It is important for students to understand how society’s scarce resources are allocated among their many possible uses. This lesson asks students to analyze the effects of a change in demand or supply in one market on the equilibrium position in a related market. The student activity assumes the product and resource markets are perfectly competitive.
This lesson supports the Nature and Function of Product Markets section of the AP microeconomics curriculum.
This lesson is available on EconEdLink: http://www.econedlink.org/teacher-lesson/1366/AP-Microeconomics-Resource-Allocation