Transcript Law of Demand - Cloudfront.net

Supply and Demand (3.1.2)
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Table of Contents
Access Prior
Knowledge
Set Goals
New
Information
Activity
Conclusion
What Do You
Know About…?
“The Market”
Learning Targets
Two Types
Of Goods
Market Graph
Puzzle
“The Market”
Learning Targets
Related Goods
Economic
Time Frames
Identifying
Markets
A Market Graph
Creating a Graph
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What Do You Know About…?
Write down words that come to mind when you think of each of the following.
There are no right or wrong answers!
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What Do You Know About…?
Write down words that come to mind when you think of each of the following.
There are no right or wrong answers!
1)
Market
2)
Supply
3)
Demand
Need help
thinking of ideas?
Equilibrium / Equal
4)
Shortage
Surplus
5)
Elastic
Inelastic
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What Do You Know About…?
Write down words that come to mind when you think of each of the following.
There are no right or wrong answers!
1)
Market
2)
Supply
3)
Demand
1) WHAT does this mean?
2) HOW does this happen?
3) WHY does this happen?
Equilibrium / Equal
4)
Shortage
Surplus
5)
Elastic
Inelastic
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Ask yourself these questions:
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“The Market” Learning Targets
Knowledge
Understand the definitions for the different types of goods and
services.
Skill
Translate price and quantity data into supply and demand
graphs.
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Two Types of Goods
Goods (and services) fall into one of two categories.
1) Normal Goods
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2) Inferior Goods
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Two Types of Goods
Goods (and services) fall into one of two categories.
1) Normal Goods
2) Inferior Goods
Definition
Items that people tend to buy
more of when their incomes
increase. This is true of most
goods and services.
See Examples
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Two Types of Goods
Goods (and services) fall into one of two categories.
1) Normal Goods
2) Inferior Goods
Definition
Items that people tend to buy
more of when their incomes
increase. This is true of most
goods and services.
Examples
What
A) New Cars
B) Coca-Cola or Pepsi examples
can you
C) Televisions
think of?
D) Clothes
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Two Types of Goods
Goods (and services) fall into one of two categories.
1) Normal Goods
2) Inferior Goods
Definition
Items that people purchase more
of when their incomes decrease.
These items tend to be low-cost
options for saving money.
See Examples
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Two Types of Goods
Goods (and services) fall into one of two categories.
1) Normal Goods
2) Inferior Goods
Definition
Items that people purchase more
of when their incomes decrease.
These items tend to be low-cost
options for saving money.
What
examples
can you
think of?
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Examples
A) Ramen Noodles
B) Frozen Dinners
C) Bus Transportation
D) Used Clothes
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Related Goods
Sometimes goods (or services) are related to each other in one of two special
ways.
1) Substitute
2) Complementary
Goods
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Goods
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Related Goods
Sometimes goods (or services) are related to each other in one of two special
ways.
1) Substitute
2) Complementary
Goods
Goods
Definition
Items that may replace each other
when used or consumed.
See Examples
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Related Goods
Sometimes goods (or services) are related to each other in one of two special
ways.
1) Substitute
2) Complementary
Goods
Goods
Definition
Items that may replace each other
when used or consumed.
Examples
A) Butter . . . . . . . . . . Margarine
B) McDonald’s . . . . . Burger King
What examples can you think of?
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Related Goods
Sometimes goods (or services) are related to each other in one of two special
ways.
1) Substitute
2) Complementary
Goods
Goods
Definition
Items that are almost always
consumed or used together.
See Examples
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Related Goods
Sometimes goods (or services) are related to each other in one of two special
ways.
1) Substitute
2) Complementary
Goods
Goods
Definition
Items that are almost always
consumed or used together.
Examples
A) Hot Dogs . . . . . Hot Dog Buns
B) Toothbrush . . . . Toothpaste
What examples can you think of?
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Economic Time Frames
There are two ambiguous time frames that economists use to analyze a market.
1) Short Run
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2) Long Run
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Economic Time Frames
There are two ambiguous time frames that economists use to analyze a market.
1) Short Run
2) Long Run
Definition
An undefined period of time that is
NOT long enough to allow
consumers or producers enough
time to adjust to all changes in an
economic situation.
See Example
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Economic Time Frames
There are two ambiguous time frames that economists use to analyze a market.
1) Short Run
2) Long Run
Definition
An undefined period of time that is
NOT long enough to allow
consumers or producers enough
time to adjust to all changes in an
economic situation.
Example
Suppose Coca-Cola Vanilla becomes extremely
popular. Coca-Cola cannot increase its output
immediately to accommodate demand because it
takes time to adjust to the new demand.
