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ISS Unit 6 2013 Slide 2 Using a Venn Diagram, compare and contrast Private and Public goods. Slide 3 I can explain and give examples of how numerous factors influence the supply and demand of products. Slide 4 How do you feel about economics thus far? Are you confused? What do you need more help on this unit? Anything that you just dont get? Slide 5 Any place where people come together to buy and sell goods or services. Slide 6 Slide 7 It is the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period. Slide 8 Slide 9 DEMAND QUANTITY DEMANDED This is my willingness and ability to buy something at a particular price This is the actual amount (or number) of units purchased at a specific price. Slide 10 A law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases. If price then quantity demanded Slide 11 They move in opposite directions because of the law of diminishing marginal utility, which states that as a person consumes additional units of a good, eventually the utility or satisfaction gained from each additional unit of the good decreases. Slide 12 Consider the utility that a person obtains from drinking glasses of lemonade on a hot day. Suppose the first glass just begins to quench one's thirst. After two glasses, however, the thirst has all but disappeared. A third glass of lemonade might also provide some utility, but not as much as the second glass. A fourth glass cannot be finished. In this example, the marginal utilitythe addition to total utility that one obtains from drinking lemonade on a hot dayis increasing for the first two glasses but is decreasing beginning with the third glass and would continue to decrease if one were to consume further glasses. Slide 13 Individuals consume goods and services because they derive pleasure or satisfaction from doing so. Economists use the term utility to describe the pleasure or satisfaction that a consumer obtains from his or her consumption of goods and services. Utility varies from individual to individual according to each individual's preferences. Slide 14 PLC: Students will be creating their own demand curves. See the Day 5 Demand Curve Activity on Sharepoint Slide 15 Shifts in Supply & Demand Some changes in circumstance will cause either demand or supply to shift Left (Decrease) or Right (increase) QoQo Q1Q1 Q2Q2 QoQo Q1Q1 Q2Q2 DEMAND SUPPLY Slide 16 Factors that Shift Demand When income demand for goods/services also decreases. Change In Income Slide 17 Factors that Shift Demand Price of substitutes (one item used instead of another) When the price of a good increases, demand for its substitute increases. Slide 18 Availability of Substitutes When availability of a good increases, demand for its substitute decreases. Slide 19 Factors that Shift Demand Price of Complementary Goods (goods that often are used together). When the price of a good increases, the demand for its compliment decreases Slide 20 Availability of Complimentary Goods When the availability of a good increases, the demand for its compliment increases. Slide 21 . Elasticity how the quantity of a product bought/sold reacts to price, income, etc. A product is elastic if the amount of it demanded stretches and shrinks based on price (luxury items like electronics) ) A product is inelastic if the amount of it demanded pretty much stays constant despite price (necessities like gas and water) Slide 22 Factors that Shift Demand Change in the number of buyers = If the population of a community demand for products Slide 23 Factors that Shift Demand Change in styles, tastes, habits. THEN NOW Slide 24 Factors that Shift Demand Change in Expectations When people expect either a shortage of a good or an increase in its price, their demand today will increase. Slide 25 http://www.youtube.com/watch?v=8- yWKgZv9JY http://www.youtube.com/watch?v=8- yWKgZv9JY Slide 26 Elasticity of Demand Activity Slide 27 1.Elasticity refers to: A).inelasticity in the market. B). how the quantity of a product bought/sold reacts to price, income C).how the quantity of a product does not react to price and income in the market. D).rubber bands in my desk drawer. Slide 28