Transcript Law of demand

Take out
Spiral
What will we learn today?
Standard 12.1.3 Monetary and non-monetary incentives and how they change
behavior.
Standard 12.2.1 Relationship between incentives and law of supply and law of
demand.
Directions: Bellwork, answer the following question.
You need to write a one paragraph response. There
should no talking during the Bellwork.
Unit: Demand
Ch 4
1. What are some things
you buy as
substitutes, or in
place of another
product?
2. What are some things
you buy more of
when you have more
money (aka normal
goods).
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Assignment :
4.1 Understanding Demand Notes
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Assignment :
4.1 Understanding Demand
• Demand: the desire to own something and the
ability to pay for it
• $Law of demand: when a good’s price is lower,
people will buy more of it. Higher = people buy
less
Example: if pizza is a dollar, people buy more. If
pizza is ten dollars, people will buy less.
• $Supply and Demand of goods determines the
price and quantity produced of most goods.
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• Substitution effect: when people react to an increase in price by
consuming less of that good and more of other goods.
• Example: pizza got more expensive, so I ate beans & tortillas
instead. Pizza’s price going up resulted in my buying more beans &
tortillas.
• Income effect: the change in consumption resulting from a change
in real income.
• Example: John buys two donuts every morning for $1 (50 cents
each). One day the price goes up to $1 each. Now John just buys
one. The demand for donuts goes down.
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Video Example of Demand
• Charlie and Chocolate Factory
• 0:14 – 0:19
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• Demand schedule: a table that lists the
quantity of a good a person will buy at each
different price.
• Market demand schedule: a table that lists
the quantity of a good that all consumers in a
market will buy at each different price
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• Demand curve: a graphic representation of a
demand schedule
• Lowest price on the bottom, highest on top.
Lowest quantity on the left, highest on the
right.
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Assignment :Create a Demand Curve-Look at the example and
then create your own product. EL= Do on white boards
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