BellringerAs always, go get your notebook
How much would you be willing to pay for this iphone? (what would be the most you would be
willing to pay)
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
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
• Chicken exampleD
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.
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