BellringerAs always, go get your notebook
How much would you be willing to pay for this laptop computer? (what would be the most you
would be willing to pay)
MANKIWCHAPTER 4 ALL WEEK
Write answers on board
• Factors might change our answers?
Today
• Topic: Law of Demand and Consumer Surplus
• Why important: It’s the consumption side of our economy
What is “demand”?
• The amount of a good or service that a consumer is willing and able to buy at various prices during a given time period
Create Demand Schedule
Price Quantity Demanded
Graph on boardShow proper labels
Proper Economics Supply/Demand Graph
Price$$$$P$
Quantity# of goods/serviceQ
TITLE: _______ ___ Market
You try one
Widget Demand Schedule
PriceQuantity
Demanded
5 10
4 17
3 26
2 38
1 53 Demand curve reason ?
D
Law of Demand
Law of Demand: As price declines, quantity demanded increases. As price increases, quantity demanded decreases
Law of Demand: P Therefore Q demand
P Therefore Q demand
Demand curve always slopes down
A linguistic problem
• Does P$ change the actual demand of a good?
• NO, P$ change only changes quantity demanded
• “thinking on the margin”
• Chicken example D
D
Consumer SurplusConsumer surplus is the difference between the
amounts people would willingly pay for various amounts of specific goods and the amounts they do pay at market prices.