Economics Demand Activity: Mother said… Viktor Ni, NIS 2014 Unit 11.2A: The functions of the market and supply and demand Demand Activity: Mother said… Задание по спросу: Мама сказала… Viktor Ni, NIS 2014

Introduction Your mother said that you have to go to the market and buy potato…

Story begins… Step 1 Instruction to teacher: Students… I’ll tell you the story and you have to write two indicators P and Q. P – price, Q – quantity. 1. Mother said: “You have to go to the market and buy 10 kg of potato which cost approximately 100 tg”. 2. When you come to the market you see that the price of potato is 75 tg. How many would you buy? 3. You see the price and tell to the seller: “I actually saw potato like this in the shop for just 50 tg”. The seller says: “Ok. Take it. How many would you buy?” 4. You say: “Ok. However, I think I may know you and you’re my neighbor.”. The seller: “Yes, it is true. Specially for my neighbor the potato cost just 25 tg. How many would you buy?”

Step 2… 1. Draw the curve like you draw PPC. Put at the vertical curve P and horizontal curve Q 2. Don’t worry about the shape of the curve: every curve is correct. 3. Label the curve: It is called “Individual demand” Let’s try to give some information about the person who draw straight and downward-sloping curves. 4. Now, imagine that the market consist of your group (3-4 person). Collect group data for each price and draw the new curve. How many group of 4 person would buy at the price 100 tg? Answer: 40 5. Label the curve: It is called “Market demand”

Step 3… (can be skipped) 1. The idea could be extended buy looking at the demand of the class: “Each group have to tell their group data.” 2. Use the excel data file.

Step 4 1. Let’s try to come up with conclusion about price and quantity of the goods. 2. This is called: “The Law of Demand” 3. “Ceteris paribus”. The seller will not sell bad potato at the price 25 tg. Continue: look at the presentation about “Shrimps”