Unit #1 Benchmark TEST

1. Unit #1 Benchmark TEST 25 questions Take out a pencil and clear your desk. 30 minutes

2. Warm Up #10 When I buy something, I usually expect… List characteristics of the goods or services that are supposed to be provided. 5 minutes

3. Class Confession • We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. • We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox. • We will graduate on time May 20, 2016 and become productive citizens in society.

4. Scaffold understanding of the standard(s) and/or element(s).Paraphrase the standard(s) and/or element(s).Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. SSEMI2 You will be able to explain how the Law of Demand (want), the Law of Supply (amount), prices (values), and profits (earnings) work to determine production and distribution (delivery) in a market (shop) economy.

5. The Law of Demand What is Demand? You will be able to explain how the Law of Demand, the Law of Supply, prices, and profits work to determine production and distribution in a market economy.

6. Chapter 4: Demand • KEY CONCEPT Demand is the willingness to buy a good or service and the ability to pay for it. • WHY THE CONCEPT MATTERS *The concept of demand is demonstrated every time you buy something. Think of five goods or services that you have purchased. Which of them would you stop buying if the price rose sharply?

7. 2 important conditions of Demand • 1. People are willing to purchase it • 2. People are able to purchase it • $200

8. So what influences YOU to purchase an item or not?

9. The Price As the price increases consumers buy less. P ↑, QD↓ P= Price QD= Quantity Demanded As the price decreases consumers buy more. P ↓, QD↑

10. There is an inverse relationship between a product’s price and the quantity demanded. *Law of demand explains consumer behavior as well as economic concept. This is the Law of Demand

11. How do producers come up with these prices anyway?

12. Demand Schedules • KEY CONCEPTS • Demand schedule- a table that summarizes one consumer’s behavior *Lists how much of an item an individual will buy at each price

13. Quantity Demanded to Price

14. Demand Curves • KEY CONCEPTS • Demand curve-a graph that shows amount of an item a consumer will buy at each price • Demand curves graphically show information found on demand schedules • Vertical axis shows prices • Horizontal axis shows quantities demanded • Demand curves slope down from upper left to lower right

16. Demand schedules show in table format the quantity of goods and services consumers are willing and ableto purchase at each price in the market. Demand curves show in graph format the data listed in demand schedules How much of goods and services consumers will buy at a price What demand schedules and demand curves illustrate?

17. Closure Activity #8:Vera Wang: Designer in Demand p. 104 • Responding to Demand • Sophisticated wedding gowns not available for career women • Wang created line of wedding gowns to meet demand • Style became popular; other designers imitated • Wang created more demand for her style by designing other products • Answer Analyzing Cause and Effect D. on the lines below. 5 minutes _________________________________________________________ __________________________________________________________ _______________________________________________________

18. Show What You Know! Georgia Milestone Practice Question In economics, the amount of a product a consumer is willing and able to buy at various possible prices during a given time is called Supply Demand Substitution Utility

19. Show What You Know! Georgia Milestone Practice Question If the price for an item continues to increase what will happen to the quantity demanded It will fall It will fluctuate It will increase It will remain the same

20. Show What You Know! Georgia Milestone Practice Question The quantity of goods that consumers are willing and able to buy at a series of prices can be listed on a demand Graph Schedule Curve Line

21. Show What You Know! • Georgia Milestone Practice Question • When people use their resources so that marginal • benefits exceed marginal costs, they • Make rational economic decisions • Make irrational economic decisions • Eliminate the opportunity costs of decisions • Fail to use resources efficiently

22. Show What You Know! • Georgia Milestone Practice Question • When people make more money they usually • Save more • Spend more • Sell more things • Have more interest

23. THE END • Any Questions? • Any Questions? • Any Questions? • Any Questions? • Any Questions? • Any Questions? • Any Questions?

24. Warm Up #11 Draw demand curves from the demand schedules in each group from the white board. 5 minutes

25. Class Confession • We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. • We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox. • We will graduate on time May 20, 2016 and become productive citizens in society.

26. SSEMI3You will be able to explain how the markets, prices, and competition influence economic behavior.a. Identify and illustrate on a graph factors that cause changes in market demand. Determine and define vocabulary. Identify key terms within the standard. Define each term. ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________

27. Scaffold understanding of the standard(s) and/or element(s).Paraphrase the standard(s) and/or element(s).Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. You will be able to explain (describe) how the markets, prices, and competition (rivalry) influence (effect) economic behavior.a. Identify (recognize)and illustrate (demonstrate) on a graph factors (issues) that cause changes in market demand.

