Lesson Plan

Resources → Subject Notes → Economics → Notes
Lesson Plan
Grade: Date: 25/02/2026
Subject: Economics
Lesson Topic: significance of relative percentage changes, the size and sign of the coefficient of: cross elasticity of demand
Learning Objective/s:
  • Describe how the sign of the cross‑elasticity coefficient indicates whether two goods are substitutes, complements, or independent.
  • Interpret the magnitude of cross‑elasticity to assess the strength of the relationship between goods.
  • Calculate cross‑elasticity of demand from given percentage changes.
  • Explain how cross‑elasticity informs pricing, product‑mix and promotional decisions.
Materials Needed:
  • Projector and screen
  • PowerPoint slides summarising formulas and sign‑magnitude rules
  • Printed worksheet with numerical XED problems
  • Calculators (or spreadsheet access)
  • Whiteboard and markers
  • Summary handout of elasticity table
 Introduction:
Begin with a quick poll: “When the price of coffee rises, what happens to tea sales?” Connect this to students’ prior knowledge of price elasticity and set the success criteria: students will identify the sign and size of cross‑elasticity and explain its business relevance.
Lesson Structure:
  1. Do‑now (5’) – Students list definitions of PED, YED and XED on a sticky note; teacher checks for correct recall.
  2. Mini‑lecture (10’) – Present the XED formula, explain sign interpretation (positive = substitutes, negative = complements, zero = independent) and magnitude categories (>|1| strong, ≈1 moderate, <|1| weak).
  3. Guided example (15’) – Work through the tea‑coffee calculation, highlighting each step of percentage change and interpretation.
  4. Group case study (15’) – Teams analyse short scenarios (e.g., smartphones vs. tablets, butter vs. margarine) and determine sign, magnitude and business implications.
  5. Check for understanding (5’) – Quick quiz via Kahoot or hand‑raise: three rapid‑fire questions on XED sign/magnitude.
  6. Summary & reflection (5’) – Teacher revisits key points; students write one takeaway on an exit ticket.
Conclusion:
Recap the importance of the XED sign and size for strategic decisions such as pricing and product placement. Collect exit tickets to gauge individual understanding, and assign homework: complete a worksheet calculating XED for two additional pairs of goods and write a brief paragraph on the managerial implications.