 Bellringer—Each partner pair should retrieve the
following from the back of the room. You have one
minute after the bell rings to be in your seat with the
materials.
1 small whiteboard
1 black dry erase marker
1 color (other than black) dry erase marker
Sock eraser
Put these under your desk.
 What is the difference between a change in demand
and a change in quantity demanded? Be able to
graphically apply the determinants of demand.
 Agenda
1. Demonstration
2. Lecture
3. Whiteboard Practice Problems
4. Group Project
Desire to own
2. Ability and willingness to pay
1.
 Law of Demand—
 As prices decrease, the QUANTITY demanded
QD
Prices
QD
Prices
INCREASES
 As prices increase, the QUANTITY demanded
DECREASES
 Demand Schedule—a table that lists the various
0
$1.50
1
$1.00
2
$0.50
3
2.00
1.50
$2.00
Demand for Pizza
1.00
Quantity
.50
Price
Price
quantities demanders will purchase at various prices.
 Demand Curve—schedule in graph form
 Individual—one person’s demand for a product
 Market—a group’s demand for a product
1
2
3
4
Quantity
 Quantity Demanded—ONE quantity at ONE price
 Demand—List of quantities at different prices illustrated by a
demand schedule and a demand curve.
Demand Schedules
Individual Demand Schedule
Price of a
slice of pizza
$.50
$1.00
$1.50
$2.00
$2.50
$3.00
Market Demand Schedule
Quantity demanded Price of a
slice of pizza
per day
5
4
3
2
1
0
$.50
$1.00
$1.50
$2.00
$2.50
$3.00
Quantity demanded
per day
300
250
200
150
100
50
Price per slice (in dollars)
Market Demand Curve
3.00
2.50
2.00
1.50
1.00
.50
Demand
0
0
50
100 150 200 250 300 350
Slices of pizza per day
 Change in QUANTITY demanded
 Movement along the demand curve
 Caused by a change in the PRICE of the product
 Change in DEMAND
 Shift of the entire curve
 Caused by one of the determinants of demand
 Factors that shift the demand curve
 Taste and Preferences
 Related goods—prices of substitutes and complements
 Income
 Buyers—Number of buyers
 Expectations—CONSUMER expectations
LEFT or RIGHT
 NOT up or down
 If demand
INCREASES, the
demand curve
shifts to the
RIGHT
 If demand
DECREASES, the
demand curve
shifts to the LEFT
P
6
5
Price (per bushel)
 Shifts the curve
Increase in Demand
4
3
2
1
0
D2
Decrease in Demand
2
4
6
8
10 12
D3
D1
14 16 18
Quantity Demanded (bushels per week)
Q
Price of
Ice-Cream
Cone
A popular
new diet
forbids
dairy
$3.00
2.50
2.00
1.50
1.00
0.50
Decrease
in demand
0 1
D2
D1
2 3 4 5 6 7 8 9 10 11 12
Quantity of
Ice-Cream
Cones
Price of
Ice-Cream
Cone
The price of
frozen
yogurt
drops
$3.00
2.50
2.00
1.50
1.00
0.50
Decrease
in demand
0 1
D2
D1
2 3 4 5 6 7 8 9 10 11 12
Quantity of
Ice-Cream
Cones
Price of
Ice-Cream
The price of
cake drops
$3.00
2.50
2.00
1.50
1.00
0.50
Increase
in demand
D1
0 1
2 3 4 5 6 7 8 9 10 11 12
D2
Quantity of
Ice-Cream
Price of
Ice-Cream
Cone
$3.00
An increase
in income...
2.50
Increase
in demand
2.00
1.50
1.00
0.50
D1
0 1
2 3 4 5 6 7 8 9 10 11 12
D2
Quantity of
Ice-Cream
Cones
 Inferior good: demand decreases when income
increases.
