Table of Contents Access Prior Knowledge New Information Set Goals Activity Conclusion Demand Survey “Law of Demand” Targets Definition Changes in Demand “Law of Demand” Targets Demand Can Change In Two Ways You Draw the Graph Increases Demand Decreases Demand The Effects of Shifting Demand

Circle the product that has been assigned to your group. Demand Survey Circle the product that has been assigned to your group. Divide the class into six groups. Assign one of the products listed under “Get Started” to each group. The instructions for this activity are also listed on the student handout and the teacher’s lesson plan. The numbers used on the slideshow are just for example purposes. When students complete the lesson, they should obviously use the numbers they get during the survey, and not copy what is on this slideshow.

Demand Survey Circle the product that has been assigned to your group. Price Range Number Who Would Pay This as the Highest Price (Put Tallies Here) Totals Actual Demand Highest Lowest Prepare Ranges Read through the directions on “Prepare Ranges” with the students on their sheet, and then click the action button with the same name on this slideshow. It will fill in a sample of price ranges. Allow students time to write in price ranges that they choose for their product on their sheet.

Demand Survey Circle the product that has been assigned to your group. Price Range Number Who Would Pay This as the Highest Price (Put Tallies Here) Totals Actual Demand Highest Lowest $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 Prepare Ranges Poll Classmates Read through the directions on “Poll Classmates” with the students on their sheet, and then click the action button with the same name on this slideshow. It will fill in a sample of what to do when polling classmates. Allow students several minutes to poll their classmates and put tallies on their own sheets.

Demand Survey Circle the product that has been assigned to your group. Price Range Number Who Would Pay This as the Highest Price (Put Tallies Here) Totals Actual Demand Highest Lowest $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 I I I I I I Prepare Ranges Poll Classmates Fill In This Column When the students have finished polling each other, they should add the tallies from each column and write that number in the “Totals” column. Click the “Fill in This Column” button to show students how to do this.

Demand Survey Circle the product that has been assigned to your group. Price Range Number Who Would Pay This as the Highest Price (Put Tallies Here) Totals Actual Demand Highest Lowest $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 I I I I I I 1 3 2 Prepare Ranges Poll Classmates Fill In This Column Fill In This Column The tricky part of this exercise is to fill in the “Actual Demand” column correctly. Remember, demand is a cumulative total here because those who are willing to pay a high price will definitely also be willing to pay for the same item at a lower price. Add the number from the next row to the number in the previous row. Once you get this new total, write it in that row. Next, add the next row’s number to the new total you just got. Keep adding cumulatively like this to get the “Actual Demand” column. Click the second “Fill in This Column” button for the example.

Demand Survey Circle the product that has been assigned to your group. Price Range Number Who Would Pay This as the Highest Price (Put Tallies Here) Totals Actual Demand Highest Lowest $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 I I I I I I 1 3 2 1 4 6 7 9 10 Prepare Ranges Poll Classmates Fill In This Column Fill In This Column Now we have the proper numbers for graphing the data: 1) Price, and 2) Quantity Demanded. Click the “Graph the Data” button to get these two columns of information in a more friendly format. Graph the Data

Demand Survey Price Range Actual Demand $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 1 4 6 7 9 10 Draw the Graph Students should now realize that these are numbers we can put on a graph. Read through the “Graph the Data” instructions (found on the student sheet) with the students. Allow them time to graph the numbers they got during their survey.

Demand Survey Price Range Actual Demand $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 1 4 6 7 9 10 Their graph should look something like this. Ask students to answer the question on the bottom of their sheet. Their answer should be something like “when price gets bigger, the quantity demanded gets smaller.” What relationship does your graph illustrate between “Quantity Demanded” and Price?”

“Law of Demand” Targets Knowledge Understand the relationship between price and quantity demanded. Reasoning Explain why demand curves might shift. Skill Draw shifts in demand curves.

Definition If all things are equal, consumers will demand more of a product as its price decreases, and less of a product as its price increases.

