1. Attempt to answer these questions to the best of your ability. .
a. Why are diamonds expensive?
b. Why do heart surgeons make more money than teachers? 

2. What is Scarcity? What are some examples of scarcity in society?
Demand = ?
Supply = ? 2

4. Is Demand always the same?

6. What is Demand? Snickers Demand: Price Demand $0.25 4 $0.75 2 $1 1 $2
the quantities of a product that people are willing and able to purchase at a given price
Snickers
Price
Demand
$0.25 4
$0.75 2 $1 1 $2
0.5

7. Law of Demand: states that  as price decreases or increases, quantity demanded does the opposite.

8. Law of Demand

9. Change in quantity demanded
Represented by movement along the demand curve.  
Only reason demand is changing is because price is increasing or decreasing.

10. Utility: amount of satisfaction received from consuming a good or service.
What are the most satisfying goods to buy?
law of diminishing marginal utility describes how the last item consumed will be less satisfying than the one before.
This means that at some point, no matter how low the price is, consumers will purchase less.

12. What does this represent?

13. Shift (change) In Demand
refers to  an increase (rightward change) or decrease (leftward change) in the quantity demanded at each possible price.
Price is staying the same but people are demanding more or less quantity.

14. Shift in Demand = new demand curve Change in Quantity Demand = movement along curve

15. What does this graph represent?

16. How to get a “shift” in Demand?
A Change in income:
When income increases, consumers buy more.  When income decreases, consumers buy less. Example??
A Change in taste:
Fads, fashions, and the advertising of new products influence consumer decisions. 
Examples??
A Change in the price of a substitute good:
A substitute good competes with another good for consumer purchases. If the price of soda increases too much, consumer may decide to drink juice instead.

17. How to get a Shift in Demand?
A Change in the Number of Buyers:
Population growth will increase the demand for products because the pool of consumers has grown. 
Examples?? (Baby boom generation)
A Change in buyer expectations
If consumers think the price of a good will increase in the future, they may decide to buy more of it now so that they pay less. 
Examples??

18. How much is Demanded at each price?

19. What could have caused this shift?

20. Pop Quiz #2 1.)What is the law of supply?
2.) What causes a change in quantity demanded?
3.) Does a price ceiling create a shortage or surplus?
4.) What is the law of demand?
5.) Does a price floor keep price high or low?
6.) Which graph represents a change in Quantity demanded?
7.) Is graph 4 graphing a price ceiling or floor?
8.) Which letter is demanded the most on graph 1?
9.) Which letter has a higher price on graph 2?
10.) List 1 things that could cause a shift in demand.

21. What is Supply?
Supply: refers to the quantities of a product that producers are willing and able to offer at a given price.
Producers make decisions on how much to supply based on profitability. 

22. Law of Supply
Sellers will offer more of a good at a higher price and less at a lower price.

23. Change in Quantity supplied: change in supply caused only by change in price.
Results in movement along supply curve.

24. Change in Quantity supplied

25. Shift (Change) in Supply
Price is staying the same, but for some reason supply is going up or down.

26. Change (shift) in Supply = new supply curve Change in Quantity supply=movement along the curve

27. How we get a shift in Supply?
Change in technology:
Produce more at same price
Change in production costs:
Change in the number of sellers:
Increase or decrease in supply.

28. Equilibrium price

29. Price Floor Lowest legal price that can be paid for a product.
Keeps the price High!
Examples:
Min Wage, agricultural produce.
Cause a surplus or shortage?
Creates a surplus of goods.

30. Price Ceiling Maximum price that can be charged for a product.
Price Ceiling: Keeps the price low!
Examples:`
Section 8 housing,
Cause a surplus or shortage?
Creates a shortage of goods.

31. Read chapter 6 section 3 and answer the following questions
Read chapter 6 section 3 and answer the following questions. (use paragraph guidelines on board)
Paragraph Answers:
1.) Explain price ceilings and how they work with examples.
2.) Explain price floors and how they work with examples.
3.) Answer # 2 pg 158 under “Thinking Critically”.
4.) Answer # 2 pg 159 under “Applying economic concepts”

32. Pop Quiz 3 Does a price ceiling create a shortage or surplus?
The only thing that causes a change in quantity supplied is what?
What is the law of supply?
What is the law of demand?

33. Pop Quiz cont…
5.) Minimum wage would be an example of a price floor or price ceiling?
6.) What is a possible reason for why supply changed from point a to b?