1. The Law of Demand

2. What is demand? buy a good or service Demand is the desire, willingness, and ability to buy a good or service want First, a consumer must want a good or service willing Second, a consumer must be willing to buy that good or service resources Third, the consumer must have the resources available to buy it

3. The Individual Demand Schedule price A demand schedule is a table that lists the amount of a product or service that someone is willing to buy depending on the price of that product or service. more cheaper For example, George is not willing to pay $60 each for a video game, but would be willing to buy more video games if they were cheaper.

4. The Individual Demand Schedule PriceQuantity $600 $401 $301 $202 $103 $55

5. The Demand Curve demand schedule The Demand Curve is a graphic representation of the demand schedule

6. The Demand Curve

7. people are more likely to buy it and buy more of it. The demand curve slops down from left to right because when a good or service becomes cheaper, people are more likely to buy it and buy more of it. For example, when gas becomes cheaper, more people will drive more and buy cars that use more gas

8. The Law of Demand lessmore The concept that people are normally willing to buy less of a product if the price is high, and more of it if the price is low http://www.khanacademy.org/finance- economics/microeconomics/v/law-of-demand http://www.khanacademy.org/finance- economics/microeconomics/v/law-of-demand

9. Which direction does a demand curve slope?

10. Why does the demand curve slope down and to the right?  As the price falls the quantity demanded by consumers will fall.  [As the price rises the quantity demanded by consumers will fall.]  As the price rises the quantity demanded by consumers will rise.

11. The Law of Diminishing Returns utility, Almost everything that we buy provides utility,  meaning the pleasure, usefulness, or satisfaction we get from using the product. more The utility we get from consuming more of a product usually changes though.

12. The Law of Diminishing Returns For example, when eating pizza, you may be very hungry before eating the first slice and therefore get the most utility from the first slice. the less utility you receive from each slice.  However, the more slices you eat, the less utility you receive from each slice.

13. The Law of Diminishing Returns When we buy something, we ask ourselves the utility we get from a purchase and whether it is worth the price we have to pay. pay as much Because utility diminishes as we consume more and more of a product, it is reasonable to believe that people are not willing to pay as much for the second item as they did the first

14. The Law of Diminishing Returns first unit So when the demand curve slopes downward, it simply tells us that we would be willing to pay the highest price for the first unit we consume.  And a slightly lower price for the next unit  And an even lower price for the third unit

15. The Law of Supply

16. What is Supply? that producers are willing to sell Supply refers to the various quantities of goods or services that producers are willing to sell at all possible market prices. output Supply normally refers to the output Buyers Buyers demand different quantities of a good depending on the price price that buyers are willing to pay  Suppliers offer different quantities of a product depending on the price that buyers are willing to pay

17. Individual Supply Schedule PriceQuantity $50100 $4090 $3070 $2030 $1010 $51

18. The Supply Curve opposite direction The supply curve slopes in the opposite direction of the demand curve up The supply curve slopes up from left to right because the higher the price of an item, the more of that item producers are willing to make. For example, when the price of gasoline at the pumps increases, refineries will produce more gasoline

19. The Supply Curve

20. The Law of Supply rises falls As the price rises, the supply rises. As price falls, supply falls. Why? incentive The higher price of a good, the greater the incentive is for a producer to supply more of a good to the buyers higher profit The producer will expect to make a higher profit because of the higher price

21. The Law of Supply http://www.khanacademy.org/video/law-of-supply

22. What direction does the supply curve slope?

23. Why does the supply curve slope up and to the right?  As the price rises the quantity supplied by producers will fall.  [As the price falls the quantity supplied by producers will rise.]  As the price rises the quantity supplied by producers will rise.

24. Market Supply and Market Demand the same good or service If you combine the supply schedules of all businesses that provide the same good or service, the total is called the market supply of a specific good or service If you combine the total of all consumers’ demand of a specific good or service, the total is called the market demand.

25. The Influence of Price Price Price is the most significant influence on the quantity supplied of any product For example, you are offering your services for sale when you look for a job.  Your economic product is your labor, and you would probably be willing to supply more labor for a high wage, or price, than you would for a low one

26. http://abcnews.go.com/Nightline/video/silly-bandz- latest-fad-11686769 http://abcnews.go.com/Nightline/video/silly-bandz- latest-fad-11686769 http://www.youtube.com/watch?v=Ng3XHPdexNM