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BELL RINGER

BELL RINGER. List the 3 things that come to mind when you hear the word DEMAND!. What is Demand?. Unit 2 Chapter 4 Section 1 . Demand…. Is the desire , ability and willingness to buy a good or service. Is the desire to own something and the ability to pay for it /.

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BELL RINGER

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  1. BELL RINGER List the 3 things that come to mind when you hear the word DEMAND!
  2. What is Demand? Unit 2 Chapter 4 Section 1
  3. Demand…. Is the desire, ability and willingness to buy a good or service. Is the desire to own something and the ability to pay for it /.
  4. ExampleLexus RX350 Do I have a real demand for this car ? Why or why not ? $40,000-$50,000

  5. Micro-Economics

    - The part of economics that looks at behavior and decision making by individuals. Economics on a small scale
  6. Law of Demand Consumers will buy more of good when its price decreases and less when its price increases.
  7. Two Variables of Demand Price (P) Quantity Demanded (Qd) The amount of a good or service that a person is willing to buy at a certain price. This is the amount that people are able and willing to pay for a good or service.
  8. Example: Cookies Cookies for Sale!!! Does the price matter in how many cookies you buy?
  9. Demand Schedule Shows the different Quantities demanded of a product at different price levels This is shown on a chart
  10. Demand Schedule This chart shows how many DVDs Emily will buy at different prices.
  11. Demand Curve…. A graph showing the quantity demanded at every price that could happen in the market.
  12. o Demand Curve o o $5 $10 $15 $20 $25 $30 Quantity Demanded Price o o o 0 1 2 3 4 5 6 7 8 Quantity
  13. Demand Curve…. Is downward sloping Each buyer can have their individual demand curve Based on individual demand. All individual demand curves are then combined to get the market demand curve.
  14. The Law of Demand The Law of Demand states that the Quantity Demanded has an inverse relationship with price.

  15. Marginal Utility

    Extra satisfaction received from using or acquiring more than one product. Example: Cokes
  16. The extra happiness that a person receives from a good decreases as they consume more of the product Diminishing Marginal Utility Example: Candy
  17. Define and illustrate the Law of Demand Bell Ringer

  18. Factors that Effect Demand

  19. Factors that Change Quantity Demanded Income Effect Substitution Effect The change in Quantity Demanded because of the relative price of the product. Example: Orange Juice Change in Quantity Demanded because of a change in price that alters consumers real income. Example: Dresses
  20. Changes In Demand Shift of the Demand Curve when people buy different amounts of a product at every price. Other factors change but Price stays the same.
  21. Which way does the Demand Curve shift ? Demand IncreasersThe curve shifts to the Right. Demand Decreases The curve shifts to the Left Right Left
  22. What it looks like when a demand Curve shifts…

  23. What causes Demand to shift besides price ?

    T I N E A R
  24. Tastes & Preferences Taste & preferences Demand Taste & preferences Demand Example: pepperoni pizza
  25. Income of the consumer Consumer Income Demand Consumer Income Demand Example: Income of $100 Dress for $50 new
  26. Number of Buyers Number of buyers Demand Number of buyers Demand More people buying so they will demand more
  27. Expected future price P exp then D now P exp then D now Example: GAS
  28. Advertising Advertising Demand & Advertising Demand Example: McDonalds
  29. Related Good Price The price of goods associated with the product Substitutions Compliments Example: Xbox 360 and Games If the Price of the Xbox 360 Games Increase Then the demand for the Xbox 360 Game system will likely Decrease. P Comp. Then Demand P Comp. Then Demand Example: chicken and beef If the Price for Chicken Increases Then the demand for Beef Increases P sub. Then Demand P sub. Then Demand
  30. BELL RINGER Name things that are elastic?
  31. Elasticity of Demand? Unit 2 Chapter 4 Section 3
  32. Elasticity of Demand…. A measure of how consumers react to a change in price. Example: Rubber band.

