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CONTEMPORARY ECONOMICS
4/30/2019 CHAPTER 4 Demand 4.1 The Demand Curve 4.2 Elasticity of Demand 4.3 Changes in Demand CONTEMPORARY ECONOMICS: LESSON 4.1 LESSON 4.1
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Consider CHAPTER 4 Demand
Why are newspapers sold in vending machines that allow you to take more than one copy? How much do you eat when you can eat all you want? What cures spring fever? What economic principle is behind the saying, “Been there, done that”? Why do higher cigarette taxes cut smoking by teenagers more than by other age groups? CONTEMPORARY ECONOMICS: LESSON 4.1
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LESSON 4.1 The Demand Curve
Objectives LESSON 4.1 The Demand Curve Explain the law of demand Interpret a demand schedule and demand curve CONTEMPORARY ECONOMICS: LESSON 4.1
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LESSON 4.1 The Demand Curve
Key Terms LESSON 4.1 The Demand Curve demand law of demand marginal utility law of diminishing marginal utility demand curve quantity demanded individual demand market demand CONTEMPORARY ECONOMICS: LESSON 4.1
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Demand Demand indicates how much of a product consumers are both willing and able to buy at each possible price during a given period, other things remaining constant. CONTEMPORARY ECONOMICS: LESSON 4.1
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Law of Demand The law of demand says that quantity demanded varies inversely with price, other things constant. Thus, the higher the price, the smaller the quantity demanded. CONTEMPORARY ECONOMICS: LESSON 4.1
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Law of Demand Demand, wants, and needs Substitution effect
Income effect Diminishing marginal utility CONTEMPORARY ECONOMICS: LESSON 4.1
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Demand Schedule and Demand Curve
Demand versus quantity demanded Individual demand and market demand CONTEMPORARY ECONOMICS: LESSON 4.1
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Demand Schedule a $15 8 b 12 14 c 9 20 d 6 26 e 3 32
Price Quantity Demanded per Pizza per Week (millions) a $15 8 b 12 14 c 9 20 d 6 26 e 3 32 CONTEMPORARY ECONOMICS: LESSON 4.1
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Demand Curve for Pizza 8 14 20 26 32 Millions of pizzas per week $15
12 9 6 3 Price per pizza a b c d e D CONTEMPORARY ECONOMICS: LESSON 4.1
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Individual Demand for Pizzas
$12 8 4 Price 1 2 3 Pizzas (per week) (a) Hector $12 8 4 1 2 (b) Brianna $12 8 4 1 (c) Chris d H d B d C CONTEMPORARY ECONOMICS: LESSON 4.1
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Market Demand for Pizzas
$12 8 4 Price 1 2 3 Pizzas (per week) (d) Market demand for pizzas 6 d H B C D + = CONTEMPORARY ECONOMICS: LESSON 4.1
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