The Model of Supply and Demand


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Introduction to Demand

Economists do not have a model that predicts what happens when there is one buyer and one seller. There can be a wide range of prices that will satisfy both buyers and sellers. but where in that range the exchange price will be depends on the relative bargaining skills of the buyer and seller. In this comedy clip, the buyer is dim and the seller shows no mercy. (What is a hedge fund? Why does the seller want to know what her husband does? Why should she not give an truthful answer?)

The Demand Curve

Here is a student project that spoofs the Crocodile Hunter in exploring demand for pizza, explaining substitutes, complements, and inferior goods. A quibble--the opportunity cost is not just the time it takes to eat the pizza, it also includes the money cost. In economics, cost is opportunity cost.

The Model of Supply and Demand

A class project by high school students, this video reviews the basics of supply and demand. They mix in a bit of aggregate demand and macroeconomics near the end that should not be there. The vocals are not excellent (is that a nice way to say this?), but the creativity and enthusiasm are first-rate.

There is sometimes a fine line between what is funny and what is stupid. Is this attempt to explain how different supply and demand curves explain different "prices" effective? Is it funny or is it stupid? (Should the speaker have said there was a "surplus" of men like John, or an "abundance" of men like John?)

For a series of videos that talks you through the usual textbook development of supply and demand, see the website Economists Do It with Models. (You have to click on the links, which takes you to youtube videos.)

These links were checked on December 7, 2009.
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Copyright Robert Schenk