Download Spreadsheet and Enable Macros.

This first lesson on Supply and Demand is a series of interactive worksheets that will give the student the fundamentals. In order to effectively use this spreadsheet it should be done on a PC (Mac users need to find an alternative) and with Macros enabled.

In Excel 2003 the user will be confronted with the following screen after download but before the file is open.

In Excel 2007 the user will be confronted with the following menu bar above the spreadsheet but below the ribbon.

Watch the short movie

The movie below gives some instructions on how to proceed through the spreadsheet. The student is encouraged to to watch the movie first to understand how to take best advantage of the content.

Critique of Supply and Demand Exercise

A brief discussion to explain the assumptions and the design issues in the exercise.

Thought Problems on Supply and Demand

1. In the Filling in the Gaps approach we took to explain how each buyer is small relative to the size of the market and likewise for each seller, how would the equilibrium change if we filled in with more buyers at a time than sellers? Similarly how would the equilibrium change if we filled in with more sellers at a time than buyers?

2. (This is hard.) In the auctioneer model where you set the price and then see demand and supply at that price, the assumption is that trade doesn't occur if the price is not the equilibrium price, so the auctioneer can start anew. What would happen if trade did occur? How would the equilibrium change?