Transcript Demand PowerPoint

 Grab your Freyonomy and a Bellwork
Agenda
 Bellwork: Review
 SMG Update
 Standard 2 Graphing Activity
 Demand Notes
 PowerPoint
 Reading
 Review
 HW- SMG Investment Worksheet (due Friday)
 EverFi Module 4 (due Friday)
Download the app
On back of bellwork sheet…
When purchasing things to buy
 You evaluate your…
willingness to buy
ability to buy
Papa John’s Pizza
• $15
– Are you willing?
– Are you able?
– Do you have a demand?
Private Jet
• $8,000,000
– Are you willing?
– Are you able?
– Do you have a demand?
Demand –
Consumer Behavior
Ms. Frey
What is Demand?
 Demand- the willingness to buy a good or service
and the ability to pay for it.
 Law of Demand-
As prices
As prices
quantity demanded goes up
quantity demanded goes down
Challenge Question #1
 You have $10 that you want to spend buying
music on iTunes.
 What quantity would you demand if the price was $1 a
song?
 What quantity would you demand if the price was $3 a
song?
 What caused the quantity of songs of that you
demanded to change?
Cheryl’s DVD Demand Schedule
 Demand schedule- a table that
shows how much of a good or
service an individual consumer
is willing and able to purchase at
each price in a market.
 As the price falls, the number of
DVDs Cheryl will buy rises.
 So quantity demanded and
price have an inverse, or
opposite relationship.
Price
per DVD ($)
Quantity
Demanded
30
0
25
1
20
2
15
3
10
4
5
7
Demand Curve
 Demand curve- a graph that displays the
data from an individual demand
schedule
(How much of a G/S someone
will purchase at various prices)
$
 How many DVDs will Cheryl buy when
the price is $10?
$
$
$
$
Quantity of DVD’s Demanded
Montclair Video Mart Market Demand Schedule
 Market demand schedule- shows how
much all consumers are willing and
able to buy at each price in a market.
 How did the video mart owner create a
market demand schedule?


