Economic Demand Tutorial The purpose of this tutorial is to review the concept of demand in...
40
Economic Demand Tutorial • The purpose of this tutorial is to review the concept of demand in economics. • Click on the arrows in the lower right corner to work your way through the tutorial. • You can always click the “Home” button to come back to the beginning. • Make sure to finish the quiz at the end! For Teacher s
Economic Demand Tutorial The purpose of this tutorial is to review the concept of demand in economics. Click on the arrows in the lower right corner to
Economic Demand Tutorial The purpose of this tutorial is to
review the concept of demand in economics. Click on the arrows in
the lower right corner to work your way through the tutorial. You
can always click the Home button to come back to the beginning.
Make sure to finish the quiz at the end! For Teachers
Slide 3
Demand Demand is not just simply wanting to own a product.
Remember, to have demand, you must have: 1.The desire to own it.
2.The ability to pay for it. 3.The willingness to buy it.
Slide 4
What Demand Can Look Like There are two ways to represent
demand. One way is through a demand schedule, which you might think
of as a demand chart. Another way is through a graph called a
demand curve.
Slide 5
Demand Schedule In a demand schedule or demand chart, we simply
list the amount of a product that would be demanded at a variety of
prices. According to this demand schedule, when the price is $1,
the quantity demanded will be 20. When the price rises to $2, only
15 will be demanded. PriceQuantity Demanded $120 $215 $310 $45
Slide 6
Demand Curve We can also represent demand in a graph called a
demand curve. The data from the demand schedule is plotted on a
graph. Quantity demanded serves as our X coordinate. Price is our Y
coordinate. Example: At $1, the quantity demanded is 20. We can
then graph the coordinate pair (20, $1)
Slide 7
Compare the Two Demand Schedule Price Quantity Demanded Point
on Graph $120A $215B $310C $45D
Slide 8
Quick Check #1 According to the demand schedule, what is the
quantity demanded when the price is $4? (Click your answer below.)
5 10
Slide 9
Correct! You are correct! Lets move on!
Slide 10
Sorry! That was incorrect. Try again.
Slide 11
Quick Check #2 Check out this demand schedule. Do you notice a
pattern? What happens to demand as price goes up? Price Quantity
Demanded $.25100 $.5075 $.7550 $1.0025 The demand increases. The
demand decreases.
Slide 12
Correct! You are correct! As price goes up, the demand
decreases. Lets move on!
Slide 13
Sorry! That was incorrect. Try again.
Slide 14
Quick Check #3 Based on what you have learned so far, choose
the statement below that is correct: As price goes down, demand
goes up. As price goes down, demand goes down.
Slide 15
Correct! You are correct! As price goes down, the demand
increases. Lets move on!
Slide 16
Sorry! That was incorrect. Try again.
Slide 17
Law of Demand As you have already figured out, price has an
effect on demand. This is known as the Law of Demand. The Law of
Demand states that the demand for a product varies inversely with
its price. In other words: As price goes up, demand goes down. As
price goes down, demand goes up.
Slide 18
Changes in Demand Factors other than price can cause changes in
demand These other factors include: 1.Consumers income 2.Consumers
tastes 3.Prices of related products (substitute and
complements)
Slide 19
Consumers Income Naturally, if your income increases, you will
be more able and willing to buy more products at any price. And of
course, if your income decreases, you will be less willing and able
to buy goods regardless of price.
Slide 20
What would you do? Nike has come out with a new popular line of
basketball shoes. Unfortunately, your boss tells you he has to cut
back your hours at work so your pay check will be $100 - $200 less
this month. Your demand for the new Nike shoes would probably:
(Remember, demand is desire, ability, and willingness to buy.) Buy
the shoes! Pass on the shoes.
Slide 21
Great choice! Like most consumers, you would cut back on your
purchases when your income decreases. That means a decrease in
demand. Lets see what else can change demand.
Slide 22
Are you sure? Most consumers recognize that when their income
decreases, they should cut back on spending. Losing hours at work
means you have less money to spend on necessities like groceries,
rent, and bills. The shoes might be great, but you should consider
saving your money for more important things.
Slide 23
Consumer Tastes Advertising, trends, and even seasons can
affect consumer tastes. Example: Demand for sweaters goes up in the
fall and winter. Swimsuits are in higher demand in the spring and
summer. Think about Oprahs Book Club. When Oprah picks a new book
for her club, what will happen to the demand for that book? It will
increase.It will decrease.
Slide 24
Youre correct! Endorsements from celebrities can definitely
increase demand! Lets move on!
Slide 25
Sorry! Maybe you dont believe in the power of Oprahs sway, but
celebrity endorsements DO create an increase in demand for a
product.
Slide 26
Substitutes Substitutes are product that can be used in place
of another. Example: Margarine can be substituted for butter.
Increase in the price of one good can cause an increase in demand
for a cheaper substitute.
Slide 27
Complements Complements are goods that go together. Example:
Hot dogs and buns. Decreasing the price of one good increases the
demand for its complement.
Slide 28
Quick Check #4 Butter and corn would be considered: Substitutes
Complements
Slide 29
Thats correct! Great job! Lets try another one!
Slide 30
Oops! Wrong choice! Lets try another one!
Slide 31
Quick Check #5 Coke and Pepsi would be considered: Substitutes
Complements
Slide 32
Thats correct! Great job! Lets try another one!
Slide 33
Oops! Wrong choice! Lets try another one!
Slide 34
Quick Check #6 Peanut Butter is on sale this week. What will
happen to the demand for jelly? Demand for jelly will go down.
Demand for jelly will go up.
Slide 35
Thats correct! Great job! Lets try another one!
Slide 36
Oops! Wrong choice! Lets try another one!
Slide 37
Quick Check #7 If coffee goes on sale, what will happen to the
demand for tea? Demand for tea will go down. Demand for tea will go
up.
Slide 38
Thats correct! Great job! Lets try another one!
Slide 39
Oops! Wrong choice! Lets try another one!
Slide 40
Assignment Using the following information, create a demand
schedule & graph the demand curve: If Pistons tickets are $100
each, I will buy one for me and one for my husband. If the tickets
are $50, I will buy four and take my husband and my parents. If the
tickets are $200, Ill buy my husband a ticket and send him to the
game. If the tickets, are $25, I will be generous and buy eight to
take my entire family. Complete your demand schedule and graph on a
separate sheet of paper and turn it in. Go back through this
tutorial if you need help. For Teachers
Slide 41
Michigan Standards and Benchmarks Met with this Tutorial Law of
Demand E.1.3.2 Explain the law of demand and analyze the likely
change in demand when there are changes in prices of the goods or
services, availability of alternative (substitute or complementary)
goods or services, or changes in the number of buyers in a market
created by such things as change in income or availability of
credit. Price in the Market E 1.2.2 Analyze how prices send signals
and provide incentives to buyers and sellers in a competitive
market.