11th Grade Microeconomics Elasticity Lesson Plan Example

Topic: Elasticity

Objectives & Outcomes

• Students will be able to explain elasticity and its various forms (price elasticity of demand, cross-price elasticity of demand, income elasticity of demand, and price elasticity of supply).
• Students will be able to calculate and interpret the elasticity of demand, cross-price elasticity of demand, income elasticity of demand, and price elasticity of supply for given scenarios.

Materials

• Handout with definitions and examples of elasticity
• Calculators for performing calculations
• Example scenarios for practicing interpretation

Warm-Up

• Ask students to think about a time when they purchased a good or service.
• Then, have them share their story with a partner.
• After a few minutes of sharing, have a few pairs share their stories with the class.
• As a class, discuss what factors might have influenced the students' decisions to buy (or not buy) the good or service.

Direct Instruction

• Introduce the concept of price elasticity of demand (PED).
• Explain that PED measures how responsive demand is to changes in price.
• Show the graph of the demand curve and explain how it shows the relationship between price and demand.
• Discuss how PED can be calculated using the formula PED = (% change in demand)/(% change in price).
• Introduce the concept of cross-price elasticity of demand (XED).
• Explain that XED measures how responsive demand is to changes in the price of another good.
• Show the graph of the demand curve and explain how it shows the relationship between price and demand for a good when the price of another good changes.
• Discuss how XED can be calculated using the formula XED = (% change in demand)/(% change in price of other good).
• Introduce the concept of income elasticity of demand (IED).
• Explain that IED measures how responsive demand is to changes in income.
• Show the graph of the demand curve and explain how it shows the relationship between price and demand when income changes.
• Discuss how IED can be calculated using the formula IED = (% change in demand)/(% change in income).
• Introduce the concept of price elasticity of supply (PES).
• Explain that PES measures how responsive supply is to changes in price.
• Show the graph of the supply curve and explain how it shows the relationship between price and supply.
• Discuss how PES can be calculated using the formula PES = (% change in supply)/(% change in price).
• Introduce the concept of income elasticity of supply (IES).
• Explain that IES measures how responsive supply is to changes in income.
• Show the graph of the supply curve and explain how it shows the relationship between price and supply when income changes.
• Discuss how IES can be calculated using the formula IES = (% change in supply)/(% change in income).

Guided Practice

• Have students work in pairs or small groups to calculate PED, XED, IED and PES for the following scenarios:
• A store raises the price of apples by 10%. How does this change in price affect the demand for apples?
• A store lowers the price of apples by 10%. How does this change in price affect the demand for apples?
• A store raises the price of oranges by 10%. How does this change in price affect the demand for oranges?
• A store lowers the price of oranges by 10%. How does this change in price affect the demand for oranges?
• A family's income increases by 10%. How does this change in income affect the demand for apples?
• A family's income decreases by 10%. How does this change in income affect the demand for apples?
• A family's income increases by 10%. How does this change in income affect the demand for oranges?
• A family's income decreases by 10%. How does this change in income affect the demand for oranges?
• Have students work in pairs or small groups to calculate PES, IES for the following scenarios:
• A store lowers the price of apples by 10%. How does this change in price affect the supply of apples?
• A store raises the price of apples by 10%. How does this change in price affect the supply of apples?
• A store lowers the price of oranges by 10%. How does this change in price affect the supply of oranges?
• A store raises the price of oranges by 10%. How does this change in price affect the supply of oranges?

Independent Practice

• Have students work individually or in small groups to create a list of products for which they expect to be price-elastic (PED > 1) or price-inelastic (PED < 1).
• Have students research the prices and availability of these products online to see if their predictions were accurate.
• Have students create a presentation or report on their findings and the implications for the market.

Closure

• Review the main concepts covered in the lesson, including price elasticity of demand, cross-price elasticity of demand, and income elasticity of demand.
• Ask students to reflect on the importance of price elasticity in the operation of a market economy.
• Encourage students to think about how their own demand for various products may be affected by price changes.

Assessment:

• Have students complete a written reflection on the lesson, including their understanding of the concepts covered and how they can apply them in the real world.
• Have students complete a brief quiz on the main concepts covered in the lesson.
• Have students present their final project proposals, including any calculations and assumptions they made.