Demand Taught by Professor Coleman

Bellringer What is most important when you consider buying something?

What is demand? 0 The desire to own something and the ability to pay for it

The Law of Demand 0 When the price is lower, consumers will buy more of it. 0 When the price is higher, consumers will buy less of it.

What does the law of demand say about lower prices?

The Law of Demand The Substitution EffectThe Income Effect 0 Takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good 0 The change in consumption resulting from a change in real income

A Demand Schedule 0 to have demand, must be willing and able to buy at specified price 0 A demand schedule is a table that lists the quantity of a good that a person will purchase at each price in a market 0 A market demand schedule shows the quantities demanded at each price by all consumers in the market. 0 Allows producer to make predictions

What is a Demand Graph? 0 A graphic representation of a demand schedule 0 Vertical axis labeled with lowest possible prices at bottom and the highest at top 0 Horizontal axis labeled with lowest possible quantity at left and highest possible quantity at right 0 Each pair of price and quantity-demanded numbers are plotted as a point on the graph 0 Connecting the points creates a demand curve

Reading a Demand Curve 0 Shows only relationship between price of good and quantity that will be purchased 0 Slopes downward to the right

Which of the following is plotted on the vertical axis of a demand curve? A. Demand Schedule B. Price C. Quantity D. Market Demand Schedule

Limits of a Demand Curve 0 Can be used to predict how people will change their buying habits when price of good rises or falls 0 Only accurate for one very specific set of market conditions

Key Terms and Main Ideas, pg. 83

Section 1 Assessment 0 Applying Economic Concepts 0 Page 83 0 #’s 3-6

Bellringer 0 What might happened to sales of a particular type of car if its producer announced that its new engine emitted no pollution, was more powerful than previous engines, and would cost the same?

“Ceteris paribus” 0 Latin : “all other things held constant” 0 Assumption that nothing besides price would change 0 Demand curve accurate if this is true

Shifts of the Demand Curve 0 When price changes, we move along curve to different quantity demanded 0 This is referred to as “decrease in the quantity demanded” 0 Decrease in price would lead to “increase in quantity demanded” 0 Drop ceteris paribus rule, entire demand curve shifts 0 Called “change in demand”

What Causes a Shift? 0 Income 0 Consumer Expectations 0 Population 0 Consumer Tastes and Advertising

Normal Goods & Inferior Goods 0 Normal = What I Want 0 Inferior = What I Can Afford 0 Make a list of normal and inferior goods that affect your life 0 Describe how the list might change if your income was to rise

Read: The Surging Hispanic Economy PHSchool.commnc-2042 We will discuss in 5 minutes

Prices of Related Goods 0 Demand curve for one good can be affected by a change in demand for another 0 Complements: 2 goods that are bought & used together 0 Substitutes: goods used in place of one another

Section 2 Assessment 0 Page 88, #s Economic Profile: Christy Haubegger, pg. 89, 1-3

Bellringer 0 List 5 products you could not do without. 0 How might your list change if the price of each product, doubled, tripled, or even quadrupled?

Elasticity of Demand TAKE NOTES! NO SLEEPING!!

Which of the following shows the relationship of elastic demand to total revenue? A. Prices rise, demand falls, revenues decrease B. Prices rise, demand rises, revenues increase C. Prices fall, demand falls, revenues decrease D. Prices rise, demand rises, revenues decrease

Math Activity 0 PHSchool.com 0 Mnd-2043

Activity 0 Real-life Case Study: What Makes a Person an Entrepreneur? 0 Page 97, Applying Economic Ideas

Section 3 Assessment 0 Key Terms and Main Ideas, page 96, #s 1-4

Chapter 4 Exam 0 PHSchool.com 0 Webcode: mna Print & Submit scored exam