1. Chapter 4 : Lesson 1 What is Demand

2. Essential Question:
What is the relationship between the price of an item and the quantity demanded?

3. Microeconomics: branch of economic theory that deals with behavior and decision making by small units such as individuals a firms

4. Demand: combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment.

5. Law of Demand: rule stating that more will be demanded at lower prices and less at higher prices

6. Law of Demand Part 1. As PRICE increases, DEMAND decreases
Part 2. As PRICE decreases, DEMAND increases
Price goes up
Demand goes down
THEN
Demand goes up
Price goes down
THEN

7. The Law of Demand
When a good’s price is lower, consumers will buy more of it
When a good’s price is higher, consumers will buy less of it

8. Demand Curve: graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time

9. Market Demand Curve: This curve illustrates the quantities of apple juice demanded at each price ay all consumers in the market.
Price of a bottle of Apple Juice
Quantity demanded per week
$0.75
800
$1.00
650
$1.25
500
$1.50
350
$1.75
200
$2.00 50

10. Change in Demand
A demand curve is only accurate as long as there are no changes other than price that could affect a consumer’s decision
When factors other than price (non-price factors) affect the demand curve, the entire curve shifts to the left or to the right

11. Change in Demand: Recently, ECHS changed its snack cart from name brand snacks to generic snacks. As a result, Ms. Williams needed to buy fewer snacks. The decrease in demand is shown by a shifting demand curve.

12. How does Scarcity affect Demand?
If there is a scarcity of an item, the demand goes up.
Ex. Gasoline

13. Incentive: something that motivates

14. Marginal Utility: additional satisfaction or usefulness obtained from acquiring or consuming one or more unit of a product

15. Demand Schedule
A demand schedule shows the likely number of purchases based on a series of arbitrarily chosen prices

16. Review Question:
Chapter 4 : Lesson 1
Read pages and answer Review Questions on page 106. Hand in Google Class Room.