Transcript Dayton Unit 2 Demand

MICROECONOMICS
INDIVIDUALS
SINGLE BUSINESSES
DEMAND (CONSUMERS)
 DEMAND
IS BEING ABLE AND WILLING TO BUY
A GOOD OR SERVICE
 RANGE OF QUANTITIES THAT A PERSON WILL
BUY AT DIFFERENT PRICES
QUANTITY DEMANDED
 QUANTITY
DEMANDED IS HOW MUCH A
PERSON BUYS AT ONE PRICE
 Example:
I
buy 1 pair of flip-flops at $20 (QD = 1);
 I buy 4 pairs at $2 each (QD = 4)
LAW OF DEMAND
As the price of a good or services RISES, the
quantity demanded FALLS.
 As the price of a good or service FALLS, the
quantity demanded RISES.
 IT’S AN INVERSE RELATIONSHIP!

NOTE:
If I’ll pay $5, I’ll also pay less ($4, $3, $2, $1).
 Count a person for the most they are willing to
pay and then for every price BELOW that, too.

GRAPHING DEMAND




A DEMAND SCHEDULE is the list of prices and
quantities demanded
Quantity demanded is ALWAYS on the X axis
Price is ALWAYS on the Y axis
As price changes, we move ALONG THE CURVE
DRILLS
1.
2.
3.
4.
Whose behavior does the Law of Demand describe?
What happens to consumer demand when the price
rises?
What happens to consumer demand when the price
falls?
Does the law of demand apply to producers?
DRILLS
5.
6.
7.
8.
Does the law of demand apply to suppliers?
Does the law of demand apply to firms?
What is written on the Y axis for the demand graph?
What is written on the X axis for the demand graph?
DRILLS
9.
10.
11.
What is a demand schedule?
Which direction does the demand curve
slope?
Why does the demand curve slope down to
the ground?
TYPES OF GOODS



Normal = products you like and will buy
MORE of when you’re richer (smart
phone)
Inferior = products you buy ONLY when
you’re less rich (regular phone)
Substitute = products you buy when
the price of what you want rises (BUT
YOU LIKE THESE PRODUCTS JUST
FINE) (iPhone and Andriods)
PRICE AND QD
When the price changes, we move ALONG THE
LINE.
 If anything OTHER than price changes, then we
need a new line.

NON-PRICE DETERMINANTS
1. Income: raises, tax refunds
2. Number of consumers: holidays,
events
3. Consumer taste: popularity, health
4. Consumer expectations: future price
change, weather
5. Substitute good price change: brand
vs. generic
6. Complimentary good price change
 Ex:
Waffles (normal) and syrup
(compliment)
PRICE STAYS SAME, BUT YOU BUY LESS:
Demand shifts LEFT. INWARD.
 Consumers buy less because of something
OTHER THAN PRICE.
 At every price point, people buy less.
 3 reasons my demand curve for Dove dark
chocolate might shift left:

 What
is the ONE factor that will NOT change?
DEMAND ALSO SHIFTS RIGHT.
A
shift right = increased demand
 PRICE DOES NOT CHANGE
 At every price, people buy more of the product.
 3 reasons my demand curve for dark chocolate
shifts right:
PRACTICE: DEMAND FOR APPLES
Say “right”, “left”, or “price” for
each of the following.
 Zahra finds apples on sale for $1
less per pound.
 Price
 Yonatan only buys 1 apple instead
of 2 because they are expensive.
 Price
 Xena finds apples on buy one, get
one free sale.
 Price

Demand for apples
Consumers buy more apples because
school is about to start.
 right
 David buys more apples because he has a
cold and is scared of doctors.
 right
 Uri buys fewer apples because he prefers
oranges.
 left

Demand for APPLES
 Tony
buys more apples because he is trying to
lose weight and it is better for him than candy.
 right
 Samrina buys fewer apples because she is
fasting.
 left
 Raven buys more apples because peanut
butter (which she always eats with her apples)
is on sale.
 right
DEMAND FOR APPLES
 Andrew
buys fewer apples because he lost his
job.
 left
 Sara buys no apples today because she knows
that next week they will be on sale.
 left
 Ryland buys fruit snacks instead of apples
because fruit snacks are cheaper.
 left
DRILLS
1.
2.
3.
According to the Law of Demand,
when price rises, …
According to the Law of Demand,
when price falls, …
How is a price change shown on
the demand graph?
DRILLS
4.
5.
6.
How is a change in quantity demanded shown
on the demand graph?
What is the law of demand?
What does “movement along the line” mean
for the demand graph?
DRILLS
What does a change in demand
mean?
8. What does NOT change when
demand changes?
9. How is a change in demand
shown on the demand graph?
10. Name 1 reason a consumer
demands less soda.
7.
Name another reason a consumer demands
less soda.
12. Name another reason a consumer demands
less soda.
13. What is the one determinant that did NOT
change for 10 – 12?
11.
DRILLS
How is decreased demand
shown on the demand graph?
15. How is decreased quantity
demanded shown on the
demand graph?
16. What is the difference between
demand change and quantity
demanded changed?
14.