  33. Inelastic:

    - Describes demand that is not very sensitive to a change in Price!
  34. Elastic Vs. Inelastic Elastic Inelastic Is not very effected by a price change. Salt This is when a good is very sensitive to a price change. Example: Cookies
  35. Calculating Elasticity To compare elasticity of demand- Take the percentage Change in the demand of a good and divide this number by the percentage change in the price of a good.
  36. Elasticity = Percentage Change in Qd Percentage Change in Price Percentage Change = Original Number –New Number Original Number Calculating Elasticity Formula Calculating Percent Change X 100
  37. Unitary Elastic This is when the percentage change in quantity demanded is exactly equal to the percent change in the price.
  38. Demand Curve…. Is downward sloping Each buyer can have their individual demand curve Based on individual demand. All individual demand curves are then combined to get the market demand curve.

  39. Total Revenue

    The total amount of money a firm receives by selling goods or services.
  40. Total Revenue- is determined by two factors The Price of the Goods The quantity sold
  41. Name: Alice Age: 55 Yearly income: $55,000 Occupation: Sales Manager, Medical Instruments Cooperation Other Factors: Has Diabetes that requires daily insulin. Activity -Predict Alice’s Elasticity of demand for each of the 5 goods and give reasons for predictions. -How much of Alice's elasticity of demand is affected by substitute goods, the relative importance of goods, necessities versus luxuries, and change over time. Frozen Orange Juice Italian Sports Car Insulin Cellular Phones House or apartment
  42. BELL RINGER Name 1 item that is normally inelastic. Explain your answer.
  43. What is supply ? Unit 2 Chapter 5 Section 1

  44. How do producers decide how much they will produce?

    The Law of Supply
  45. The Law of Supply…. Suppliers offer more of a good at a higher price. Quantity Supplied (Qs) – the amount a supplier is willing and able to supply at a certain point.
  46. Law of Supply Price Supply Price Supply As Price falls … Quantity Supplied falls As Price increases.. Quantity Supplied increases

  47. A chart that lists how much of a good a supplier will offer at different prices.

    Supply Schedule
  48. Supply Curve… A graph of the Quantity Supplied of a good at different prices Always slopes upward. Can be individual or market.
  49. Elasticity of Supply A measure of the way quantity supplied reacts to a change in price
  50. When supply is Elastic, a small increase in price has a big effect on supply. Price Supply
  51. BELL RINGER Draw a visual that explains what happens when supply is elastic. Then explain your visual.
  52. Review When supply is Elastic, a small increase in price has a big effect on supply. Price Supply
  53. Marginal Product of labor Increasing marginal returns Diminishing marginal returns Fixed cost Variable cost Total cost Marginal cost Marginal revenue Operating cost Vocabulary Terms Chapter 5 section 2 Put definitions in your own words.
  54. Costs of Production ? Unit 2 Chapter 5 Section 2
  55. Labor & Output The Question that every Business owner has to ask is….. How many workers should I hire?
  56. Marginal product of labor.. The Change in the out put from hiring one additional unit of labor. It is called the marginal product because it measures the change in output at the margin, where the last worker has been hired or fired.
  57. Marginal Product of labor Increasing Marginal Returns Decreasing marginal returns. This is a level of production in which the marginal product of labor decreases as the number of workers increase. This is a level of production in which the marginal product of labor increases as the number of workers increases.
  58. Production costs Fixed Costs Variable Costs A cost that rises or falls depending on how much is produced. This is a cost that does not change, no matter how much of a good is produced.
  59. Production Costs Total Cost Marginal Cost The cost of producing one more unit of a good. This is the Fixed costs plus variable costs.
  60. Mix cost is the same thing as total cost
  61. A. Rent B. Electricity C. Labor D. Heat Example question All of the following are examples of variable costs except?
  62. A. Rent B. Electricity C. Labor D. Heat Example question All of the following are examples of variable costs except?
  63. Setting Output Marginal Revenue Operating Cost The cost of operating a facility, such as a store or factory. The additional income from selling one more unit of a good, sometimes equal to price.
  64. BELL RINGER What is an example of a fixed cost?

