1. Demand Chapter 4.1

2. The law of demand  This states that if the price is lower of a certain thing consumer will buy more of it.  This goes as the opposite affect the higher the price the less the consumer will buy.  The law of demand is the result of two patterns that overlap which are substitution effect and income effect.  vs

3. The Substitution Effect  The substitution effect takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good.  Example: Instead of buying pizza on Monday and Fridays buy pizza on Monday and eat a bagel on Friday.  This may also apply to drop in prices

4. Income effect  Income effect is Purchasing fewer things without increasing your purchases.  Important thing to remember is that economists measure consumption in the amount that is bought, not the amount spent to but it  The income effect also works also works when the price is drooped so you feel wealthier.

5. A Demand schedule  The law of demand explains how the price of any item affects the quantity demanded of the item.  A demand schedule is a table that lists the quantity of a good that a person will purchase at each price in a market.  When u add up the demand schedules of every buyer in the market, you can create a market schedule.  A demand schedule show the quantities demanded at each price by all consumers.  For example: a restaurant owner would predict the total sales at several different prices.

6. The Demand graph  Is a graphic representation of a demand schedule.  How do economists create a demand curve? When they transfer numbers from a demand schedule to a graph, they always label the vertical axis with lowest possible prices at the bottom and the highest at the top.  Likewise, they always label the quantities demanded on the horizontal axis with the lowest possible quantity at the right.

7. Limits of a demand  The market demand curve can be used to predict how people will change their buying habits when the price of a good rises or fall.  The market demand curve is only accurate for one very specific set of market conditions.  For example: if a nearby factory were to close, so that fewer people were in the area at lunchtime, the pizzeria would sell less pizza even if the price stayed the same.

8. Understanding demand  Demand is the desire to own something and the ability to pay for it.

9. Movie scene  http://www.imdb.com/title/tt0221027/ http://www.imdb.com/title/tt0221027/

10. 5 question quiz  1) what is a demand schedule?

11. Question 2  What is a demand curve accurate for ?

12. Question 3  What is the law of demand?

13. Question 4 The law of demand is the result of not one pattern of behavior, but of two separate patterns that overlap. What are the patterns?

14. Question 5  What is demand exactly?

15. Congratulations

16. Answer to 1  Is a table that lists the quantity of a good that a person will purchase at each price in a market.

17. Answer to question 2  The demand curve is only accurate for one very specific set of market conditions.

18. Answer to question 3  As the prices go down. The quantity demanded goes up  As the prices go up the quantity demanded goes down.

19. Answer to question 4  The substitution effect &the income effect

20. Answer to question 5  Is the desire to own something and the ability to pay for it