1. Demand Warm Ups
Unit 2

2. 2/20/13: You and your friends order a pizza
2/20/13: You and your friends order a pizza. The delivery person arrives with a hot, delicious pizza with all your favorite toppings. Assuming you let the pizza cool down so it doesn’t burn your mouth, how is the first slice? The second? If you eat more than one slice in a sitting, what number slice would you consider the best? Why?

3. Draw a demand graph for Store Brand Cereal.
2/22/13
Draw a demand graph for Store Brand Cereal.
Consumer income increases. Illustrate the change in demand on your graph. List what determinant was involved.
Next, draw a demand graph for steak.
Consumer income decreases. Illustrate the change in demand on your graph. List what determinant was involved.
Hint: For each one, decide if it’s an inferior or normal good

4. Demand for Store Brand Cereal
Decrease in demand
*Income – Inferior Good
Price D2
Quantity

5. Demand for Steak Price D1 D2 Quantity Decrease in demand
*Income – Normal Good
Price D2
Quantity

6. Determinants: Mnemonic Device
In Income
Times Past Tastes & Preferences
Really Good Related Goods (Substitute & Complementary Goods)
White Weather
Beans # of Buyers
Existed Expectations

7. 2/25/13
The price of movie tickets has increased to $15. Will this cause a change in demand or a change in the quantity demanded? Illustrate your answer on a demand graph.
The price of peanut butter has increased. What will happen to the demand for jelly? Illustrate your answer on a demand graph.

8. Demand for Movie Tickets
Decrease in QUANTITY demanded B P2
Price P1 A D1 Q2 Q1
Quantity

9. Demand for Jelly Price D1 D2 Quantity Decrease in demand
*Price of Complementary Good (Peanut Butter) D1
Price D2
Quantity

10. Income
Tastes and Preferences
Price of Substitute Goods
Price of Complementary Goods
Weather
Number of Buyers
Expectations