SUPPLY

This week in class we learned about supply. Supply is what producers are willing to sell because they have the ability and willingness to do so. Producers are willing to make more of their product for a higher price. This is obvious to us, because the reason producers are making their product is to make money. This concept is also called the law of supply. We also talked about all of the factors that move a supply curve. Some of the factors are input; meaning the cost to make a product, labor productivity, technology, government actions, producer expectations and number of producers.
I think the two that are the most important are government actions and technology. Today in the news we hear all the time about government regulating businesses, taxing or providing subsidies. The government can either help or hinder producers. Technology is also very important. Our society is constantly growing and coming up with new ideas. The amount of technology we use today even on a daily basis is pretty impressive. I'm sure there will be new and innovative technology to come in the future. I think all of these factors are equally important to understanding the role of supply in economics.

Elasticity

This week in class we focused on elasticity. Elasticity is how consumers respond to changes in price. When something is elastic,  the change in price has had a large effect on quantity demanded. When something is in inelastic, a change in price has a small effect on quantity demanded. When we talked in class about in-elasticity we talked about insulin. I have Diabetes, so this was an example I could relate to! For Diabetics, insulin is necessary to keeping them alive. So if the price for insulin increases, a Diabetic is still going to purchase the same amount. If the price for insulin decreases, the person with Diabetes isn't going to stock up and buy more, because insulin expires. Therefore insulin is inelastic.
I think this concept of elasticity is extremely important to understanding Economics. Elasticity basically shows us how to make more money for ourselves. Without it, we wouldn't be able to figure out why people buy more of products when the price is lower. We wouldn't be able to increase our total revenue. Elasticity also tells us in what situations we should keep the prices the same or that we can raise prices and not lose sales. Overall, I think this concept is very important to studying economics. 

Demand

Even though we had two days off from school this week we were still able to learn about Demand. One concept that stuck out to me was Change in Demand and the 6 factors that affect it. A Change in Demand is when something causes buyers to purchase a different amounts at every price. This cause the entire demand curve to shift. There are six factors that can cause this. The first is income. People may have more or less money to spend and this might occur because a promotion or a loss of a job. The second factor is consumer taste, which is when the popularity of something increases the demand. Market size is also a factor, because it the number of potential buyers changes. Consumer expectations are also important, because it's the prediction of future prices affect the present buying. An example of this is when people know a hurricane is going to happen so they purchase and stock up on water and food. The fifth factor is complementary goods. This is when some products are used together. For example, butter and bread. If the price for bread goes down, the demand for butter might increase. The last factor is substitute goods when products are interchangeable. An example of this could be white bread costing$2 while wheat bread costs $3. Most people are going to buy the cheap white bread.
The factor that most interested me was Market Size. I thought it was interesting when Mrs. Weser explained why ketchup isn't the leading condiment anymore. Salsa is. She explained it's for two reasons. The first is that America's baby boom generation has gotten older and their taste buds are duller, so salsa excites their taste buds. The second is that our country has had an increase in our Hispanic population and Salsa is seen as a Hispanic food. So the market size for Salsa is significantly larger than the market size for ketchup since salsa is now the most popular condiment.