
- Supply: When prices go up, businesses want to produce more because they can earn more. When prices go down, businesses produce less because they make less profit.
Example of TEKS 113.31(d)(2)(A): Imagine a bakery selling cupcakes for $5 each. If the price drops to $2, more customers will buy cupcakes. But if the price rises to $10, fewer customers will buy them, even though the bakery might produce more.
Key Idea: Prices create balance between what consumers want and what businesses can provide.
Section 2: What Factors Besides Price Affect Supply and Demand?
TEKS 113.31(d)(2)(B)
Explanation: Sometimes, factors other than price change supply and demand. These are called non-price determinants.
- Non-Price Factors That Change Demand:
- Trends and Preferences: Popular items (like the latest smartphone) increase demand.
- Income: When people make more money, they buy more.
- Population: More people in an area create more demand for products.
- Expectations: If people think prices will rise soon, they buy now.
- Non-Price Factors That Change Supply:
- Cost of Materials: If materials get cheaper, businesses can produce more.
- Technology: New tools or methods help businesses produce faster and cheaper.
- Government Policies: Taxes or subsidies can encourage or discourage production.
Example of TEKS 113.31(d)(2)(B): If farmers get new, faster machines, they can grow more crops, increasing supply even if the price stays the same.
Key Idea: Non-price factors shift supply and demand, creating new market balances.
Section 3: How Do You Read a Supply-and-Demand Graph?
TEKS 113.31(d)(2)(C)
Explanation: A supply-and-demand graph helps us see how markets work. It has two main lines:
- Demand Curve: This line slopes down because people buy less when prices are high.
- Supply Curve: This line slopes up because businesses produce more when prices are high.
- Equilibrium Point: This is where the demand and supply lines meet. It shows the price where supply equals demand.
Example of TEKS 113.31(d)(2)(C): If the graph shows 50 pairs of shoes being sold at $40 each, and that’s the price where customers and businesses agree, $40 is the equilibrium price. If supply or demand changes, the equilibrium point moves.
Key Idea: Supply-and-demand graphs show how prices balance the market.