Mrs. Powell’s demand
for Wal-mart brand
ice cream decreases
after she receives a
$10,000 pay increase
P
D2
Q
D1
MTSU
increases
attendance
by 10,000
Price of
Ice-Cream
Cone
$3.00
2.50
Increase
in demand
2.00
1.50
1.00
0.50
D1
0 1
2 3 4 5 6 7 8 9 10 11 12
D2
Quantity of
Ice-Cream
Cones
Ben & Jerry’s offers
a FREE ice cream
cone on Sunday.
This is the demand
curve for FRIDAY.
Price of
Ice-Cream
Cone
$3.00
2.50
2.00
1.50
1.00
0.50
Decrease
in demand
D2
0 1
D1
2 3 4 5 6 7 8 9 10 11 12
Quantity of
Ice-Cream
Cones
 What is the difference between a change in
QUANTITY demanded and a change in DEMAND?
Draw a demand and supply graph in black (brown).
 Title it “Beef Consumption in May.”
 You do not need numbers on the graph.
Pop Quiz—
(Points 1-3) Draw a demand and supply graph for Beef Consumption in MAY.
Point 1. Axes are labeled correctly and original D curve is in the correct
shape. ONE will be a no shift.
4. Price of beef expected to rise in June.
5. Millions of immigrants swell the US population
6. Pork prices drop
7. Mad Cow disease comes to the US
8. Beef prices fall. Consumers buy more.
9. Real income for US drops for 3rd month
10. Charcoal prices go up (You will only eat burgers the right way—on a charcoal
fired grill!!!)
11. When demand increases, what happens to the equilibrium price and
equilibrium quantity.
12. When demand decreases, what happens to the EP and EQ?
13. Explain the difference b/wn a shift in the demand curve and a movement along
the demand curve. In other words, what causes each?
Group Practice
 Draw a demand and supply graph for a product in one
color.
 Show an increase and a decrease in demand in
different colors.
 Write out 6 scenarios. One for each determinant and
one that doesn’t change demand. You may write it on
the poster or on your own notebook paper. DON’T
write down the ANSWER on the poster.
 1-2 people in charge of drawing/writing. 2-3 people in
charge of scenarios.
“Rising oil prices have caused a sharp decrease in the demand for
oil.” Speaking precisely, and using terms as they are defined by
economists, choose the statement that best describes this
quotation.
(A) The quotation is correct: An increase in price always causes a
decrease in demand.
(B) The quotation is incorrect: An increase in price always causes
an increase in demand, not a decrease in demand.
(C) The quotation is incorrect: An increase in price causes a
decrease in the quantity demanded, not a decrease in demand.
(D) The quotation is incorrect: An increase in price causes an
increase in the quantity demanded, not a decrease in demand.
Other things constant, which of the following would not
cause a change in the demand (shift in the demand
curve) for mopeds?
(A) A decrease in consumer incomes
(B) A decrease in the price of mopeds
(C) An increase in the price of bicycles
(D) An increase in people’s tastes and preferences for
mopeds
“As the price of domestic automobiles has inched upward,
customers have found foreign autos to be a better bargain.
Consequently, domestic auto sales have been decreasing, and
foreign auto sales have been increasing.” Using only the
information in this quotation and assuming everything else
constant, which of the following best describes this statement?
(A) A shift in the demand curves for both domestic and foreign
automobiles
(B) A movement along the demand curves for both foreign and
domestic automobiles
(C) A movement along the demand curve for domestic autos, and a
shift in the demand curve for foreign autos
(D) A shift in the demand curve for domestic autos, and a
movement along the demand curve for foreign autos
Which of the following would increase demand for a
normal good? A decrease in:
a. Price
b. Income
c. The price of a substitute
d. Consumer taste for a good.
e. The price of a complement

A.
B.
C.
D.
E.
A decrease in the price of butter would most likely
decrease the demand for
margarine
Bagels
Jelly
Milk
Syrup
Card #3 Demand
 Draw a demand and supply graph for a product.
 Show an increase in demand in one color and a




decrease in demand in another color. State which
color is which out to the side.
Give an example of what would cause the increase and
what would cause the decrease.
List and briefly explain the 5 determinants of demand.
State the difference b/wn a change in demand and QD.
Due Tuesday, but not really…not taking up until we do
Supply on the back.