Agenda
- Bellringer
- Types of Goods notes
- Demand activity
- Graphing demand
Objective
Students will identify the
law of demand and how to
graph a demand curve by
completing a worksheet
Normal versus
inferior goods
Normal good: When income goes up the
quantity demanded increases with income;
Inferior good: When income goes down the
quantity demanded decreases with income;
Normal good Examples:
New clothes
New car
Movie theater tickets
Meals at a nice restaurant
Caribbean vacations
NFL football games
Starbucks
**When things are good, what do you splurge
on?**
Inferior good Examples:
DVD rentals
Used clothes
Used cars
Public transportation
McDonalds
Coffee at home
**When times are tough, what do you cut
back on?**
As income decreases,
more people use public
transportation
Public
Transportation
(bus)
Luxury cars or
new cars
(purchased)
As income goes up, more
people buy new cars or
luxury cars…..
As income decreases,
more people eat Ramen
noodles
Ramen noodles
Dinner at Number
5
As income goes up, more
people go out to eat at nice
places…..
Substitute goods: an increase in the price of
one product leads to an increase in the
quantity demanded of a cheaper, similar
product
Complementary goods: A decrease in the price
of one leads to an increase in the quantity
demanded of the other.
substitute good Examples:
Tea (for coffee)
Ford (for Toyota)
Gap (for Abercrombie)
Skippy peanut butter (instead of Jiff)
Underarmour (Northface)
Pepsi (coke)
**This is why companies offer coupons/sale
prices!! Increase demand over competition!**
Complementary good Examples:
Hot dogs and buns
Pencils and erasers
DVD players and DVDS
Toothbrushes and toothpaste
Printers and toner cartridges
**One is not good without the other. If there’s
a sale on hot dogs, people will automatically
demand buns**