Apples Juice Up Economics Susan Wright Brookville Middle School Lynchburg, Virginia

Overview

Make economic concepts come to life! What better way to teach about the economic concepts of supply and demand than by using real-life situations that give a human touch to learning? This lesson focuses on supply and demand for a new variety of apple, the Ginger Gold.

Throughout the lesson students are actively involved in their learning as they plot graphs, create logos, and develop marketing plans to increase demand for this new variety of apple.

Understanding supply and demand will enable students to be more aware of the various factors that affect prices in the marketplace. This knowledge will prepare students to be better-informed consumers and producers in a market economy.

Objectives

• Students define supply, demand, and equilibrium price.

• Students explain and use the laws of supply and demand.

• Students construct and read demand, supply, and market equilibrium graphs.

• Students discuss and develop a plan to create demand for a new product being introduced on the market.

• Students discuss and give examples of factors that affect supply, demand, and price in a market economy.

Time Required

• 3 - 4 class periods

Materials

• 8.5 x 11" paper, colored pencils, crayons, Ginger Gold or Golden Delicious Apples

• Handout 1 Hurricane Camille Leaves a New Apple in Nelson County

• Handout 2 Supply and Demand Graphs

• Handout 3 Equilibrium Price Graph

• Handout 4 Predicting Changes in Supply, Demand, and Price for Ginger Golds

Teaching Activity

Introduce the lesson by holding up a Ginger Gold apple (which looks similar to the Golden Delicious) and explaining to the students that the apple will be used to teach the economic concepts of supply and demand. Pass out Handout 1 and read this with the students to give them the background on the apple. Explain supply (the quantity of a product producers are willing to provide at a particular price) and demand (the willingness and ability to buy a product at a particular price).

Once students have an understanding of the concepts, give them Handout 2 and have them plot supply and demand curves for the apple. Go over the graphs with the students, explaining how they illustrate the law of supply (producers will supply more products when they can sell them at higher prices) and the law of demand (consumers will buy more of a product at a low price than a high price).

Discuss with your students the fact that producers and consumers must reach a compromise on price so consumers can afford to buy products and producers can still make a profit. This price is called the market equilibrium price. Have your students complete Handout 3, which will demonstrate the actual price that Ginger Golds sold for when they first went on the market about ten years ago. Students should realize that, as time passed, the supply of apples increased as more orchards grew the apple and the price began to drop. By spring of 1997, the Ginger Gold was selling for $35 a bushel.

The next activity is one the students really enjoy. Divide the class into groups of three students. Explain to them that, no matter how exceptional an apple the Ginger Gold may be, no one will benefit unless people learn of its existence, find out where it may be purchased, and become acquainted with the quality and price of the apple. If Ginger Golds are available, give one to each student to see and taste. This allows the students to become familiar with the product. Then tell the students they must develop a marketing plan to increase demand for the Ginger Gold. This includes having each group member design a logo and slogan for the apple; then the group will brainstorm ways to promote the Ginger Gold.

Have each group present their marketing ideas and logos to the class. Students ideas might include:

• advertising in apple/trade magazines;

• contacting nurseries that grow apple trees commercially;

• sending free samples to grocery store produce buyers;

• inviting major apple growers from throughout the nation to visit the orchard and giving them gift boxes of the apple; and

• contacting newspapers and magazines about doing a feature story on the Ginger Gold.