Surveyed customers
Reviewed sales figures to see how
many DVDs he sold at each price
Price
per DVD ($)
Quantity
Demanded
30
50
25
75
20
100
15
125
10
175
5
300
Market Demand Curve
 Market demand curve- shows
the data found in the market
demand schedule.
Challenge Question #2
 Cheryl was unwilling to buy any DVDs at $30. Montclair Video
Mart can sell 50 DVDs at that price. How do you explain the
difference between the market curve and Cheryl’s individual
curve?
• Different ability- Cheryl makes less money than those in the market
• Different willingness- members of the market might be DVD
collectors while Cheryl is not
Law of Demand
 As prices
… quantity goes .
As prices … quantity demanded .
 Inverse relationship between price and quantity.
 Independent variable (Price)  dependent variable (Quantity)
 Called the “Price Effect” – Price caused consumer
behavior to change…we buy more or less because of the
change in price
Challenge Question #3
 Considering the law of demand, when the price of
concert tickets increase, what will happen to the
quantity that is demanded?
Read and take notes pages 2-3
of your Demand Notes
Textbook pages. 97 and 98
Notes Review
Price of a product changes while all other factors remain the same
Other factors change while the price remains the same
Income and Substitution Effect
 Income- change in price of product will make you feel
“richer” and more likely to buy more of that product
 Substitution Effect- consumers react to a change in
price through buying a substitute
 Challenge Question#1: Malik goes to the mall to buy a $40 pair of jeans
and discovers that they are on sale for $25. If Malik buys two pairs, is this an
example of the income effect or the substitution effect?
Change in Quantity Demanded
 Change in the amount of product demanded because of a change in price
 Change in quantity demanded shown by movement along the curve
CHALLENGE QUESTIONS 2-4
#2-4: Price of chicken sandwiches
increased, what happened to the
quantity of sandwiches demanded?
 Decreased
#5: What caused the quantity of
sandwiches demanded to change?
 Price
#6: What description illustrates the
change in quantity demanded?
 Movement along the curve
Practice questions
1.
Law of Demand: If the price of Krispy Kreme
doughnuts increased from $1 to $2, would the
quantity demanded increase or decrease?
2. Law of Demand: If the price of Steak ‘n Shake
Milkshakes was reduced from $4 to $2, would the
quantity demanded increase or decrease?
3. Law of Demand: Is price and quantity directly related
or inversely related?
Inverse- variables act in opposite ways
Direct- variables act in the same way
Direct
Inverse
Direct
Inverse
Inverse
9. At the price of $2.50 a slice, what quantity of slices are demanded?
10. At the price of $1.00 a slice, what quantity of slices are demanded?
11. If you owned a pizza shop and you wanted to increase the demand for
your pizza, what should you do to the price?
Please get:
1) Laptop (sign out assigned computer)
2) Bellwork
3) Freyonomy
Agenda
 Bellwork
 Changes in Demand Reading Notes
 Demand Interactive
 Demand Practice Problems
 HW- SMG Investment Worksheet (due Friday)
 EverFi Module 4 (due Friday)
OUTCOMES
 Students will contrast changes in demand from changes in quantity
demanded
Stock Market Game Update
1st period
 Team 82- $100k remaining
 Team 83- $100k remaining
 Team 84- $100k remaining
 Team 85- $100k remaining
 Team 86- $100k remaining
Stock Market Game Update
2nd period
 Team 88- $100k remaining
 Team 89- $98k remaining
 Team 90- $65k remaining
 Team 91- $70k remaining
 Team 92- $100k remaining
 Team 93- $90k remaining
 Team 94- $100k remaining
Stock Market Game Update
4th period
 Team 96- $89k remaining
 Team 97- $100k remaining
 Team 98- $100k remaining
 Team 99- $94k remaining
 Team 00- $78k remaining
Missing Tests
Change in Demand Reading Notes
 Pgs. 4-5 of your notes packet
 myhaikuclass.com/msfrey/economics
 Downloadable assignments page
 Download “Change in Demand Reading”
 Finished early? Invest more $$$ in the Stock Market Game!
Change in Demand
 Change in demand occurs when
 change in marketplace prompts consumers to buy different
amounts of a good or service at each and every price.
 Change in demand shown by shift of demand curve
CHALLENGE QUESTION!!
Figure 4.8 Does this shift to
the left indicate in increase or
decrease of demand? (circle
one)
Figure 4.8 Does this shift to
the right indicate in increase
or decrease of demand? (circle
one)
6 Demand Determinants
Make more $$$
(# of buyers)
Change in the size of the
consumer population
Popularity or trends
Expectations about the price
changes in the future
Sally gets a raise so
she buys more clothes
More people move to a community so
they need more gas stations
People buy a particular running
shoe because its trendy
- Consumers anticipate a sale so they
hold off on buying shoes now
(Price Expect…)
Change in price of a related
product causes consumer to
buy something different
Goods that are bought
together
Dominos is expensive so people buy
Pizza Hut instead
Change in the price of milk
affects the sale of cereal
Change in Demand: CQ #1-9
Chick-fil-a consumers offended by anti-gay
marriage comments
#1-6-:What happened to demand at each price
($1, $2, and $3)?
 Decreased- curve shifted left
#7: Which of the 6 demand determinants explains
why demand shifted?
 Consumer tastes
#8: Which description illustrates this change in
demand?
 Scenario caused a SHIFT
#9: Because the curve shifted to the left, what
happened to the overall demanded for chicken
sandwiches?
 It decreased (less is left!!!)
Demand Interactive
Changes in Demand
Income, Market Size, Consumer Tastes, Consumer Expectations, Substitute
Goods, Complimentary Goods
 Change in demand of hotel rooms
in Florida during the school year
Market Size (# of buyers)
 Demand Decrease 
 Change in demand of ipods
because iphones have become more
popular
 Consumer Tastes
 Demand Decrease 
 The price for peanut butter falls
which results in a change of demand
for jelly
 Complements
 Demand Increase 

 Change in demand for t-shirts at
Old Navy the week before Black
Friday
Consumer Expectations
 Demand Decrease 
 Matt gets a raise at work so he
decides to buy more comic books
than before
 Income
 Demand Increase 
 The price of Advil rises so people
begin to buy the generic brands of
ibuprofen.
 Substitute Goods
 Demand Increase 

