Monday's Special: Introduction to Demand and its Functions

1. Bell Work What was special about Monday?

2. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

3. Bell Work What was special about Monday?

4. Unit 1 Exam The Science of Economics

5. Demand How does demand help societies determine WHAT, HOW, and FOR WHOM to produce? What are the causes of a change in demand?

6. An Introduction to Demand • Demand depends on two variables: the price of a product and the quantity available at a given point in time. • In general, when the price of a product goes down, people are willing to buy, or demand, more of it. When the price goes up, they are willing to buy less. • A demand curve shows the quantity of a product demanded at each price that might prevail in the market.

7. The Law of Demand • The Law of Demand states that the quantity demanded of a product varies inversely with its price. • The Law of Demand is called a “law” because it has proven true after repeated studies and tests, and it is consistent with common sense and observation. • A market demand curve shows the quantities of a product demanded by everyone who is interested in purchasing it at all possible prices.

15. Demand and Its Functions Exploration and Practice

16. Reflection Give an example from your life when you changed the amount of a product you purchased because of a change in price?

17. Bell Work • Suppose the snack bar decided to start selling 6” diameter cookies (calling them “Kookies”) during the school day. How many Kookies would you be willing to buy per week if they cost: • $0.20 $0.80 • $0.40 $1.00 • $0.60

18. In Lak’ech by Luis Valdez • Tueres me otroyo • Si tehagodaño a ti, • Me hagodaño a mi mismo • Si teamo y respeto • Me amo y respetoyo • You are my other me • If I do harm to you, • I do harm to myself • If I love and respect you • I love and respect myself

19. Bell Work • Suppose the snack bar decided to start selling 6” diameter cookies (calling them “Kookies”) during the school day. How many Kookies would you be willing to buy per week if they cost: • $0.20 $0.80 • $0.40 $1.00 • $0.60

20. Demand and Marginal Utility • Marginal utility is the extra satisfaction or additional usefulness obtained by acquiring multiple units of a product. • As we use more and more of a product, the extra satisfaction we get from using additional quantities begins to decline; this is known as diminishing marginal utility. • Because of diminishing marginal utility, people are not usually willing to pay as much for the second, third, or fourth unit as they did for the first unit.

21. A Change in the Quantity Demanded • The only event that can cause a change in quantity demanded is a change in price. • A change in the quantity demanded due to a change in price is represented on a demand curve as movement along the curve. • The income effect is a change in quantity demanded because of a change in price that makes consumers feel richer or poorer. • A shift in relative prices may cause a substitution effect, in which consumers substitute an alternative less expensive product for one that has become more expensive.

23. A Change in Demand • When a change in demand occurs, the entire demand curve shifts to the left or right. • A change in total consumer income affects how much of a product consumers buy at all possible prices. • The demand curve for a product shifts when consumer tastes change. • An increase in the price of a product causes an increase in demand for substitute products and a decrease in demand for the product’s complements. • Consumer expectations cause people to demand either more or less of a good. • A change in the total number of consumers causes the entire demand curve to shift right or left.

24. AC/DC Econ: Demand • https://www.youtube.com/watch?v=LwLh6ax0zTE

25. Demand Shifts Exploration and Practice

26. What is happening to the demand for canned tuna? Mary runs the only grocery store in a 12-block area of a large city. Many of her customers are elderly and don't have much income. Mary sells lots of canned tuna fish. It isn't too expensive, and it is a good source of protein. Mary charges 79 cents a can all the time, but she has noticed that her sales have changed from time to time.

27. What is happening to the demand for canned tuna? • When hamburger went up 20 cents a pound, Mary sold about 50 more cans of tuna fish each day. • Mary sells about 100 more cans of tuna fish a day at the start of a month than at the end of a month. • For a few weeks after there was an article in the newspaper about how healthful tuna fish is, Mary's sales increased 30 cans a day. • There was a truck drivers' strike and food deliveries were interrupted. Mary sold 100 cans more a day.

28. Demand Check In • products that may not be exactly the same but which may be put to the same use • Substitutes

29. a graphic representation of the number of items that will be demanded at various prices • Demand Curve

30. the willingness and ability to buy something • Demand

31. a belief in future changes that affects one's willingness to buy products now • Expectations

32. people will buy more units of a good at a lower price than at a higher price • Law of Demand

33. anything, other than price, that affects customers' willingness to buy a product • Shifters of Demand

34. How many pairs of socks would be sold at a price of $4?

35. If there were a cold spell, would the demand curve for socks move to the left or to the right?

36. Demand Shifts Assessment Ted’s Tape Production Company

37. Test Results • Overall Average : 74% • This Class : 71.3%

38. Paradox of value refers to the • high value of an essential item and the low value of a nonessential item. • high value of a nonessential item and the low value of an essential item. • contradiction of what consumers want and what they need. • contradiction between gross domestic product and market value.

39. Consumers waiting in long lines for a new product is an example of • consumerism. • consumer responsibilities. • consumer rights. • scarcity.

40. Which of these economic systems have the least in common? • market economy and capitalism • command economy and socialism • command economy and capitalism • free-enterprise economy and market economy

41. Which of these statements is descriptive of a market economy? • Most media is state-owned and operated. • The government determines what is produced and by whom. • Major economic decisions are made for individuals, not by them. • Major economic decisions are made by individuals, not for them.

42. Which of these helps explain why mixed economies develop? • People become unhappy with aspects of their current economy. • People are seldom exposed to the ideas and technologies of other cultures. • Government control of an economy tends to make a nation more prosperous. • Government control of an economy leads to a diversity of economic approaches.

43. How are economic transactions shaped in a traditional economy? • Each community decides as a group for whom the group will produce. • Elders and ancestors make certain that things are done in specific ways. • The three basic questions of production do not arise in this type of economy. • Individuals form networks within which they buy, sell, and trade as they choose.

44. Which of the following lists economic systems in order from least to most flexible? • command, socialism, free market • socialism, command, free market • free market, socialism, command • free market, command, socialism

45. Which of the following could raise the cost of production in a command economy? • a newly discovered source of raw materials • a free media • a large and inefficient bureaucracy • a strict quota system

46. Which of these is a major advantage of a market economy? • It can change direction rapidly as needed when markets change. • There is a high degree of individual freedom. • There is efficient government control of production and distribution. • People are likely to be offered goods and services they cannot afford.

47. According to the Circular Flow model above, what happens in the factor market? • Households receive money from businesses by selling resources • Businesses receive money from households by selling goods and services • Individuals spend money on resources • Businesses spend money on goods and services

48. According to the Circular Flow model above, what happens in the product market? • Households receive money from businesses by selling resources • Businesses receive money from households by selling goods and services • Individuals spend money on resources • Businesses spend money on goods and services

49. According to the Circular Flow model above, who controls the factors of production? • The product market • Individuals • The factor market • Businesses

50. According to the Circular Flow model above, where does business income originate? • The product market • Individuals • The factor market • Businesses