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View Full Version : What is a really good video on supply and demand to send to a friend?




haaaylee
07-22-2010, 01:17 PM
My friend is studying economics right now and i'm trying to figure out which would be the best video to send her to help her out. She is currently on supply and demand curves but is really confused. Does Peter or Woods have a good youtube anywhere? I feel like one of them helped me out in the past when i first got into economics, and i know they both make it really easy to understand.

Zippyjuan
07-22-2010, 01:52 PM
When I was a kid we had these things called books to learn from. In basic terms, if the supply of something goes up and everything else stays the same, we would expect the price of that good to go the other way- down(. If the supply went down and other things stayed the same, the prices would be expected to go up. (like say the orange crop got wiped out by a frost then the price of orange juice would go up because there is less to go around).

Consider IPods or phones. When they first come out, lots of people want them but there aren't many available yet. Limited supply. So people who really want one so that they can be one of the first to own one are willing to pay lots of money to get one- even more than the list price. So Apple starts making more. Supply increases. Now they are not hard to find so people are not willing to pay more. Compared to when they first came out, the price is lower because the supply is greater.

There was another factor too though. The demand. When they were new, everybody wanted one. Lots of demand. High demand also means higher prices. After a while most of the people who wanted one eventually got one and did not need another one so the demand fell. That also contributed to lower relative prices.

Changes in supply and demand can happen at the same time. If the supply rises at the same rate the demand does, the price should stay about the same. If demand goes up faster than the supply, the price should tend to rise. If supply rises faster than demand, then theoretically prices should fall.

Prices can also effect supply. If prices are going up, a company can make more money off each one so they will want to make more of the item. In this case, Apple increased the production of their IPods because people were willing to pay more to get them.

And price can effect demand as well. If you raise the price of what you are selling, fewer people will be willing and able to buy it. If they can't afford your item or just think you are asking too much for it, they will spend their money on somethine else. If you have a lot of excess things now, you probably will want to lower your price so that more people will be willing and able to buy it and you can get rid of your excess supply. Have a sale on it.

haaaylee
07-22-2010, 01:54 PM
When I was a kid we had these things called books to learn from. In basic terms, if the supply of something goes up and everything else stays the same, we would expect the price of that good to go the other way- down(. If the supply went down and other things stayed the same, the prices would be expected to go up. (like say the orange crop got wiped out by a frost then the price of orange juice would go up because there is less to go around).

Consider IPods or phones. When they first come out, lots of people want them but there aren't many available yet. Limited supply. So people who really want one so that they can be one of the first to own one are willing to pay lots of money to get one- even more than the list price. So Apple starts making more. Supply increases. Now they are not hard to find so people are not willing to pay more. Compared to when they first came out, the price is lower because the supply is greater.

There was another factor too though. The demand. When they were new, everybody wanted one. Lots of demand. High demand also means higher prices. After a while most of the people who wanted one eventually got one and did not need another one so the demand fell. That also contributed to lower relative prices.

Changes in supply and demand can happen at the same time. If the supply rises at the same rate the demand does, the price should stay about the same. If demand goes up faster than the supply, the price should tend to rise. If supply rises faster than demand, then theoretically prices should fall.

Prices can also effect supply. If prices are going up, a company can make more money off each one so they will want to make more of the item. In this case, Apple increased the production of their IPods because people were willing to pay more to get them.

And price can effect demand as well. If you raise the price of what you are selling, fewer people will be willing and able to buy it. If they can't afford your item or just think you are asking too much for it, they will spend their money on somethine else. If you have a lot of excess things now, you probably will want to lower your price so that more people will be willing and able to buy it and you can get rid of your excess supply. Have a sale on it.


The problem is, reading this isn't helping her get it. Some people need visuals to help out, and she is taking the course online so she doesn't have a teacher that can show her the graphs, etc.

Zippyjuan
07-22-2010, 02:15 PM
Sorry, I did not intend to come off as snippy or anything. It can be hard to learn something sometimes if there is not somebody there to show you how and explain things to you better if you have questions.

It is not a video but maybe this will help? It uses flash so you can move around the graphs and see what happens. http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm

I don't know which are good but there are a lot of vids on YouTube.

Danke
07-22-2010, 04:34 PM
PM FrankRep. I'm sure JBS has some videos on this.