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Economic Time Frames
There are two ambiguous time frames that economists use to analyze a market.
1) Short Run
2) Long Run
Definition
An undefined period of time that is
long enough for people to adjust
to all changes in an economic
situation.
See Example
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Economic Time Frames
There are two ambiguous time frames that economists use to analyze a market.
1) Short Run
2) Long Run
Definition
An undefined period of time that is
long enough for people to adjust
to all changes in an economic
situation.
Example
On the other hand, Coca-Cola Vanilla can
increase its production in the long run by
opening new factories and by locating additional
raw materials.
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Identifying Markets
When analyzing a market, it is always important to know which market you are
talking about!
Example 1
Example 2
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Identifying Markets
When analyzing a market, it is always important to know which market you are
talking about!
Example 1
Which market is this?
?
Example 2
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Identifying Markets
When analyzing a market, it is always important to know which market you are
talking about!
Example 1
Which market is this?
Oranges?
Orange Juice?
Navel Oranges?
Example 2
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Identifying Markets
When analyzing a market, it is always important to know which market you are
talking about!
Example 1
Example 2
Which market is this?
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?
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Identifying Markets
When analyzing a market, it is always important to know which market you are
talking about!
Example 1
Example 2
Which market is this?
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Shoes?
Women’s Shoes?
High Heels?
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A Market Graph
Each graph you draw will contain each of the following items.
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A Market Graph
Each graph you draw will contain each of the following items.
1) Title of the market
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Market for High Heels
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A Market Graph
Each graph you draw will contain each of the following items.
1) Title of the market
Market for High Heels
$60
$50
Price
2) Price range on
the vertical axis (yaxis)
$70
$40
$30
$20
$10
$0
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A Market Graph
Each graph you draw will contain each of the following items.
1) Title of the market
Title Page
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on
(y-
the
(x-
$60
$50
Price
2) Price range
the vertical axis
axis)
3) Quantity on
horizontal axis
axis)
$40
$30
$20
$10
$0
Back
Market for High Heels
$70
0
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50
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75 100 125 150 175
Quantity
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Creating a Graph
This unit will require us to draw several market graphs. Follow these steps.
Market for High Heels
$70
$60
Price
$50
$40
$30
$20
$10
$0
Title Page
Table of Contents
Back
0
Last Slide
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25
50
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75 100 125 150 175
Quantity
Resources
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Creating a Graph
This unit will require us to draw several market graphs. Follow these steps.
Market for High Heels
$70
$60
$50
Price
1) Plot data points
using
provided
information
$40
See Data
$30
$20
$10
$0
Title Page
Table of Contents
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0
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25
50
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75 100 125 150 175
Quantity
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Creating a Graph
This unit will require us to draw several market graphs. Follow these steps.
Price ($)
Quantity
$20
50
$30
75
$40
100
$50
125
Market for High Heels
$70
$60
$50
Price
1) Plot data points
using
provided
information
$40
$30
$20
$10
$0
0
25
50
Plot Data
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75 100 125 150 175
Quantity
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Creating a Graph
This unit will require us to draw several market graphs. Follow these steps.
Price ($)
Quantity
$20
50
$30
75
$40
100
$50
125
$60
$50
$40
$30
$20
$10
$0
Title Page
Table of Contents
Market for High Heels
$70
Price
1) Plot data points
using
provided
information
Back
0
Last Slide
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Copyright © 2012 N.S.
25
50
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75 100 125 150 175
Quantity
Resources
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Creating a Graph
This unit will require us to draw several market graphs. Follow these steps.
Price ($)
Quantity
$20
50
$30
75
$40
100
$50
125
$60
$50
$40
$30
$20
$10
$0
2) Connect data
points with a line
Title Page
Table of Contents
Market for High Heels
$70
Price
1) Plot data points
using
provided
information
Back
0
Last Slide
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25
50
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75 100 125 150 175
Quantity
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Market Graph Puzzle
DIRECTIONS
1) Cut this sheet in half on the dotted line.
2) Cut out the items from the bottom portion on the dotted lines.
3) Glue these items into the empty box on the top portion. Be sure to glue
them in the proper locations for creating a market graph.
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“The Market” Learning Targets
Knowledge
Understand the definitions for the different types of goods and
services.
Skill
Translate price and quantity data into supply and demand
graphs.
Title Page
Table of Contents
Back
Last Slide
Viewed
Copyright © 2012 N.S.
Forward
Resources
End Show
Resources
Title Page
Table of Contents
Back
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