Understanding the Price System and Demand: Basics of Economics

Subject: Economics
Class: SS 1
Term: First Term
Week: 5
Age: 14-16 years
Topic: Concept of Demand and Supply
Sub-topic: Price System (Definition, Types, Objectives), Definition and Law of Demand, Demand Schedule and Curve
Duration: 80 minutes

Behavioral Objectives

By the end of this lesson, students should be able to:

Define the price system and its types.
Explain the objectives of the price system.
Define demand and state the law of demand.
Interpret demand schedules and draw demand curves.

Keywords

Price System
Demand
Law of Demand
Demand Schedule
Demand Curve

Set Induction

The teacher will start by discussing how students make purchasing choices based on prices and availability, linking this to the concept of demand and supply.

Entry Behavior

Students understand the basic concept of buying goods and services and know that prices can affect their purchasing decisions.

Learning Resources and Materials

Economics textbooks
Whiteboard and marker
Graph paper
Example data on prices and quantities

Building Background/Connection to Prior Knowledge

Students have a general understanding of prices and their influence on purchasing decisions.

Embedded Core Skills

Critical thinking
Data interpretation
Graphing skills

Learning Materials

Printed demand schedule examples
Economics textbooks

Reference Books

“Economics for Senior Secondary Schools” by Adegoke
Lagos State Scheme of Work for Economics

Content

1. Price System

Definition: The price system is a mechanism where prices serve as signals for the allocation of resources. It is a way to communicate the value of goods and services.
Types of Price Systems:
- Free Market Price System: Prices are determined by supply and demand without government intervention.
- Controlled Price System: Prices are regulated by the government to ensure affordability and fairness.
Objectives of the Price System:
- Efficient Resource Allocation: Ensures resources are used where they are most needed.
- Signaling Function: Prices communicate information to consumers and producers.
- Incentive for Production: Higher prices can encourage producers to supply more.

2. Demand

Definition: Demand is the quantity of a good or service that consumers are willing and able to buy at a given price over a specified period.
Law of Demand: As the price of a good or service increases, the quantity demanded decreases, and as the price decreases, the quantity demanded increases, ceteris paribus (all other things being equal).

3. Demand Schedule

Definition: A demand schedule is a table showing the relationship between the price of a good and the quantity demanded.
Example Demand Schedule:

Price (Naira)	Quantity Demanded (units)
10	50
20	40
30	30
40	20
50	10

4. Demand Curve

Definition: A demand curve is a graphical representation of the demand schedule, showing the relationship between price and quantity demanded.
Characteristics:
- Downward sloping from left to right, indicating the inverse relationship between price and quantity demanded.

Presentation Steps

Step 1:
Teacher’s Activities: Define the price system and discuss its types and objectives.
Learners’ Activities: Students will note the types of price systems and discuss examples in their local economy.

Step 2:
Teacher’s Activities: Explain the concept of demand and the law of demand, providing examples of how price changes affect consumer purchasing behavior.
Learners’ Activities: Students will identify situations where they buy more or less based on price changes.

Step 3:
Teacher’s Activities: Introduce the demand schedule, explaining its purpose and how to interpret it. Display an example demand schedule on the board.
Learners’ Activities: Students will practice filling out a demand schedule with different price points.

Step 4:
Teacher’s Activities: Demonstrate how to draw a demand curve based on the demand schedule and explain its characteristics.
Learners’ Activities: Students will use the demand schedule to plot a demand curve on graph paper.

Assessment

Define the price system and list its types.
State the objectives of the price system.
Explain the law of demand.
What is a demand schedule?
Draw a demand curve based on the following demand schedule:

Price (Naira)	Quantity Demanded (units)
15	60
25	50
35	40
45	30
55	20

Conclusion

The teacher will summarize the lesson by emphasizing the importance of understanding the price system, demand, and how the demand schedule and curve illustrate consumer behavior in Economics.

Meta Description

“Learn about the price system and demand in this SS1 Economics lesson. Discover how demand schedules and curves reflect consumer choices and price relationships.”

Fill-in-the-Blank Questions

The ________ is a mechanism where prices signal resource allocation.
In a ________ market, prices are determined by supply and demand alone.
The law of ________ states that as prices increase, quantity demanded decreases.
________ is the quantity of a good consumers are willing to buy at a given price.
A ________ is a table showing price and quantity demanded relationships.
The demand curve slopes ________ from left to right.
When prices are controlled by the government, it is a ________ price system.
Higher prices can act as an ________ for producers to supply more.
Demand decreases as price ________, according to the law of demand.
A ________ price system promotes efficiency in resource allocation.
The most common type of demand curve is ________ sloping.
The ________ function of prices helps communicate information to the market.
A decrease in price typically results in an ________ in quantity demanded.
A ________ price system ensures affordability for essential goods.
In a demand schedule, ________ is shown on one side and quantity on the other.

Class Activity Discussion

What is the price system?
The price system is a mechanism for allocating resources through prices.
What are the types of price systems?
The main types are the free market price system and controlled price system.
What is the objective of the price system?
To allocate resources efficiently, signal market needs, and incentivize production.
Define demand in Economics.
Demand is the quantity of a good or service consumers are willing to buy at various prices and at a particular time.
What does the law of demand state?
It states that as price increases, quantity demanded decreases, and vice versa.
What is a demand schedule?
A demand schedule is a table that shows the relationship between price and quantity demanded.
How is the demand curve related to the demand schedule?
The demand curve is a graphical representation of the demand schedule.
What causes a demand curve to slope downward?
The inverse relationship between price and quantity demanded.
How does a controlled price system operate?
Prices are set by the government to regulate affordability.
What role do prices play in a free market?
Prices signal the needs and supply of goods without government intervention.
Why does demand decrease with higher prices?
Higher prices make goods less affordable, reducing demand.
Can a demand schedule have multiple values for one price?
Typically no, as each price correlates with one quantity demanded.
What is an example of a controlled price system?
Rent control in some cities, where the government limits rent prices.
What information does the demand curve provide?
It shows how much of a good consumers will buy at different prices.
Why is the price system important?
It helps balance supply and demand and ensures resources are efficiently used.

Evaluation Questions

Define the price system and explain its importance.
List two types of price systems and explain each.
State the law of demand.
What is a demand schedule, and how is it used?
Draw a demand curve based on a given demand schedule.
How does the demand curve illustrate the law of demand?
Give an example of a controlled price system in practice.
Why do prices act as signals in the economy?
Describe how high prices affect producer behavior.
Explain why understanding the demand curve is useful in Economics.