1. You MUST watch this in PowerPoint mode
(not slide mode)

2. Microeconomics: Supply and Demand
Unit 2 Economics
Microeconomics: Supply and Demand

3. Essential Question:
Define and illustrate the concept of elasticity.

4. Determinants of Demand
Individual Demand
Determinants of Demand
(factors that cause a shift or change in Demand)
Tastes and preferences
Number of Buyers (Population)
Income
Normal Goods
Inferior Goods
Price of Related Goods
Substitute Good
Complementary Good
Consumer Expectations

5. Introduction to Individual Demand
4:14

6. Individual Demand Individual Demand P Qd $5 4 3 2 1 10 20 35 55 80 P6 5 4 3 2 1
Quantity Demanded (bushels per week)
Price (per bushel)
Individual
Demand P Qd $5 4 3 2 1 10 20 35 55 80 D Q

7. Individual Demand Demand Can Increase or Decrease Individual Demand P6 5 4 3 2 1
Individual
Demand P Qd
Increase in Demand $5 4 3 2 1 10 20 35 55 80
Price (per bushel) D2
Decrease in Demand D1 D3 Q
Quantity Demanded (bushels per week)

8. Demand Curve is Called a Change in Quantity
Individual Demand
Demand Can Increase or Decrease
An Increase in Demand
Means a Movement
of the Line P 6 5 4 3 2 1
Individual
Demand
A Movement Between
Any Two Points on a
Demand Curve is Called a Change in Quantity
Demanded P Qd $5 4 3 2 1 10 20 35 55 80
Price (per bushel) D2
Decrease in Demand D1 D3 Q
Quantity Demanded (bushels per week)

9. Elasticity of Demand Concept measuring responsiveness to price changes
Relatively Elastic (small change in Price results in a large change in Q Demanded)
Relatively Inelastic (large change in Price results in a small change in Q Demanded)

10. Price Elasticity of Demand
Pause and take notes as needed
9:34

12. Answer the EQ: (minimum 5 sentences)
Define and illustrate the concept of elasticity.