Definition 1) Lower prices are an incentive for consumers. If all things are equal, consumers will demand more of a product as its price decreases, and less of a product as its price increases. 1) Lower prices are an incentive for consumers. $89.95

Definition 1) Lower prices are an incentive for consumers. If all things are equal, consumers will demand more of a product as its price decreases, and less of a product as its price increases. 1) Lower prices are an incentive for consumers. $89.95 2) Higher prices for the same item will deter consumers. $119.95

Demand Can Change in Two Ways 1) Change in “Quantity Demanded”

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve.

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. For example, the price for lemonade might change from $2.00 to $1.00

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. Notice how the blue demand line did not move. Just price changed, so we moved from one “quantity” to another. Allow students time to copy down the graph onto their note sheets.

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. Notice how the blue demand line did not move. Just price changed, so we moved from one “quantity” to another. 2) Change in “Demand”

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. Notice how the blue demand line did not move. Just price changed, so we moved from one “quantity” to another. 2) Change in “Demand” This is a shift of the entire demand curve either “left” or “right.”

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. Notice how the blue demand line did not move. Just price changed, so we moved from one “quantity” to another. 2) Change in “Demand” This is a shift of the entire demand curve either “left” or “right.” For example, this might be a really hot day, so more people want lemonade

Demand Can Change in Two Ways 1) Change in “Quantity Demanded” This is just a change along the demand curve. Notice how the blue demand line did not move. Just price changed, so we moved from one “quantity” to another. 2) Change in “Demand” This is a shift of the entire demand curve either “left” or “right.” Students do not copy down this graph right now. Move forward on the slideshow and it will walk everyone through the steps of graphing an increase in demand and graphing a decrease in demand. Notice how the new blue demand line shows that more lemonade will be demanded at every price. D2

You Draw the Graph Increase in Demand On your notes there is a graph labeled “Increase in Demand.” Draw an increase in demand on that graph. Increase in Demand Allow students an opportunity to try to draw a graph that shows an increase in demand. Draw This Graph

You Draw the Graph Increase in Demand On your notes there is a graph labeled “Increase in Demand.” Draw an increase in demand on that graph. Increase in Demand D2

You Draw the Graph Increase in Demand Decrease in Demand On your notes there is a graph labeled “Increase in Demand.” Draw an increase in demand on that graph. On your notes there is a graph labeled “Decrease in Demand.” Draw a decrease in demand on that graph. Increase in Demand Decrease in Demand D2 Allow students an opportunity to try to draw a graph that shows a decrease in demand. Draw This Graph

You Draw the Graph Increase in Demand Decrease in Demand On your notes there is a graph labeled “Increase in Demand.” Draw an increase in demand on that graph. On your notes there is a graph labeled “Decrease in Demand.” Draw a decrease in demand on that graph. Increase in Demand Decrease in Demand D2 D2

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. MOVERS 1) Consumers enter the market Examples include an increase in the birth rate, an influx of immigrants, or students arriving in a college town.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. 1) Consumers enter the market $ 2) Consumers have more money This factor only holds true for normal goods. For inferior goods consumers will actually purchase less as they get more money. Whenever people have more money (raise, tax refund, etc.), they are willing and able to spend it on more things.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. 1) Consumers enter the market 2) Consumers have more money 3) Consumers expect good things to happen in the future This factor is not always an absolute case. Sometimes a good thing in the future (like a holiday purchasing season and all of its sales) will cause demand to actually decrease in the present moment. If consumers think they will have more money in the future or that the economy will grow (along with prices), they will purchase now.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. 1) Consumers enter the market Tickle Me Elmo 2) Consumers have more money 3) Consumers expect good things to happen in the future 4) Product is a fad (popular) Items may become more popular due to a shift in tastes. This may happen because of fads, beliefs, culture, or advertising.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. 1) Consumers enter the market 2) Consumers have more money D E L MONa e $ 00 1. o S d A Soda 2. 3) Consumers expect good things to happen in the future 4) Product is a fad (popular) 5) Price of a substitute good increases If an item that serves a similar function (substitute) becomes expensive, consumers will demand more of the original item.