Kregisen
07-22-2010, 04:38 PM
Have you watched any of the ones on youtube? There are hundreds, I imagine there are atleast a few very simple and easy-to-understand ones on there.

erowe1
07-22-2010, 04:40 PM
I wouldn't be surprised if none of the above (Woods, Schiff, JBS) have such a video. This isn't political stuff, it's just basic economics education. Have you tried to find what's out there for that? I don't want to spend any time watching it, but here's a youtube video that might do the trick.
http://www.youtube.com/user/economicsfun#p/a/u/0/TuZKYc-fWvY

YumYum
07-22-2010, 04:47 PM
My favorite when I first became a Ron Paul supporter was "Money as Debt" It's awesome.

YouTube - Money As Debt (1 of 5) (http://www.youtube.com/watch?v=vVkFb26u9g8)

Ekrub
07-22-2010, 05:04 PM
Not trying to be a jerk but.... what is it that she isn't understanding? It's a pretty simple concept.

dannno
07-22-2010, 05:04 PM
How about roll playing?

First give her some blank graphs with price on the Y axis and quantity on the X axis to draw on. Make about 10 or 20 on a page.

Then get a 12 pack of soda pop.

Give her the entire twelve pack and tell her to pretend she is at school at lunch and the vending machine or whatever ran out of soda pop. Luckily she just happens to have a 12 pack of soda and wants some money to buy candy after school. Sodas normally sell for $.75. If 4 kids came up to her and wanted soda, and she had twelve, ask her how much she thinks she will be able to get for that. Logically, it should be somewhere around $.80. If she is way off, remind her that the kids are willing to pay a little more than normal because the vending machine is out of soda. On the other hand, she wants money for candy so she doesn't want to drive away the customers with too high a price.

So then have her write the answer on the graph, the demand being 4, and the price being $.80.

Now have her pretend 20 kids want soda. How much should she charge? She can charge much more, because she only has 12 sodas. She can ask how many kids will buy soda at $2. If only 6 kids raise their hand, then she can ask how many would buy it for $1.50. If 12 kids raise their hand, then she can make $18, rather than the $12 she would have made selling them at $2 each.

Now have her plot $1.50 and 12 and $2 at 20. Connect the dots. This is the demand curve.

Separately, she can plot a supply curve.

Have her pretend she had 20 sodas instead of 12. Now if she asks how many kids would buy soda at $1.25, all 20 kids happen to raise their hand. That is $25 she would make. Have her plot the supply and price, that's 20 sodas $1.25 and 12 sodas at $1.50. Connect the dots. There is your supply curve.

The idea is to get her thinking about how this stuff applies to every day life. You don't have to use these exact numbers or these items, just use real world examples and start plotting them on graphs.

Is she into fashion or anything else you can give her examples of? Like if there was a really popular fashion clothing company, and they only brought 100 dresses to a store in the mall, they sell them for $150.. but if they brought only 10 dresses to the store, we might assume that 10 of those women might be willing to pay $225 for a dress, so they could raise their price and still sell out all of their inventory. Have her plot those two points on a graph, connect the dots, another supply curve. Then flip it around and plot a demand curve. Say the store has 20 dresses. If 10 women come in, how much should they charge? If 50 women are expected to come in, how much should they charge? Plot those to points and connect them.

StilesBC
07-22-2010, 08:30 PM
She will fail Econ101 if she takes advice from these forums.

But perhaps have her listen to this: http://mises.org/media/4620

She might fail, but she'll be better educated. :)

dannno
07-22-2010, 09:01 PM
She will fail Econ101 if she takes advice from these forums.

Why? I have a degree in economics. This stuff isn't that hard.




But perhaps have her listen to this: http://mises.org/media/4620

She might fail, but she'll be better educated. :)

That's true.

Zippyjuan
07-22-2010, 09:10 PM
Why? I have a degree in economics. This stuff isn't that hard.




That's true.

You too? I also have an Econ degree. Plus one in Poly Sci. Both aren't really worth that much in the real world though- unless you have an advanced degree or something to go with them. Maybe the problem is trying to learn online instead of in a class.

michaelwise
07-22-2010, 11:25 PM
Oh God. Where do I start? The Power of Nightmares is a good start on google video.

michaelwise
07-22-2010, 11:28 PM
For economic understanding on this thread I started, overlook the population stuff, and understand the power of exponential functions it talks about. People will think she is a genius if she learns from it.

http://www.ronpaulforums.com/showthread.php?t=253601

Zippyjuan
07-23-2010, 01:07 AM
For economic understanding on this thread I started, overlook the population stuff, and understand the power of exponential functions it talks about. People will think she is a genius if she learns from it.

http://www.ronpaulforums.com/showthread.php?t=253601

Not the sort of info the poster is looking for.