1. Agenda -Bellringer -Types of Goods notes -Demand activity -Graphing demand

2. Objective Students will identify the law of demand and how to graph a demand curve by completing a worksheet

3. Normal versus inferior goods

4. Normal good: When income goes up the quantity demanded increases with income; Inferior good: When income goes down the quantity demanded decreases with income;

5. Normal good Examples: New clothes New car Movie theater tickets Meals at a nice restaurant Caribbean vacations NFL football games Starbucks **When things are good, what do you splurge on?**

6. Inferior good Examples: DVD rentals Used clothes Used cars Public transportation McDonalds Coffee at home **When times are tough, what do you cut back on?**

7. Public Transportation (bus) Luxury cars or new cars (purchased) As income goes up, more people buy new cars or luxury cars….. As income decreases, more people use public transportation

8. Ramen noodles Dinner at Number 5 As income goes up, more people go out to eat at nice places….. As income decreases, more people eat Ramen noodles

9. Substitute goods: an increase in the price of one product leads to an increase in the quantity demanded of a cheaper, similar product Complementary goods: A decrease in the price of one leads to an increase in the quantity demanded of the other.

10. substitute good Examples: Tea (for coffee) Ford (for Toyota) Gap (for Abercrombie) Skippy peanut butter (instead of Jiff) Underarmour (Northface) Pepsi (coke) **This is why companies offer coupons/sale prices!! Increase demand over competition!**

11. Complementary good Examples: Hot dogs and buns Pencils and erasers DVD players and DVDS Toothbrushes and toothpaste Printers and toner cartridges **One is not good without the other. If there’s a sale on hot dogs, people will automatically demand buns**