There are six factors that will cause demand to increase. Increases Demand There are six factors that will cause demand to increase. 1) Consumers enter the market 2) Consumers have more money D E L MONa e $ 00 1. ca Cup ke s 4. 2. 3) Consumers expect good things to happen in the future 4) Product is a fad (popular) 5) Price of a substitute good increases When goods are consumed together (complements), a decrease in the price of one makes both more appealing. 6) Price of a complementary good decreases

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. MOVERS 1) Consumers leave the market Examples include a decrease in the birth rate, people moving away, or students leaving a college town for the summer.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. $ 1) Consumers leave the market 2) Consumers have less money This factor only holds true for normal goods. For inferior goods consumers will actually purchase more when they have less money. Consumers will obviously not be able to buy as much if less money is available. This can be caused by unemployment, taxes, etc.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. 1) Consumers leave the market 2) Consumers have less money 3) Consumers expect bad things to happen in the future This factor is not always an absolute case. Sometimes a bad thing in the future (like significantly higher taxes in the next year) will cause demand to actually increase in the present moment. If consumers think they will have less money in the future or that the economy will shrink (along with prices), they will purchase later.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. 1) Consumers leave the market 2) Consumers have less money 3) Consumers expect bad things to happen in the future 4) Product goes out of style Items may become less popular due to a shift in tastes. Products that were once in style may suddenly become out of favor.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. 1) Consumers leave the market 2) Consumers have less money 3) Consumers expect bad things to happen in the future 4) Product goes out of style 5) Price of a substitute good decreases If an item that serves a similar function (substitute) becomes inexpensive, consumers will switch their demand to the substitute.

There are six factors that will cause demand to decrease. Decreases Demand There are six factors that will cause demand to decrease. 1) Consumers leave the market 2) Consumers have less money 3) Consumers expect bad things to happen in the future 4) Product goes out of style 5) Price of a substitute good decreases When goods are consumed together (complements), an increase in the price of one makes both less appealing. 6) Price of a complementary good increases

The Effects of Shifting Demand When the demand curve shifts, it affects quantity and price. Complete the table (on your notes) by deciding whether quantity and price increase or decrease for each scenario. Use the graphs to help you.

The Effects of Shifting Demand When the demand curve shifts, it affects quantity and price. Complete the table (on your notes) by deciding whether quantity and price increase or decrease for each scenario. Use the graphs to help you. Effect on Quantity Effect on Price Increase in Demand Decrease in Demand Show Answers Draw the Graphs

The Effects of Shifting Demand When the demand curve shifts, it affects quantity and price. Complete the table (on your notes) by deciding whether quantity and price increase or decrease for each scenario. Use the graphs to help you. Effect on Quantity Effect on Price Increase in Demand Decrease in Demand Show Answers Increase in Demand Decrease in Demand D2 D2

The Effects of Shifting Demand When the demand curve shifts, it affects quantity and price. Complete the table (on your notes) by deciding whether quantity and price increase or decrease for each scenario. Use the graphs to help you. Effect on Quantity Effect on Price Increase in Demand Decrease in Demand Increases () Increases () Decreases () Decreases () Increase in Demand Decrease in Demand D2 D2

Changes in Demand DIRECTIONS On the front side, fictional newspaper headlines illustrate the market for butter. Determine if the quantity demanded changed (which means only the price of butter has changed), or if the entire demand has changed. If only quantity demanded changed, circle “No Change.” If the entire demand has changed, identify if it was an increase or a decrease, and identify which determinant of demand is responsible. The determinants of demand are listed in the box. On the back side, you will graph these changes. GRAPH CHANGES IN DEMAND For each of the headlines listed on the front side, draw the appropriate change in demand on the graph. Remember, an Increase means the line moves to the right, a Decrease means the line moves to the left, and No Change means the line stays the same. These are the directions for the Class Activity that is included in the download. You may differentiate instruction by using the three different versions, or you may decide to simply use just one version for the whole class.

“Law of Demand” Targets Knowledge Understand the relationship between price and quantity demanded. Reasoning Explain why demand curves might shift. Skill Draw shifts in demand curves.

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