Changes in Demand
Income, Market Size, Consumer Tastes, Consumer Expectations, Substitute
Goods, Complimentary Goods
 Price of hotdogs increase impacting
the demand for mustard
Complements
 Demand Decrease 
 Change in demand for Sprite
because Lebron James sponsored
the product
 Consumer Tastes
 Demand Increase 
 Change in demand for Uber
because more people travel to
Houston for the super bowl
 Market Size (# of buyers)
 Demand Increase 

 Layoffs at a company impact the
demand at a local happy hour
restaurant
Income
 Demand Decrease 
 Lysol wipes increased in price so
people buy Clorox instead
 Substitute Goods
 Demand Increase 
 News of an upcoming spike in gas
prices changes demand for gasoline
now
 Consumer Expectations
 Demand Increase 

D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Less is left!!!!
D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Right is more!
Exit Ticket
Determinant Review (if time)
 Name the determinant (∆D) or write price (∆QD):
 Glazed doughnuts are more expensive at Krispy Kreme
 Dunkin Doughnuts is more expensive, which impacts the
sales of Krispy Kreme
 At Krispy Kreme, doughnuts go on sale, impacting the
demand for coffee
 Mark gets a raise at work, so buys more doughnuts
 Krispy Kreme becomes less popular, as consumers hear they
use artificial sweeteners
 Boston crème doughnuts go on sale
 Consumers anticipate Krispy Kreme might go out of business
next week, impacting their demand for doughnuts now
 Many consumers move away from Krispy Kremeland,
impacting the demand for doughnuts
 Grab your bellwork and Freyonomy
Agenda
 Bellwork
 Freyonomy Events
 Check Freyonomy Math
 Demand Notes pgs. 6-9
 Demand Practice Problems
 Quiz on Demand next Tuesday
Essential Question
 Why is demand important to understand?
 How can a graph show how demand changes?
Turn in Investment Worksheets
Stock Market Game Update
1st period
 Team 82- $100k remaining
 Team 83- $0k remaining
 Team 84- $100k remaining
 Team 85- $100k remaining
 Team 86- $59k remaining
Stock Market Game Update
2nd period
 Team 88- $11k remaining
 Team 89- $98k remaining
 Team 90- $2k remaining
 Team 91- $22k remaining
 Team 92- $97k remaining
 Team 93- $0k remaining
 Team 94- $75k remaining
Stock Market Game Update
4th period
 Team 96- $20k remaining
 Team 97- $78k remaining
 Team 98- $66k remaining
 Team 99- $94k remaining
 Team 00- $0k remaining
Freyonomy Events
 You scraped your car on a wall  $700
 Nothing! 
 Your bike got stolen $300
 You broke your nose while playing sports $300
 You need a new dryer $600
 Nothing! 
 Your air conditioner is broken $1000
 Your car needs a tune up $400
 You lost your wallet $200
 You need to repair your roof $1200
 You won a contest! +$200
Checking
Freyonomy Math
3
3
3
3
3
3
3
3
3
3
3
3
3
Challenge Question
 At the bottom of your bellwork page:
 Why do you think it is important to study demand?
Why does it matter? What practical applications might
demand have in your life?
Get out your Demand Notes
 Pg. 5
Determinant Review: Pg. 5
Answer the following questions about the 6 demand determinants.
 If number of buyers= Demand will _____________
 If consumer income = Demand will _____________
 If consumer expectations (price higher later) = Demand will ________now
 If consumer taste = Demand will _____________
 Regarding substitutes: the price of Cocoa Puffs = Demand for Cocoa Krispies _____
 Regarding complements: the price of milk  = Demand for cereal ________
Pages 6-9 Practice Problems
PRICE
movement
6
demand determinants
shift
D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Less is left!!!!
D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Right is more!
Group Work
 Your goal is to LEARN
 Help each other
 No copying
 Constant dialogue of how to work the problem
 Should be multiple people talking, not just one person
doing all the work
When you enter, please get:
 Whiteboard, eraser, marker
 Old Freyonomy
 New Freyonomy Sheet
 Bellwork
Agenda
 Bellwork- review
 Collect Tokens
 Stock Market Game Update
 Whiteboard Review
 Demand Notes pg. 10- Price Elasticity
 Study Guide work time
 HW- Demand Study Guide
(Quiz next class- Tuesday!)
Stock Market Game Update
 Freyonomy penalties and rewards on Tues
 Have until 4pm to make trade
EverFi
 Week of forgiveness
 Make up any missing module (small grade reduction)
 Redo any module you failed
 Grades will be posted Friday
bellwork
D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Less is left!!!!
D
$10
$8
$6
$4
$2
10 20 30 40 50 60 70 80 90
Right is more!
1. Which graph reflects what would
happen to demand if Hersey
bars became more expensive?
2.
Which graph reflects what
would happen to demand for
N’Sync songs after a reunion
caused them to become more
popular?
3. Which graph reflects what would
happen to demand for Dominos
if Pizza Hut became cheaper?
4. Which graph reflects what would
happen to demand for Corvettes
if they became cheaper?
5. Which graph reflects what would
happen to demand for ski
equipment in Salt Lake City in
the Summer?
Whiteboard
Review Questions
1. Which graph reflects what would
happen to the sales of salsa if
tortilla chips became more
expensive?
2.
Which graph shows the
demand of Ben & Jerry’s ice
cream after it goes on sale?
3. Which graph shows what would
happen to the sales of gas now
if consumers expect there will
be a shortage next week?
4. Which graph reflects what would
happen to demand for airline
tickets if they became more
expensive?
5. Which graph reflects what would
happen to demand for
restaurants in a city that recently
doubled in size?
Review Questions
Get out your Demand Notes
 Turn to pg. 10
Chapter 4.3
Critical Thinking: Challenge Question 1-2
1. Does quantity demanded always decrease if price rises?
List a good or service that you think would remain in
demand even if the price rose sharply.
2. Why does demand for these items change very little?
Key Concepts
 Buying habits affected by type of product and importance to consumer
•
Price elasticity of demand is a measure of the relationship
between a change price and a change in quantity demanded
 Elastic- quantity demanded changes greatly as price changes
 Ex: Price of candy bars increases from $1 to $5

