1. After today, you will know what you need to take the Ch
After today, you will know what you need to take the Ch. 4 Practice Test online.
What will we learn today? Standard Monetary and non-monetary incentives and how they change behavior.
Standard Relationship between incentives and law of supply and law of demand.
Unit: Demand Day 4
Directions: On Day 4 of your Bellwork, answer the following question. You need to write a one paragraph response, so fill out all of Day 4. There should be little to no talking during the Bellwork.
Inelastic goods are things that we still buy, even if they were very expensive.
What are some examples of inelastic goods? For each item you list, tell me why it is inelastic.

2. Assignment 6: 4.3 Elasticity of Demand Notes

3. 4.3 Elasticity of Demand
Elasticity of demand- a measure of how consumers react to a change in price.
Elastic- describes demand that is very sensitive to a change in price. Something you buy less of if there is a small increase in price in wants such as pizza, magazines etc.
Inelastic- describes demand that is not very sensitive to price. Something you will buy despite the price such as gas, medicine and houses (needs).

4. 3 questions can be asked to determine whether demand is elastic or inelastic:
1. Can the purchase be put off?
A product that is needed such as medicine, must be purchased no matter the cost, making demand inelastic. If product can be put off, demand is elastic.
2. Are enough substitutes available?
If substitutes are available than buyers can choose the one that’s the best price. More substitutes=elastic. The fewer substitutes=inelastic.

5. 3. Does the purchase use a large portion of income?
Products that require small portion of income are inelastic. When products require large part of income, demand is elastic.

6. Assignment 7: Elastic or Inelastic?
Elasticity = Percentage change in quantity demanded
Percentage change in price
1. The price of XBOX increases from $200 to $300 and the demand drops from 1000 sold a day to 25 sold a day.
Elastic Inelastic
2. The price of the Carl’s Jr. Western Bacon Cheeseburger has dropped from $2.00 to $1.00 and the quantity demanded has gone from 200 a day to 475 a day.

7. Elasticity = Percentage change in quantity demanded
Percentage change in price
3. The price of insulin medication goes from $75 a shot to $200 a shot and the quantity demanded goes from 450 shots a day to 425 shots a day.
Elastic Inelastic
4. The price of a product goes from $5 to $4 and the quantity goes from 550 to 425 a day.

8. 5. ELASTIC (Scenario & Math)
Elasticity = Percentage change in quantity demanded
Percentage change in price
It’s your turn….Create one real life situation using real products to demonstrate the following concepts. Mathematically work it to prove that your scenario is a true example of the concept.
5. ELASTIC (Scenario & Math)
6. INELASTIC (Scenario & Math)

9. Assignment 8: Ch. 4 Vocab. Review (Crossword)

10. Create a Business with a high demand and a low supply
What business can you think of that is in demand, but there is a low supply?
Example: 18 and under night club
On one side of the paper, draw a visual to represent your business and put the name of the business
On the other side, explain your business and what services you provide.
If your business is not school-appropriate, you will receive a zero.