  65. What causes supply to Change?

    Unit 2 Chapter 5 Section 3
  66. C T E G N P Cost ( price of resources) Technology Expected future price Government Policies Number of sellers Physical
  67. Cost (price of resources) C then S C then S Example: Sugar
  68. Technology Cost of technology decreases then the producer buys more technology. Tech Supply Example: Robots
  69. Expected Future Price P exp. Supply now P exp. Supply now Example: Pine Trees
  70. Government policies Taxes, Subsidy & Regulations Tax Supply Subsidy Supply Reg. Supply Tax Supply Subsidy Supply Reg. Supply
  71. Number of Sellers More Sellers More Competition N S More Comp. N S Less Comp. Example: Coke and Pepsi
  72. Physical Random Acts of Nature Harmful S Example: Natural Disaster or Terrorism Beneficial S Example Absence of Disaster Good weather.
  73. BELL RINGER Why do we have minimum wage and what is it set at currently ?

  74. Combining Supply & Demand: Balancing the Market

    Unit 2 Chapter 6 Section 1
  75. Balancing the Market Equilibrium Disequilibrium Describes any price or quantity not at equilibrium when quantity supplied is not equal to quantity demanded in the market. The Point where quantity demanded and quantity supplied are equal.
  76. Equilibrium The Place where supply and demand meet is market Equilibrium. The market trend toward disequilibrium.
  77. Excess Excess Demand Excess Supply When Quantity Supplied is more than quantity demanded. When Quantity Demanded is more than Quantity Supplied.
  78. Government Intervention Price ceiling Price Floor A minimum price for a good or service. Mandated by the government A maximum Price that can be legally charged for a good or service. Set by the government
  79. Rent Control… A price ceiling placed on rent . The purpose of this to keep the price of housing low so that all people can be come residents if they desire.
  80. A. Bribery being used to allocate scare apartments B. Poor maintenance in rent controlled apartment buildings C. a surplus of apartments D. Rent-controlled apartments in the hangs of wealthy individuals. Example Questions Which of the following has not been cited as a cost of rent control?
  81. A. Bribery being used to allocate scare apartments B. Poor maintenance in rent controlled apartment buildings C. a surplus of apartments D. Rent-controlled apartments in the hangs of wealthy individuals. Example Questions Which of the following has not been cited as a cost of rent control?
  82. Example of graph
  83. Price floors The best known price floor is minimum wage. Which sets a minimum price that an employer can pay an employee for an hour of labor The federal government sets the base for minimum wage the state government can set their own level even higher if desired.
  84. BELL RINGER What is the most well known example of a Price floor?

  85. Changes in Market Equilibrium

    Unit 2 chapter 6 section 2
  86. Shifts in Supply….. Sometimes causes…. Surplus
  87. Surplus Situation in which Quantity supplied is greater than Quantity demanded, this is also known as excess supply Example: C.D.s
  88. Change in Supply
  89. Shifts in Demand Can cause problems such as excess demand Tastes and preferences go up in a short amount and supply can not keep up.
  90. The problem of Excess Demand Shortage Search costs The financial and opportunity costs consumers pay when searching for a good or service. Situation in which quantity demanded is greater than quantity supplied, also known as excess demand.
  91. Change in Demand
  92. Long lines at stores B. Limits on the quantities purchased C. Driving to a different town to find a product D. Increasing the cost of a good that is in high demand Example Question Which of the following are forms of search costs?
  93. Long lines at stores B. Limits on the quantities purchased C. Driving to a different town to find a product D. Increasing the cost of a good that is in high demand Example Question Which of the following are forms of search costs?
  94. BELLRINGER Identify a situation that could cause a shortage in demand?

  95. The Role of Prices

    Unit 2 Chapter 6 section 3
  96. The advantages of Prices Prices can work as incentives Prices as signals Flexibility The price system is a free system.
  97. Flexibility Supply Shock Rationing A system of allocating scarce goods and services using criteria other than price. A sudden Shortage of a good.
  98. The Black Market This is a market where goods are sold illegally. This causes problems for the free market.
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