28. Determinants of Demand You will be able to explain how the markets, prices, and competition influence economic behavior.a. Identify and illustrate on a graph factors that cause changes in market demand.

29. What Factors Affect Demand? • KEY CONCEPTS • Law of diminishing marginal utility • marginal benefit of each additional unit declines as each unit is used • Income effect • amount people buy changes as purchasing power of their income changes • Substitution effect • amount people buy changes as they buy substitute products

30. Change in Quantity Demanded • KEY CONCEPTS • Change in quantity demanded • change in amount consumers buy because of change in price • each change shown by new point on demand curve • Does not shift the demand curve itself

31. Change in Quantity Demanded • EXAMPLE: Changes Along a Demand Curve • Individual demand curve • change in quantity demanded shown by movement to right or left along the curve • Market demand curve • shows similar information for entire market

32. Change in Demand • KEY CONCEPTS • Change in demandis caused by a change in the marketplace • prompts people to buy different amounts at every price • also called shift in demand Six factors can cause change in demand

33. Non-Price Determinants of product demand shifts: • C-onsumer tastes and preferences • R-elated Goods Price/Complementary goods • I- ncome • M-arket Size • E-xpectations (consumer) • S-ubstitues

34. Change in Demand • FACTOR 1 Consumer Tastes and Preferences • Consumer tastes change; products gain and lose popularity • Consumers demand a greater amount of popular items at every price • Sellers advertise to create demand for products • i.e. Air Force Ones

35. Change in Demand • FACTOR 2 Related Goods/Complements • Complements—goods that are used together • Rise in demand for one increases the demand for the other • If price of one product changes, demand for both changes in same way • if price of one rises, demand for both will drop

36. Change in Demand • FACTOR 3 Income • A person’s ability to buy goods changes as his or her income changes • As incomes of most consumers in a market change, so does total demand • Normal goods- demanded more when consumers’ incomes rise • Inferior goods- demanded less when consumers’ incomes rise

37. Change in Demand • FACTOR 4 Market Size • As number of consumers in an area changes, so does market size • i.e. Moody Air Force Base • Demand for most goods changes as market size changes • rise in population leads to increased demand • decrease in population leads to decreased demand

38. Change in Demand • FACTOR 5 Consumer Expectations • Expectations about future price of items affect individual behavior • expected rise or fall in price can decide whether to buy now or wait • Expectations of all consumers in a market affect demand • example: because cars go on sale at end of summer, demand goes up then

39. Change in Demand • FACTOR 6 Substitutes • Substitutes—products used in place of each other • if price of substitute drops, people buy it instead of original item • if price of original item rises, people will buy substitute • $2 • $1.50

40. Show What You Know! • Georgia Milestone Practice Question • When economics refer to “demand” they mean which of • the following? • How much satisfaction buyers receive from a purchase • How much consumers will purchase at different prices • How much sellers will supply at different prices • How much people want the product if its free

41. Show What You Know! • Georgia Milestone Practice Question • Which of the following is an attempt by a firm to increase the demand for its product? • the imposition of a price ceiling on the product • an advertising strategy designed to change consumer tastes and preferences • a marketing strategy to make the good scarce and therefore more expensive • a production strategy to flood the market with the good or service

42. Show What You Know! • Georgia Milestone Practice Question • The principle that producers will only produce goods that • will yield them a profit because it is something • consumers want is known as the: • Law of diminishing marginal utility • Law of demand • Equity price • Price elasticity

43. Closure Activity #9 • Worksheet 5A • Worksheet 5B • Worksheet 5C • Determinants of Demand Worksheet

44. THE END Any Questions? Any Questions? Any Questions? Any Questions? Any Questions? Any Questions? Any Questions? • 44

45. Warm Up #12 Get a Math Skills: Demand Calculating Elasticity of Demand off of the podium. 5 minutes

46. Class Confession • We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class. • We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox. • We will graduate on time May 20, 2016 and become productive citizens in society.

47. SSEMI3cc. Define price elasticity of demand and supply. Determine and define vocabulary. Identify key terms within the standard. Define each term. ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________ ________________________________________

48. Scaffold understanding of the standard(s) and/or element(s).Paraphrase the standard(s) and/or element(s).Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1. Define price elasticity (resistance) of demand (want) and supply (quantity).

49. Elasticity of Demand SSEMI3c c. Define price elasticity of demand and supply.

50. KEY CONCEPT Buying habits affected by type of product and importanceto consumer Elasticity of demand The degree or measure of how responsive consumers are to price changes Elasticity of Demand