1. Agenda Test #1 Test #1 Intro to Demand Intro to Demand –Lecture –Going to the movies Homework… Homework… –Crossword puzzle – –Print and Review Powerpoint for class two periods from today – –Read “Current Reading Assignment” Next Class….Watch “Freakonomics”

2. Test #1 Ten Minute Review Remain Quiet or detention awaits you Cheat and you die (and you get a ZERO on the test… a really embarrassing eulogy) TEST ENDS @ 10.50

3. Module #2 – Supply and Demand Law of Demand Law of Demand –As price increases, quantity demanded decreases –As price decreases, quantity demanded increases

4. Module #2 – Supply and Demand Law of Demand Law of Demand –As price increases, quantity demanded decreases –As price decreases, quantity demanded increases –Price means Q d and Price means Q d

5. Module #2 – Supply and Demand Law of Demand Law of Demand –As price increases, quantity demanded decreases –As price decreases, quantity demanded increases –Price means Q d and Price means Q d –P Q d, P Q d

6. LAW OF DEMAND As Price Falls… …Quantity Demanded Rises …Quantity Demanded Rises As Price Rises… …Quantity Demanded Falls …Quantity Demanded Falls Price Quantity Demanded

7. Module #2 – Supply and Demand Law of Demand Law of Demand –As price increases, quantity demanded decreases –As price decreases, quantity demanded increases –P Q d, P Q d –“Quantity demanded” means willing AND able to buy the good or service

8. Module #2 – Supply and Demand Law of Demand Law of Demand –“Quantity demanded” means willing AND able to buy the good or service –Do I create demand if I want a $125,000 sports car?

9. Module #2 – Supply and Demand Law of Demand Law of Demand –“Quantity demanded” means willing AND able to buy the good or service –Do I create demand if I want a $125,000 sports car? –Sadly…NO.

10. Module #2 – Supply and Demand Law of Demand can be represented in a “Demand Schedule” Law of Demand can be represented in a “Demand Schedule” A Demand Schedule is a table that relates Price (the driver) to Quantity demanded (the responder) A Demand Schedule is a table that relates Price (the driver) to Quantity demanded (the responder) P Q d P Q d$6 8 10 10 12 12 14 14 This is a Demand Schedule

11. The Law of Demand can be represented graphically The Law of Demand can be represented graphicallyPriceQuantity

12. Price Demand Curve Demand CurveQuantity Why does is go “high to low”?

13. The Law of Demand can be represented graphically The Law of Demand can be represented graphicallyPrice Demand Curve Demand CurveQuantity Why does the demand curve go “high to low”? Because when price is high, quantity demanded is low And when price is low, quantity demanded is high.

14. Module #2 – Supply and Demand Going to the movies P Q d P Q d$6 8 10 10 12 12 14 14

15. Module #2 – Supply and Demand Going to the movies P Q d P Q d$6 8 10 10 12 12 14 14 As price went up, did Q d go down?Law of demand?

16. Next class we watch Freakonomics

17. Module #2 – Supply and Demand Homework –Crossword puzzle – –Print and Review Powerpoint for class two periods from today – –Read “Current Reading Assignment” (online) – –Next Class….Watch Freakonomics

18. Handouts