Ch. 4 Demand

Understanding Demand
Buyers and Sellers
What effect does their interaction have?


Agreement on the price and quantity traded

The Law of Demand
When a good’s price is lower, consumers will buy more of it.
How is “demand” different from want or need?

a consumer who demands is wiling and able to buy the good or service at a specified price
How is consumption measured?

By the amount of a good that is bought
The substitution effect
When consumers react to an increase in a good’s price by consuming less of that good and more of other goods.
The income effect
The change in consumption resulting from a change in real income
Market demand schedule
A table that lists the quantity of a good all consumers in a market will buy at each different price

See Figure 4.3 on pg. 81
Why do economists create market demand schedules?
To predict how people will change their buying habits when prices change
Demand Curve
A graphic representation of a demand schedule

Comments

Post a Comment

Popular posts from this blog

Ch. 2 Study Guide

Define Terms on pgs. 23, 28, 34 & 40 1. What are the three key economic questions? 2. What are the five main economic goals? 3. How do a traditional economy, a market economy, a centrally planned economy and a mixed economy differ? 4. How does a capitalist system allocate scarce resources? 5. Study the Circular Flow Model of a Market Economy on pg. 30. What is exchanged in the factor market? 6. What is exchanged in the product market? 7. What did Adam Smith mean by “The Invisible Hand” of the marketplace? 8. In what kind of economic system does the government own key industries? 9. How do socialism and communism differ? 10. Study the Circular Flow Model of a Mixed Economy on pg. 42. In what ways does the government participate in the marketplace?
Read more

Ch. 6 SG

1. What example of a price ceiling does the text give? Explain. 2. Why do few people benefit from price ceilings? 3. How do rent control laws affect price equilibrium? 4. What two examples of price floors does the text give? Explain? 5. What will happen to suppliers in a market if there is a surplus of the good they sell, but no supplier can afford to lower prices? 6. List three reasons why a price-based system works more efficiently than central planning. 7. What do you think Adam Smith would think of rationing? Explain. 8. How do prices act as a “language” in the free market?. 9. What alternative is there to participating in a market controlled by government? 10. What’s another term for externalities? How does it affect price and supply?
Read more

School Loop Registration

1. find a computer (in your classroom, the library or a computer lab); 2. log on to http://mhs-cjuhsd-ca.schoolloop.com;    3. the student DOES NOT FILL OUT THE BOXES (yet); 4. the student clicks on “register now”; another page will open; the student clicks on “student registration” and follows directions; 5. the “student id number” for School Loop is always the “long” six-digit ID number; 6. select an EASY TO REMEMBER password
Read more