INDIVIDUALS SINGLE BUSINESSES

F DEMAND IS BEING ABLE AND WILLING TO BUY A GOOD OR SERVICE F RANGE OF QUANTITIES THAT A PERSON WILL BUY AT DIFFERENT PRICES

F QUANTITY DEMANDED IS HOW MUCH A PERSON BUYS AT ONE PRICE F Example: F I buy 1 pair of flip-flops at $20 (QD = 1); F I buy 4 pairs at $2 each (QD = 4)

 As the price of a good or services RISES, the quantity demanded FALLS.  As the price of a good or service FALLS, the quantity demanded RISES.  IT’S AN INVERSE RELATIONSHIP!

 If I’ll pay $5, I’ll also pay less ($4, $3, $2, $1).  Count a person for the most they are willing to pay and then for every price BELOW that, too.

F A DEMAND SCHEDULE is the list of prices and quantities demanded F Quantity demanded is ALWAYS on the X axis F Price is ALWAYS on the Y axis F As price changes, we move ALONG THE CURVE

1. Whose behavior does the Law of Demand describe? 2. What happens to consumer demand when the price rises? 3. What happens to consumer demand when the price falls? 4. Does the law of demand apply to producers?

5. Does the law of demand apply to suppliers? 6. Does the law of demand apply to firms? 7. What is written on the Y axis for the demand graph? 8. What is written on the X axis for the demand graph?

9. What is a demand schedule? 10. Which direction does the demand curve slope? 11. Why does the demand curve slope down to the ground?

 Normal = products you like and will buy MORE of when you’re richer (smart phone)  Inferior = products you buy ONLY when you’re less rich (regular phone)  Substitute = products you buy when the price of what you want rises (BUT YOU LIKE THESE PRODUCTS JUST FINE) (iPhone and Andriods)

 When the price changes, we move ALONG THE LINE.  If anything OTHER than price changes, then we need a new line.

1. Income: raises, tax refunds 2. Number of consumers: holidays, events 3. Consumer taste: popularity, health 4. Consumer expectations: future price change, weather 5. Substitute good price change: brand vs. generic 6. Complimentary good price change  Ex: Waffles (normal) and syrup (compliment)

 Demand shifts LEFT. INWARD.  Consumers buy less because of something OTHER THAN PRICE.  At every price point, people buy less. F 3 reasons my demand curve for Dove dark chocolate might shift left: F What is the ONE factor that will NOT change?

F A shift right = increased demand F PRICE DOES NOT CHANGE F At every price, people buy more of the product. F 3 reasons my demand curve for dark chocolate shifts right:

 Say “right”, “left”, or “price” for each of the following.  Zahra finds apples on sale for $1 less per pound.  Price  Yonatan only buys 1 apple instead of 2 because they are expensive.  Price  Xena finds apples on buy one, get one free sale.  Price

 Consumers buy more apples because school is about to start.  right  David buys more apples because he has a cold and is scared of doctors.  right  Uri buys fewer apples because he prefers oranges.  left Demand for apples

F Tony buys more apples because he is trying to lose weight and it is better for him than candy. F right F Samrina buys fewer apples because she is fasting. F left F Raven buys more apples because peanut butter (which she always eats with her apples) is on sale. F right Demand for APPLES

F Andrew buys fewer apples because he lost his job. F left F Sara buys no apples today because she knows that next week they will be on sale. F left F Ryland buys fruit snacks instead of apples because fruit snacks are cheaper. F left

1. According to the Law of Demand, when price rises, … 2. According to the Law of Demand, when price falls, … 3. How is a price change shown on the demand graph?

4. How is a change in quantity demanded shown on the demand graph? 5. What is the law of demand? 6. What does “movement along the line” mean for the demand graph?

7. What does a change in demand mean? 8. What does NOT change when demand changes? 9. How is a change in demand shown on the demand graph? 10. Name 1 reason a consumer demands less soda.

11. Name another reason a consumer demands less soda. 12. Name another reason a consumer demands less soda. 13. What is the one determinant that did NOT change for 10 – 12?

14. How is decreased demand shown on the demand graph? 15. How is decreased quantity demanded shown on the demand graph? 16. What is the difference between demand change and quantity demanded changed?