Demand will change greatly= elastic
 Inelastic- quantity demanded changes little as price changes
 Ex. Price of medicine increases from $10 to $50

Demand will change very little= inelastic
Firms must know the Price Elasticity of
Demand of their product!
What determines elasticity?
1.
Necessity or Luxury
Necessities are inelastic (x-rays)
Luxuries are elastic (milkshakes)


2. Substitute goods or services




If there is a substitute demand will be elastic
Ex. McDonald's customers going to Burger King
If there is no substitute demand will be inelastic
Ex: Only gas station in a small town
Whiteboard Challenge Questions
1. Is pizza a necessity or luxury item?
 Luxury
2. If the price of pizza doubled, would demand have a big
change or small change?
 Big
3. Is demand for pizza elastic or inelastic?
 Elastic
4. Are car seats a necessity or luxury?
 Necessity
5. If the price of car seats doubled, would demand have a big
change or small change?
 Small
6. Is demand for car seats elastic or inelastic?
 Inelastic
Whiteboard Challenge Questions
7. Does this have a substitute: a groceries in a small town
(there are no other stores for 200 miles)
 No
8. If the price of groceries in the small town doubled,
would demand have a big change or small change?
 Small
9. Is demand for groceries in a small town elastic or
inelastic?
 Inelastic
Whiteboard Challenge Questions
10. The CEO of a pharmaceutical company brags that their new
medication has a low price elasticity of demand. This means.
A. Small changes in price will result in large changes in quantity
demanded.
B. No matter the price, people will want the same quantity of the
product.
11. Which of the following products is MOST LIKELY to have the
highest level of price elasticity?
A. Acid Reflux medication
B. A vacation package to the Bahamas
C. Milk
Study Guide Work Time
 Quiz tomorrow!!!!!!!!!